Tài liệu dịch hợp đồng FTU

QUESTION
CHAPTER 1:
1. what are 5 steps in negotiating delivery?
- timing
- location
- transport
- risk title and insurance
- terms of trade
2. when must delivery take place?
- the date of dispatch from the factory
- the date of loading onto ship
- the date when the goods arrive at the destination
2.2 how to fix the date of delivery? (gap fill)
- the date of delivery may be a simple CALENDAR date.
- if approvals or certificates are required, the contract may have two starting
dates: the date of SIGNATURE and the date of COMING into force; delivery is fixed
for a number of days after coming into force.
- if the contract has not come into force by a certain date – no delivery.
2.3 typical clause: COMING INTO FORCE:
- this agreement shall come into force after execution by both parties on the date
of the last necessary approval by the competent authorities in the country of the
seller and the buyer.
- if the contract has not come into force within ninety days of execution, it shall
become null and void.
- the date of delivery shall be twenty-eight days after the date of coming into force
of the contract.
- time is and shall be of the essence of this contract.
3. place of delivery: what is place of deliver?
- when the goods are HANDED OVER to the carrier
- when the goods are OFF LOADED in the buyer’s country
- when the goods are SHIPPED ON BOARD in the exporter’s country

- when the goods ARRIVE at the buyer’s warehouse.


Part 2 ( Delivery)
-Transport
To introduce the key transport issues affecting the “main” export contract.
To stress the importance of correct, clean shipping documents in all transaction
involving a letter of credit.
- Risk, Title and Insurance
To distinguish between risk and title
To suggest that retention of title is not always of particular advantage to the
seller.
To note that responsibility to insure generally lies with the party who is at risk.
9 Transport: Packing and Marking
9.1 Packing:
1- In what conditions are good considered to conform to the contract?
- To avoid misunderstanding, the parties often regulate the matter
(TRANSLATION)
Goods are to be packed in new, strong, wooden cases suitable for longdistance ocean transport and are to be well protected against dampness,
shock, rust or rough handling. The SELLER shall the liable for any damage to
or loss of the Goods attributable to improper or defective packaging,
Hàng hóa phải được đóng gói trong thùng gỗ mới, chắc, phù hợp với việc vận
chuyển xa bằng đường biển và phải được bảo vệ tốt có chống ẩm, va đập, gỉ sét
hoặc xử lý hàng mạnh tay. người bán có nghĩa vụ phải chịu trách nhiệm cho bất kỳ
hư hỏng , thất thoát của hàng hóa do việc đóng gói bị lỗi hoặc không phù hợp
Nếu tàu do người mua chỉ định không đến cảng trước hoặc vào 1 ngày xác định
nào đó thì người bán sẽ tự định đoạt đưa hàng vào kho và sẽ được xem như là đã
hoàn thành nghĩa vụ giao hàng theo hợp đồng...... ( chỗ này t chép thiếu)
The BUYER shall advise the SELLER of the name of the vessel not later than
<NUMBER> Days before the agreed Delivery date.

If the vessel named by the BUYER fails to arrive on or before <date>, then the
SELLER may at his discretion deliver the Goods to a bonded warehouse in the
port of and shall be deemed to have fulfilled his Delivery
obligation under this contract. In this event the SELLER must notify the buyer of
the full circumstances of the delivery to the warehouse. With delivery to the
warehouse, all costs, including but not limited to cost of storage and insurance
are to the Buyer’s account.


9.2 Marking:
What is marking concerned with? What will happen if packaging or marking are
incorrect?
- Identifying the goods
- Handling the goods
- Government regulation
- If packing or marking are incorrect, payment under a L/C will be delayed.
Specimen clause (translation)
On the surface of each package delivered under this Contract shall be marked: the
package number the measurements of the package, gross weight, the lifting
position, the letter of credit number, the words right side up, handle with care,
keep dry, and the mark: DNP/36/Q.
lifting position: vị trí nâng hàng
letter of credit number: Số tín dụng thư
right side up: nhấc hàng theo phương thẳng đứng.
9.3 Transport: Waybills
1.
What are the five main Waybills (or Bills of Lading)
- Marine, Air, Rail, Road, Combined.
2. When is a Marine Bill of Lading as Negotiable instrument?
In consignee box “ To order”

3. What is differences between Clean and Claused Bills of Lading
Clean: no problem with appearance of the goods
Claused: problem with appearance of the goods
“Claused” : any apparent defects are noted on the way bill as “claused”
When the carrier accept the goods, he examines the packaging.
4. What will happen if a waybill bearing such clauses is not “clean”?
The bank may not accept it for payment under L/C.
Specimen clause ( Translation)
Packaging soiled by contents
Packaging broken/ holed/torn/damaged
Packaging contaminated
Goods damaged/ scratched
Goods chafer/torn/deformed: biến dạng
Packaging badly dented
Packaging damaged0 contents exposed: lộ hàng
insufficient packaging: bao bì đóng không đủ.
10. Risk, title and insurance


