Summary of the export order process

(1) All shaded boxes represent actions that have or may have legal consequences.
(2) Sometimes a pro forma invoice is issued, which might be the first step with just some details such as goods specification, shipment, and price, but only the quotation itself contains all details to form a legal sales contract. Pro forma invoices may also be used by the buyer when applying for an import license, opening a letter of credit, or arranging for funds.
(3) The quotation may also be preceded by a letter of intent- LOI or a letter of understanding-LOU without a legal undertaking, being more a moral obligation to proceed and deliver the quotation at a later stage, perhaps after some formalities or restrictions have been dealt with.
(4) The legality of the order is dependent on the authority of the signatures, and if in doubt or not controllable in other ways, the seller should await the opening of the letter of credit, which is the most probable method of payment if the seller has such doubts. The box is in shadowed color at this stage, because if the order is without any restrictions or ‘subject to…’, a legal agreement then exists between the parties.
(5) The order confirmation does not add to the legal agreement; it is just a confirmation of its existence.

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