International Trade Agreements — Frame and Subject Matter
An international trade agreement joins the sale of goods and their carriage into a single commercial chain. Under Georgian law both links are regulated by the Civil Code: the sale by the rules of purchase and sale, the carriage by the rules of the carriage contract, and the payments by the usages of international circulation. A well-drafted agreement integrates these elements in advance.
The essence of the sale is defined by Article 477: the seller must transfer to the buyer the right of ownership in the property, the documents connected with it, and deliver the goods; the buyer must pay the agreed price and take delivery of the purchased property. Where the price is not directly indicated in the contract, the parties may agree on the means of determining it — a flexibility that in international deals enables price indexation and exchange-linked formulas. Note also the seller’s duty to hand over the documents connected with the property: the transfer of ownership is complete in the full sense only when those documents reach the buyer, which in international trade expands directly into the carriage and customs process — and the list of documents in the contract should therefore be exact.
Passing of Risk — the Moment of Delivery
The central legal question of international trade is the passing of risk: who loses if the goods perish on the way. Article 482 provides that the risk of accidental loss or deterioration of the sold thing passes to the buyer upon its delivery, unless the parties have agreed otherwise. The moment of delivery can be shifted by contract — and in international practice, fixing that shift precisely is one of the main tasks of drafting.
A separate rule governs redirection: where the seller, at the buyer’s request, sends the thing to a place other than that provided for in the contract, the risk passes to the buyer from the moment the seller hands the thing over to the carrier or to a person responsible for that. Transport documents here carry evidentiary weight: it is precisely they that confirm the fact and moment of handover.
The Carriage Contract and the Waybill
Carriage of goods is organised by a carriage contract: under Article 668, the carrier is obliged, against payment of the agreed remuneration, to carry the cargo or convey the passenger to the place of destination. In the international chain, carriage is the link where documentation is decisive.
Article 673 regulates the waybill: it is drawn up in three copies, signed by the consignor and the carrier; the first remains with the consignor, the second accompanies the cargo, and the third is retained by the carrier. Where the cargo is distributed over several means of transport, or concerns different kinds of goods, both the consignor and the carrier may demand as many waybills as there are means of transport or kinds of goods. Observing these rules makes it possible to reconstruct the fate of the cargo in a dispute.
Loss of Cargo — the Compensation Rule
Where the cargo is lost wholly or partly on the way, Article 692 sets the calculation: compensation is computed according to the price of the cargo prevailing at the place and time of delivery. The value of the cargo is determined by the exchange price, in its absence by the market price, and where neither exists — by analogy with goods of the same kind and value.
The remaining rules are equally practical: the carriage charge and customs-related and similar expenses must be returned in full on total loss, and proportionately on partial loss. Where the delivery deadline has been exceeded and the authorised person proves damage, the carrier compensates only up to the value of the cargo — more can be claimed only where a special interest in the carriage was declared or the value of the cargo was indicated. In an international contract, declaring the value of the cargo exists precisely to cross that ceiling.
Payments and Usages
International trade payments are organised by documentary credit or collection, and here Article 878 applies: unless otherwise agreed, the rights and obligations of the parties are determined by the established usages of documentary credit or documentary collection in international circulation. For a Georgian exporter this means that knowing the payment mechanism requires knowing international banking practice as well. The reference to usages is also convenient: the parties need not transplant every detail of the credit mechanism into the contract — it is enough to name the form of payment, and established practice supplies the rest. For this to work, however, the agreement on that form must be recorded precisely; this is where mistakes are commonly made, leaving the contract with a generic payment clause and the parties with divergent understandings of what they agreed.
We assist in preparing international trade agreements — documenting the passing of risk, the waybill regime, the declaration of value and the payment mechanism — and in litigating disputes where cargo or deadlines have been lost. Contact us: in foreign trade, the right document is the cheapest insurance.
Frequently Asked Questions
The most frequent questions.
What obligations do the parties bear?
The seller must transfer ownership, the related documents and deliver the goods; the buyer must pay the price and take the property.
When does the risk pass to the buyer?
With delivery, unless otherwise agreed; where the seller dispatches elsewhere than stipulated — from handover to the carrier.
How is the waybill drawn up?
In three copies signed by sender and carrier: one for the sender, one accompanying the cargo, one for the carrier.
How We Help on Legal.ge
In an international transaction the precision of the contract — price, delivery, risk, documents — is decisive. The lawyers of Legal.ge will review your draft and help build correct waybill procedures. Submit a request.