10.1 Title, Risk and insurance
1-Define risk and title?
Risk of loss of or damage to the goods or risk of the goods injuring 3rd party.
2. Transfer risk and title?
Under incoterms, delivery is defined as the point at which risk pass from S to B,
Some S try to retain the ownership of the goods until the B paid for them in full.
A clause securing retention of title might run:
1. Property, legal or beneficial in any goods supplied by the seller shall pass to
the buyer only when the seller has received full payment for all sums then owed
by the buyer to the seller.
2. Goods in respect of which property has remained with the seller shall be kept

identifiable as those of the seller, and the buyer shall at its own expense
immediately return such goods to the seller, or permit the seller to enter into the
buyer’s premises to collect such goods should the seller so request.
3. Name some feature of penalties?
Name the main kinds of insurance policies? Make the differences among
them?
-Floating policy; open cover; valued policy; unvalued policy; time policy;
voyage policy.
Some feature of liquidity damages: The sum is fixed in advance with the
agreement of the parties related; The sum is fair; the objective is to
compensate; there is always a maximum for the sum.
QUESTION IN BOOK
1. where is risk often passed from the exporter to the importer
at the point of delivery
2. what are Modes of transportation
Sea, Air, Inland (road, rail, Barge, Mail, Mixture)
3. where does transfer of ownership take place
Any point between signature of contract and final payment for goods.
4. what are kinds of delay in delivery
excusable delay, non-excusable delay
5. what events does delivery dates trigger = start
Exporter fulfills duties under the contract
Payment made become due


risk and title pass to the Buyer
6. name typed of insurance policy
floating, valued, unvalued, tailor-made, open cover, time, voyage.
7. name some features of liquidated damages
The sum is fixed in advance with the agreement of the parties related

the sum is fair
the objective is to compensate
there is always a maximum for the sum.
8. name some features of penalties
The sum is fixed in advance with the agreement of the parties related
the sum is big
the objective is to punish
the sum is subject to actual loss.
9. how to fix the delivery date In a contract
to use a straight forward calendar date or a period of time
10. when Is a contract binding and effective
After the date of coming into force.
11. what is the importance of a well-designed set of specifications
Protect the seller and buyer
the exporter.

CHAPTER 2:
Negotiating Price and Payment
1. list all changes must affect price:
- size of order
- specification
-packaging and safety warnings
- payment term
-delivery
-warranty period


-incoterms
2. what are five steps in negotiating payment?
- mode of payment

-timing
-place of payment
-delay
-result of delay
_step 1: method of payment: state some common methods of payment in
international trade?
+ payment on open account with no security
+ payment on open account secured by export credit insurance
+ payment on open account secured by a payment guarantee
+ payment by L/C
_step 2: time of payment: how to mention the time of payment in a contract?
è the time for payment can be regulated in 2 ways:
+ they are enter calendar date (ex: 30th june)
+ interval time (ex: within 30 days of date on invoice)
_step 3: place of payment: where can payment take place?
+ payment can be said to occur when the importer pays money to his bank for
transferring to the seller (for the buyer)
+ + payment shall be deemed to have been made only when the contract sum in
paid into the seller's bank account and is at the seller's full disposal (for the
seller)
_step 4: delay in payment: define delay in payment?
+ force Majeure can cause payment to be delayed
_step 5: results of delay in payment: if payment is late, what must a buyer
normally do?
+ the buyer must normally pay an interest on all sum owned to the exporter.
“If payment of any sum payable is delayed, the seller is entitled to receive an
interest on the amount unpaid during the period of delay. The interest shall be at
an annual rate three percentage point above the discount rate of the central bank
in the seller’s country.”
“specimen clause: the price for the goods to be delivered under this contract is

<currency symbol><figure>(<currency in words><figure in words>). Payment
shall be made by means of an irrevocable confirmed L/C. the buyer shall open the
L/C on or before <date of opening of letter of credit> on the terms agreed by the
parties and annexed to this contract as appendix <number>. This contract shall
not come into force under clause 16 below until the seller has received advice
that the L/C has been opened in his favor and has ascertained that the terms are


in accordance with those agreed between parties. Any discrepancy between the
terms are in accordance with those agreed between parties. Any discrepancy
between the terms agreed by the parties and the L/C as issued shall be notified by
the seller to the buyer immediately.
Export credit insurance
3.1 What is Export credit insurance? 3.1 What is Export credit insurance
used for?
Document ensure exporter against the risk of non-payment.
To recover the cost of goods exported but not paid for, allow the exporter to trade
on open account.
3.2 What is bank guarantee? What are common guarantee? What is each
for?
It promises from the guarantor to pay money to the beneficiary if the principle
break its promises.
Tender guarantee: đảm bảo thực hiện thầu.
Advance payment: đảm bảo trả tiền.
Common guarantee:
· payment guarantee ( risk of non-payment)
· Tender guarantee (risk of cancellation an offer)
· Performance guarantee (risk of non-performance or inadequate
performance)
· Advance payment guarantee (risk of loosing pre payment)

L/C: principles
What is Letter of credit?
A L/C adds a bank promises to pay the exporter to a sum of money of the foreign
buyer provided that the exporter has complied with all the terms and condition of
the L/C. Separate with the sales contract.
State the principles of the letter of credit?
Autonomy: is a contract in its own right, entirely separate from Sales contract.
Strict compliance: exporter must present to the bank shipping document that
comply in all respects with the terms and condition of L/C, small deviations will
result in refusal by the bank to pay.
4.2 The principle of autonomy:


