One of our tasks is to promote, wherever possible, the use of the official International Contracts.
Let us explain a little more about them ...
There are two ... the International Contract No.6 for Raw Hides and Skins [which also includes Crust] and No.7 for Finished Leather. There are also Short Form versions. These are available on this page. There are three formats for use with either a typewriter, laser printer or computer.
In saying "we" have two contracts, we are referring to the International Council of Tanners as well as the International Council of Hides, Skins and Leather Traders Associations. These contracts are the outcome of continuous deliberation, drafting and revision between the councils. Annually, the Contracts Committees of both Councils review the contracts to ensure that they give as comprehensive a coverage to the entire leather industry as possible - whilst remaining fair to both the Buyer and Seller alike.
Over the years the collective wisdom of the industry has been brought to bear upon these documents. The International Contract is no short-term wonder. It has endured. It has been successfully and successively upheld in courts of law all over the world for many years.
Within the contract framework we now include the use of INCOTERMS where applicable. INCOTERMS provides a set of international rules for the interpretation of the most commonly used foreign trading terms. This therefore reduces the uncertainties of different interpretations of such terms in different countries.
Sadly there are still many organisations and/or companies who believe that they can do without the official contract. They are quite happy to state on their own ‘house contracts’ that "terms and conditions are in accordance with the International Contract Number ........." whichever is currently relevant. Usually these ‘house contracts’ state neither the place nor the Authority under which arbitration, should it become necessary, will be held.
TThe issue of such ‘house contracts’ is not acceptable. Firstly, to refer to either the International Contract No. 6 or 7 without using the actual printed contract form is a violation of the copyright held by our Council. Secondly, should the matter of a claim be unresolved amicably, it would automatically become impossible to settle that claim through normal trade arbitration procedures. And going one step further, in the case of litigation, a judicial Court would not accept that sufficient information appertaining to the business had been conveyed from/to either Buyer/Seller. As a result the case would be dismissed. Most, if not all, Arbitration Centres in the world will no longer conduct arbitration procedures where the full or approved short form contract has not been used.
A pretty good case for using the International Contract forms you would think ... and quite correctly! It is extremely short sighted that some companies persist in their refusal to use either the full contract or the approved short form version. The International Contract contains the detail to which the Buyer/Seller have agreed and it is also an insurance over the goods that you have bought/sold in that you know for what you are covered.
The cost per contract is minimal compared with the cost of one container or, indeed, the many containers to which the one contract may apply. We hardly need to remind you of the value, in today’s trading terms, of one container of skins or hides! You are comparing a few $US cents with thousands of $US dollars - or their equivalent!
Fortunately, today, there are people of sense who insist that they will only sell ‘on the International Contract’. On the other hand, there are also those who demand the right to purchase in the same way. They both realise the value of selling and buying ‘on the International Contract’.
The question most frequently asked is, "What does it do?" and "What should I expect to get out of using them?". The quick answer is ... it allows you to sleep at night!
You know that in the event of the many problems which can occur, particularly, but not solely, with international trade, you have within the International Contract specific rules and regulations which set out the way in which these problems can be suitably resolved. Should the Seller/Buyer and/or Buyer/Seller be unable to agree then they can make recourse to the official arbitration and appeal procedures within the trade - which normally come at a fraction of the cost of instigating legal procedures!
In effect, the International Contracts are a form of ‘TRADING MANUAL’ which you need to use and read to understand what you are actually covered for.