An overseas buyer may agree to your price, request an invoice and even discuss a shipping date. But until the important commercial terms are clearly agreed, a Nigerian exporter can still be exposed to payment disputes, unexpected logistics costs, rejected goods or expensive disagreements after shipment.
A good export contract answers the difficult questions before the container leaves Nigeria.
The Nigerian Export Promotion Council describes an export contract as an agreement between the exporter and importer that spells out the obligations of both parties.
Before producing, packing or shipping an international order, Nigerian sellers should make sure the following terms are clear.
1. Correct Names of the Buyer and Seller
Start with the legal identity of both parties.
The contract should state the exporter’s:
- Registered company name
- Business address
- Registration details where appropriate
- Contact information
Do the same for the overseas buyer.
Avoid contracting only with a brand name, salesperson or trading name when the legal entity responsible for payment is unclear.
The beneficiary name later used on invoices, banking documents and export paperwork should also be consistent.
2. Exact Product Description
Do not describe the goods simply as “food products,” “agricultural produce” or “clothing.”
The contract should identify exactly what is being sold.
Depending on the product, this may include:
- Product name
- Grade
- Variety
- Size
- Model
- Material
- Moisture level
- Purity
- Colour
- Packaging
- Technical standard
For commodities, quality specifications are particularly important.
If the buyer expects sesame with a particular purity percentage or cocoa meeting an agreed grade, write that standard into the contract.
3. Quantity and Tolerance
State the quantity being sold and the unit of measurement.
Examples include:
- 25 metric tonnes
- 10,000 cartons
- 5,000 pieces
If some variation is acceptable, state the tolerance.
For example:
Quantity: 25 MT, ±5% at seller’s option.
Without a tolerance clause, even a small shortage caused by loading or production differences can become a contract dispute.
4. Price and Currency
Your contract should state:
- Unit price
- Total price
- Currency
- Whether the price is fixed or adjustable
- What is included in the price
For example:
USD 1,200 per metric tonne
is clearer than simply writing:
Price: 1,200
International transactions can involve dollars, euros, pounds or other currencies, so never leave the currency open to interpretation.
5. Use the Correct Incoterm
The Incoterm determines important responsibilities involving delivery, transportation, costs and transfer of risk.
Do not write only:
FOB
Instead write something specific such as:
FOB Apapa Port, Nigeria, Incoterms® 2020
The International Chamber of Commerce recommends identifying the named place or port as precisely as possible because that location can determine where delivery occurs, where risk transfers and how costs are divided.
Depending on the shipment, exporters may encounter terms such as FCA, FOB, CFR, CIF, CPT or CIP.
Containerised shipments also deserve special attention. ICC guidance generally points exporters toward FCA rather than FOB where containers are handed to a carrier or terminal before actual vessel loading.
6. Agree on Payment Before Shipping
The contract should explain exactly how and when the exporter gets paid.
Common options include:
- Advance payment
- Letter of Credit
- Documentary collection
- Open account
- Deferred payment
NEPC identifies documentary credit, open-account arrangements and documentary collections among international trade payment methods and advises exporters to consider appropriate payment arrangements carefully.
For a new buyer, the seller should pay particular attention to payment risk before agreeing to ship without receiving funds.
If payment is by Letter of Credit, the contract should cover important points such as whether it must be confirmed, whether payment is at sight or deferred and which party bears banking charges.
Under UCP 600, banks deal with documents rather than the underlying goods. That makes the document requirements in an LC particularly important.
7. Set the Shipment Period
Do not use vague phrases such as “ship as soon as possible.”
State either a specific date or a defined shipment window.
For example:
Shipment between 1 and 15 November 2026.
The seller should make sure the timeline allows enough time for:
- Production
- Packaging
- Export documentation
- Inspection
- Inland transportation
- Customs processing
- Terminal cut-offs
If a Letter of Credit is involved, the contract shipment date should also match what will eventually appear in the credit.
8. List the Documents the Seller Must Provide
Agree on the required documents before shipping.
Depending on the transaction, these may include:
- Commercial invoice
- Packing list
- Bill of Lading
- Air Waybill
- Certificate of Origin
- Clean Certificate of Inspection
- Phytosanitary certificate
- Fumigation certificate
- Health certificate
- Weight certificate
- Quality certificate
- Insurance certificate
NEPC lists commercial, financial, quality-assurance and goods-movement documents as important components of formal Nigerian exports.
