ABSTRACT
The terms of payment for goods and services performed in the same country are significantly more straight-forward than when contracting between different countries. When contracting between countries for the delivery of goods, one must decide when the liability for delivery changes from the supplier to the buyer. With progress payments, the difficulty is balancing payment schedules with the work performed. A contractor will want to, and will try to, front-end load their payment terms by placing a disproportionate overhead and profit element on early activities. The problem of overpayment is less likely to occur with shared risk contract forms involving schedules and rates, since regular measurements need to be made to determine the value of the work performed. Payment is dependent upon making progress. Stage payments appear to be an equitable arrangement and this is optimal when the client and contractor have a neutral cash flow situation.