Ex3: A letter of credit is an "autonomous" contract: it has no legal connection with
the export contract which it supports, the bank must pay the seller if the
document presented are correct. This principle defends the interest of the seller.
4.3 The principle of strict compliance
The bank promises to pay if the documents presented are correct if the
documents in any way fail to comply strictly with the terms of the letter of credit,
the bank must refuse to pay. This principle defends the interest of the importer.
5. Notification from the Advising Bank
In practice, all letters of credit are irrevocable
- The advising bank always notifies the seller that the letter of credit has been
opened
- the letter of credit always contains an indication of whether or not the advising
bank confirms the credit.
- If the letter of credit is confirmed, then the advising bank must pay the exporter
on exactly the same amount as the issuing bank. That means the exporter can, if
the credit is suitably worded, collect payment immediately after delivery.

6. Letter of credit: associated documentation
Documents required
- a Letter of Credit is a “documentary credit” - it can be paid only against
document.
- The parties should agree which documents are important to them - not leave the
decision to the bank.
key documents
- commercial invoice
- transport docs
- insurance docs
other common documents
- certificate of origin
- certificate of inspection
- special requirements
Specification
the Letter of Credit should state exactly what documents are required
including any special requirements as to:
- signature
- sources
- notarization


-

exact contents

7. common Discrepancies reported by Banks
problems with the Letter of Credit
- Documents required by the credit are missing
- documents required to be signed are not signed

- the credit amount is exceeded
- the credit has expired or documents are presented within the required time
- shipment was short or late
problems with the Bill of lading
- the bill of lading is “uncleaned”
- a marine bill of lading is required, but the bill does not state that the goods were
“shipped on board” a named vessel
- the bill of lading shows shipment between ports other than those specified in
the credit
- the bill of lading shows that the goods were shipped on deck. (forbidden)
- the bill of lading offers no evidence that freight was paid by the exporter (if this
was required)
- There is no endorsement (if endorsement is necessary).
Problems with Insurance
• The insurance document is not of the type specified in the credit
• The insurance risks are not those specified in the credit.
• Insurance cover is expressed in a currency other than that of the credit
• Insurance cover begins after or ends before the date of the transport document.
Inconsistencies among the Documents
• Description of the goods on the invoice and in the credit are different.
• Weights differ between two documents.
• Marks and numbers differ between two documents.
Issuing a letter of credit
- exporter and buyer sign a contract
- The buyer asks a local bank to open a letter of credit
- The issuing bank askes a band in the exporter’s country to advise the exporter
that the letter of credit has been opened
- The advising bank advises the exporter that the letter of credit has been opened.
Presenting letter of credit
- Seller ships the goods and gets shipping documents

- The exporter presents the shipping documents to the advising bank
- The advising bank checks the documents and (if appropriate) pays the exporter


-

The advising bank notifies the issuing bank that the credit has been presented
and forwards the shipping documents
The issuing bank transfers necessary funds to the advising bank

Method of payment
10.1 settlement by sight payment
- The Seller presents the documents to the paying bank.
- The paying bank immediately pays the seller.
10.2 settlement by deferred payment
- The seller presents the documents to the paying bank.
- The paying bank agrees to pay the seller the face value of the credit when it
matures.
- If the seller needs money immediately, he can exchange the letter of credit for
cash (at a discount) with any agreeable bank.
10.3 settlement by acceptance
- The seller presents to the accepting bank the documents and a bill of exchange
(time draft) drawn usually on the buyer.
- The accepting bank agrees to pay the bill when it matures.
- If the seller needs money immediately, he can exchange the letter of credit for
cash (as a discount) with any agreeable bank
10.4 settlement by negotiation
- The seller presents to the negotiating bank the documents and a bill of exchange
drawn usually on the buyer.
- The negotiating bank negotiates the bill (at a discount).

QUESTION:
1. What are the common methods of payment in international trade?
Payment on open account with no security / secured by export credit
insurance.
Payment on open account secured by a payment guarantee
Payment open letter of credit
2. What are methods of payment in small purchase
cash on delivery
cash against invoice
cash with order


3. what kind of method of payment makes late payment impossible
The confirmed irrevocable at sight L/C
4. when delay in payment is excused?
Delay happens in the grace period
Delay is caused by Force Majeure
5. What does the insurance premium depend on
The type of goods
The creditworthiness of the buyer
the stability of the Buyer’s Country and so on
6. what is the guarantee triangle
That is the relationship of the principal, guarantor, and beneficiary in terms
of guarantee.
7.what are the business situations that commonly use guarantee
Non payment, reservation, non-performance, losing prepayment.
8. what are the guarantees used in the following business situations
Payment
tender
Guarantee

