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Intermediary signing the export contract




© INTERMEDIARIES, BROKERS EDUCATION ASSISTANCE 2023 FTNX

FTNX TRIBE  

FTN EXPORTING EDUCATIONAL SERVICE  (Est:1988)

THE INTERNATIONAL TRADE CONTRACT   

From: 1 August 2022

© INTERMEDIARIES, BROKERS EDUCATION ASSISTANCE 2023 FTNX



The signing of a commodity contract digitally by a PCT

These opinions  are served not as it applies to individual circumstances or where local laws within a country or state are contradictory to such opinions; they are served based on actual experience of the author, as enacted upon  internationally over decades. A person goes on online applies for a large  loan exceeding lets say $100,000.00. The applicants digitally signs the online document. Approval is secured  in 60 seconds thereafter.  In another scenario; a commodity deal worth millions  of dollars where documents are signed digitally and are sent to the recipient electronically online  via email ? Are such documents  legally binding? Again, the usual answer of “Yes” prevails.  If you look up online and ask the question “is a digitally signed document legally binding”  the answer is you’ll often arrive at is ‘Yes.’


If you ask you lawyer, the same answer is served, that’s if you have admitted signing such documents. Denying as much on the other hand, will create issues of legality which is tested at such a time. Let us  examine the interpretations  of matters found online to the reality of the situation in hand. In our example re: the loan application, what will happen is that while the loan was approved online, in most cases before the funds are actually deposited into your account, the applicant will still need to appear  before the lender and sign hardcopies  of the application already pre approved  online. In many situations  it may  seem that you are entering into a legally binding situation when accepting a deal or  contract using digitally served and signed documents; and yet, eventually hardcopy signatures and original hardcopy documents are still required, when large amounts of money support the transaction. No different when dealing in commodities. No matter the process ( and we have seen some elaborate bordering on ridiculous online processes), the end of such a process  must lead to a hand signed original hardcopy contract.The whole deal must  not be closed using emails/PDF alone.This aspect allows legal loopholes to  creep into the transaction. 


“Understand this, dealing online is now a precarious event. Scam artists and hackers are everywhere, so much so that I can foresee changes in the future where we will need to revert back to good old fashioned hardcopy documents being served  by post– will make a comeback, unless governments guarantee the integrity of the internet/email system. As a further note , the ‘old’  facsimile machine, was a superior aspect, alas some countries like Australia  has now made this application impossible to use as a home based application; in their short sighted zeal to expand the use of the internet, politicians  with ‘small brains’ have created a huge problem. The internet/email system  has also allowed  service providers,  lazy way to provide such services.”


The whole premises of digitally signing a document becomes legally binding, once a dispute is apparent, if both parties have acknowledged and agreed upon, in the first instance, to the deal being enacted  upon online. By confirming to the online deal and supporting documents being served  therein, the parties to the contract  become  ‘legally bound’ to each other. The question whether  or not digitally served and signed documents are legally binding is dismissed once the admissions are made and confirmed in support of the deal being applied. The ‘admissions’ made  is what makes the deal  legally binding and thus enforceable, to which any pre-approval  or any other document carrying a digital signature  becomes effectively and legally served. The act of digitally signing a document is a lawful one. The act of acknowledging the signing of such a document is legally binding.  But ! is the act of using a digital signature legally binding on the basis of actual presentation, if one party later reneges on a deal  and  then declares that they did not accept nor apply any signature  to any document. It’s in this light that a plaintiff may engage a lawyer  to sue  the other party for breach of contract. Without  any witness stating otherwise, the defendant denies applying any signature(s) digitally. To argue that the document was falsely signed  would not readily be dismissed   in the realm where millions of dollars are being scammed online daily,  and in where  digitally  documents  and signatures could (and are) easily be copied. 


