I.

Sales contract

1. Definition:
International trade contract is a legally binding agreement between two or more parties
having the headquarters located from different countries, whereby the exporter has the
obligation to transfer the title of a certain property called as a good; the importer has
the obligation to receive that good and to fulfill payment.

2. Purpose of sale contract:

A sales contract records a transaction between a buyer and seller for legal purposes
and record-keeping. Contracts can be written out, but any buyer who pays for a
product or service on the spot automatically agrees to the terms of a sales contract. A
sales contract specifies who the parties are, what transaction has taken place, the legal
obligations and rights of each party to the contract and information regarding certain
contingencies.

3. Characteristics:

 Subject: Subjects of an international sales contract are parties, the buyer and
seller, have their places of business in different countries. Vietnam Commercial
Law 2005 further stipulates that: between parties having their places of business
in the territory of Vietnam but one party is inland and the other is in special
zones in the Vietnamese territory, which are regarded as exclusive customs
zones according to the provisions of law (Article 28).
 Object: Goods that are the objects of contracts for the purchase and sale of
international goods are movable goods, that is, goods that can be transferred
across the border of a country.
 Currency: The currency of payment is usually domestic or may be foreign
currency to the parties. There are also cases that the payment currency is the
domestic currency of both parties, for example, businesses in countries of the
European community use the Euro as a common currency.
 Language: International sales contracts are usually written in foreign languages,
most of which are written in English.
 Dispute settlement: Agencies in charge of settling disputes arising from the
conclusion and implementation of an international sales contract may be the
court or arbitrator of either party or a third country.
 Contract governing law: The laws applied to the international sales contracts are
diverse and complex, which means that international sales contracts may be
adjusted by not only national laws but also foreign laws, international treaties,
customs and usage of international sale or case laws.
 Structure of the contract:
 Introduction: This part normally includes the following information:
 Title: Contract, Agreement
 Contract No.: to manage, archive the contract, refer to later transaction
documents.
 Place of signing contract: written at the beginning or the end of the
contract. The location of signing the contract has a meaning to determine
the source of the law governing the contract. If the parties do not agree
on the contract, it is the law of the place where the contract is signed.
 Parties’ names and addresses: Names, addresses, telephone numbers,
fax, email, representatives. In case the signer is not the representative,
he/she must be authorized by the seller or buyer.
 Definition: Definitions of the goods, complicated services or any other
terms related to a specific meaning of the contract mentioned, not as
common interpretation.
 Basis for contract: Conventions, Decrees, voluntariness and requirements
of relevant parties.
 Voluntary agreement: Parties agree that the seller commits to sell and the
buyer commits to buy according to the terms and conditions of the
contract.
 Terms and conditions
 Commodity, quality, quantity, packing and packaging.
 Financial conditions: price, payment, payment document.
  Transportation: date, place of delivery, number of delivery,
transshipment.
 Legal terms: applied law, claims, force majeure, arbitration.
 Ending:
 Number of contract copies, number of contracts retained by each party.
 Language: If the contract is written in many languages, it must specify
whether those languages have equal legal validity. If not, parties must
define which language is the official version of the contract to be
considered in case a dispute occurs.
 Duration of validity of the contract.
 Rules relating to the modification and implementation of the contract.
 Signatures of the authorized representatives between the parties.

II. Analysis of the contract:

Hình thức hợp đồng:
- The contract is made in the form of a document, in accordance with the
requirements of the law
- In general, the contract is presented relatively accurately according to the
specified contract form. The contract include sections: Name of contract, contract
date, introduction, terms and conditions, signature. The sections are clearly
divided, easy to see, easy to read and understand, avoiding confusion for both sides

Nội dung hợp đồng:

A. General overview of the contract:
1. Buyer/ Import:
- Name: HAVITECH PRODUCTION JOINT STOCK COMPANY
- Add: Lot 5, Cam Thuong Cluster, Cam Thuong Commune, Ba Vi District,
Hanoi City, Vietnam
- Represented by: Ms. Le Thi Kim Oanh
- Position: Import Export Director
- Tel: +84 0399 799 888

2. Seller/ Exporter:
- Name: Romeroca Industry Co., Limited
- Add: No.14 Business Area, Gong Yuan Yi Hao, LuCheng, ChangZhou,
Jiangsu, China
- Represented by: Mr. Wayne Wang
- Position: General Director
- Tel: +86 519 6878 1160

