Chapter 1: Negotiating Delivery 1. The five steps in Negotiating Delivery.

To deal with problems arising if there is a delay or if delivery is not as planned the Buyer and the Seller should negotiate delivery systematically. That means making sure all foreseeable problems are discussed and approaches to solving such problems are agreed. An overview of the five negotiating steps is suggested to simplify discussion of the ideas and to avoid problems: Timing, Location, Transport, Risk Title and Insurance, Terms of Trade. 2. Timing: When must Delivery take place? - Good negotiators should mention a delivery date in negotiating the timing of an export deal and then other issues relating to coming into force, delay and compensation for delay. Delay might be classified into two categories, excusable and non-excusable. Excusable one involves a grace period and is mostly subject to a force majeure provision. Any losses to the buyer caused by non-excusable delay must be compensated. The amount of compensation is usually set in advance and called liquidated damages - Use a straightforward calendar date to name the delivery date: 15th September 2010, for example. The parties often plan for the contract to come into existence in two steps: the signature date and the date of coming into force. The date of coming into force is not usually a calendar date, but the date on which the last precondition is met. Common preconditions are: + Receipt of import and/ or export approval + Receipt of foreign exchange approval from a central bank + Issuance of a letter of credit or bank guarantee. + Making of a down-payment by the buyer + Issuance of an insurance policy + Issuance of a certificate of origin + Delivery by the buyer of plans, drawings or other documentation. - Negotiators may agree on a cut-off date: if the contract has not come into force within a certain time, then it becomes null and void.

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. iu khon hiu lc Tha thun ny s c hiu lc sau khi c thc hin bi c hai bn vo ngy ph duyt cn thit cui cng ca c quan c thm quyn ti nc ngi bn v ngi mua. Nu hp ng khng c hiu lc trong vng chn mi ngy k t ngy thc hin, n s tr nn v hiu.

- The delivery date is normally fixed for a certain number of days after the contract has come into force. The date of delivery shall be twenty-eight days after the date of coming to force of the contract. Ngy giao hng s l 28 ngy sau ngy hp ng c hiu lc

- Time is of the essence of the contract. If the time is not kept, the buyer has the right to return the goods and refuse payment. Time is and shall be of the essence of the contract Thi gian l v s l vn ct li ca hp ng.

- Excused Delay and Grace Period: For each week of late delivery the Seller shall pay the Buyer 0.1 % of the contract price. i vi mi tun giao hng chm ch ngi bn s phi tr ngi mua 0.1 % tr gi hp ng.

A grace period is the time exceeding the deadline for an obligation during which a late penalty that would have been imposed is waived. If delivery is not effected within one month of the agreed delivery date, then the Seller shall pay
2

the Buyer 0.1 % of the contract price. Nu giao hng khng c thc hin trong vng 1 thng k t ngy giao hng c tha thun th ngi bn s phi tr cho ngi mua 0.1% tr gi hp ng.

Sometimes the exporter cant deliver the goods on time because of natural disasters called acts of God, which is unavoidable. It is the force majeure, which is negotiable. The parties can decide what excuses and what does not excuse the performance in the contract. 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 includes, but are not limited to: war (whether war is declared or not), riots, insurrections, acts of sabotage, or similar occurrences, or Government regulations, delay due to Government action or inaction, fire, explosion, or other unavoidable accident, flood, storm, earthquake, or other abnormal natural event. Nu mt trong hai bn b ngn cn, hoc chm tr trong thc hin bt k ngha v theo Hp ng ny v mt s kin ngoi tm kim sot hp l ca mnh, th s kin ny c coi l bt kh khng, v mc nh l bn ny s khng c xem xt v khng c bin php khc phc, c th l theo Hp ng ny hoc cch khc, s c sn cho cc bn khc. S kin bt kh khng bao gm, nhng khng gii hn: chin tranh (cho d l tuyn b chin tranh hay khng), bo lon, ni dy, hnh vi ph hoi, hoc cc s c tng t, hoc quy nh ca Chnh ph, chm tr do hnh ng hay khng hnh ng ca Chnh ph, chy, n, hoc khc khng th trnh khi: tai nn, l lt, bo, ng t, hoc s kin t nhin bt thng khc..

Force majeure events do not include monsoon rains. S kin bt kh khng khng bao gm ma gi ma.

If a force majeure condition continues for long time, contracts may regulate the force majeure period, in particular the right of one or both parties to terminate the contract. 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. If any force majeure event prevents or delays performance of any duty under this Contract for more than sixty days, then either party may on due notification to the other party terminate this
3

Contract. Nu mt trong hai bn b ngn cn hay chm tr trong thc hin bt k ngha v theo Hp ng ny, th bn ny s ngay lp tc thng bo cho bn kia v s kin, cc ngha v b nh hng, v thi gian ko di d kin ca s kin Nu bt k s kin bt kh khng no ngn cn hoc tr hon vic thc hin cc ngha v no theo Hp ng ny trong hn su mi ngy, th mt trong hai bn sau khi thng bo cho bn khc c th chm dt Hp ng ny.

Three outcomes of force majeure: resumption of delivery, termination of the Contract, unclear and dangerous situation. - Unexcused delay and Buyers Remedies: when delivery cannot take place as planned, this causes some loss or damage to the Buyer. There are two remedies: a decree of specific performance orders the exporter to deliver or an award of damages makes the exporter pay compensation to the Buyer. In addition, the court may allow the Buyer to cancel the Contract. - Liquidated Damages: is a lump sum to be paid per day, week or month of late delivery for compensation. Payment of liquidated damages avoids expensive discussion. Even if the Buyers losses are lower or higher than anticipated, nothing changes. The exporter pays the agreed sum, and the matter is settled. Liquidated damages are enforceable everywhere but subject to increase or decrease in some legal systems. - Penalties: is the amount to be paid for late delivery. It is used as a threat of punishment to achieve acceptable performance and is not enforceable in English law or other common law systems. - Quasi-indemnity: is to relieve the exporter of liability for delay in delivery. It is enforceable everywhere but open to challenge as unconsionable. 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 Thanh khon thit hi Nu ngi bn khng cung cp bt k hng ha trong khong thi gian quy nh trong hp ng, ngi mua phi thng bo cho ngi bn l mt s vi phm hp ng xy ra v s khu tr
4

gi hp ng trn mi tun tr hon, lm thit hi thanh khon, mt khon tin tng ng vi mt na mt phn trm gi c giao ca hng ha b chm ch cho n khi hng thc t ln n mt mc khu tr ti a l 10% gi c giao ca hng ha b chm ch.

3. Place of delivery: is the point at which the exporter passes responsibility for the Goods to the Buyer. Delivery can take place at a number of places between manufacturers factory and the Buyers warehouse. A contract for the sale of Goods abroad (transportation by ship) is normally considered as an FOB (Free on board) contract: delivery takes place when the Goods cross the rail of the ship nominated by the Buyer. Another is CIF, the exporter pays the full costs plus the freight charges plus insurance up to the named place of destination, usually a port. Delivery of the Goods shall be made FOB (Mombasa) Giao hng s c thc hin theo gi FOB Mombasa.

Delivery of the Goods shall be made CIF Durban. Giao hng s c thc hin theo gi CIF Durban

Delivery of the Goods shall be made (Incoterm). The schedule date of Delivery shall be (date of delivery). Risk and title to the Goods shall pass from the Seller to the Buyer on Delivery. The place of Delivery under this Contract is (port of shipment) Giao hng c thc hin (Incoterm). Ngy giao hng theo lch trnh s l (ngy giao hng). Ri ro v quyn s hu cc hng ha c chuyn t ngi bn n ngi mua khi giao hng. a im giao hng theo Hp ng ny c (cng giao hng) If the vessel named by the Buyer fails to arrive on or before the agreed delivery date, then the seller may at his discretion deliver the Goods to a bonded warehouse in the port of Mombasa, and shall be deemed to have fulfilled his delivery obligations under this Contract. Nu tu c ch nh bi ngi mua khng n vo hoc trc ngy giao hng c tha thun, th bn bn theo s suy xt ca mnh c th giao hng hng ha n kho ngoi quan ti cng Mombasa, v c coi l hon thnh ngha v giao hng ca mnh theo hp ng. ny

4. Transport. - Negotiators should mention the type of packaging and the shipping marks in the Contract. Goods are to be packed in new, strong, wooden cases suitable for long-distance ocean transport and are to be well protected against dampness, shock, rust or rough handling. The Seller shall be liable for any damage to or loss of the Goods attributable to improper or defective packaging. Hng ha s c ng gi trong thng g chc v mi thch hp cho vn ti bin ng di v phi c bo v chng li m, va p, g hoc x l th. Ngi bn phi chu trch nhim cho bt k h hng, mt mt ca cc hng ha do bao b khng ng hoc b li.

On the surface of each package delivered under this Contract shall be marked: the package number, the measurements of the package, gross weight, net 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 Trn b mt ca mi kin hang c giao theo Hp ng ny s c nh du: s gi, cc kch thc ca gi, trng lng, trng lng tnh, v tr mc cu, s th tn dng, cc t xp theo chiu ny, xp d nh tay, gi hang kh, v nh du: DNP/36/Q - On delivery, the exporter receives from the carrier the most important of all the shipping documents, the bill of lading (consignment note). Each mode of transport has a characteristic shipping of document: the marine bill of lading, the airway bill, the rail consignment note, the road consignment note. Combined transport uses a combined transport bill of lading - The Marine bill of lading is the special document used for shipment by sea. It can be made negotiable, which means it can be bought or sold. The word Order makes the bill of lading negotiable. That means the shipper must endorse the bill by signing it on the back. To be acceptable as a shipping document under a letter of credit, it must bear the notation that the goods have been shipped on board a named vessel. - Payment under a letter of credit depends largely on the correctness of the shipping documents. To be acceptable under a letter of credit, all shipping documents must be clean, free notes about defects. It is the carrier who notes any defects in packaging, weight, or general appearance of the goods on accepting them from the Exporter. 5. Risk, Title and Insurance

Risk passes on delivery. Two risks are involved in the sale of goods: the risk of the goods injuring a third party and the risk of loss or damage. These risks are covered by insurance. In international trade, ownership (title) is of doubtful value and passes from exporter to buyer. Title to the goods passes with risk. Quyn s hu hng ha gn lin vi ri ro.

