Total Contract Value

Total Contract Value refers to the full amount agreed in a foreign trade contract that the buyer shall pay to the seller, usually including the value of goods, packing charges, freight, insurance, and all other costs under the contract, but excluding extra-contractual expenses. Usage scenarios: used in total price clauses in letters of credit, proforma invoices, sales confirmations, purchase orders, and formal contracts; it is an important basis for customs declaration, settlement of foreign exchange, verification and cancellation, and tax handling. Notes: trade terms (such as FOB, CIF) must be specified because the cost coverage included in the Total Contract Value differs under different terms; if there is a more or less clause, it should be stated that the total amount may be adjusted according to the actual shipped quantity; the currency must be consistent with the settlement currency, and exchange rate fluctuation risks should be considered. Difference from 'invoice amount': the Total Contract Value is the total price at the contract level, while the invoice amount may differ due to partial shipments, discounts, or quantity adjustments; it is similar to 'order total amount,' but the Total Contract Value is more legally binding.