Distinction between Domestic Sales Contract and Export Sales Contract : A major point of distinction between a domestic and export contract lies in identifying the proper law governing the export contract. This is not a problem for domestic sales contracts because the proper law will always be the Indian law in India. It will be the respective national laws in each country so far as their domestic transactions are concerned. But in export transactions, there are two nations, that of the exporter and importer. Therefore, the question arises, which country's law will apply to an export contract.

This is a very complex problem bur the principle generally followed is that the parties to the contract may agree mutually about the applicability of particular country's law. The country chosen must be either that of the exporter or the importer. In special circumstances, a third country's law may be chosen, provided that the country has something to do with the contract. For example, that may be the country where the goods will be re-exported by the importer subsequently. Only when the parties fail to mention the applicable law and a dispute arises later on, the court will decide which law should apply.

Each country's law has developed a set of rules which the courts consider while deciding on this issue. This is commonly known as 'conflict of laws' situation. Some of the factors considered by the courts are: the place where the contract is signed, the language the contact is written, the place of business of the parties, etc. However, these days, the courts normally identify as 'proper law', i.e., the law applicable to the contract (as the one where the contract is to be carried out, i.e., the place where the delivery is to take place). Since in most export transactions, delivery is made in the exporter's country (normally when the goods are placed on the carrier in the exporter's country), the applicable law becomes the exporting countries law.