- Since merchandise is at risk at all times during its journey, it is advisable to insure the goods. It is easier for the exporter to arrange insurance. Minimum coverage is Cargo clause C. In CIF and CIP contracts, the exporter normally assigns the insurance agreement to the buyer. Exporters have an agreement with an insurance company covering the shipments over a period of time. Each is covered by a certificate of insurance, which states in outline the cover offered and gives the details of the individual shipment. There is a so-called letter of insurance. This is a letter from the exporter to the buyer stating that the goods are insured and it has no legal force but as evidence in a law suit against the exporter. - In some situation the exporter negotiates special insurance policies: floating policy and open policy. Both offer the exporter insurance cover on all shipment over a period of time. Open cover is not a policy, the insurer will write a policy if required. The normal insurance document under an open cover is the Certificate of Insurance, which is, in principle, the equivalent of a policy. - If the exporter insures the Goods and states on the insurance document (valued policy), he has some decisive advantages: the prestated figure can include not only the cost of the goods but also the profit the exporter hoped to make on them. If the value is not stated (unvalued policy), then the value can be established after a loss, the exporter must prove his figures precisely. - A marine insurance policy has three variant clauses: Cargo Clause A, B and C. Clause A covers anything not excluded, Clause B and C exclude anything not expressly covered. Even an all risks policy (Clause A) excludes many risks. - Goods must be correctly and fully describe on the insurance document or cover may be withdrawn and a held cover clause offers some protection against innocent misdescription: under given conditions the goods are held to be covered. The main principle of insurance is utmost good faith 6. Terms of Trade - The ICC publication, Incoterms 1990, gives full and clear information about the rights and duties of buyer and exporter in Incoterm contract. The 13 terms are classified in 4 groups: Eterms, F-terms, C-terms, and D-terms. The E-terms deals with deliveries at the exporters factory. The F-terms all concern delivery within the exporters country. The C-terms involve
7

delivery in the exporters country, with extra costs for exporter after delivery. D-terms take care of delivery outside the exporters country. The equipment listed in Annex 1 shall be delivered FOB (Beira) (Incoterms 1990) Cc thit b lit k trong Ph lc 1 c giao theo iu kin FOB (Beira) (Incoterms 1990)

For the equipment listed in Annex 1 the price is for delivery free on board carrying vessel designated by the Buyer at the port of Beira including the cost of packing, as well as expenses incurred before loading the equipment on board the carrying vessel. i vi cc thit b c lit k trong Ph lc 1 gi l gi giao hng min ph trn boong tu ch theo ch nh ca ngi mua ti cng Beira bao gm chi ph ng gi, cng nh cc chi ph pht sinh trc khi ti cc trang thit b ln boong tu ch.

The contract should always specify that terms such as FOB, CIF and so on are Incoterms under the rules set out in Incoterms 1990. The contract should regulate what happens if Incoterms 1990 and the terms of the contract conflict. Normally, the contract prevails. Incoterms apply only to international trade, for trade within a country, Incoterms are not appropriate. Incoterms 1990 as used in this contract means the publication Incoterms 1990, being the international rules for the interpretation of their terms published by the International Chamber of Commerce. When a term from Incoterms 1990 is used in this Contract, the rules and definitions applicable to that term in Incoterms 1990 shall be deemed to have been incorporated in the Contract except insofar as they may conflict with any other provision of the Contract, in which case the Contract provisions shall prevail. Incoterms 1990 nh c s dng trong hp ng ny l n bn Incoterms nm 1990, l cc quy tc quc t cho vic din gii cc iu khon ca chng do Phng Thng mi quc t xut bn. Khi mt iu khon t "Incoterms 1990" c s dng trong Hp ng ny, cc quy tc v nh ngha p dng cho thut ng trong Incoterms 1990 s c coi l c kt hp trong hp ng ngoi tr trng hp chng c th xung t vi bt k iu khon khc ca Hp ng, trong trng hp quy nh ca hp ng s c p dng.

CHAPTER 2: NEGOTIATING PRICE AND PAYMENT 1. EXPORT PRICING STRATEGIES THE PROBLEM

How can the exporter avoid the price trap occured in many negotiations when the buyer demands concessions about delivery time, method of payment,etc?

THE PRINCIPLE

The exporter should guarantee that the contract price reflects any change in a set of assumptions about delivery, payment and warranty terms.

IN MORE DEPTH

Any terms of a contract relate to each other. Therefore, as items in the contract are negotiated, the exporter should assess the influence of each factor on price, and adjust the price accordingly. For example, a longer warranty period creates higher costs, it should be reflected in the contract price. In fact, the most common term negotiated with the two sides is on price.

Scenario: Verbena Electric hopes to export its best-selling product, small domestic electric fans, from Verbena to Esperanza. Royalstone, the manager of Verbena Electric, begins discussions with the purchasing manager of Esperanza Electrical Importing, Alice Smart. Negotiations begins. Royalstone offers a unit price of $22 based on some main following assumptions: The size of the order is 3000 items. Delivery is FOB. The warranty period on the fans is three months from the date of delivery.

Order Size: 3000 units is one container load, the unit price will increase on a smaller order. An order of 1000 fans, for example, would cost $25 each not $22. Incoterm: the cost of insurance and freight between Port Verbena and Esperanza City is $520 on an order of 3000 items. Warranty Period: Royalstone knows that a three-month warranty on an FOB delivery produces very few claims for defects. If Smart asks for a six-month warranty, it will add 30 cents per fan to Royalstones costs.

This example shows that the negotiating decisions bear directly on the price of the product. And a good manager knows that almost every decision made during a negotiation incluences price.

2. THE FIVE STPES IN NEGOTIATING PAYMENT In negotiating payment, the exporter should follow these five steps: Step 1: Mode of Payment This determines how payment will be made. There are four common mode of payment: payment on open account with no security: this type is seriously risky to the exporter payment on open account secured by export credit insurance: the exporter pays money to an insurance company to buy an export credit insurance payment on open account secured by a paymenr guarantee: the buyer pays money to a bank to receive a bank guarantee. payment by letter of credit.: the buyer must position the money with a bank in the coutry of the exporter and the exporter can collect that money when the goods are delivered.

10

Step 2: Timing This step determines the date of payment. The importer often wants to delay the time of payment but the exporter suffers from delay because late payment is subject to payment of interest so mosts sellers offer discount for early payment. This helps the buyer save on the invoce price and the seller qickly collect his money. The date of payment may be regulated date or a chain of dates. It is also calendar dates or interval times.

Step 3: Place of payment This step determines where the money must be before payment is to be completed

Step 4: Delay - what delay in payment is excusable? Delay in payment may be excused during a grace period (not common) or a force majeure event (more common). But most exporters do not want to excuse these delays and any payment made after the agreed date of payment is in delay.

Step 5: Results of delay When delay in payment happens the exporter is usually compensated for losses due to late payment. The exporter may ask for a payment guarantee which makes sure payment be made on time. The best solution to get risk of delay is to create a payment article in the sale contract which makes late payment is impossible. Cu trong sch - trang79 Cu dch

Payment shall be deemed to have been Vic thanh ton c cho l hon thnh made only when the contract sum is paid ch khi s tin hp ng c chuyn
11

into the Sellers bank account and is at the n ti khon ngn hng ca ngi Bn v Sellers full disposal. Cu trong sch -trang 80 do ngi Bn ton quyn nh ot Cu dch

If payment of any sum payable is delayed, Thanh ton chm the Buyer shall be entitled to receive Nu chm thanh ton bt c khon tin no interest on the amount unpaid during the theo hp ng, bn Mua s phi chu trch period of delay. The interest shall be at an nhim vi khon tin li tnh trn khon annual rate three percentage points above tin cha thanh ton trong sut khong thi the discount rate of the central bank in the gian tr hon . Li sut s c tnh cao Sellercountry. hn 3 % so vi li sut chit khu do Ngn hng Trung ng nc ngi bn quy nh

3. THIRD-PARTY SECURITY FOR PAYMENT In the international trade, the exporter may face a lot of risks and one of the significant ones is non-payment. There are two main way that the exporter can use to reduce this risk. One is export credit insurance and the other is bank guarantee. Export credit insurance

Export credit insurance allows exporter to recover the major part of the contract price if the buyer fails to pay after six months. To buy such insurance, the exporter must explain the detail of the busineess to an insurance company and receive a quotation. If the insurer refuses to pay, its may mean that there are some problems in the exporter or importer. The exporter has to pay export insurance premiums which depends on many factors, such as: the type of goods exported, the creditworthiness of the buyer, the political stability of the importer country. Although this way is attractive, it has some limitations: the exporter has to wait for a long time to be compensated and the compensation is unlikely to cover 100% of the invoce price. Payment guarantee

12

In this method, the buyer may ask for a bank guarantee which means that the bank will pay the contract price if the buyer fails to do so. Guarantees are comonly used in four business situations, as the following: Risk 1: Non-payment =>Payment guarantee A payment guarantee makes sure that the exporter will receive payment. It commits the bank which issuses the payment guarantee to pay if the buyer defaults. The payment guarantee is ussually for 100% of the contract price.

Risk 2: Revocation => Tender guarantee This type of guarantee is used in case that the exporter who bids on a contract to supply goods or materials to a goverment department or agency is withdrawn. A normal figure for tender guarantee is usuallly between 1.5% to 5% of the contract price

Risk 3: Non-performance=>Performance guarantee Performance guarantee makes sure that if the exporter works badly or not at all, the guarantor will pay, within stated limits, the costs of the exporters failure to perform. A figure for performance guarantee is between 5% to 10% of the contract price.