(thực hiện thầu)
performance
(thực hiện hoạt động)
prepayment
9. Name types of L/C you know
revocable - irrevocable, confirmed - unconfirmed, At sight, back to back,
resolving, stand by L/C (dự phòng)
10. What is export credit insurance
Export credit insurance is a guarantee of payment for the exporter from a
third party, an insurance company, which issues an export credit insurance
policy covering the risk of non-payment. The exporter has to pay the costs
for that guarantee. The insurance company will pay the exporter in case the
buyer fails to do so.
11.what is bank guarantee
A bank guarantee is a guarantee of payment for the exporter from a third
party, a bank. The bank may issue a bank guarantee assuring in case the


bank will pay for the exporter in case the buyer fails to do so. The buyer has
to pay the costs of that guarantee
12 Distinguish Export credit insurance and Bank guarantee
- Both of them are guarantee of payment from a third party, providing the
exporter with some level of security in terms of payment
- For ECI, the exporter has to pay for that guarantee while it is the buyer
who pays for a Bank Guarantee. The third party offering export credit
insurance is the insurance company while the bank offers a Bank Guarantee
13. What are some limitations of export credit insurance
Though ECI seems to be so attractive, it has certain limitations. Firstly, there
is always a long wait between the time when the buyer fails to pay and the
time when the insurance company compensates the exporter, says 6

months. Secondly, when the compensation is paid, it is unlikely to cover
100% of the original invoice price. So, with ECI, the exporter is covered
against the worst.
14. what kind of method of payment makes late payment impossible
The confirmed irrevocable at sight L/C
15. distinguish Irrevocable and Revocable Letter of Credit
A revocable L/C is the L/C that can be canceled at any time by the Buyer or
by the issuing bank while an Irrevocable L/C is the L/C that can only be
canceled with the written consent of

CHAPTER 3:
1. Why do companies have quality assurance programs?
Because no manufacturer can product perfect products all the time. Moreover,
quality is a key issue and customer satisfaction is essential to successful
business. So companies have quality assurance program to ensure that
customers get what they paid for to ensure customer satisfaction.
2. Why may conflicts arise in negotiating specifications?
Because it is a difficult process. The manufacturer often tempted to be overoptimistic and to agree to impossible specifications, which is very risky in
business. Conflicts can arise even with in the exporter’s own team: the
marketing manager is eager to sell brilliant products, but the production
department knows that it cannot make them.


3. What is the benefit of a well-designed set of specifications?
It protects both the buyer and the seller: the buyer is protected against inferior
products as he can reject any products that fail to meet specification, the seller
can protect its reputation and avoid cost.
4. What kind of goods needs pre-delivery inspection? Give example.
All kinds if goods, especially sophisticated items or capital equipment.
5. What are the functions of independent inspection?

It reports on the weight, size, and most importantly, the value of the goods. It
prevents exporter and importer agreeing on unrealistically low invoice price in
other to avoid customs duties in the buyer’s country. Such inspection also
prevents shipment of patently defective goods.
6. What does customs inspection reveal?
Discrepancies in weight, size, and description.
7. What is the real inspection for goods?
That is inspection by the buyer, or “open package inspection”
8. What counts as a patent defect? Give examples.
Defects that are apparent, e.g. wrong items, broken or missing parts, scratches,
etc.
9. What counts as a latent defect? Give examples.
Defects that only come to light after buyer’s acceptance, or hidden defects, e.g.
structural weaknesses, failure to operate at high or low temperature, high fuel
consumption.
10. What are Implied Warranties?
Assumptions that buyers can make about goods, even if the exporter gives no
express warranty.
11. What are 3 types of Implied Warranties? Give examples
- Implied warranty of conformity with contract.
- Implied warranty of merchantable quality.
- Implied warranty of fitness for intended purposes: merely requires that the
Seller possess knowledge and expertise on which the buyer may rely.
12. What is a Product Warranty?
A promise by the exporter to cure defects in his product. There are 2 parties: the
Buyer and the Seller.
13. What is a Product Guarantee?
A promise of the guarantor to pay the beneficiary, made out at the request of
the principal. There are 3 parties: guarantor, principal and beneficiary.
14. What are the 3 types of defects? Give examples.

Defective workmanship, defective materials, defective design.
15. What are the 5 options for curing defects?
Repair, allow the buyer to repair at the exporter’s cost, replace, reduce the
price, return the goods and refund the price.


CHAPTER 4:
1. Give the main characteristics of Continental Law?
Consistency and uniformity of enforcement, predictable, brief, nationally
accepted.
2. Give the main characteristics of Anglo-American Law?
Unpredictable, long, detailed, international accepted.
3. What does the clause of applicable law govern?
Questions concerning validity, interpretation for performance of the contract.
4. What are the principles of an enforceable contract?
The parties achieve a “meeting of mind” referring to mutual agreement,
purpose is legal, the parties are capable of meeting a contract.
5. What is the Entire Agreement clause?
The final written version of the contract replaces all previous agreement
between the parties.
6. What is The Whereas Recital? Why is it purpose?
It is the Background/Preamble of the contract. When the dispute arises, the
judge must ask some background questions.
7. What is discharge by performance?
Both parties perform their duties exactly according to the contract and the last
duty is fully performed.
8. What is termination? Name the two types of termination.
One side may have the right under a contract to end this contract.
- Termination for convenience
- Termination for default

9. What is cancellation?
When one party breaches a contract, the other has the right to demand
cancellation of the contract.
10. What is recession?
The parties may simply agree to end their contractual relationship.
11. What are the ways to solve disputes?
- Conciliation: an amicable settlement
- Arbitration: a panel of arbitrator solves the disputes.
- Litigation: settlement by the court.
12. What are the advantages of arbitrators?
- Quick
- Costs are predictable
- Decision is business-oriented.
13. When is a contract unenforceable?