All is well when a deal concludes in good stead. But when a deal turns sour; and no admissions are made nor recorded, using digitally signed documents to back your claims that a breach has occurred, is a precarious  legal situation. The chances of winning such a case internationally under such circumstances are remote. A sagacious person looking to protect their interest would ensure that a hardcopy of the contract is in hand in where a hardcopy signature(s) are  apparent. Often  such a person  is always the applicant taking out the loan or is  e.g; buying commodities.  The supplier is only concerned with payment; regardless of   the format used to secure  such payment.  In the case for securing a loan, the lender will require the applicant  to sign a contract, a contract which  is not open to negotiations on a “take it or leave it” basis, no different to a seller offering goods to and  legitimate buyer ( but where some aspects of ‘negotiation’ is allowed). Therefore reviewing  and considering a deal ‘on a tablet or computer ’ then accepting the deal with a digital signature instantly, is simply not the same as obtaining a hardcopy of the deal and contracting basis therein to examine such intently and to seek peer advice,  within a reasonable amount of time.  Furthermore  persuasive  argument  found in the international arena as it applies to the PCT trading in commodities could also find that  a digitally signed document  sent by email may be deemed as not being an ‘original document’  once Meta Tags are added to the document upon its transmission. Documents  marked as ‘original’ are required by banks  and therefore should  also be relied upon for those conducting business internationally. Thus ‘the original’ status of a document being transmitted online  could also  be questioned–as matter of legally; then in the same light a digitally  applied signature could be argued in a court of law as being a copy of the original  signature, and therefore ‘not legally binding’ in the right circumstances where admission have not been made prior.


A PCT may trade on line and may accept an offer  ‘subject to final contract.’ That is, no binding aspect is apparent until the contract is signed.This is a very important aspect for the PCT as funds to buy commodities on offer must be secured and therefore the contract is ‘subject to finance’ on the condition the the offer once  accepted states as much.  And here is where  the saving grace of the whole premise can be practised safely without fear of consequences. The offer from the supplier  is accepted  by the PCT  and therefore legally binding , at the time the PCT is ready to complete the transaction. The expectation is that the Supplier will serve his contract to the PCT  within i.e 3 days of accepting the offer. Failure to meet such deadlines incorporated  in the offer is a breach of the supplier not the PCT. The contract is read and signed  online in PDF with the hardcopy being posted and postal receipt and tracking details secured. This allows the PCT to continue with the deal using the PDF document  sent via email. Whether this action takes 2 days or 2 weeks is not relevant on the condition that the PCT advised his bank within 5 banking days with a set of instructions to ensure the financial instrument used is not  activated  too early. A bank will accept a DLC ( ICC under UCP rules) if no instructions are served by the PCT. Instruction as served by the PCT have nothing to do with the contact signed with the supplier; both a two independent aspects. A contract must give reference to the offer accepted  prior, as there is no contract without an offer under  applicable international trade rules and laws of applications. 


The contract also  states that every page has been read and that a hardcopy prevails as a matter of legality and that the PDF version is forwarded to ensure that all important  transactional dates applied on the contract remain effective. The online PDF version of the contract is submitted online to allow a deal to continue without delays becoming apparent. This aspect is well prescribed in the FTNX doctrine of trade. However the doctrine also stipulates that the hardcopy of the contract, marked as original and signed accordingly is also posted  by courier  in where as stated earlier, a postal  receipt and tracking details are secured. Before the hardcopy contract is posted a witness  signs a statutory declaration that they have sighted the contract  and have witnessed  the courier picking up the document, would also be a prudent move. Tracking details makes it very hard for the other party to deny that the contract never arrived. This one aspect is a far more secure and far more ‘legally binding’ than any online transmitted document or contract  alone. The hardcopy contract is posted once the PDF version has been accepted by ay parties to such. As for the end buyer side and the PCT. The contract model is issued by the PCT to the end buyer which may be different to the copy signed with the supplier and the PCT. The end buyer applies the same process,  which includes lodging the payment payment instrument. The bank of the PCT is advised by the PCT that the payment is accepted on the 5th banking day instructing the bank that the financial instrument is to be transferred  i.e: 7 days later once the transfer fee has first been received. This allows the contract with the supplier  to be fully sealed . The contract with the end buyer is an independent aspect and model to the contract served to the supplier. What ever demands are  made by the PCT to the end buyer, may differ to the demands made of the supplier .The skill for the PCT to apply  is to ‘time’ the deal as close as possible  so as one deal is finalised the other side of the deal has also been finalised or nearly  finalised. The PCT has a the required ostensible authority to trade on such goods on the condition that the PCT   has obtained an offer from a genuine export ready supplier first. Therefore the whole process is dependant on once critical factor.The PCT has in his hand a signed offer  with a validity date denoting  that it has secured the  product  with a price apparent first.No contract  can be enacted upon unless this event has occurred first. 


Millions of dollars in value apply to large trade contracts and therefore time and proper considerations must be apparent  to ensure the ‘safest’ trading aspect possible has been served as it takes a lot of efforts to close upon one single deal. So many ill informed traders are attempting to trade in commodities  online without any considerations to hardcopy documents and signature. Such ill informed traders have no scope in closing on such ill informed  deals–may be assumed. Finally  a good trade  contract is one which is simply and clearly  prescribed without ambiguity, in support of the offer made prior, and is under 40  A4  pages long.  The larger the contract, the more open to disputes, interpretations and legal challenges become apparent–may also be assumed. 