Risk 4: Losing Prepayment=>Prepayment guarantee This guarantee promises the buyer that the bank will return advance payments if the exporter fails to deliver. The guarantee is often for 100% of the prepayment. 4. THE LETTER OF CREDIT Letters of credit are issued in many forms for many purposes. Some letters of credit offer first class security for the exporters, some are little better than a personal check
13

The most ideal type of letter of credit from the exporters point of view is irrevocable, comfirmed, at sight letter of credit. The Uniform Customs and Practice for Documentary Credits (UCP) by the International Chamber of Commerce is the most universal set of practices rulling over payment by letter of credit. Besides, parties to a contract can also use the rules of the United States.

Letter of credit: The Ground Rules Documents are exchanged for money. Firstly, the letter of credit is issued by an issuing bank at the request of the buyer. The issuing bank, then, istructs the advising bank to advise the exporter that the letter of credit has been opened. Normally, the issuing bank is in the buyers country and the advising bank is in the country of the exporter. Next, the exporter ships the goods, passes them to the carrier and receives shipping documents from the carrier. Then, presents these documents to the bank as evidence that the goods have been shipped. The bank checks the correctness of the documents and sets the payment procedure in motion.

Two principles that make a letter of credit watertight: Principle 1: Autonomy The letter of credit is an agreement by a bank to pay money against documents; It is a separate agreement from the sale contract and is unconnected with it. This means the bank is obliged to pay whatever the disputes between the buyer and the exporter are.

Princile 2: Strict compliance

14

The bank will pay only if the shipping documents are exactly in line with the buyers instructions. In case of discrepancies in one or some aspects of the documents presented, the bank will refuse to pay. In this situation, to proceed payment, the exporter can: Provide missing payper or correct errors. Ask the buyer to instruct the bank to change the terms of the letter of credit. Ask the bank to process the letter of credit with the discrepancies but to pay only when and if the issuing bank permits payment. If the letter of credit is near its expiry date and there may be no time for the exporter to provide the missing pieces, he (or the advising bank) must contact the buyer asking the buyer to instruct the issuing bank to extend the date of credit. The exporter should provide scrupulous care in providing the documentation called for by the letter of credit. Page 87: The Buyer, on receipt of the Ngi mua, khi nhn c Chp nhn n Confirmation of Order from the Seller, shall hng t pha ngi bn, phi m mt th tn at least 20 days prior to the date of delivery dng xc nhn, khng th hy ngang mun open a confirmed, irrevocable letter of credit. nht l 20 ngy trc ngy giao hng. Th tn This credit shall be subject to Uniform dng ny c iu chnh bi Cc Qui tc v Customs and Practice for Documentary Thc hnh thng nht v Tn dng Chng t Credits, 1993 Revision, ICC Publication No S 500 ca ICC, bn sa i nm 1993. 20% 500. 20% of the credit shall be available gi tr th tn dng ny phi c thanh ton against the Sellers draft accompanied by khi ngi bn xut trnh hi phiu v ha invoice; the remaining 80% shall be available n; 80% cn li phi c thanh ton khi against the Sellers draft accompanied by the ngi bn xut trnh hi phiu v cc chng shipping documents. t vn ti.

Page 90: Credits, by their nature, are separate V bn cht, tn dng l mt giao dch ring transactions from the sales or other contracts bit vi cc hp ng mua bn hoc cc hp on which they may be based and banks are in ng khc m cc hp ng ny c th l c no way concerned with or bound by such s ca tn dng. Cc ngn hng khng lin
15

contracts, even if any reference whatsoever to quan ti hoc b rng buc bi cc hp ng such contracts is included in the creditIn nh th, thm ch ngay c c trong tn dng c credit operation all parties concerned deal in bt c s dn chiu no n cc hp ng nh documents and not in goods, services and/or th.Trong thanh ton bng tn dng, cc other performances to which the documents bn ch chp nhn chng t ch khng phi l may relate. hng ha, dch v hay bt k nghip v no khc c lin quan n cc chng t ny. Page 90: A letter of credit is like a bill of Mt th tn dng cng ging nh mt t hi exchange given for the price of goods. It phiu c k pht tr tin hng. N cng ranks as cash and must be honored. No set off l tin v phi c thanh ton. N khng th or counterclaim is allowed to detract from it. b lm gim gi tr bi bt k yu cu tr tin hay vic phn i tr tin ca bt k bn no.

Letter of Credit: Revocable and Irrevocable A revocable letter of credit can be canceled at any time by the buyer or by the issuing bank. Few exporters will accept such an arrangement, so the plain expression letter of credit generally means the irrevocable kind. UCP600 says that the letter of credit will be taken as irrevocable if nothing is mentioned in the credit.

Letter of credit: Confirmed and Unconfirmed A confirmed Letter of Credit is understood as the letter of credit to which a confirmation is added by a nominated confirming bank. Confirming bank means the bank that is asked to confirm the credit by an issuing bank. By adding its confirmation to an L/C, it has an absolute obligation to pay the exporter according to the terms of credit. The payment are made without recourse, which means that if the issuing bank finds a problem with the documents and refuses to send funds to cover the payment, the confirming bank has no way of recovering the money it has paid to the exporter. It is different from an advising bank which always makes payment with

16

recourse if it agrees to pay the value of the credit over the counter. This helps the advising bank get its money back from the exporter if the problems occur. Sometimes, problems can arise when very small banks or banks in countries with severe foreign currency shortages try to instruct a bank in exporters country to confirm a letter of credit. The issuing banks may delay in sending funds to cover the payment. The sign of a confirmed letter of credit is usually the cross in the confirmation box.

The At-sight Letter of Credit and the Alternatives Settlement by sight Payment Under this method of payment, if the documents the exporter presents are in order, the paying bank immediately pays the full face value of the letter of credit.

Settlement by Deferred Payment In settlement by deferred payment, the letter of credit is not payable until a number of days after delivery. The seller presents the documents to the paying bank, and the paying bank agrees to pay the seller the face value of the credit when it matures. If the exporter needs ready money, he can exchange the letter of credit for cash (at a discount) with any agreeable bank.

Settlement by Acceptance The seller presents to the accepting bank the documents and a bill of exchange (time draft) drawn usually on the buyer, and the bank will accept the bill of exchange and agree to pay it at full face value when falls due. This is obviously a danger for the seller. A bill of exchange that is accepted can be sold at a discount to an agreeable bank if the seller needs money immediately.
17

Settlement by Negotiation Negotiation means the selling of a financial instrument to a bank for (usually) less than its face value. In this method of settlement, the seller presents to the negotiating bank the documents and a bill of exchange drawn usually on the buyer, and the negotiating bank negotiates the bill.

The Letter of Credit and its Associated Documentation I. The letter of credit contains a list of the documents which must be presented and is also the basis for bank checking that the documents are in perfect order and correct or not. II. Associated Documentation 1. Commercial invoice must be made out to the applicant for the L/C about the description and the amount of the goods, and specific demands. 2. Transport documentation is the document issued by the carrier to the exporter, and includes five types: sea transport, air transport, rail transport, road transport and combined transport. The type required is stated in the L/C.

Special problems related to transport document. There are some problems arising in specific circumstances when transport document is used as follows:

Shipment by sea: The carrier could issued a marine bill of lading, or a sea waybill to the exporter. And in some case some types of sea transport are not allowable without the agreement by the paties and being worded in the L/C. when the parties use this method of transportation, a sea waybill can be the alternative of a marine bill of lading.

18

Shipment by air: The carrier could issued an Air waybill, which must be issued in 3 originals and 9 copies. That the L/C calls for a full set of original air waybill is a mistake because it is an impossible demand. Also, a correctly completed waybill can not show the date of the flight.

Shipment by rail: The carrier could issued a Rail consignment note. L/C, in this method of transportation, must not demand the original of a rail consignment note, otherwise it can delay the payment. 3. The Insurance Document: is usually required when the shipment is made on CIF or CIP terms. If the L/C does not stated otherwise, insurance coverage must be for 110% of the CIF or CIP value of the goods. 4. Other Documents includes Certificate of Origin, Certificate of Inspection and Special Requirements.

Certificate of Origin(C/O) is required for import to the buyers country under a preferential tariff or other agreement.

Certificate of Inspection can make importing easier. The parties should make a note in their contract if this document is required. The parties must clear that details in inspection certificate must correspond exactly with the details in the transport document and the commercial invoice. Special Requirements should be agreed exactly about what and who should issue and shown clearly in the L/C. When wording in the L/C, the parties should not use unspecific words such as appropriate, it could make difficulty in satisfying the bank for the payment.

Negotiating the Terms of a Letter of Credit

19

- Agreement: the exporter and the buyer discuss and list all required documentation. The two parties may have to talk to their Chambers of Commerce, to their bank or to the carrier to establish the complete list. - Incorporation: the list is incorporated into the contract. - Specification: the buyer applies for the letter of credit specifying the agreed documentation. ICC form can be used to apply for a letter of credit. The exporter and the buyer can complete this application form during their negotiations and append a copy of the form to their contract, then passsing it to the bank. This is to make sure that the credit once issued should be exactly as agreed by the parties with no nasty surprise for the exporter. - Verification: the exporters checks the credit as soon as he receives the advice of the L/C being opened to make sure it complies with the agreement negotiated with the buyer. Immediate discussion with the advising/confirming bank is essential since amendments are always time consuming, which can lead to the delay in payment. - Compliance: the exporter rigorously checks documentation and submits it to the bank. Remember that timely payment depends on the compliance by the exporter with the terms of credit.

Documentary Credit Application Form Segment 1: Applicant: full name, address, account number with issuing bank of the buyer. Segment 2: Issuing bank: name (can be left blank) Segment 3: Application date: the date on which the application form is submitted to the bank (can be left blank)
20

Segment 4: Date and place of expiry: + The last date for presentation of documents to the bank + The place of expiry: often at the counter of the confirming bank Segment 5: Beneficiary: full name, address (the exporter in most cases) Segment 6: Method of issue: +Issue by mail: slower +Issue by teletransmission (normally telex) + Issue by mail and brief advice by teletransmission. Segment 7: Transfer of the Credit - In case the exporter wants to hide the actual supplier. - In principle, a L/C is not transferable unless it is permitted. Segment 8: Confirmation: Exporters prefer confirmation. Segment 9: Amount +the amount of the credit is expressed both in figures and in words. +The currency of the credit: using the ISO currency code. Eg: USD, DEM, GBP + About, Approximately: the actual payment can be +/- 10% the stated amount. +Mixed payment: must state what percentage of the invoice price is covered by the credit. Segment 10: Partial Shipment In principle, partial shipments are allowed unless the not allowed box is crossed. Distinguish carefully between partial shipments and shipment in installments.

