QUẢN TRỊ XUẤT NHẬP KHẨU - ANALYZING CONTRACTS

GROUP 5 (CLASS: CLC-14DTM3)

ANALYZING CONTRACTS

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There is a Robusta coffee export contract, we analyze the risk arisen following
this contract
 

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Introduction
SELLER
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SEVEN Company
Address: 16H Cong Hoa St., Ward 16, Tan
Binh District,Hochiminh City, Vietnam.
Tel: 08.3811.7138
Fax: 08.3811.7138

Email:
Represented by Mr. Le Tuan Dung - Director

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BUYER
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United States Coffee, LLC
Adress: 6901 West SW Marginal Way, Seattle ,
WA 98106, USA
Tell: 1(866)763-3133
Fax: (206) 7633323
Email:
Represented by Mr. Matthew J.Doherty –
Director

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ANALYZING THE RISK ARISEN

Price

Shipment

Packing and Weights

Payment

Delivery

Law and Jurisdiction

Force Majeure

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PRICE
The price is based on the on market
price at the time of purchasing so it
can take risks for exporter if the
coffee price is low at that time

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Shipmen
t

Pre-shipment inspection
Quality / Quantity is not suitable and
importer refuse to take the goods

Term used under Incoterms
According to the FOB the seller must deliver the
goods on board, however, they cannot put the
container on the vessel, so they have to deliver
it to the CY-container yard or to the CFScontainer freight station. The examination and
counts between the two sides and customs
clearance are done in CY or CFS. This means
that the seller has actually delivered the goods
at CY / CFS but is still responsible for the cargo
risk until the goods are loaded onto the vessel.
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Shipmen
t
Daily, the container delivered to the carrier
at CY until received the bill of lading of the
ship takes from 5-7 days, especially the
peak season can take more than 10 days.
This is a great loss for exporter because of
delivery but cannot get money.

Custom formalities in Vietnam are complex
and prolix. The customs authorities are slow
to fulfill their obligations, often take
advantages of their positions, making it
difficult for many companies to export.

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Shipmen
t

That is not to mention the seller is very
dependent on the ship / container by the seller
who signed the contract and decided the
method of transport. Sometimes, due to
dependence on foreign guests, the ship arrives
late to damage the goods gathered at the port
or in stock, especially agricultural products.
Sell FOB earns less currency for the country than
selling CIF.
Usually, exporters will charter and buy
insurance companies in their own country. So if
exporter choose FOB, they cede this right to
importer, accidentally causing the insurance

companies and shipping lines in importer's
country lost jobs.
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Shipmen
t
If exporter directly deal with marine insurance
companies and shipping companies, they will
be entitled to a commission. However, exporter
choose FOB, so they do not hire the ship, then
lose this to the importer
Custom clearance
Custom formalities in Vietnam are complex
and prolix. The customs authorities are slow
to fulfill their obligations, often take
advantages of their positions, making it
difficult for many companies to export.
The commodities will be delayed at the
border due to a working defaults at the port.

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Shipmen
t
Arranging carriage
During loading, the goods might be damaged
Booking space can bring difficulties if the
exporter do not prepare sufficient related
documents and certificates.

The quantity is 1500 MTs and the cargo is to
be loaded by the Seller at the rate of 800 MTS
per weather working days of 24 consecutive
hours.
The partial shipment have to allowed

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Packing and Weights
Because coffee is packed in jute bags so if the bag
are not sewn carefully, it can be easily torned
during shipping. When packing the good, if the
exporter does not pay attention to features of the
good: physical, chemical in order to pack properly,
the good might damage due to weather, climate,

genius,…

Export bar code can be wrong due to exporter
mistakes. This leads name of seller/buyer, port of
loading/unloading, weight, name of commodity,…
are wrong.

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Payment
Seller can lose the payment if
Vietcombank goes bankrupt.

When the bank checks the
documents and if any incompliance
between documents and
Memorandum, bank can refuse to
make payment

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Delivery
For shipping FCL, the seller will
deliver the goods to the carrier
without delivering directly to
the ship. Sellers cannot manage
their goods until boarding, so if
seller use FOB conditions under
Incoterms the seller cannot
complete the delivery
obligation and transfer the risks
to the buyer.
Another risk is that exporter has to
be borne the THC fee when use FOB
term.

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Delivery
The consignor, after packing the
container, must bring the container to
the port to the carrier. If the good owner
does not know clearly the Closing time,
after the Closing time, the goods which
are brought to the landing site will not be

updated in the book, and that container
will not be loaded on the ship and may
have to move to the next ship.
Seals must be received from the carrier's
office and must be kept carefully. If the lost,
the seal is lost, seller must buy another
seal from shipping line.

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Delivery
If damaged or lost containers, the shipping
company must pay compensation to the
shipping company according to the
regulations of each shipping company

When shipping FCL, after changing the
empty container order, the owner will get
the empty container, which will directly
affect the benefits of the exporter. If the
container is not good, it can cause damage
to the goods during transportation.

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Law and Jurisdiction
Here, the applicable law is English
law. Therefore, when a dispute
arises or any incidents arise,
Vietnam have to hire a lawyer from
the host country to participate in the
explanation of the law, the cost of
hiring a lawyer abroad is many
times higher than in country. If the
Vietnam company cannot afford to
hire a lawyer, it cannot be solved.

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Force Majeure
There should be specific regulations
on time limits for force majeure
notification. The buyer may delay
the time of notice to the seller and
give reason as a reasonable time.

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THANKS
!
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