International Business Transactions
Expert-defined terms from the Professional Certificate in International Commercial Law course at London School of Business and Administration. Free to read, free to share, paired with a professional course.
Acceleration Clause refers to a provision in a contract that requires a b… #
This concept is often used in international business transactions to protect lenders from potential losses. Related terms include default and foreclosure. Acceleration clauses can be found in loan agreements, mortgages, and other types of contracts. For example, a company may include an acceleration clause in a contract with a supplier to ensure that the supplier pays the full amount due if they miss a payment.
Acceptance is a critical concept in international business transactions,… #
This can be expressed through written or verbal communication, and it is essential to clearly define the terms of acceptance to avoid any misunderstandings. Related terms include offer and consideration. For instance, a company may accept a contract offer from a supplier by signing and returning a copy of the contract.
Accounting Standards refer to the rules and regulations that gover… #
In international business transactions, companies must comply with accounting standards such as GAAP or IFRS to ensure transparency and consistency in financial reporting. Related terms include financial reporting and auditing. For example, a company may need to prepare financial statements in accordance with IFRS to comply with the requirements of a foreign investor.
Ad Valorem Tax is a type of tax that is levied on the value of a p… #
In international business transactions, ad valorem taxes can be imposed on imports or exports, and companies must factor these taxes into their pricing strategies. Related terms include tariff and customs duty. For instance, a company may need to pay an ad valorem tax on imported goods based on their value.
Agency Agreement is a type of contract that establishes a relationship be… #
In international business transactions, agency agreements are used to appoint agents or distributors in foreign markets. Related terms include principal and agent. For example, a company may enter into an agency agreement with a local agent to represent their products in a foreign market.
Anti #
Dumping Duty is a type of tariff imposed on imported goods that are sold at a price below their normal value. In international business transactions, anti-dumping duties are used to protect domestic industries from unfair competition. Related terms include countervailing duty and safeguard measure. For instance, a company may face an anti-dumping duty on their exports if they are found to be selling their products at a price below their normal value.
Arbitration is a dispute resolution process that involves the use of a ne… #
In international business transactions, arbitration is often used to resolve disputes between companies from different countries. Related terms include mediation and litigation. For example, a company may agree to arbitration to resolve a dispute with a supplier from a foreign country.
Assignment is the transfer of rights or obligations under a contra… #
In international business transactions, assignments are used to transfer ownership of goods or services. Related terms include novation and delegation. For instance, a company may assign the rights to a contract to a third party, such as a subcontractor.
Bank Guarantee is a type of guarantee provided by a bank to secure a t… #
In international business transactions, bank guarantees are used to secure payment or performance under a contract. Related terms include letter of credit and surety bond. For example, a company may require a bank guarantee from a supplier to secure payment for goods or services.
Bill of Lading is a document that serves as a receipt for goods sh… #
In international business transactions, bills of lading are used to document the shipment of goods and to transfer ownership. Related terms include shipping notice and delivery order. For instance, a company may use a bill of lading to document the shipment of goods from a supplier.
Bond is a type of security that represents a debt obligation #
In international business transactions, bonds are used to raise capital or to secure a transaction. Related terms include debenture and note. For example, a company may issue bonds to raise capital for a foreign investment project.
Business Ethics refer to the principles and standards that guide b… #
In international business transactions, companies must comply with business ethics standards to maintain their reputation and to avoid legal liability. Related terms include corporate social responsibility and compliance. For instance, a company may adopt a code of business ethics to guide their operations in foreign markets.
Capital Account is a component of a country's balance of payments #
In international business transactions, capital accounts are used to record investments and other capital flows. Related terms include current account and financial account. For example, a company may invest in a foreign country through a capital account transaction.
Carriage of Goods by Sea Act is a law that governs the shipment of… #
In international business transactions, this law is used to regulate the rights and obligations of parties involved in the shipment of goods. Related terms include Hague-Visby Rules and Rotterdam Rules. For instance, a company may need to comply with the Carriage of Goods by Sea Act when shipping goods from a foreign supplier.
Certificate of Origin is a document that certifies the origin of g… #
In international business transactions, certificates of origin are used to determine the country of origin for customs purposes. Related terms include certificate of authenticity and commercial invoice. For example, a company may need to provide a certificate of origin to comply with customs regulations when importing goods.
Charter Party is a type of contract that governs the rental of a s… #
In international business transactions, charter parties are used to transport goods or people. Related terms include time charter and voyage charter. For instance, a company may enter into a charter party to transport goods from a foreign supplier.