21

Segment 11: Transshipment Transshipment means moving the goods from one conveyance to another. Normally transshipment is allowed except for goods travel by sea under a sea waybill or marine B/L or some other special reasons for prohibition.

Segment 12: Availability Credit available with this is sometimes followed by the name of the advising bank chosen by the exporter or left blank, and the issuing bank is free to decide a bank will act for it in the exporters country The various types of payment are by sight payment, by acceptance,etc.

Segment 13: Insurance covered by the Buyer The box is normally checked when the delivery term is FOB, CFR.

Segment 14: Transport Information Shipment from (precise places habors, airports) To (precise places habors, airports)

22

CHAPTER 3 Negotiating Inspection and Defects Liability 1. EXPORTING AND THE PROBLEM OF QUALITY - The Problem: When things go wrong with the exported products, repair and replacement can be ruinously expensive. There are some special steps that the exporters can take to minimize the risk of the goods being rejected or of heavy defects liability claims. - The Principle: + The exporter should ensure that all exported goods meet or exceed the quality specified, that marking and packaging are correct and that delivery is on time. + The agreement between the parties should contain specific quality specifications. - In more depth: The quality of the product is a key issue, and customer satisfaction is essential to successful business. Many companies have qualities assurance programs to ensure that customers get what they pay for. Until things are going well in the local market, it makes little sense to export, because quality assurance and customer satisfaction are much tougher when the customer is in another country, and distance makes communication, transport, inspection, payment and verification of claims expensive and time-consuming. + Specification. Negotiation of specifications can be a difficult process. A well-designed set a specifications offers vital protection the both sides. The importer is protected against inferior products- it can reject any equipment that fails to meet specification. Moreover, the seller is protected also-through more subtly. If the products are fully specified and the consignment meets the specifications, the buyer will be unable to find any excused for rejection or for exaggerated defects liability.
23

+ Pre-delivery Inspection Many importers require inspection of their goods in the manufactures factory before delivery. With sophisticated items or capital equipment, the buyer may also want to inspect the goods at pre-agreed times during manufacture. Some countries, Indonesia for example, require that all imported goods are inspected by an inspections service immediately before shipment. This inspection prevents exporter and buyer agreeing an unrealistically low invoice price in order to avoid customs duties in the buyers country. This also prevents shipments of patently defective goods. The next step, assuming FOB delivery, is examination of the goods by the carrier. The carrier does not unpack the goods or check their quality, although leaks and obvious damage as well as incorrect shipping marks, defective packaging or discrepancies in weight and size are noted on the shipping documents. + Inspection and Acceptance The principle is clear- the buyer has the right to inspect the goods when they arrive and to reject them if they are incorrect. At this point, exact specification is of great value to exporter if the goods conform to specifications, the buyer is obligated to accept them. + Defects Liability Period Once the goods are accepted by the buyers as apparently correct, they must jump to the final hurdle the defect liability period. The manufacturer accepts liability for defects the come to light after acceptance: if anything is wrong with any item, they will repair or replace it. Such defects are called latent defects. The defects liability period is negotiable, this is likely to be several months from the date of delivery or the date of arrival. Protection against dishonest claims or excessive demands should be written into the contract. To sum up, in negotiating the terms of the contract, we can look at the process in steps.
24

 them?

Step 1. Inspection: When are the goods inspected? And when can the buyer to reject

Step 2. Terms: Warranty or guarantee? Step 3. Definitions: What is, and what is not, a defect? Step 4. Timing: How long is the defects liability period? When does it begin? What about

other timings? Step 5. Corrective action: What must the seller do to cure defects?

2.

INSPECTION, ACCEPTANCE AND REJECTION n a contract, both the parties, the buyer and the exporter run risks. Obviously, the goods delivered are not always perfect. Thus, the buyer stands the risk of receiving inferior goods when inspecting the goods on arrival. The exporter may have a disaster when the buyer

decides to cancel the contract if the deviation amounts to a fundamental breach of contract. The defects liability provision gives double protection. This warranty protects the buyer from receiving inferior goods and the exporter from losing the contract right away. Delivery can be rejected from two kinds of defects: the patent one ( which can be found when being inspected), the latent one (which only comes to light during usage). Under most laws, a buyer can make certain assumptions about goods even if the exporter gives no express warranty. These assumptions are legally called implied warranties, which come in three types: + Implied warranty of Conformity with Contract: Most laws provide a way to grade non-conformity: while major discrepancies allow the buyer the right to reject the goods and cancel the contract, minor discrepancies do not. The Vienna Sales Convention (Article 49) says:

25

The buyer may declare the contract advoided (=canceled) if the failure by the seller to perform any of his obligations under the contractamounts to a fundamental breach of contract. + Implied warranty of Merchantable Quality: Goods can well conform with the contract but they can be of serious inferior quality which make them inappropriate for sale. Most laws have a provision on this warranty of merchantability which allows the buyer to reiect goods and cancel the contract + Implied warranty of Fitness for Intended Purpose: Goods can conform with the contract, be merchantable but useless to the buyer. In the case when the exporter knew the buyers intented purpose and the buyer trusted the seller with the correct goods then the buyer has the legal right to reject unusual items. + Rejection: Total or Partial: The buyer can reject the consignment wholly or partially. National laws take one of three choices. While English law requires rejection of all contract goods, German law and Vienna Sales Convention (Article 51) both allow total and partial rejection. When goods are rejected, the buyer most notify the seller within a reasonable period. Then, on assuming that the rejection is justified, the exporter has the additional cost to dispose the unwanted goods. + The Exporters Right to cure: Does the exporter have the right to cure? Or it is simply a duty requested by the buyer? The Vienna Sales Convention says the following: the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. If the seller wants the right to cure, the contract should contain the necessary provision.

26

3. WARRANTY AND GUARANTEE: TERMINOLOGY

re a warranty and a guarantee the same thing? Why do some contracts replace a warranty with a defects liability provision?.

A warranty is a promise you make about your own perfomance. A product warranty is a promise by the exporter to cure defects in his products. There are two parties to a warranty: buyer and seller. A guarrantee is a promise about somebody elses performance. It involves three parties: principal, beneficiary and guarantor. The guarantor makes a promise to one party at the request of another. In strict legal usage, a warranty is an absolute undertaking on the part of the warrantor, and the contract is void unless it is strictly and literally perfomed, while a guarantee is a promise () not imposing any primary liability on the guarantor, but binding him to be answerable for the failure or default of another. Internationally, the distinction between warranty and guarantee is often blurred. Many contracts avoid the problem by speaking of defects liability rather than warranty; this is the right concept. 4. THE DEFECTS LIABILITY PERIOD: A CHANCE TO PUT THINGS RIGHT

he exporter is liable for defects in his products. What is a defect? And what liability for defects must the exporter accept?

There is one thing that everyone knows: not all products are perfect on delivery. So the warranty covers defects that are present at the moment of delivery. The defects that give rise to the most serious problems between exporter and buyer are hidden or latent defects. There are three kinds of defects: workmanship, materials and design. + Three types of Defect: A product with defective workmanship is incorrectly built. Faults are often hidden and do not come to light until the product is used.

27

Defective materials are materials or parts of a product that are inferior or somehow incorrect. Many such hidden defects take time to come to light. Defective design means that a product does not meet specifications. The design is defective, again, is not apparent until the product is used. + What is Not a Defect: A defects liability provision does not cover: two common exclusions are fair wear and tear and misuse by the buyer. Fair wear and tear is the result of normal use. Misuse is seriously incorrect handling by the buyer. Sometimes misuse is expressly defined in the contract: opening a sophisticated machine. + Faults Not Present on Delivery: The defects liability period is the period during which the exporter is liable for and must make good defects that are apparent on delivery or that come to light later. The buyer must prove that the defects was present in the goods at the date of delivery. When two sides negotiate contract, both sides must understand that a defect is a fault provably present in the goods on delivery. + Specimen Warranty Clauses: A standard provision mentions the three types of defect, it states a date on which the products were free of defects, it excludes problems caused by misuse or wear and tear, and it establishes the exporters duty to cure the fault. Sometimes, the parties decide on a totally different kind of obligation. An interesting example is the Disclaimer of Warranty common in software contracts. Such a disclaimer is often printed in capital letters because it is unusual and because it denies the purchaser some of his normal rights. Any attempt to hide or subordinate such a disclaimer makes it invalid under most laws. The purchaser has given up certain rights: but in exchange for what? What is the justification of this whole proceeding? The answer is: without such a Disclaimer of Warranty, the contract price would be far higher.
28

T
period.

5. TIMING OF THE DEFECTS LIABILITY PERIOD he defects liability period presents four separate timing problems. Many contracts regulate only one. What are the other problems, should the exporter regulate them, and if so, how? Lets now look at each timing problem in more detail.

+ Timeframe 1: The Defects Liability Period The parties first agree the length of the defects liability period. We can note that many legal systems allow a six-month period if the two sides agree nothing. The exporter should know how many defects liability claims does he generally experience within a three-month, a sixmonthperiod, in order to calculate the cost of extending (or reducing) the defects liability

Having agreed the length of the defects liability period, the two sides then ask: When does it start? The contract must regulate this problem. It is generally accepted as fair that the period is extended by the down-time. + Timeframe 2: The Notification Period If a defect occurs, the buyer must notify the exporter. If both parties act in good faith, such a soft-edged timeframe works well. If a problem arises, the judge sets a fair period for undue delay, a reasonable time, or forthwith. + Timeframe 3: The Rectification Period Once the exporter has learned of the defect, he must cure it as soon as practicable and at his own cost. + Timeframe 4: The Legal Action Period If the exporter has failed to repair under warranty, the buyer must start a legal action. This legal action period differs under applicable laws (Civil law or Continental law). This period also varies greatly from country to country and from one type of contract and/or duty to another. In practice, contracts rarely regulate the legal action period, leaving the matter to the applicable law. If you foresee a problem, take legal advice.
29

6. CORRECTIVE ACTION + The Problem: Some contracts do not point out corrective action that the exporter must take, which is dangerous for both exporter and importer. + The Principle: The exporter used to correct the defects. In case the buyer has this right, it must be indicate exactly in the contract. + In more depth: The defects liability provision allows the exporter to correct problems without losing the contract. There are five steps that the manufacturer of goods can normally take to cure defects: + 5 options for curing defects: Option 1: Repair.