“ In my earlier years , I have seen contract for renting a commercial premises exceed 500 pages as lawyers try to cover every possible scenario, especially as it relates to default in payment of the rent; and yet, legal challenges were still apparent ( which we won). In trade, I have been served a FAS or FOB contract detailing all aspects of a CIF contract. Keep the contract simple and relevant is the best course, by ensuring a very detailed offer is supporting such. ”


Those who want added insights about contracts and disputes can study about such matters via  various websites especially UNCITRAL. The PCT must remember that the contract is an extension of the offer and that anything in contrary of the offer must be removed before it is signed. A contract served by a supplier to the PCT may have standard or many  entries , that may not even  be applicable to the deal being transacted upon ; such entries are not a concern of the PCT. The PCT must simply ensure that matters described on a detailed  offer are also prescribed on the contract. This is why the contract stage is a simpler process of lesser concern because  mastering the  aspect of creating the offer and the legally binding status therein, is what the PCT must practice  serving intently. Then contract is a standard application when compared. 


All contracts including those to do with buying and selling commodities internationally  must have within its body  six essential elements.

The essential elements are:

  1. The Intention.
  2. An Offer. 
  3. Valuable Considerations. 
  4. Legal Capacity. 
  5. Genuine Consent. 
  6. Legality of the Contract (objects therein) 


Lets take a look at a simple express written contact applicable in the year 2022

All contracts are agreements but not all agreements  are contracts. 


Date: This agreement  made on the 1 first day  of January 2022.

The reference or transaction number for all matters of this contract is : DPFTNX-00045

Made between parties: FTN Exporting   of  Melbourne City located in the State of Victoria,  Australia, trading commodities   hereby called the ‘seller’ 

enacting  with  Tom Smith  located within another state in Australia defined  herein as  the ‘buyer.’ 


 IT HAS BEEN WITNESSED  AS FOLLOWS:

(1)The seller agrees to sell, and the buyer agrees to purchase  one (1)  20 Metric Ton full container load of Copper Cathodes.

  Product offered prior as specified in the accepted offer at the delivery mode of EXW as located in Melbourne Australia, for the total sum of $80,000.00 United States Dollars.

(2) Upon the signing of this contract the buyer will pay the seller  a deposit of  $8,000.00 United States Dollars  dollars. The balance of the payment shall be paid on the day prior to loading taking place.

(3) Goods shall be made ready for delivery  at our factory at EXW  3 weeks for the date of the contract.


As witnessed by parties to this contract.

Signed by  the seller FTN Exporting Ceo D.G.Papa in the presence of:

Signed by Buyer Mr Tom Smith  in the presence of:


Wow! It may not seem so, but above aspect describes a simply made contract made  on a local deal which  is legally binding,  as all 6 elements are apparent. A PCT must not  hesitate when it comes to issuing and signing a contract, if they feel confident on the actual trading  process which  will take a year or so to learn intently. Mistakes is the bedfellow of experience; mistakes in the early days of trading are mitigated by the doctrine. If you have secured the supplier, secured the end buyer and secured the funds; any adverse matters can be worked out  later, as the supplier wants to get paid and the end buyer only wants to receive goods as ordered in good condition. Anything added to the contract basis must adhere to the 6 elements. Our formal doctrine; International Trade and the Successful Intermediary (ITSI)  can be purchased online and has a full  FTNX commodity  trading contract model applied. Other matters may be added to the contract under the appropriate heading. By learning aspects  of trading as a Buyer/Seller, the PCT could readily revert to the position  of an entrepreneur applying international deals  for other products other than commodities, now defines the complex  educational  aspect  of the FTNX doctrine of trade. 


e.g: So, a 20 million dollar hotel complex is being sold in London.By applying matters of doctrine, in the correct light, the entrepreneur could tout and offer to a potential buyer in USA, and close the deal with the realestate agent offering such.


e.g: Likewise:A Swiss based company is offering the PCT exclusive agency on product it is manufacturing. 


e.g: A PCT is USA  has been tenured by a company in Africa to serve consultancy services for fee’s  on deals it it working on. 


e.g: A PCT want to buy a ship, hold brownfield rights to mine resources found on land, deal in scrap gold, do a countertrade on a food for oil deal, etc.etc. 


Once a PCT masters trading internationally on  high valued deals, other  non related business applications could be initiated, especially when the PCT understands intently the role of the offer and the supporting premise of contract and later finance. 

 













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