CIF is a term that refers to the cost , insurance , and fr… #
In international business transactions, CIF is used to determine the price of goods, including the cost of transportation and insurance. Related terms include FOB and CPT. For example, a company may quote a CIF price to a customer to include the cost of transportation and insurance.
Civil Law is a system of law that is based on codes and statute… #
In international business transactions, civil law systems are used in many countries, and companies must comply with civil law regulations to operate in these countries. Related terms include common law and sharia law. For instance, a company may need to comply with civil law regulations when establishing a subsidiary in a foreign country.
Commercial Invoice is a document that serves as a receipt for good… #
In international business transactions, commercial invoices are used to document the sale of goods and to determine the value of goods for customs purposes. Related terms include bill of sale and packing list. For example, a company may use a commercial invoice to document the sale of goods to a foreign customer.
Commodity is a type of good that is traded on a commodity exchange #
In international business transactions, commodities are used to hedge against price risks or to speculate on price movements. Related terms include future and option. For instance, a company may trade commodities such as oil or gold to hedge against price risks.
Compliance refers to the act of conforming to laws, regulations, a… #
In international business transactions, companies must comply with various regulations, such as anti-bribery laws and tax laws, to avoid legal liability. Related terms include regulatory risk and compliance risk. For example, a company may establish a compliance program to ensure that they are complying with all relevant regulations.
Consignee is the party that receives goods shipped #
In international business transactions, consignees are used to receive goods on behalf of the buyer. Related terms include consignor and forwarder. For instance, a company may appoint a consignee to receive goods from a foreign supplier.
Contract is a legally binding agreement between two or more partie… #
In international business transactions, contracts are used to establish the terms and conditions of a business relationship. Related terms include agreement and memorandum of understanding. For example, a company may enter into a contract with a foreign supplier to purchase goods.
Contract Law is a branch of law that governs contracts #
In international business transactions, contract law is used to regulate the rights and obligations of parties to a contract. Related terms include tort law and property law. For instance, a company may need to comply with contract law regulations when entering into a contract with a foreign party.
Countertrade is a type of trade that involves the exchange of good… #
In international business transactions, countertrade is used to reduce the need for hard currency or to promote trade between countries. Related terms include barter and counterpurchase. For example, a company may engage in countertrade with a foreign supplier to reduce the need for hard currency.
Country Risk refers to the risk of loss or damage due to <i… #
In international business transactions, country risk is used to assess the risk of investing in a foreign country. Related terms include political risk and economic risk. For instance, a company may assess the country risk of a foreign country before investing in a local business.
Credit Insurance is a type of insurance that covers the risk of <i… #
In international business transactions, credit insurance is used to protect against the risk of non-payment by a foreign buyer. Related terms include export credit insurance and trade credit insurance. For example, a company may purchase credit insurance to protect against the risk of non-payment by a foreign buyer.
Currency Risk refers to the risk of loss or gain due to … #
In international business transactions, currency risk is used to assess the risk of exchange rate fluctuations on a company's financial performance. Related terms include exchange rate risk and foreign exchange risk. For instance, a company may hedge against currency risk by using currency derivatives.
Customs Broker is a party that assists with the clearance o… #
In international business transactions, customs brokers are used to facilitate the importation of goods into a country. Related terms include freight forwarder and logistics provider. For example, a company may appoint a customs broker to assist with the clearance of goods through customs.
Debt Financing is a type of financing that involves the borrowing … #
In international business transactions, debt financing is used to raise capital for a company or project. Related terms include equity financing and mezzanine financing. For instance, a company may use debt financing to raise capital for a foreign investment project.
Delivery is the act of transferring goods or services to a buyer #
In international business transactions, delivery is used to transfer ownership of goods or services. Related terms include shipment and transportation. For example, a company may deliver goods to a foreign customer through a logistics provider.
Depository Receipt is a security that represents a claim on a comp… #
In international business transactions, depository receipts are used to facilitate the trading of foreign securities. Related terms include American Depositary Receipt and Global Depositary Receipt. For instance, a company may issue depository receipts to facilitate the trading of their shares on a foreign exchange.
Direct Investment is a type of investment that involves the ownership<… #
In international business transactions, direct investment is used to establish a presence in a foreign market. Related terms include foreign direct investment and portfolio investment. For example, a company may make a direct investment in a foreign country by acquiring a local business.