To the domestic manufacturer, this is the most saving; but this is very expensive to the exporter because he has to send a mechanic together with many tools and spare parts to the buyers country. Option 2: Allow the Buyer to repair at Exporters cost.

The risk that the exporter may easily encounter can be an expensive repair bill or the repair may not properly be carried out which make the exporter has to fix under the warranty. Almost every exporters try to avoid this or allow it only in exceptional cases and then only with the exporters express approval. Option 3: Replace (Part or Whole Item)

By this way, the exporter can keep the goodwill of the customer. However, it is very expensive especially, when the customer want to send back the defective item, which leads to the
30

same problems as option 1: 2 sets of customs, air mail or air freight. Sometimes, skilled technican must be at hand, gi th n nc NK lp t thit b. And the exporters expense is much more higher than the local trader. Option 4: Reduce the price.

This is the replacement of option 1 and option 3. If the buyer pay by L/C, the seller must reduce price directly. If payment is on open account, and the invoice has not yet been settled, the payment due is simply reduced. Moreover, complex item include retainer provision (normally 5%) which is kept by the buyer until the end of the defects liability period to negotiate price reductions. Option 5: Return the Goods and Refund the Price.

The exporter do not want to use this option; this is the same as lose the contract. The value of defective goods is not as high as the cost of return shipment to the exporters country. This means the deal is a total loss for the exporter. So, if the buyer insists on including a return and refund clause in the contract. The exporter must protect himself by allowing this option only in exceptional cases and with his express agreement. + Who chooses? Mainly exporter depends on what kinds of defects that the exporter must be flexible in repairing to save money. Let us look at a clause that mentions all five options, but still allows the exporter the necessary freedom:

Trang

Cu gc

Cu dch

31

143

In the event of a defect coming to Trong trng hp sai st c tm thy v light and being notified to the Seller, thng bo n ngi bn, ngi bn ngay the Seller shall, without undue dalay, lp tc v khng chm tr chu mi ri ro v make good the defect at his own risk chi ph sa cha sai st mt cch ty and cost and at his discretion in one theo nhng cch sau: of the following ways: a. Repair the defective item; a. Sa cha hng ha khim khuyt; b. Cho php ngi mua hoc bn th ba

b. Allow the Buyer or a third party c ngi mua y quyn sa cha hng appointed by the Buyer to repair the ha khim khuyt v tnh chi ph cho ngi defective item at the sellers cost; c. Replace the defective item; d. Reduce the contract price; bn; c. Thay th hng khim khuyt; d. Gim gi hp ng;

e. Allow the Buyer to return the e. Cho php ngi mua gi tr hng khim defective goods and refund all sums khuyt v hon ton b s tin hng paid for the goods. Many exporters like option 1 or 3 because the rests need the negotiation of both the exporter and importer. In this case, the clause runs: Trang 143 Cu gc Cu dch

In the event of a defect coming to Trng hp sai st c tm thy v thng light and being notified to the Seller, bo n ngi bn, ngi bn phi ngay lp the Seller shall, at his discretion and tc la chn phng n sa cha hoc thay without undue dalay, repair or th hng ha sai st, chu mi ri ro v chi replace the defective item at his own ph. risk and cost. + Liquidated damages: A different kind of cure The exporter, sometimes, cures a defect by offering a reduction. The size of the discount

is clearly open to negotiation and more complex deals benefit from this area.
32

+ Costs, Defects, and the Results of defects The defects liability provision usually requires the exporter to cure defects at his own risk and cost. In fact, the major risk for the seller is not the cost of repairing and replacing defective goods. The biggest risk that the exporter has to compensate for the importer is consequential damage orconsequential loss. Given the wording, the exporter must take responsibility for the repair cost. Another cost is not mentioned. This means the exporter has no duty. This is not true. Whenever the contract says nothing about a problem, we look for the answer in the applicable law, which has a close connection to the contract. Nearly all applicable laws divide the buyers losses from defects into two categories: direct losses and indirect (often called consequential) losses. National laws differ in their approach to consequential loss. In Germany, the BGB allows a claim for all direct costs including uncovering, making good, and so on. In America, the UCC allows recovery of all losses including incidential and consequential damages. On the other hand, the loss must closely result from defect. Courts have made decisions in many thousands of cases. However, like all relationship of all deals, the exporters liability for the buyers loss is disposive. Consequently, most exporters try to reduce their responsibility to direct loss only. For an example please refer to table 10 on page 29. Conversely, the exporter is required to accept such risks clearly stated in table 11 on page 29.

LIST OF TABLES AND THEIR TRANSLATIONS: Table 1 (page 117): Cu trong sch - trang 117 Cu dch
33

Inspection before Delivery The Buyer may, at the Buyers option, inspect the Goods prior to shipment. At least fourteen days before the actual delivery date, the Seller shall give the notice to the Buyer, or to any agent nominated by the Buyer, that the Goods are available for inspection. The Seller shall permit access to the Goods for purposes of inspection at a reasonable time agreed by the parties.

Kim tra trc khi vn chuyn Ngi mua c quyn, trong s la chn ca mnh, kim tra hng ha trc khi cht hng ln tu. Ngi bn phi thng bo cho ngi mua hoc bt k mt i l no do ngi mua ch nh v vic hng ha sn sang kim tra, t nht 14 ngy trc ngy giao hng thc t. Ngi bn s cho php hng ha c kim tra vo thi im hp l m hai bn tha thun.

Table 2(page 123):

34

THM TRA V IU KIN BO HNH SUY DIN

Hng Hngc cgiao giao

Ngi mua c kim tra hng ha khng?

C KHNG

Hng ha c ph hp vi hp ng khng? S sai lch c b coi l vi phm c bn khng?

C KHNG
Hng ha C Hng ha c cht c lng ph hp C vi mc thng mi ch s khng? dng KHNG khng?

KHNG C KHNG C KHNG

Ngi bn c th hay ng sa cha vi phm khng?

Chp nhn

Chp nhn giao hng tng phn

T chi

Ngi mua c chp nhn hng ha giao theo b phn khng?

35

Table 3 (page 125): Cu trong sch Trang 125 What you should know 1. The buyer has the right (in some legal systems, the duty) to inspect delivered goods. 2. Three implied warranties apply to most delivered goods, even if the exporter has given no express warranty: (a) warranty of conformity with the contract; (b) warranty of merchantability; (c) warranty of suitability for an intended purpose. 3. Warranty of Conformity with the Contract: In principle, the buyer can reject goods if they do not conform with the contract. 4. Warranty of Merchantability: The buyer can reject goods that are not of merchantable quality. 5. Warranty of Suitability for an Intended Purpose: If the exporter knew the intended purpose, and if the buyer relied on the exporters judgment, the buyer can reject goods that are not suitable for their intended purpose. 6. The question of warranty is disposive: exporters can exclude all warranties. 7. Systems vary in their thinking about whether rejection of contract goods must be total or can be partial. 8. The right of the exporter to cure any defects in his delivery is controversial; if an exporter wants this right, the contract should contain the necessary provision. Cu dch Nhng iu cn bit 1. Ngi mua c quyn (trong mt vi h thng php lut, ngha v) thm tra hng ha nhn c. 2. Ba iu kin bo hnh suy din p dng cho hu ht hng ha c giao, ngay c khi nh xut khu khng a ra bt c iu kin bo hnh tc thi no. (a) bo hnh cho vic thc hin hp ng; (b) bo hnh v cht lng thng mi; (c) bo hnh v s thch hp cho mc ch s dng. 3. Bo hnh cho vic thc hin hp ng: V nguyn tc, ngi mua c th t chi hng nu hng ha khng ph hp vi mc ch s dng. 4. Bo hnh v cht lng thng mi: Ngi mua c th t chi hng ha khng p ng yu cu v cht lng thng mi. 5. Bo hnh v s thch hp cho mc ch s dng: Nu ngi bn bit v mc ch s dng, v nu ngi mua tin tng ngi bn, ngi mua c th t chi hng ha khng ph hp vi mc ch s dng ca chng. 6. Vn bo hnh l ty chn: nh xut khu c th loi b vic ny. 7. Cc h thng a dng trong vic xem xt nu vic t chi hng ha phi l tng th hay mt
36

phn. 8. Quyn ca ngi bn sa cha bt c khim khuyt no trong vic giao hng vn l vn gy tranh ci; nu nh xut khu mun c quyn ny, hp ng phi cung cp iu khon cn thit.

Table 4 (page 127): Cu trong sch trang 127 Guarantee Cu dch Bo lnh

All material, equipment and perfomance of Tt c cc vt liu, thit b v cch hot ng ca goods supplied shall be guaranteed by the hng ha c cung cp s c bo lnh bi cc Supplier against any defect or failure for the nh cung cp vi bt k khuyt tt hay sai st no period of one year from the date of delivery. trong thi gian mt nm k t ngy giao hng. The Supplier must replace defective parts as Nh cung cp phi thay th phn b li cng nhanh quickly as possible. Replaced parts will be cng tt. Cc phn c thay th s c bo lnh guaranteed by the Supplier for six months bi ngi cung cp trong 6 thng k t ngy thay beginning from the date of replacement, and th, v c hon li ton b chi ph cc b phn the whole expense of returning and replacing thay th. the parts will be at his cost

Table 5 (page 128): Cu trong sch trang 128 What you should know Cu dch Nhng iu cn bit
37

1.