Do not allow the buyer to introduce an impossible document requirement after the goods have already shipped.
9. Agree on Inspection and Quality Acceptance
The contract should explain how quality will be established.
Specify:
- Inspection standard
- Inspection company or authority
- Where inspection occurs
- Who pays for it
- Whether the result is final
- How samples are taken
An agricultural contract might require inspection before loading, while a manufactured product could require conformity with a technical specification.
NEPC recognises documents such as Certificates of Weight and Quality from independent assessors agreed by buyer and seller.
The contract should also explain what happens if the goods fail inspection.
10. Clarify Packaging and Labelling
Packaging disputes are common because buyer expectations can differ significantly between markets.
State requirements such as:
- Bag or carton size
- Number of units per package
- Pallet requirements
- Shipping marks
- Labels
- Language
- Barcodes
- Country-of-origin marking
If the buyer requires customised packaging, determine who bears the cost before agreeing to the price.
11. Decide When Risk and Title Transfer
Risk and ownership are not necessarily the same thing.
Incoterms deal with delivery, costs and transfer of risk, but they do not by themselves determine when legal ownership of the goods passes.
Your sales contract can separately state when title transfers, such as:
- On full payment
- On shipment
- On delivery
- On presentation of specified documents
This becomes particularly important when an original Bill of Lading is being used to control the release of cargo.
12. Address Insurance
The contract should state who arranges cargo insurance.
Under CIF and CIP, the seller has insurance obligations under Incoterms® 2020. Other terms may leave insurance to the buyer.
Even where insurance is required, specify the appropriate level of cover and insured value.
Do not assume that merely stating “insured” tells both parties which risks are covered.
13. Include a Claims Procedure
Agree in advance on how the buyer must report shortages, damage or quality complaints.
The contract can state:
- Time limit for notification
- Evidence required
- Inspection procedure
- Whether independent survey is required
- How losses are calculated
Without a claims procedure, a buyer could attempt to raise a quality complaint long after the goods have been delivered or resold.
14. Cover Delay and Force Majeure
International shipments can be affected by port closures, strikes, extreme weather, government restrictions and other events outside either party’s immediate control.
The contract should explain what happens when performance becomes impossible or seriously delayed.
Avoid relying only on the words force majeure without defining the events covered, notice requirements and whether the contract is suspended or can eventually be terminated.
15. Agree on Governing Law and Dispute Resolution
Every international contract should address what happens when the parties cannot resolve a disagreement.
NEPC specifically identifies governing law and dispute resolution as important components of export contracts.
The contract should state:
- Governing law
- Courts or arbitration
- Arbitration institution or rules where applicable
- Seat of arbitration
- Language of proceedings
Nigeria’s Arbitration and Mediation Act 2023 provides the current national framework for arbitration and mediation, including international commercial disputes.
For significant transactions, have a trade lawyer review this section rather than copying an arbitration clause from another contract.
16. Make Sure the Contract Works With Nigerian Export Rules
A commercial agreement with a foreign buyer does not remove the seller’s Nigerian regulatory obligations.
Formal exporters need the relevant NEPC registration and export documentation, while export proceeds must comply with applicable banking and repatriation rules.
Current CBN rules require non-oil export proceeds to be repatriated within 180 days of the Bill of Lading date, while oil and gas export proceeds have a 90-day period. Extensions were suspended from 8 January 2025.
Your payment schedule should therefore be structured so that the contract does not make regulatory compliance impossible.
Final Export Contract Checklist
Before shipping, confirm that the contract clearly covers:
- Buyer and seller legal names
- Product specifications
- Quantity and tolerance
- Price and currency
- Incoterm and named location
- Payment method and deadline
- Shipment period
- Required documents
- Inspection and quality standards
- Packaging and labelling
- Transfer of risk
- Transfer of ownership
- Insurance
- Claims procedure
- Delays and force majeure
- Governing law
- Dispute resolution
- Nigerian export compliance
Final Thoughts
A strong export contract does not need complicated language for every clause.
It needs clarity.
Both parties should know what is being sold, how much will be delivered, who pays each cost, when risk changes hands, what documents must be produced and exactly how the Nigerian exporter will get paid.
The best time to resolve those questions is before production begins and certainly before the goods leave Nigeria.
Once cargo is on the water, negotiating missing contract terms becomes much more expensive.
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