It has illegal purpose
14. What does the arbitration clause specify?
Who, number of arbitrators?
Regulations
Place (where it takes place), language
Fee
15. Why do parties agree on a definite language contract?
Avoid confusion
Have clarity when your contract is translated and which prevails in case there is
a conflict between 2 versions.

GAP FILLING
CHAPTER 1:
Gap filling 2:

delivery is the point at which RISK passes from the seller to the buyer.
Delivery may take place at any agreed POINTS along the transportation
route.
Incoterms allow the contract to state the place of delivery simply: delivery of
the goods shall be made FOB (mombasa).
For F-terms and C-terms this is the place of SHIPMENT.
A common modification allows the seller to deliver under an FOB contract
even if the importer’s ship FAILS to arrive. The seller delivers instead to a
BONDED warehouse at the DOCKS.
4. excused delay: what is excused delay and the grace period?
- delay normally DAMAGES to the buyer.
- the seller must COMPENSATE for any such loss.
- the duty to compensate may be excused if the contract contains a FORCE
MAJEURE.
“If either party is prevented from, or delayed in performing any duty under this
contract by an event beyond his reasonable control, then this event shall be
deemed force majeure, and this party shall not be considered in default and no
remedy, be it under this Contract or otherwise, shall be available to the other
party. Force Majeure events include but not limited to war (whether war is


declared or not), riots, insurrections, acts of sabotage, or similar occurrences,
strikes or other labor unrest, newly introduced laws or government regulations,
delay due to government action or inaction, fire, explosion, or other unavoidable
accident, flood, storm, earthquake, or other abnormal natural event.”
- the clause should set up a notification procedure:
“nếu một bên bị ngăn cản hoặc trì hoãn việc thực hiện bất kì nghĩa vụ nào của hợp
đồng này thì bên đó sẽ phải thông báo ngay lập tức cho bên kia về trường hợp bất
khả kháng này, các nghĩ vụ có liên quan và thời gian diễn ra sự kiện bất khả
kháng.”

- and allow termination if the event continues too long:
“If any force majeure event prevents or delays performance of any duty under
this contract for more than 60 days, then either party may on due notification to
the other party terminate this contract.”
5. unexcused delay and remedies for breach of contract: how many kinds of
remedy are available to breach of contract? What are they?
Gap filling 3:
Failure to perform by one side allows the other sides to seek a LEGAL
remedy.
Courts in continental (civil) law countries order PERFORMANCE first, with
damages if performance is impossible (as in the case of late delivery).
Courts in anglo-american (common) law countries ORDER PERFORMANCE
first with specific performance only if an award does not fully correct the
situation.
6. liquidated damages and penalties: how many kinds of penalties?
- a figure for COMPENSATORY damages may be fixed before loss occurs, or
afterwards a PRECALCULATED sum fixed before loss occurs is payable as
liquidated damages.
- liquidated damages are typically PAID for delay in delivery.
(Liquidated damages: if the seller fails to supply any of the goods within the time
period specified in the contract, the buyer shall notify the seller that a breach of
contract has occurred and shall deduct from the contract price per week of delay,
as liquidated damages, a sum equivalent to one half percent of the delivered price
of the delayed goods until actual delivery up to a maximum deduction of 10% of
the delivered price of the delayed goods//bên bán phải trả tiền cho bên mua tiền
bồi thường thiệt hại ước tính là 0.1% giá trị của hợp đồng tính cho mỗi tuần giao
hàng trễ, nhưng tối đa là 20% giá trị của hợp đồng.)


TỪ KHÚC NÀY, CHỖ NÀO “…” LÀ BLANK!

gap filling 4:
-such damages are payable even if the buyer suffers no actual loss, and even if the
seller is not at … (unless the contract contains a force majeure clause)
-if liquidated damages are paid, the buyer cannot normally claim further …
damages.
- if the parties agree that the seller will pay a penalty for late delivery (i.e. the
purpose of the payment is not to compensate the buyer for loss), then angloamerican … do not in principle enforce the clause. Punishment is not part of the
contract … .
- the courts define a “penalty clause” as a clause that
+intends to … the seller, and
+does in effect punish the seller by setting a far higher figure to pre paid than was
reasonably … when the contract was signed.
gap-filling 5
1. If the parties must wait for the contract to become effective, the delivery date
often depends on the date of coming into force.
2. Some contracts (especially fixed-price contracts) set a cut-off date after which
the contract cannot come into force.
3. A grace period is sometimes used to facilitate early delivery.
Sometimes delay in delivery is caused by a force majeure event, i.e., an
event beyond the control of the exporter.
4. A force majeure clause often relieves the exporter of his duty to deliver until
the force majeure event is over.
5. If the force Majeure event continues for too long, both parties should have the
right to terminate the contract,
6. Late delivery causes loss to the buyer—loss that must be compensated. To
avoid the cost and uncertainty of legal proceedings, many contracts regulate in
advance the compensation for late delivery.
7. Many export contracts cannot "come into force" (become effective) until certain
preconditions (for example, government approvals) are met
8. A loss caused by late delivery is not easily quantified, so lump-sum

compensation is normal. The lump-sum may be set too high (penalty), about
right (liquidated damages), or too low (quasi-indemnity). The motive behind
the penalty is to force ("terrorize") one party into full performance.
9. A penalty is not enforceable in Anglo-American courts, though the quasiindemnity is usually enforced.