Most

contracts

contain

an 1. Hu ht cc hp ng c mt m bo rng ngi xut khu s sa cha tt bt k mt khim khuyt no trong cc sn phm ca mnh: bo m c bit nh l mt s bo hnh, mt trch nhim cung cp cc khim khuyt, hoc khng hon ton chnh xc mt s bo lnh. 2. Vic bo lnh, trong vic p dng php lut nghim ngt, c ngha l mt li ha v hot ng ca ngi khc, do , khng phi khng ng trong ni dung l trch nhim cho sn phm li. 3. T bo lnh c th gy ra mt kt qu nguy him cho cc nc xut khu theo quy lut p dng. 4. S bo hnh l (chnh xc) c s dng trong nhiu ng cnh khc hn bo hnh sn phm. 5. C th iu khon tt nht l trch nhim cho khuyt tt v y l iu khon duy nht vi ngha c quyn v khng th nhm ln.

assurance that the exporter will make good any defects in his products: the assurance is variously know as a warranty, a defects liability guarantee. 2. The term guarantee, in strict provision, or incorrectlya

legal usage, means a promise about somebody elses perfomance; it is , therefore, not incorrect in the context of defects liability. 3. The word guarantee might

produce a dangerous result for the exporter under certain applicable laws. 4. The term warranty is (correctly)

used in many other contexts than the product warranty. 5. with an Probably exclusive the and best term is

defects liability since this is the only term unmistakable meaning.

Table 6 (page 130): Cu trong sch trang 130 The Supplier warrants that each Item supplied Cu dch Ngi cung cp m bo cho mi mn hng
38

under this contract ( and each part thereof) c cung cp chiu theo hp ng ti thi im shall at the date of its acceptance: (i) Be free from defects in material chp nhn: (i) (ii) Min tr khim khuyt nguyn liu Min tr khim khuyt tay ngh nhng khng hn ch cho tt c qu trnh sn xut (iii) Min tr khim khuyt v thit k nhng khng hn ch n vic la chn nguyn liu v phi ng nht vi cc khon thng thng Nu c khim khuyt hay thiu ht c tm ra

(ii) Be free from defects in workmanship including but not limited to all manufacturing processes (iii) Be free from defects inherent in design including but not limited to selection of materials, and be fit for the purpose for which the Item is normally used.

If any defect or deficiency is discovered in trong cc mn hng hay ca ci, th bn cung cp the Item or in any part thereof, then the s sa cha, thay th nhng mn hng hoc b Supplier shall either repair or replace such p hng thiu ht. Item or rectify such deficiency. iu khon trn l mc cho ngi mua tn thnh

The warranty above is subject to the vi ngi sn xut hoc ch dn chi tit khi s Purchaser having adhered to the procedures dng, lu kho, lp t hoc qu trnh hat ng or instructions applicable to the use, storage, ca hng ha v ngn chn nhng tn tht pht installation or operation of the Itemand sinh t vic hao mn t nhin khi s dng. expressly excludes all damage arising from wear and tear to the Item in normal use.

Table 7 (page 131): Cu trong sch trang 131 Disclaimer of Warranty A. The software provided under this A. Cu dch iu khon t b Phn mm c cung cp di s ng
39

Agreement is furnished as is and without support of any kind whatsoever. B. The supplier disclaims all warranties

ny cung cp ging ht v khng km theo bt k s h tr no. B. Ngi cung cp t b ton b nhng iu

with regard to any software licensed to the purchaser under this agreement, including all implied warranties of merchantability and fitness for a particular purpose. In no event shall the supplierbe liable for any special, indirect or consequential damages whatsoever resulting from loss of use, data or profits, whether in an actionof contract, negligence or other tortious action, arising out of or in connection with use or performance of any software licensed under this agreement. C. The Suppliers prices are based in

khan vi s quan tm n cc loi giy php mua bn di s ng , bao gm ton b cc iu khon ca kh nng thng mi v ph hp vi nhng yu cu c bit. Khng c vic nh cung cp c trch nhim vi bt k tn tht c bit hay gin tip no khi m l kt qu ca vic mt mt d liu hay li nhun, d trong cc hnh ng c lin quan, s sut hay hnh ng c hi khc pht sinh t vic kt ni vi s dng hay hiu qu ca bt k giy php s dng no di s cho php. C. Gi ngi bn da theo nguyn liu m ngi bn s dng

material part upon this limitation of the Suppliers liability.

Table 8 (a collection of chapter 5 tables):

40

Trang The

Cu trong sch Defects Liability

Cu dch Thi hn trch nhim php l v sai st s c gia hn thm mt khong thi gian bng vi thi gian m hng ha khng th s dng do nhng sai st gy ra, nhng khng gia hn qu 24 thng k t ngy giao hng u tin ca s hng ha c sa cha hay thay th theo iu khon ny.

Period shall be extended by a period equal to the period during which the Goods cannot be used by reason of any defect, but not so as to extend the Defects Liability Period for more than twentyfour months from the date of first delivery of the Goods repaired or replaced under this provision. 1 36 Any Supplies furnished by way of replacement under warranty shall be subject to the provisions of this Clause to the same extent as Supplies initially accepted by the Contractor for a full further period of warranty. Any parts replaced under this waranty shall be subject to the provisions of this clause for a full further period of warranty; however, the total warranty period shall in no case exceed three years. Notice of Defects The Buyer shall notify the Seller of defects without undue delay. 1 37 Making Good of Defects The Seller shall make good of the defect or damage

Bt c hng ha no c cung cp bng phng thc thay th trong thi hn bo hnh s phi tun theo iu khon ny vi cng mt mc nh nhng hng ha m ngi k kt hp ng chp thun lc u trong mt thi hn bo hnh y na.

Bt c phn no c thay th trong thi hn bo hnh s phi tun theo iu khon ny, phi chu mt Thi hn bo hnh y na; tuy nhin, tng thi hn bo hnh trong bt c trng hp no cng khng c vt qu 3 nm.

Thng bo v Sai st Ngi Mua s thng bo cho Ngi Bn v nhng sai st m khng c tr hon qu mc.

Sa cha sai st

41

Ngi Bn s sa cha sai st hay thit hi ngay khi c th thc hin c v phi t chu

Table 9 (page 143): Trang 143 Cu gc Cu dch

In the event of a defect coming to Trong trng hp sai st c tm thy v light and being notified to the thng bo n ngi bn, ngi bn ngay Seller, the Seller shall, without lp tc phi bi thng mi ri ro v chi ph, undue dalay, make good the sau t do la chn 1 trong nhng cch defect at his own risk and cost sau: and at his discretion in one of the following ways: a. Repair the defective item; b. Allow the Buyer or a third party appointed by the Buyer to repair the defective item at the sellers cost; c. Replace the defective item; d. Reduce the contract price; e. Allow the Buyer to return the defective goods and refund all sums paid for the goods. a. Sa cha hng ha khim khuyt; b. Cho php ngi mua hoc bn th ba c ngi mua y quyn sa cha hng ha khim khuyt v tnh chi ph cho ngi bn; c. Thay th hng khim khuyt; d. Gim gi hp ng; e. Cho php ngi mua gi tr hng khim khuyt v hon ton b s tin hng

Table 10 (page 143) Trang 143 Cu gc Cu dch

In the event of a defect coming to Trng hp sai st c tm thy v thng light and being notified to the Seller, bo n ngi bn, ngi bn phi ngay lp the Seller shall, at his discretion and tc la chn phng n sa cha hoc thay
42

without undue dalay, repair or replace th hng ha sai st, chu mi ri ro v chi the defective item at his own risk and ph. cost.

Table 11 (page 146) Trang 146 Cu gc Cu dch

The duty of the Seller to repair or Ngha v sa cha hoc thay th hng ha replace defective items is the Sellers khim khuyt ca ngi bn l ngha v duy only duty under this contract or nht ca ngi bn c trong hp ng; mt otherwise, and the Seller shall not be khc, ngi bn s khng phi bi thng liable to compensate the Buyer for any cho ngi mua bt c tn tht no pht sinh loss of use of any works beloing to the khi ngi mua t sa cha (d ton b hay Buyer (whether complete or partial) or b phn), hoc bt c s thm ht li nhun for any loss of any profit or for any no, bt c thit hi gin tip hay thit hi v direct or consequential damage that sau ca ngi mua. may be suffered by the Buyer.

Table 12 (page 146) Trang 146 Cu gc Cu dch

The Seller shall indemnify and hold Ngi bn phi n b v chu nhng thit
43

harmless the Buyer against any los of hi hay tn tht gy ra cho ngi mua, d damge whether direct of indirect l trc tip hay gin tip, l kt qu ca hng suffered by the Buyer as the result of ha b sai st hay thiu ht do ngi bn vn defective or faulty goods delivered by chuyn. the Seller.

Original (Page) This contract, and all questions relating to its validity , interpretation or performance shall be governed by the law of The Republic of Verbena P154 This contract, and all questions relating to its validity , interpretation or performance shall be governed by the law of The Republic of Verbena. This contract shall not include, incorporate or be subject to the provisions of the United Nations Convention on Contracts for the International Sale of Goods P155

Cu dch (Trang) Hp ng ny, cng nh nhng vn lin quan ti hiu lc, cch din gii v vic thc hin hp ng c iu chnh theo lut ca nc Cng ha Verbena Trang 154 Hp ng ny, cng nh nhng vn lin quan ti hiu lc, cch din gii v vic thc hin hp ng c iu chnh theo lut ca nc Cng ha Verbena. Hp ng ny khng bao gm, lin quan hay s dng cc iu khon ca Cng c lin hp quc v hp ng mua bn hng ha quc t lm tiu chun.