Disclaimer is a statement that limits or excludes liability #
In international business transactions, disclaimers are used to limit liability for damages or losses. Related terms include warranty and representation. For instance, a company may include a disclaimer in a contract to limit their liability for damages or losses.
Distribution Agreement is a type of contract that governs the distribu… #
In international business transactions, distribution agreements are used to establish a relationship with a distributor or wholesaler. Related terms include agency agreement and franchise agreement. For example, a company may enter into a distribution agreement with a foreign distributor to distribute their products in a local market.
Documentary Credit is a type of letter of credit that is used to s… #
In international business transactions, documentary credits are used to facilitate trade between companies from different countries. Related terms include letter of credit and bank guarantee. For example, a company may use a documentary credit to secure payment for goods exported to a foreign buyer.
Due Diligence is the process of investigating and evaluating</i… #
In international business transactions, due diligence is used to assess the risks and opportunities of a foreign investment. Related terms include feasibility study and market research. For instance, a company may conduct due diligence on a foreign company before acquiring it.
Dumping is the act of selling goods at a price below their norm… #
In international business transactions, dumping is used to describe the practice of selling goods at a low price to gain a competitive advantage. Related terms include anti-dumping duty and countervailing duty. For example, a company may be accused of dumping if they sell goods at a price below their normal value.
Economic Sanctions are measures that are imposed by a country to restrict… #
In international business transactions, economic sanctions are used to enforce foreign policy objectives or to punish a country for violating international law. Related terms include trade embargo and boycott. For instance, a company may be subject to economic sanctions if they trade with a country that is subject to sanctions.
Embargo is a restriction on trade or investment with a country #
In international business transactions, embargoes are used to enforce foreign policy objectives or to punish a country for violating international law. Related terms include economic sanctions and boycott. For example, a company may be subject to an embargo if they trade with a country that is subject to an embargo.
Equity Financing is a type of financing that involves the issuance … #
In international business transactions, equity financing is used to raise capital for a company or project. Related terms include debt financing and mezzanine financing. For instance, a company may use equity financing to raise capital for a foreign investment project.
Escrow is a type of account that is used to hold funds or secur… #
In international business transactions, escrow accounts are used to secure payment or performance under a contract. Related terms include trust account and security deposit. For example, a company may use an escrow account to secure payment for goods or services.
Export is the act of sending goods or services to a foreign countr… #
In international business transactions, exports are used to generate revenue and to promote economic growth. Related terms include import and trade. For instance, a company may export goods to a foreign country to generate revenue.
Export Credit Agency is a government agency that provides financing</i… #
In international business transactions, export credit agencies are used to facilitate trade between companies from different countries. Related terms include export-import bank and trade finance. For example, a company may use an export credit agency to secure financing for an export transaction.
FAS is a term that refers to free alongside ship #
In international business transactions, FAS is used to determine the price of goods, including the cost of delivery to the ship. Related terms include FOB and CIF. For instance, a company may quote an FAS price to a customer to include the cost of delivery to the ship.
FOB is a term that refers to free on board #
In international business transactions, FOB is used to determine the price of goods, including the cost of loading onto the ship. Related terms include CIF and FAS. For example, a company may quote an FOB price to a customer to include the cost of loading onto the ship.
Force Majeure is a clause that excuses a party from performing und… #
In international business transactions, force majeure clauses are used to allocate risk between parties. Related terms include act of god and unforeseen circumstances. For instance, a company may include a force majeure clause in a contract to excuse themselves from performing due to unforeseen circumstances.
Foreign Corrupt Practices Act is a law that governs corrupt practi… #
In international business transactions, the Foreign Corrupt Practices Act is used to regulate the payment of bribes to foreign officials. Related terms include corruption and bribery. For example, a company may be subject to the Foreign Corrupt Practices Act if they pay bribes to foreign officials.
Foreign Exchange is the market for trading currencies #
In international business transactions, foreign exchange is used to convert one currency into another. Related terms include currency and exchange rate. For instance, a company may use foreign exchange to convert their local currency into a foreign currency.
Franchise Agreement is a type of contract that governs the franchise</… #
In international business transactions, franchise agreements are used to establish a relationship with a franchisee. Related terms include licensing agreement and distribution agreement. For example, a company may enter into a franchise agreement with a foreign franchisee to establish a presence in a local market.
Free Trade Agreement is a treaty that reduces or eliminates … #
In international business transactions, free trade agreements are used to promote trade between countries. Related terms include customs union and common market. For instance, a company may benefit from a free trade agreement by reducing tariffs on their exports.
