Buying & sourcing

What payment, delivery and defect terms should I agree?

15 / THE COMMERCIAL HANDOVER

Tie payment, delivery and problem-resolution terms to specific milestones.

Separate payment, delivery and claims documents illustrate the commercial records needed before shipment.
Illustrated contract checklist. The 30% / 70% payment split is hypothetical; all commercial terms are agreed for the project.

Link payment to the inspection record

Discuss payment percentages alongside project risk and inspection milestones. For example, a 30% deposit and a 70% balance before dispatch should specify the inspection records available before the balance is paid. That arrangement differs from paying the full amount in advance.

Name the delivery point and rule version

Write the location and rule version into the delivery term. For example, FCA [named place], Incoterms 2020 is clearer than FCA alone. Agree the payment arrangement separately from the delivery term.

Agree the reporting window and remedy

Specify the reporting period, evidence and remedy for damage or defects. For example, a contract might require transport damage to be reported within five working days of receipt. Confirm the actual supplier window before ordering, along with how replacement, rework or another agreed remedy will be handled.

FCA [named place], Incoterms 2020Example delivery wording. Record payment milestones, inspection evidence and the claims process separately.

Sources and further reading

← All industry knowledge