Trang 155 Cancellation If a merchant sells goods of such Hy hp ng poor quality that the number of claims under Khi Bn bn giao hng qu km phm cht n the warranty is clearly excessive, then the mc vt qu hn mc bo hnh th Bn mua Buyer may return all the delivered goods to the c quyn tr li ton b hng nhn t Bn Seller and receive back all sums of money paid bn v i li tt c cc khon tr cho hng ha; for the goods; on cancellation, only those khi hy, ch nhng iu khon trong hp ng provisions of the contract concerning litigation, cp ti vic kin ra ta n, kin ra trng ti, arbitration, and/or the payment of damages v/hoc bi thng thit hi l cn hiu lc. shall survive Trang 156
44

P156 The Seller reserves the right to withdraw this offer at any time before acceptance by the Buyer P161 This order is subject to the Buyers General Conditions of Purchase, as printed on the reverse P161 This order is subject to the Sellers General Conditions of Sale, as printed on the reverse P161 Partial Invalidity If any provision or provisions of this contract are invalid or become invalid, then this shall have no effect on the remaining provisions. Further, the parties agree to replace any invalid provision with a new, valid provision having, as far as possible, the same intent as the provision replaced P163 Severability In the event that any provision of this Agreement is held to be illegal or otherwise unenforceable, such provision shall be deemed to have been deleted from this Agreement, while the remaining provisions of this Agreement shall be unaffected and shall continue in full force and effect P166

Bn bn c quyn rt li li cho hng bt c lc no trc khi Bn mua ng mua hng. Trang 161 n t hng ny da trn iu khon chung v Mua hng ca bn mua, c in mt sau ca n hng ny. Trang 161 n t hng ny da trn Nhng iu khon chung v bn hng ca Bn bn, c in mt sau ca n hng ny. Trang 161 Ht hiu lc mt phn Khi mt hoc mt vi iu khon trong Hp ng v hiu hoc tr nn v hiu, th chng khng nh hng g n cc iu khon cn li. Ngoi ra, cc bn ng thay th khon v hiu bng iu khon mi c hiu lc th iu khon mi ny c ngha tng ng vi iu khon c thay th. Trang 163 Ct gim iu khon Nu nh bt c iu khon no ca Hip nh ny c hiu l bt hp php hoc bt kh thi, th iu khon s b xa b, cn cc iu khon khc vn c hiu lc hon ton v khng h b nh hng.

Trang 166 Partial Invalidity Ht hiu lc mt phn If any provision or provisions of this contract Nu mt hoc mt vi iu khon trong Hp ng are invalid or become invalid, this has no effect v hiu hoc tr nn v hiu, th chng khng nh on the validity of the remaining provisions. hng g n cc iu khon cn li. If any provision of this contract is invalid or Nu bt k iu khon no ca Hp ng ny v become invalid, the parties have the duty to hiu hoc tr nn v hiu, cc bn phi c trch replace the invalid provision with a new valid nhim thay th iu khon v hiu bng mt iu provision that fulfills the original intent of the khon mi, c hiu lc; m bo nguyn vn invalid provision ngha ban u ca iu khon v hiu m n thay P166 th. Trang 166 Will you please change our order to 131 Chng ti mun thay i n t hng thnh 131 cartons of pineapple juice, 110 cartons of thng cc-tng nc da p, 110 thng cc-tng pineapple chucks, and 200 cartons of pineapple bnh da v 200 thng cc-tng da khoanh. Theo
45

rings. According to the price list you sent us, the total invoice price is now exactly the same as the original price. Please confirm the new agreement immediately P167 We hereby confirm your change of order. We shall now sent 131 cartons of pineapple juice, 110 cartons of pineapple chucks, and 200 cartons of pineapple rings. There is no change in the price P167 Entire Agreement This Contract constitutes the entire agreement and understanding between the parties. There are no agreements, agreements, conditions, reservations or representations, oral or written, that are not embodied in this contract or that have not been superseded by this contract P170 This Procurement Contract between The Styropak Company of Nonamia and Verbena Packaging Ltd. Of Verbena Witnesseth that Whereas the parties have for many years successfully traded together And whereas Styropak has recently developed biodegradable Styrofoam packaging The parties hereby agree P170 Whereas the parties have successfully cooperated in a number of projects in the Republic of Verbena during the last ten years; Whereas the Supplier has wide experience in supply of electronic products for use in tropical conditions; Whereas the parties concluded on 28 May 1995 a Memorandum of Understanding and intent to develop products for Verbena; Whereas the Supplier has developed and patented an electronic relay under the

nh bng gi qu cng ty gi th tng gi tr ca n hng hin ti ng bng gi tr n hng c. Knh mong qu cng ty xem xt v xc nhn n hng mi ngay lp tc. Chng ti xc nhn vic thay i n hng ca qu cng ty. Chng ti s gi ngay 131 thng cctng nc da, 110 thng cc-tng bnh da v 200 thng cc-tng da khoanh. Gi c khng c g thay i. Trang 167 Tha thun y Bn hp ng ny cu thnh ton b tha thun gia cc bn. Khng c tha thun, iu kin, vic bo lu hay i din, bng ming hoc bng vn bn, l khng c cp n hoc b loi b trong bn hp ng ny. Trang 170 Bn Hp ng gii thiu ny c lp gia: Cng ty Styropak Nonamia v Cng ty TNHH ng gi Verbena Xc nhn rng: V cc bn c giao thng tt p trong nhiu nm V bi v Styropak gn y pht trin cng ngh ng gi sn phm Styrofoam bng vt liu c th tiu hy c Cc bn, do , thng nht rng Trang 170 V cc bn c s hp tc tt p trong rt nhiu d n ti nc Cng ha Verbena 10 nm qua; V Bn bn c nhiu kinh nghim trong vic cung cp cc sn phm in t dng trong iu kin kh hu nhit i; V cc bn k kt Bn ghi nh v Hp tc v s pht trin sn phm ca Verbana ngy 28 thng 5 nm 1995; V Bn bn pht trin v c cp bng sng ch cho thit b in t rle di tn ng k Hair
46

registered trade name Hair Trigger; Whereas both parties are interested in introducing this new technology into the East Asian region; Whereas the Purchaser wishes to incorporate the latest relay manufacturing technology in its own products; And whereas the government of the Republic Of Verbena actively supports the introduction of pioneer technology It is hereby agreed that P171 Contract Documents All contract documents and the clauses of this contract shall be read, if possible, so as to be consistent. In the event of conflict, the order of precedence this agreement is as follow : 1. Any alterations typed on the face of the printed Purchase Agreement 2. The printed text of the Purchase Agreement itself 3. Specifications 4. Statement of Work 5. Manufacturing Drawings 6. The Buyers Special Conditions of Purchase 7. The Buyers General Conditions of Purchase P172 P.S By the way, we assume that Christmas and Easter are holidays in Esperanza. And they? The reply No. We are a Moslem country so we dont celebrate Christmas or Easter. But theres no reason why your consultants shouldnt have those day off. An exchange of notes like this has no validity once the contract is signed : a formal definition is the best way of clarifying what exactly the two sides have agreed : In this contract holiday shall mean all legal holidays in Esperanza, and in addition, 24th and 25th December, Good Friday, Easter Saturday,

Trigger; V c hai bn u quan tm n vic gii thiu cng ngh mi ny ti vng ng ; V Bn mua mong mun c tch hp sn phm rle mi nht dng cho vic ch to sn phm k thut vo cc sn phm ca h; V v chnh ph nc Cng ha Verbena ng h v vic ra mt cc sn phm ki thut i tin phong V th, ti y cc bn thng nht rng Trang 171 Cc chng t lin quan Mi chng t lin quan v cc iu khon ca hp ng ny phi c xem xt c th nht qun vi nhau. Trong trng hp c tranh chp, th t u tin xem xt gii quyt s l: 1. Bt c s sa i no trn b mt ca bn in H mua hng. 2. 3. 4. 5. 6. Bn thn cu ch ca H mua hng Nhng ch dn trong H Bo co cng vic Cc bn v sn xut Nhng iu kin mua hng c bit ca ngi mua 7. Nhng iu kin chung v mua hng ca ngi mua Trang 172 Nhn y, chng ti cng cho rng ti Esperanza, L Ging sinh v L Phc sinh c tnh l ngy ngh. C phi vy khng? Tr li: Khng. Chng ti l t nc Hi Gio nn chng ti khng k nim L Ging sinh hay Phc sinh. Tuy nhin, chng c l do g chuyn vin ca cc ngi khng c ngh vo nhng ngy ny. S trao i v ch thch nh trn y khng c gi tr mt khi hp ng c k: Mt nh ngha chnh thc l cch tt nht xc nh chnh xc iu m hai bn ng : Trong H ny k ngh nn c hiu l tt c nhng ngy ngh theo php lut ca Esperanza, thm vo l ngy 24 v 25 thng Mi Hai, v
47

and Easter Sunday P173 Definitions In this contract the words below have the meanings ascribed to them unless the context otherwise clearly dictates : 2.1 Unless expressly modified by the parties, FOB, CIF and other trade term have the meanings and obligations ascribed to the in Incoterms 1990, Publication 460 of the International Chamber of Commerce, Paris. 2.2 Contract mean this Contract, its preamble and appendices, as well as documents expressly listed as Contract documents or otherwise expressly mentioned in this contract. And so on P173 Whereas Verbena Leather has a highly trained workforce and the most modern leather making machinery; And whereas Verbena Leather has wide experience is supplying products to all parts of the world; And whereas Verbena Leather is fully familiar with regulations regarding import of leather goods into the United States; The parties hereby agree P174 Contract Documents mean collectively the completed Tender Documents with possible supplements, the Contract Agreement, Tender Drawing, the Notice of Award, the Performance Bond, the Guarantee for Advance Payment, the Form of Retention Guarantee, the Copy of Policy for Third Party Insurance, the Letter of Power of Attorney and the Joint Venture Agreement (if any) with annexures and appendices included therein and any additions, supplemental, change orders and extra work orders (if any) P174 The Amaryllis Docklands and Harbor Supply

cc ngy th Su, th By, Ch Nht ca l Phc sinh Trang 173 nh ngha Trong hp ng ny, nhng t ng di y, tr phi c ch gii r rng no khc, c hiu l: 2.1 Tr phi c s tha thun r rng gia cc bn, FOB, CIF v cc iu khon thng mi khc s c ngha nh trong Incoterms 1990, n bn s 460 ca phng thng mi quc t, Paris. 2.2 Khi nim hp ng bao gm thn hp ng ny, phn m u v ch gii lin quan, cng nh nhng chng t c lit k l chng t hp ng hoc c dn chiu r rng trong hp ng, .v..v Trang 173 Bi v Verbena Leather c i ng lao ng tay ngh cao v my mc ch to thuc da hin i nht; V bi v Verbena Leather c nhiu kinh nghim trong vic cung cp sn phm thuc da trn khp th gii; V bi v Verbena Leather hon ton thng tho cc quy nh v nhp khu hng thuc da vo Hoa K; Cc bn do ng rng Trang 174 Cc chng t hp ng c hiu l ton b nhng ti liu u thu v cc ph lc, bn Hp ng, bn v u thu, thng bo trng thu, cam kt thi hnh hp ng, bo lnh thanh ton tr trc, t mu bo lnh, bn sao hp ng bo him cho bn th ba, giy y quyn v hp ng lin doanh (nu c) cng vi nhng ph lc km theo v bt k b sung, thay th n hng hay b sung n hng (nu c).

