All international trade transactions are essentially commercial contracts. Under an international
trade contract, the exporter agrees to supply the goods to the importer for a price. The importer, in turn, agrees to receive the goods and pay the price.
Even in domestic trade the exchange of goods between two parties entails lapse of time between the time of intention and execution, and requires involvement of other agencies like transporters to accomplish the physical movement of goods. Both the buyer and seller should have a clear understanding of what is being exchanged, when and where the exchange will take place and what consideration is to be paid by the buyer to the seller for the goods exchanged. Besides, international trade involves more than one country. Each country frames its own regulations relating to foreign trade. From the time, the importer generates an enquiry or the exporter makes an offer and till required to ensure that the interests of the parties involved are taken care of and regulatory requirements are met.