The various types of commercial transactions involve the buying and selling of foreign currencies, real property and intellectual property. The most common categories of commercial transactions, involving these specialized fields of the legal field and other legal documents as title and sale of properties, are discussed here. This article covers the most common transaction types, when dealing with commercial properties overseas.
The first type of commercial transaction concerned is an exchange of payments. In this transaction, the parties to exchange one currency for another. For instance, if a British company wishes to purchase machinery from a Chinese firm, then the transaction takes place through the London Stock Exchange. The products sold to the Chinese firm can be exchanged for those being purchased in London.
Another common type of commercial transactions involves an agreement between two parties, both of which are located in different countries. For example, a British company may buy raw materials from an American company at a value slightly higher than the price prevailing in the United States. These commercial transactions take place through the negotiation between the buyers and sellers, based on the price the buyer is willing to pay and the price that the seller is willing to accept. It is not uncommon for companies to hire an expert agent to mediate these negotiations, based on the rules laid down by the FSA (Financial Services Authority). This ensures that these important commercial transactions take place according to the guidelines laid down by the law.
A third type of commercial transaction is the sale or transfer of financial assets, for example by a bank to a qualified receiver. In these types of transactions, one or more parties to transfer funds to a third party, who then uses the funds to buy back the things transferred. The sale-and-receivership transactions commonly involve large sums of money, sometimes in millions of pounds. Many banks offer commercial loans for these types of transactions. Such loans, though, are more cost-effective options than direct commercial loans, as the loans are secured against the property used to make the purchases.
A fourth type of commercial transaction is the lease or hire purchase, also called a lease agreement. In these transactions, one party hires another party and becomes the tenant or lessee of the property. In turn, the landlord is the person who owns the property that has been leased to the tenant, and he is entitled to the full rent payments. The person who has been hired becomes the tenant, but he is under no obligation to make any payments. The documents for such commercial transactions are called “lord-tenant” contracts.
Another class of commercial transaction is the sale and purchase of contracts, which are known as contracts for Difference. In this type of commercial transaction, two parties enter into a contract that stipulates an amount for a particular duration. The term can be any term up to ninety days. The most common instances for sale and purchase of contracts in the financial services sector tend to be short-term purchase transactions, sometimes called day-to-day purchase orders. There is no legal requirement for a sale and purchase contract to be registered, so the seller might be using this transaction method without creating a legal entity known as a corporation. If a corporation is created during a commercial transaction, then the transaction will create the corporate form of the entity.
There are also other types of commercial transaction, including import/export, which involves the movement of goods from one country to another country. There are many differences between commercial transactions that occur within different countries and those that occur internationally. For example, it might be possible to ship widgets manufactured in the United States to a buyer in Japan for a price that does not include allowances for duty and taxes applicable to products made overseas. On the other hand, an import/export transaction could involve products that have been manufactured in one country and are being shipped to another country. The terms of transportation and payment vary greatly among different countries, and commercial laws regarding the international movement of goods are constantly changing.
Other types of international trade involve commodities. Commodities involve goods that change value from one place in time to another. In some cases, international trade in commodities could be either a direct exchange or an indirect one. In an indirect case, the seller pays for the goods that a buyer chooses to buy from another seller, while in a direct exchange, a seller decides what commodities to sell and what commodities to buy from another seller.