Trang 174 Cng ty TNHH Amaryllis Docklands v Harbor

48

Company Ltd., a company organized and existing under the law of the Republic of Verbena, having offices in Port Mary, Verbena, hereinafter call AMARYLLIS P177 The Amaryllis Docklands and Harbor Supply Company Ltd., a company organized and existing under the law of the Republic of Verbena, having offices in Port Mary, Verbena, hereinafter call SELLER P177 Notices Notices served by one party to the other under the contract are valid only if sent by registered mail and signed. Such notices are to be sent to following address: Seller : [ADDRESS] Buyer : [ADDRESS] P178 Assignment of Rights, Delegation of Duties The rights under this Contract may not be assigned nor the duties delegated by either party without the prior written consent of the other party P178

Supply, thnh lp v hot ng theo php lut nc Cng ha Verbena, c tr s ti Port Mary, Verbena, sau y gi l AMARYLLIS Trang 177 Cng ty TNHH Amaryllis Docklands v Harbor Supply, thnh lp v hot ng theo php lut nc Cng ha Verbena, c tr s ti Port Mary, Verbena, sau y gi l BN BN Trang 177 Thng bo Thng bo a ra bi mt bn cho bn kia theo hp ng ny c gi tr ch khi c k v gi bng th m bo. Thng bo s c gi theo a ch di y: Ngi bn: [A CH] Ngi mua: [A CH] Trang 178 Trch nhim v quyn hn ca cc bn

Quyn li v ngha v ca cc bn trong hp ng ny s khng c ch nh hoc u quyn m khng c s ng thun nht tr bng vn bn ca bn cn li. Trang 178 Dear Sir, Tha qu cng ty, We have pleasure in informing you that we are Chng ti ly lm vinh d thng bo cho qu cng transferring the right to take delivery of the ty rng chng ti s u quyn vic giao l hng latest consignment of goods to one of our sp ti y cho mt trong s cc i l ca chng subsidiaries, Allpart Michigan. Delivery details ti, Allpart Michigan. Chi tit ca vic giao hng will be sent to you in the next few days. s c gi ti qu cng ty trong vi ngy ti. Futher, we are transferring the duty to pay the Ngoi ra, chng ti s u thc ngha v thanh ton contract price to our subsidiary in Nonamia gi hp ng cho i l ca chng ti Nonamia, Fudge and Gurgle. If you will send your Fudge and Gurgle. Nu qu cng ty gi ho n invoice to them, we are confident that you will cho h, chng ti tin rng qu cng ty s nhn receive payment from them in due time. c tin thanh ton ng hn. Yours faithfully Knh th. P179 Trang 179 Termination for convenience of the Buyer Vic chm dt hp ng v quyn li ca Bn mua The delivery of Goods under this contract may Theo hp ng ny, Bn mua c th chm dt ton be terminated by the Buyer in accordance with b hoc mt phn ngha v giao hng bt c khi this clause in whole, or in part, whenever the no Bn mua cho rng vic chm dt ny l c li Buyer shall determine that such termination is nht. Vic chm dt ny phi c gi cho Bn in his best interest. Any such termination shall bn thng bo ng thi ch r phm vi v thi
49

be effected by delivery to the Seller of a Notice of Termination specifying the extent to which supply of Goods under the contract is terminated, and the date upon which such termination becomes effective P183 In the event of termination for whatever reason, the Seller shall be entitled to receive full payment for all goods and services delivered by the Seller at the date of termination P183 Termination for Default The Buyer may be written notice of default to the Seller, terminate the whole or any part of this Contract in any one of the following circumstances; (i) If the Seller fails to make delivery of the Good within the time specified herein; (ii) If the Seller fails to perform any of the other provisions of this contract, or so fails to make progress as to endanger performance of this contract in accordance with its terms, and in either of these two circumstances does not cure such failure within a period of 10 days P184 Language This agreement is written in English and in Swahili. In the event of a discrepancy, the English language version shall prevail P185 Language This agreement is made in both Swahili and English. The Swahili and English versions have equal legal status P185

im vic chm dt c hiu lc.

Trang 183 Trong trng hp chm dt hp ng v bt c l do no, Bn bn c quyn nhn ton b s tin thanh ton cho tt c hng ho v dch v Bn bn thc hin trong ngy chm dt hp ng. Trang 183 V hiu hp ng Bn mua c th thng bo vic v hiu hp ng bng vn bn ti Bn bn, chm dt ton b hoc mt phn ca hp ng ny trong bt k trng hp no di y: (i) (ii) Nu Bn bn khng thc hin giao hng trong thi gian quy nh; Nu Bn bn khng thc hin bt k iu khon no khc ca hp ng, hoc khng t c tin hp ng, gy nguy hi n vic thc hin cc iu kin ca hp ng; v trong c hai trng hp nu khng khc phc sai st trong thi hn 10 ngy.

Trang 184 Ngn ng: Tha thun ny c vit bng ting Anh v ting Swahili. Trong trng hp c s khc bit, vn bn bng ting Anh s c p dng. Trang 185 Ngn ng: Tha thun ny c vit bng c ting Swahili v ting Anh. Cc vn bn ting Swahili v ting Anh c t cch php l nh nhau. Trang 185
50

This contract and the contract documents are Hp ng ny v cc chng t ca hp ng u written in English. Any translation into another c vit bng ting Anh. Bt k bn dch sang language is for information only and has no ngn ng khc ch mang tnh thng tin ch dn v legal status. khng c t cch php l. Correspondence between the parties shall be conducted exclusively in English. The language of all designs, drawings, plans, specifications, and all other documentation provided by the Seller under this contract shall be English; however, the training materials and the maintenance manuals specified in Article 11 shall be supplied in both an English language version and an Arabic version. In the event of discrepancy between the two version, the English language version shall prevail P186 Th tn gia cc bn ch s dng ngn ng duy nht l ting Anh. Ngn ng ca tt c cc thit k, bn v, k hoch, ch dn, v tt c cc ti liu c cung cp bi ngi bn theo hp ng ny c vit bng ting Anh; tuy nhin, cc ti liu o to v hng dn bo tr c quy nh ti iu 11 c cung cp c hai phin bn ting Anh v ting Rp. Trong trng hp c s khc nhau gia hai phin bn, phin bn ting Anh s c p dng. Trang 186 Bn sao ca hp ng Hai bn sao ca hp ng ny, mt ting Anh v mt ting Swahili, c k bi c hai bn. Mi bn gi mt bn vi ngn ng tng ng. Trang 186 Tranh chp Bn mua v Bn bn s thc hin mi n lc gii quyt cc tranh chp ny sinh gia hai bn trong hoc lin quan n hp ng bng ha gii thng qua m phn trc tip v thn thin. Trang 190 Th tc ha gii c thc hin nh sau: a. Cc bn thng nht thi gian v a im cho cuc hp ha gii; b. Tham gia cuc hp gm 1 ngi i din v 1 lut s ca mi bn; c. Lut s khng c quyn pht ngn ti cuc hp; d. Cuc hp din ra trong ba phin. Phin u tin, mi bn a ra quan im ca
51

Copies of the Contract Two copies of this contract, one in English and one in Swahili, have been signed by both parties. Each party retains one copy in each language P186 Revolution of Disputes The Buyer and the Seller shall make every effort to resolve amicably by direct, informal negotiation any disagreement or dispute arising between them under or in connection with the contract P190 Procedure for amicable settlement shall be as follow: a. The parties shall agree a date and place for amicable settlement meeting; b. Attending the meeting shall be one executive representing each party and one lawyer representing each party; c. The lawyer shall not be allowed to speak at the meeting; d. The meeting shall take place in three sessions. In the first session, each party shall state its position on the subject of the disagreement. In the second session

the parties shall suggest ways of resolving the disagreement. In the third session the parties shall attempt finally to resolve the disagreement. In the event that the parties fail to resolve their disagreement amicably, they shall proceed to arbitration on the terms specified here below P190

ca mnh v vn bt ng. Trong phin th hai, cc bn s xut cc cch gii quyt vn . Phin th ba, cc bn s thc hin n lc cui cng nhm gii quyt bt ng. Trong trng hp cc bn khng th gii quyt bt ng bng ha gii, trng ti s c mi xt x da trn nhng iu khon di y. Trang 190 Gii quyt tranh chp Tt c nhng tranh chp ny sinh lin quan n hp ng hin ti c phn quyt cui cng da trn Lut Ha gii v Xt x ca Phng Thng mi Quc t bi mt hoc cc trng ti c ch nh v ph hp vi quy nh ca lut ny. Trang 191 S lng trng ti l ba ngi. a im xt x l Thnh ph Verbena. Ngn ng c s dng ti phin ta gii quyt tranh chp l ting Anh. Trong trng hp nh trng ti, mi bn phi chu khon ph ca mnh. Trang 192 C hai bn ng rng quyt nh ca hi ng trng ti l quyt nh cui cng v c hiu lc vi c hai bn, khng k n cc n lc gii quyt khc. Trang 192

Settlement of Disputes All disputes arising in connection with the present contract shall be finally settled under the Rule of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules P191 The number of arbitrators shall be three. The place of settlement of dispute shall be Verbena City. The language used by the court in the settlement of dispute shall be English. In the event of arbitration, each party shall bear its own costs P192 Both parties agree to accept the decision of the court of arbitration as final and binding on them both, to the exclusion of all other remedies P192

52