Which clauses must a purchase contract get right?

A buyer sends over a three-page purchase contract and asks what the template is missing. Nothing is missing in quantity. Four keywords are missing: the trade term has no version, the arbitration clause names an institution "acceptable to both parties", delivery has one line about force majeure, and governing law says only "Chinese law".

A contract is not about filling in a template. It is about settling four things: which law governs, which version of the trade term applies, who decides disputes, and how delivery is extended. Leave those unclear and the rest is decoration.

✓Trade term with port and version, arbitration with institution, seat and rules

One reading only, no argument over which version applies

!"This contract is governed by Chinese law" and nothing more

That does not exclude the CISG; between contracting states it can still apply

!"FOB Shanghai" with no version

Risk transfer and cost split are left to later interpretation

×Disputes "to be settled through friendly negotiation"

No institution, no rules, the arbitration agreement can be void

Governing law: the CISG is not the default

China ratified the UN Convention on Contracts for the International Sale of Goods in 1986. It entered into force for China on 1 January 1988, with a reservation to Article 1(1)(b). Ghana signed in 1980 and never ratified; Nigeria, Kenya, Tanzania and Senegal are not contracting states. Sell into these five markets and the CISG does not apply automatically.

The exclusion is where most drafts go wrong. "This contract is governed by the laws of the People's Republic of China" does not exclude the CISG. Under Article 19 of the Minutes of the National Courts' Symposium on Foreign-Related Commercial and Maritime Trials, choosing a governing law without an express statement that the Convention does not apply leaves the Convention in force. To exclude it, write the full sentence: "This contract is governed by the laws of the People's Republic of China, and the application of the UN Convention on Contracts for the International Sale of Goods is expressly excluded."

Incoterms: version, cover, risk point

Incoterms are rules, not law. They bind only when incorporated into the contract, and the version must be stated: "FOB Shanghai Port Incoterms® 2020". The 2010 version remains available after 2020 came into force; leaving the version out hands the interpretation to the other side.

FOB, CFR and CIF apply to sea and inland waterway carriage only. Risk passes at the same point in all three: when the goods are on board at the port of shipment. What differs is cost: under FOB the buyer pays freight and insurance, under CFR the seller pays freight to destination, under CIF the seller adds cover. Default CIF cover is Institute Cargo Clauses (C), the lowest tier, not all risks; CIF is a shipment contract, not an arrival contract.

Clause	What to state	If omitted	Common mistake
Governing law	Which law, and whether the CISG is excluded	The Convention applies automatically between contracting states	Assuming "Chinese law" excludes it
Trade term	Term + port + Incoterms version	Risk and cost split left to interpretation	Writing "FOB" alone
Dispute resolution	Full institution name, seat, rules	No valid agreement once talks fail	"Arbitration" or "negotiation"
Delivery extension	Trigger event, days, burden of proof	Any delay can be claimed as an extension	"Force majeure extension" only

The CISG is not the default law of export contracts. It does not apply automatically in Nigeria, Kenya, Ghana, Tanzania or Senegal; it does apply in Zambia and Cameroon, so there it must be excluded expressly.

Dispute resolution and extension

The new Arbitration Law was adopted on 12 September 2025 and takes effect on 1 March 2026. Article 27 requires three elements: an expression of intent to arbitrate, the matters to be arbitrated, and a designated arbitral institution. Article 29 is blunt: if the matters or the institution are unclear, the parties may supplement the agreement; if they fail, the arbitration agreement is void. Article 81 introduces the seat of arbitration, which may be agreed in writing. State institution, seat and rules together, for example CIETAC seated in Beijing under its current rules. All seven markets are New York Convention states, but China's accession carries reciprocity and commercial reservations, and enforcement abroad is still reviewed by local courts.

The usual extension clause reads "delivery shall be extended for delays caused by force majeure" and stops there. Three things are missing: the trigger event, the number of days, and who proves it. Force majeure under Article 180 of the Civil Code means circumstances that could not be foreseen, avoided or overcome; the consequence is exemption from liability. Article 590 adds a duty to notify promptly and to produce evidence within a reasonable period, and a party already in delay cannot rely on it. Changed circumstances under Article 533 means a post-contract change that was unforeseeable at signing and is not a commercial risk, making performance manifestly unfair: renegotiate first, then ask a court or tribunal to modify or terminate. It does not exempt liability. Ordinary price movement is a commercial risk.

Four steps

Settle the law and whether to exclude the CISG

Decide by whether the buyer's state is a contracting state; write the exclusion in full

Settle the term and its version

Term + port + Incoterms 2020; state the cover tier for CIF

Write the three arbitration elements

Institution, seat, rules - none optional

Write the extension clause

Event list, calculation, burden of proof

Five traps

✓Assuming export contracts default to the CISG
✓Assuming "Chinese law" excludes the CISG
✓Writing "FOB" without port or version
✓Writing "negotiation" or bare "arbitration"
✓An extension clause with no trigger, days or evidence

Closing

Four positions with only one reading matter more than a long contract. On choosing the term itself, see the article on FOB versus CIF and who carries the risk; for landed cost, run the figure through the site's import duty calculator (/en/duty-calculator).

This reflects the position verified on 5 November 2026. CISG status follows the UNCITRAL status table; arbitration points follow the Arbitration Law in force from 1 March 2026; any actual dispute is governed by the written agreement of the parties.