CHAPTER 3 CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

CHAPTER 3
CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 1
CHAPTER 3 MATERIALS
• Textbook “Foreign Trade Techniques”;
• Incoterms 2010 (ICC);
• UN Convention on Contracts for the International Sale of
Goods;
• UNIDROIT Principles of International Commercial
Contracts;
• Civil Code (2005);
• Commercial Law (2005);
• Sample Contracts;
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 2
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1. Concept
1.1. Contracts for purchase and sale of goods
1.1.1. Contracts for purchase and sale of property
Civil Code 2005, Article 428:
A contract for purchase and sale of property is an
agreement between the parties whereby the seller has
the obligation to hand over the property to the purchaser
and receive payment, while the purchaser has the
obligation to accept the property and make payment to
the seller.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 3
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.1.2. Contracts for purchase and sale of goods

Commercial Law 2005, Article 3:
Purchase and sale of goods mean commercial activities
whereby the seller is obliged to deliver goods, transfer
ownership of goods to the purchaser and receive payment;
the purchaser is obliged to pay the seller, receive the goods
and the ownership thereof as agreed.
Goods include:
• All types of movables, including those to be formed in the
future;
• Things attached to land.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 4
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
Contracts for purchase and sale of goods:
Contracts for purchase and sale of goods is an agreement
between the parties, according to which the seller has the
obligation to deliver goods, transfer the ownership of the
goods to the buyer and receive payment, the buyer has the
obligation to arrange payment, receive the goods and the
ownership thereof.
Note:
Commercial Law 2005 does not provide any concept for
contracts for either domestic or international purchase and
sale of goods.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 5
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.2. Contracts for the international sale of goods
Contracts for the international sale of goods = Contracts for
purchase & sale of goods + international elements.

1.2.1. International Law
1.2.1.1. Convention relating to a Uniform Law on the
International Sale of Goods (Hague Convention 1964)
Article 1, Chapter I, Annex (Uniform Law on the
International Sale of Goods):
The present Law shall apply to contracts of sale of goods
entered into by parties whose places of business are in the
territories of different States, in each of the following cases:
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 6
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
(a) where the contract involves the sale of goods which are at the
time of the conclusion of the contract in the course of carriage
or will be carried from the territory of one State to the territory
of another;
(b) where the acts constituting the offer and the acceptance have
been effected in the territories of different States;
(c) where delivery of the goods is to be made in the territory of a
State other than that within whose territory the acts
constituting the offer and the acceptance are effected.
 The application of the present Law shall not depend on the
nationality of the parties.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 7
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.2.1.2. United Nation Convention on Contracts for the
International Sales of Goods (CISG 1980)
CISG, Article 1, Chapter I, Part I :
This Convention applies to contracts of sale of goods
between parties whose places of business are in different

States;
Neither the nationality of the parties nor the civil or
commercial character of the parties or of the contract is to
be taken into consideration in determining the application of
this Convention.
CISG does not define exactly the concept of contracts for
the international sale of goods.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 8
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.2.2. Vietnam Law
1.2.2.1. Temporary Regulation on concluding foreign trade
contracts (Regulation 4794/TN-XNK, issued by the
Ministry of Trade on 31/7/1991)
- Foreign trade contracts are those with international
elements;
- International elements: Traders are of different
nationalities; Goods are transported across borders;
Payment currency is foreign to at least one party.
Nationality is one of the most important elements.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 9
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.2.2.2. Commercial Law 1997
Contracts for purchase and sale of goods with foreign
traders are contracts entered into between a
Vietnamese trader and a foreign trader
What is the crucial element?
A contract entered into between a Chinese trader and a
Vietnamese one, both based in Vietnam?

A contract entered between two Vietnamese traders
based in different countries?
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 10
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
1.2.2.3. Commercial Law 2005
Chapter II, Article 27.1.:
International purchase and sale of goods shall be
conducted in form of export, import, temporary import
for re-export, temporary export for re-import and
transfer through border-gates.
Legal definitions of forms of international sale of goods:
Article 28-30, Commercial Law 2005;
Commercial Law 2005 and nationality?
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 11
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
- The movement of goods across national and/or customs
borders.
- Contracts without the movement of goods across national
and/or customs borders will not be considered “contracts for
the international sale of goods”;
- Commercial Law 2005 may not govern all cases. Traders may
refer to Civil Code 2005 (civil relations involving foreign
elements) or other Laws;
Real estate sold to foreigners?
What is on-spot import/export?
Your opinion on the listing of forms of international purchase
and sale of goods?
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 12

OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
Contracts for the international sale of goods is the
agreement between parties whose places of
business are in different countries or separate
customs areas, according to which the Seller (the
Exporter) is obliged to deliver goods, and transfer
the ownership thereof to the Buyer (the
Importer); the Buyer is obliged to receive of the
goods and the ownership thereof, and arrange
payment.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 13
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
2. Major features of contracts for the international
sale of goods
2.1. General features:
- Principles: freedom and voluntariness (Art. 389 Civil
Code 2005);
- Subjects: traders;
- Content: rights and obligations;
- Bilateral, consensual contracts, with consideration.
2.2. Particular features:
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 14
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
- Subjects: places of business in territories of different
States/separate customs areas;
- Objectives: move across State/customs border;
- Payment: foreign currency to at least 1 Party;

- Various sources of governing law:
+ National law
+ International will
+ Commercial practice
+ Legal precedent
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 15
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
3. Legal validity of contracts for the international sale of
goods
- Subjects: legal;
- Objects: legal;
- Form: legal
+ CISG: oral, in writing or by specific acts;
+ Vietnam Law: in writing or equal forms;
- Content: Legal (includes legally compulsory articles):
Dependent on sources of law:
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 16
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
+ Vietnamese Law:
• Commercial Law 1997: 6 compulsory articles;
• Civil Code 2005: 8 commonly used articles;
• Commercial Law 2005: no requirement;
+ International Law:
• CISG, Article 14: 3 articles;
• CISG, Article 19: 6 articles;
• English Law: commodity, quality, price;
• French Law: commodity, price.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 17

OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
4. Content of Contracts for the international sale
of goods:
4.1. Preamble:
- Contract date and number;
- Date and place of signing contract;
- Parties’ information;
- Legal basis of the contract (if necessary);
- Definition of terms (if necessary).
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 18
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
4.2. Terms and conditions
4.2.1. Core terms and conditions:
- Object-related terms;
- Finance-related terms;
- Transport-related terms;
- Legal-related terms;
4.2.2. Additional terms and conditions:
- Confidential information; maintenance; warranty…
- Validity of contract; number of copies; languages…
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 19
OVERVIEW ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS
5. Notes on drafting contracts
- Content: detailed, consistent;
- Word choice: clear, precise;
- Language: official, popular
Seller and buyer are free to choose language;

 VN customs regulations: Vietnamese or English;
or certified translation from other languages;
 Copies of different languages?
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 20
DRAFTING CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
1. Name of goods
- One of the most important terms in a contract
- Clearly define the goods to be exchanged
- Also known as: Commodity / Object of Contract
- Methods to draft:
a. Name of goods + trade name / scientific name
E.g.:
. Arabica/Robusta coffee
. Pitaya (Hylocereus undatus): red dragon fruit
. Pitaya (Hylocereus megalanthus): yellow dragon fruit
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 21
DRAFTING CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
b. Name of goods + place of origin
c. Name of goods + manufacture’s name
d. Name of goods + brand name
e. Name of goods + major specifications
E.g.: 14-inch TV; 29-seat bus
f. Name of goods + main use
E.g.: Cotton for medical use
g. Name of goods + HS code
E.g: Automobile air conditioner 8415.20
To specify the goods, a-g are often combined.
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 22

DRAFTING CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
2. Quality
- One of the most important terms;
- Clearly define main characteristics of the goods;
- Require wide knowledge on machandizing
2.1. Methods to denote quality:
a. As per sample
b. As it is (tale quale)
c. As inspected and approved
d. As per standard or category
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 23
DRAFTING CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
e. As per technical documents
f. As per specifications of goods
g. As per volumetric weight of goods
h. As per general customary criteria
E.g.: FAQ, GAQ, GMQ
i. As per content of essential components
j. As per ratio of products form
k. As per brand of goods
l. As per description of goods
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 24
DRAFTING CONTRACTS FOR THE INTERNATIONAL
SALE OF GOODS
2.2. Content of a quality article
- Define quality of goods (use one of / a combination of
the above methods)
- Inspection of quality

+ Place of inspection: place of manufacture; place of
delivery; place of destination; place of use
+ Inspector: Manufacturer; representatives of parties;
intermediary organization
+ Inspection cost
+ Certificate of quality: preliminary/final
07/10/2013 Lecturer: Nguyễn Thị Minh Hà 25