10. The place (and time) of delivery must be unambiguously agreed because many
contract events (including payment and transfer of risk and title) are tied to
delivery. T
11. The place of delivery should not be confused with the destination of the goods.
12. Delivery of goods under most export contracts takes place in the country of
the exporter, at the docks in the case of sea transport, and when the goods are
handed over to the carrier in most other cases.
13. CIF and CIP contracts are especially confusing since they name the point of
destination, e.g., CIF (Lagos). Lagos, in this example, is the point to which the
exporter is responsible for costs, not the place of delivery.
Gap-filling 6:
1. Ownership of goods in a foreign country is often of no practical value;
therefore; many contract stipulate: Title to the goods shall pass with risk,.
2. The seller usually insures up to the point of delivery; the buyer
thereafter.
3. Under CIF and CIP contracts, the seller must pay insurance from the
point of delivery to an agreed destination. This insurance (under
Incoterms) is minimum coverage-Cargo clause C – unless the parties agree
otherwise.
4. Although the Seller pays for insurance; the risk is entirely the Buyer’s
5. Delivery of the goods shall be made <incoterm>. The scheduled date of
delivery shall pass from the Seller to the Buyer on delivery.

CHAPTER 2:

gap filling 1:
1.
in negotiating price and payment, exporters should QUOTE a price that
relates to the complete set of contract terms.
2.
As items in the contract are negotiated, the exporter should assess the
influence of each factor on price and ADJUST the price accordingly.
3.
Payment should be negotiated so that the exporter secures PROMPT, and
correct payment.
4. Payment on OPEN ACCOUNT is often timed so that early payment secure a
discount for the buyer, this benefits the exporter by improving cashflow.
5.
The exporter prefers the place of payment to be his own bank account,
payment is not deemed to be made until the money is at his DISPOSAL.
6.
For the seller, the most favourable method of payment is the AT SIGHT
CONFIRMED IRREVOCABLE L/C; for the importer, EXPORT CREDIT INSURANCE
is most favourable.


7.
8.
9.

Terms os payment are a key factor in setting PRICE.
Delay in payment is always EXPENSIVE for the seller.
A DISCOUNT for EARLY settlement can speed up payment.

Gap filing 2:

1.
Export credit insurance (if available) allow the exporter to recover the cost
of goods exported but not paid for benefit is not covered.
2.
This insurance allow the exporter to trade on open account which can be a
useful selling point.
3.
Under a payment guarantee, the bank promises to pay the exporter if the
buyer fails to pay.
4.
Bank guarantee are expensive to set up and are not common in normal
export agreements in the developing world.
5.
Bank guarantee are also used in other situation: to secure an offer (bid
bond); to secure an advance payment; to secure correct payment.
Gap filling 3: Contract between Bank and Seller
A letter of credit is a contract between the issuing bank and seller.
It is a promise by the bank to pay a sum of money to the seller when the seller
present a given set of document in good order.
Because it allows payment to be made immediately after delivery in the seller
own country, it is the most popular means of payment.
The legal rights and duties of the parties are clearly laid down in the UCP
(uniform customs and practice for documentary credits.)

CHAPTER 3:
2.1 Warranty, guaranty or defect liability
- A guaranty is a three-sided arrangement usually (1) involving a bank
- Principal (Seller or buyer) makes a (2) promise to the beneficiary (the Buyer or
Seller)
- Principal ask the Guarantor (a bank, insurance company) to issue a (3) guarantee

- The guarantor (a bank) promises to pay (4) money to the Beneficiary if the principal
breaks his (5) premises.
- A warranty is a (6) two-sided arrangement ussually involving only the buyer and the
seller.
- The seller promises to (7) cure defects to the buyer
- The cleares term is probably “(8) defect liability”