GATT is a treaty that governs international trade #
In international business transactions, GATT is used to regulate trade between countries. Related terms include WTO and tariff. For example, a company may be subject to GATT regulations when exporting goods to a foreign country.
Guarantee is a promise to pay or perform if another party f… #
In international business transactions, guarantees are used to secure payment or performance under a contract. Related terms include letter of credit and surety bond. For instance, a company may require a guarantee from a supplier to secure payment for goods or services.
Incoterms are a set of terms that define the responsibilities</… #
In international business transactions, Incoterms are used to clarify the terms of delivery and payment. Related terms include FOB and CIF. For example, a company may use Incoterms to define the terms of delivery and payment in a contract.
Inspection is the process of examining goods or services to ensure… #
In international business transactions, inspections are used to ensure that goods or services meet quality and safety standards. Related terms include testing and certification. For instance, a company may conduct an inspection of goods before shipping them to a foreign customer.
Insurance is a contract that provides protection against risks<… #
In international business transactions, insurance is used to protect against risks such as loss or damage to goods, or non-payment by a buyer. Related terms include liability insurance and property insurance. For example, a company may purchase insurance to protect against the risk of non-payment by a foreign buyer.
Intellectual Property is a type of property that includes paten… #
In international business transactions, intellectual property is used to protect a company's innovations and creations. Related terms include patent and trademark. For instance, a company may protect their intellectual property by registering a patent or trademark in a foreign country.
International Chamber of Commerce is a organization that promotes … #
In international business transactions, the International Chamber of Commerce is used to facilitate trade and commerce between companies from different countries. Related terms include World Trade Organization and United Nations. For example, a company may use the International Chamber of Commerce to resolve a dispute with a foreign supplier.
International Commercial Law is a branch of law that governs internati… #
In international business transactions, international commercial law is used to regulate the rights and obligations of parties to a contract. Related terms include contract law and trade law. For instance, a company may need to comply with international commercial law regulations when entering into a contract with a foreign party.
International Commercial Terms are a set of terms that define the… #
In international business transactions, international commercial terms are used to clarify the terms of delivery and payment. Related terms include Incoterms and FOB. For example, a company may use international commercial terms to define the terms of delivery and payment in a contract.
Investment Treaty is a treaty that governs investments between cou… #
In international business transactions, investment treaties are used to promote and protect investments between countries. Related terms include foreign investment and investment agreement. For instance, a company may benefit from an investment treaty by reducing the risk of expropriation or nationalization.
Letter of Credit is a document that guarantees payment to a seller #
In international business transactions, letters of credit are used to facilitate trade between companies from different countries. Related terms include bank guarantee and surety bond. For example, a company may use a letter of credit to secure payment for goods exported to a foreign buyer.
License Agreement is a type of contract that governs the use of <i… #
In international business transactions, license agreements are used to grant permission to use intellectual property such as patents, trademarks, or copyrights. Related terms include franchise agreement and distribution agreement. For instance, a company may enter into a license agreement with a foreign company to grant permission to use their intellectual property.
Logistics is the process of planning , organizing , and ma… #
In international business transactions, logistics is used to manage the supply chain and to ensure that goods are delivered on time and in good condition. Related terms include supply chain management and transportation management. For example, a company may use logistics to manage the supply chain and to ensure that goods are delivered to a foreign customer on time.
Market Research is the process of gathering and analyzing d… #
In international business transactions, market research is used to assess the potential of a foreign market and to identify business opportunities. Related terms include feasibility study and due diligence. For instance, a company may conduct market research to assess the potential of a foreign market before entering it.
Memorandum of Understanding is a document that outlines the terms… #
In international business transactions, memoranda of understanding are used to establish the framework for a business relationship between companies from different countries. Related terms include contract and agreement. For example, a company may enter into a memorandum of understanding with a foreign company to establish a joint venture.
Merger is the act of combining two or more companies #
In international business transactions, mergers are used to create a new company or to expand into a new market. Related terms include acquisition and joint venture. For instance, a company may merge with a foreign company to expand into a new market.
Multimodal Transport is the use of multiple modes of transport to… #
In international business transactions, multimodal transport is used to transport goods from one country to another. Related terms include intermodal transport and combined transport. For example, a company may use multimodal transport to transport goods from a foreign supplier to a local customer.
