In this case, therefore, neither the purchase order and its terms and conditions nor the exporter's counter offer will bind either party. The importer should keep in mind, however, that the CISG does not require a written document to bind parties to a transaction. Therefore, the importer and exporter could in fact be bound to one another in a transaction via oral contract. The importer should also be aware of the fact that the CISG establishes rights and obligations for the importer and the exporter and that these rights and obligations will be given effect in a transaction, unless they are specifically altered or excluded in an agreement between the parties. Payment Terms Payment terms are frequently linked to performance requirements established by either the importer or the exporter.
Letters of credit are laden with performance requirements established by the importer.
An importer prescribes such requirements in an application for a letter of credit. In issuing the letter of credit in favor of the exporter, the importer's bank makes the importers's performance requirements known to the exporter and promises to pay the exporter if and when the exporter complies with the importer's performance requirements. Collections, on the other hand, are generally laden with performance requirements established by the exporter. The exporter's requirements are prescribed in the collection letter which the exporter forwards to his bank. The exporter's bank makes the importer aware of the exporter's requirements and requires the importer to perform accordingly in order to receive the title documents to the exported product.