2.2 Inspection by inspection service.
- Goods (1) delivered must jumpt to at least 6 quality hurdles.
- Open package inspection can result in (2) rejection of goods.
- Problems during defects liability period are always (3) expensive to cure.
- The parties should work systematically through a negotiating scheme to be sure
that all the main points in the (4) defect liability provision are regulated.
- Naturally the points can be handled in any (5) order and the discussion will be
recursive.
- Detailed specification (6) protects both importer and seller.
- The importer is protected against (7) defective equipment.
- The seller is protected against unjustified (8) rejection of the goods.
3.4 When do we mention definition?
1. Definitions: In this Contract the words below have the (1) meanings ascribed to
them unless the context (2) otherwise clearly dictates.
2. Unless expressly (3) modified by the parties, “FOB” “CIF” and other trade terms
have the meanings and (4) obligations ascribed to them in Incoterms 1990,
Publication 460 of the international Chamber of Commerce,Paris.
3. “Contract” means this contract, its preamble and (5) appendix, as well as all
documents expressly (6) listed, as Contract documents or otherwise expressly (7)
mentioned in this contract.
4.1 Assignment of Rights, Delegation of duties.
1. Unless the contract specifies otherwise, assignment of rights is allowed but (1)

delegation of duties is not normally allowed.
2. In international contracts, try to (2) exclude both assignment of rights and
delegation of duties without your written (3) consent.
5.1 Procedure for amicable settlement shall be as follow:
1. The parties shall agree a date and place for an amicable (1) settelment meeting
2. Attending the meeting shall be the one (2) executive represeting each party and
one lawyer representing each party.
3. The (3) lawyers shall not be allowed to speak at the meeting.
4. The meeting shall take place in 3 sessions. In the first session, each party shal state
its (4) position on the subject of the disagreement. In the second session the parties
shall suggest (5) ways of resolving the disagreement. In the third session the parties
shall attempt finally to (6) resolve the disagreement.
5. In the event that the parties fail to solve their disagreement amicably, they shall (7)
proceed to arbitration on the terms specified (8) herebelow.


6.1 Bonus
1.
Public law is territorrial. It (1) operates only within the territory of one state.
Company must (2) obey the public law of any territory where they operate. Public law
is (3) strictly stringent.
Public law (4) controls such matter as: taxation, crime, immigration, factory
conditions, pollution and so on…
Public law affects the export (5) contract in that the law of some countries control
the export and import of some ( or all) items, matters (6) affecting public health;
availability of foreign currency and so on…
Public law is also (7) positive: incentive cheme, tax credit, and so on encourage trade.
2.
Every question not regulated in the contract is regulated by the (1) applicable law.
Big contract fish displace ( take place of) most of the (2) legal water

If the two sides write a big contract, very few question (3) left open for decision
under applicable law.
The most common mistake made by inexpreienced (4) drafter is to write a
minicontract regulating almost nothing beyond scope, price and (5) delivery.
The total agreement between the parties is the (6) written contract plus the
applicable (7) private law ( the water)
In principle, the parties to a contract are free to decide the (8) applicable law that will
supplement their contract, the party are free to choose the water their fish (9) swims
in.
3.
The conventions applies to (1) Int’ sales only.
Many questions about the seal meaning of the Convention must be answered in the
(2) courts. So far the answers have been (3) slow in coming.
Even so, the importer might wish to accept the (4) convention if the law applicable to
the contract is weak or (5) undeveloped or if it (6) favors the seller too strongly.
5.1. The right to inspect
The importer can not inspect the goods on (1) delivery because delivery
takes place in the country of seller.
The importer inspects the goods on their (2) arrival
The inspection must be carried out “ within as short a period as
(3) practical


The inspection must be reasonably thorough : if the importer (4) fails to
observe a defect that he should have observed, he can not later (5) inspect the
goods
If the goods are not in (6) conformity with the contract, the importer may
(7) reject them
5.4. Rejection is rejection partial or total
Inspection on arrival will discover patent/apparent (8) defects. Hidden

defects latent (9) come in to light later when the goods are in use (10).
Delivered goods are subjected to (11) three implied warranties
The implied warranties (12) exist unless expressly disclaimed
If the contract says nothing, then the applicable (13) law decides if
rejection of a consignment can be partial or total (14)
English law requires total rejection; German law and the United Nations
Convention on Contracts for the international Sale of Goods allow rejection
(15) of only the defective goods in the consignment; the Uniform Commercial
Code of the United States allows the buyer (16) to decide
5.5. what happen to the goods after rejection?
The importer has a duty to tale reasonable (1) care of the goods for a
certain amount of time
Perishable goods should be resold (2) as quickly as possible.
The seller must tell the importer within a reasonable time how to return
or dispose (3) of the goods.
The importer may charge( 4) the seller for the work involved.
All the costs of handling and/ or returning rejected goods are to
the account (5) of the seller
Ex1:
1. Delivery of poor quality products to export markets is particularly
dangerous because the cost of curing (1) defect is high (2) .
2. To guard against high costs, the exporter should be particularly careful
about quality (3 )assurance
3.
In negotiating quality clauses, the exporter should pay special attention
to detailed, realistic, specification (4) of the goods
4.
Inspection provisions both before and after delivery must be negotiating
with care (5)
5. The final quality hurdle is the defects liability period (6) during which the

exporter is liable (7) to cure defects that come to light (8) in the goods.
6. The buyer has the right ( in some legal systems, the duty) to inspect (9)
delivered goods.