Nationalization is the act of taking control of a company or indus… #
In international business transactions, nationalization is used to describe the process of a government taking control of a company or industry. Related terms include expropriation and confiscation. For instance, a company may be subject to nationalization if a government takes control of their assets or operations.
Non #
Tariff Barrier is a type of barrier to trade that is not a tariff. In international business transactions, non-tariff barriers are used to restrict trade between countries. Related terms include tariff and quota. For example, a company may face non-tariff barriers such as regulatory requirements or standards when exporting goods to a foreign country.
Novation is the act of replacing a contract with a new one #
In international business transactions, novation is used to replace a contract with a new one, often to reflect changes in the business relationship. Related terms include assignment and delegation. For instance, a company may novate a contract with a foreign supplier to reflect changes in the business relationship.
Offer is a proposal to sell or buy goods or services #
In international business transactions, offers are used to initiate a business relationship between companies from different countries. Related terms include acceptance and counteroffer. For example, a company may make an offer to a foreign supplier to purchase goods or services.
Offset is a type of payment that is made by a buyer to a seller #
In international business transactions, offsets are used to reduce the amount of a payment. Related terms include countertrade and barter. For instance, a company may use an offset to reduce the amount of a payment to a foreign supplier.
Option is a type of contract that gives the holder the righ… #
In international business transactions, options are used to manage risk or to speculate on price movements. Related terms include future and swap. For example, a company may use an option to hedge against the risk of exchange rate fluctuations.
Packaging is the process of preparing goods for shipment #
In international business transactions, packaging is used to protect goods during transportation and to ensure that they are delivered in good condition. Related terms include labeling and marking. For instance, a company may use packaging to protect goods during transportation to a foreign customer.
Payment is the act of transferring funds to settle a debt #
In international business transactions, payment is used to settle debts between companies from different countries. Related terms include invoice and receipt. For example, a company may make a payment to a foreign supplier to settle a debt.
Penalty is a type of fine or penalty that is imposed for <i… #
In international business transactions, penalties are used to enforce compliance with regulations or contracts. Related terms include fine and forfeiture. For instance, a company may face a penalty for non-compliance with customs regulations when importing goods.
Political Risk is the risk of loss or damage due to poli… #
In international business transactions, political risk is used to assess the risk of investing in a foreign country. Related terms include country risk and economic risk. For example, a company may assess the political risk of a foreign country before investing in a local business.
Pre #
Shipment Inspection is the process of inspecting goods before they are shipped. In international business transactions, pre-shipment inspections are used to ensure that goods meet quality and safety standards. Related terms include quality control and safety inspection. For instance, a company may conduct a pre-shipment inspection to ensure that goods meet quality and safety standards before shipping them to a foreign customer.
Product Liability is the responsibility of a company for damage or… #
In international business transactions, product liability is used to regulate the responsibility of companies for damage or injury caused by their products. Related terms include consumer protection and product safety. For example, a company may be liable for product liability if their products cause damage or injury to a foreign customer.
Quotation is a document that outlines the terms of a sale or purch… #
In international business transactions, quotations are used to initiate a business relationship between companies from different countries. Related terms include offer and counteroffer. For instance, a company may provide a quotation to a foreign customer to initiate a business relationship.
Quota is a limit on the quantity of goods that can be imported or exporte… #
In international business transactions, quotas are used to restrict trade between countries. Related terms include tariff and non-tariff barrier. For example, a company may face a quota on the quantity of goods that can be imported into a foreign country.
Reinsurance is a type of insurance that provides protection … #
In international business transactions, reinsurance is used to protect against risks such as loss or damage to goods, or non-payment by a buyer. Related terms include insurance and hedging. For instance, a company may purchase reinsurance to protect against the risk of non-payment by a foreign buyer.
Representations and Warranties are statements that are made by a party to… #
In international business transactions, representations and warranties are used to provide assurance about the quality or condition of goods or services. Related terms include guarantee and indemnity. For example, a company may make representations and warranties about the quality of their products to a foreign customer.
Risk Management is the process of identifying , assessing , a… #
In international business transactions, risk management is used to manage risks such as exchange rate fluctuations, political risk, or non-payment by a buyer. Related terms include hedging and insurance. For instance, a company may use risk management to mitigate the risk of exchange rate fluctuations when exporting goods to a foreign country.
Royalty is a payment made by a company to the owner of intellectua… #
In international business transactions, royalties are used to compensate the owner of intellectual property for the use of their property. Related terms include licensing fee and franchise fee. For