7. Three “ implied (10) warrantied” apply to most delivered goods, even if
the exporter has given no express warranty: (a) warranty of conformity with the
contract; (b) warranty of merchant liability (11) ; (c) warranty of suitability for
an intended
(12)
8. Warranty of conformity with the contract: in principle, the buyer
can reject (13) goods of they do not conform with the contract
9. Warranty of Merchantability: the Buyer can reject goods that are not
of merchantable (14) quality
10. Warranty of Suitability for an intended purpose: If the exporter knew the
intended purpose, and if the buyer relied (15) on the exporter’s judgment, the
buyer can reject goods that are not suitable (16) for their intended purpose.
11. The question of warranty is dispose: exporters can exclude (17) all
warranties.
12. System vary in their thinking about whether rejection of contract goods
must be total or can be partial (18)
13. The right of exporter to cure (19) any defects in his delivery is
controversial ; if Anny exporter wants the right, the contract should contain
necessary provision (20)

CHAPTER 4:
1. Exporting creates risks for all parties: exporter, buyer, and government (1)
alike
2. Governments protect the interests of the country by passing laws (2) over
which the exporter has, in effect, no influence.

3. The relationship between the exporter and the buyer is on the other hand ,
largely at the disposal/ discretion (3) of the parties concerned.
4. Exporters protect themselves against the risk of non payment be insurance
(4), by guarantees and retentions
5.
For the buyer, some protection against poor quality is offered by
performance guarantee (5) and retentions.
6.
For both exporter and buyer, their contract ( 6) and law which
supplements is are their main protection.
7. The United Nations Convention on Contracts for the International Sale of
Goods, (the
(7) Convention) is the law of any country that adopts (8)
it. When the Convention conflicts with existing (9) national law, the
Convention prevails (10).
Specimen clause
8.
The delivery of Goods under this contract may be terminated (1) by the
Buyer in accordance with this clause in whole, or in part (2) , whenever the
Buyer shall determine that such termination is in his best interest (3) . Any such


termination shall be effected be delivery to the seller of a notice (4) of
Termination specifying the extent (5) to which supply of Goods under the
contract is terminated, and the date upon which such termination
becomes effective( 6).
9.
In the event of termination for whatever( 7) reason, the Seller shall be
entitle (8) to receive full payment for all goods and services delivered (9) by the
Seller at the date of termination (10)

Termination for default
10. The buyer may be by written (1) notice of default to the Seller, terminate
the whole (2) or any part of this contract in any one of the following
circumstances:
11. If the seller fails to make delivery of the Goods within the time
specified herein (3)
12. If the seller fails to perform any of the other provisions of this contract, or
so fails to make progress (4) as to endanger performance of this contract in
accordance with its terms (5 )and in either of these two circumstances does
not cure 6 such failure within a period of 10 days
Ex 2:
- If there is no “ meeting of minds”, there is no contract, Duress, fraud, and mistake(1)
all create create no-contract situations
- A contract must come about through a process of offer and acceptance (2) ; in
agreements that are not reduced to a written, signed (3) contract, this process is hard
to trace and offer breaks down completely.
- Under the public law ( company law) of many countries, a company can only sign a
contract that is within its power (4). A contract that is ultra vi res ( beyond its power)
is unenforceable (5)
- A contract is not enforceable (6) if it has an illegal purpose. To avoid problems with
contracts that might infringe government regulation (7), most contracts include a
partial invalidity (8) clause
- Within most Anglo- American jurisdictions, a contract must be two-sided: both sides
must have rights and duties (9). Unless the parties agree otherwise, rights can be
assigned but duties cannot be delegated (10)
Ex 3: Specimen clause
1. This contract constitutes the entired 1) agreement and understanding
between the parties. There are no agreements, understanding,
conditions, reservations(2), or representations, oral or written, that are
not embodied (3) in this contract or that have not been superseded (4) by this

contract.
2.
In international practice, the two sides often wish to incorporate (5)
outside material into contract: letters, general conditions, the Incoterms,..


3. This agreement is made in both Swahili and English. The Swahili and
English versions have equal (3) legal status
4. This contract and the contract documents are written (4) in English. Any
translation into another language is for information reference (5) only and has
no legal status.
5. Correspondence between the parties shall be conducted (6) exclusively in
English

TRANSLATE V-E:
CHAPTER 1:
1. Việc thanh toán sẽ phải được
thực hiện trong vòng 20 ngày kể
từ ngày nhận được “vận đơn
sạch, hàng đã được giao lên tàu”
của bên A

Payment shall be made within 20
days since/ from/ upon receipt of
“clean shipped on board” B/L of party
A

2. Hàng sẽ được giao theo
Incoterms 2000. Rủi ro và quyền
sở hữu đối với hàng hóa sẽ được

chuyển từ người bán sang người
mua tại thời điểm giao hàng.

Delivery of the goods shall be made
Incoterms 2000. The scheduled date
of Delivery shall be delivery>. Risk and title to the goods
shall pass from the Seller to Buyer on
Delivery

3. Nếu một bên bị ngăn cản hoặc trì
hoãn việc thực hiện bất kì nghĩa
vụ nào của hợp đồng này thì bên
đó sẽ phải thông báo ngay lập
tực cho bên kia về trường hợp
bất khả kháng này, các nghĩa vụ
có liên quan và thời gian diễn ra
sự kiện bất khả kháng.

If either party is prevented from, or
delayed in performing any duty under
this contract then this party shall
immediately notify the other party of
the event, of the duty affected, and of
the expected duration of the event.