3. Basic information:
- Contract number: RFS-HA200526-002
- Contract date: 26th, May, 2020
4. Overall:
- The preamble of the contract is quite detailed, giving information about the
name, address, telephone and the representatives of two parties involved as well
as mentioning the position of the representatives in the two parties'
organizations so that both parties can understand each other clearly and in case
a dispute occurs. However, there is no information about the fax number of
both companies. In some articles of the contract, it is requested that the means
of communication is fax or email. Therefore, we suggest the fax number should
be added so that it is more convenient for two companies to work with each
other
- Given “ Location and date ” section, the contract does not specify the location
of signing but only mention about the signed date. This is because the contract
is signed VIA fax/email
- According to Article 6 of the 2005 Commercial Law and Decree 13 CP / 2013
on the right to import and export business, both parties in the contract are legal
entities. The entities have legal status in signing the contract and have the right
to import and export business in Vietnam. Two parties are based in different
countries which are Viet Nam (the buyer/importer) and China (the
seller/exporter)
- This is a one-text contract formulated by both parties, is a short-term document
and is an import contract.

B. Analyze and evaluate the contract:

1. Commodities, Price and Quantity:
a) Name of commodities: The very first clause of every contract shall be the name of
commodities. The contract goods should be specified at least to the degree that they
can be identified. Naturally, greater precision describing them reduces the potential for
misunderstanding. If the product is very complex (for example, machinery), a detailed
description can be made in an annex of the contract

No. Description Quantity Uni Unit Price Amount

t (USD) (USD)
1 PVC Wear-Resisting Layer
2 PVC Decor Film
3 IXPE underlay 1.5mm Blue
Color
4 EVA underlay 1.5mm
Black Color
TOTAL FOB SHANGHAI

In this contract: There are 4 types of traded products. The names of these commodities
are stated in the Description column of the table above. Three of them have their name
specified as commercial name together with their main specifications. And there are
one commodity whose name is added its mains specification as well as its use

+ PVC Wear-Resisting Layer: The name of this good is written together with its two
main specifications (made of PVC and wear-resisting)
PVC - Polyvinyl Chloride is a popular thermoplastic that's odorless, solid, brittle, and
generally white in color. It's currently ranked as the third most widely used plastic in
the world (behind polyethylene and polypropylene). Due to its versatile nature, PVC is
used extensively across a broad range of industrial, technical and everyday
applications including widespread use in building, transport, packaging,
electrical/electronic and healthcare applications.
Wear-resisting means being resistant to damage from normal wear or usage
  A PVC Wear-Resisting Layer is the protective top layer of vinyl flooring, made
of clear PVC film and applied to the top of the decorative film, the wear layer
adds an extra boost of durability and extends the life of your flooring
PVC Wear-Resisting Layer in PVC rigid core vinyl flooring, the protective top layer,
is very important to the durability of the product. The thickness of the wear-resistant
layer is measured in millimeters. The greater the thickness of the wear-resistant layer,
the better the durability of the PVC rigid core vinyl flooring. The wear-resistant layer
is built into the vinyl planks and plays an important role in durability of the vinyl
floors. The wear layer protects the floor against scratches, stains and scuff marks
+ PVC Decor Film: The name of this good is written together with its main
specifications (made of PVC) and its use (for decoration)
PVC decorative film is a newly developed environmentally friendly material. It can be
used and applied for the surface finishing of flooring, furniture, doors, speakers,
cabinets, gift boxes, steel etc. It can be also used as Boeing films with glue, interior
decoration and other fields with variety kinds of products. With characteristics of
verisimilar emulation effect, elegant color and luster, super stereoscopic impression,
waterproof, acid & alkali resistance, self-extinguishing from fire, ease of use,
environmental protection, non-toxic and odorless, paint free, it's a new type of
environmentally friendly products.
+ IXPE underlay 1.5mm Blue Color: The name of this good is written together with
its two main specifications (1.5mm and blue color)
IXPE is a premium acoustical underlayment made up of sound dampening high-
performance cross-linked foam with an overlapping film for extra moisture protection
at its joints. The extra fine foam offers advanced moisture protections and shock
absorption. Utilizing the Progressive Foam Technology (PFT), IXPE underlay is
designed for supreme sound reduction.
IXPE underlay’s specification:

 Thickness: 1.5mm
 Colors: blue

+ EVA underlay 1.5mm Black Color: The name of this good is written together with
its two main specifications (1.5mm and blue color)
EVA underlay is designed for using under floated floors laminate flooring, bamboo
and engineered wood floors and is ideal for many types of subflooring.
This underlay is with a 3mm thickness that provides optimal cushioning and sound
absorption, as well as a closed-cell foam design that offers excellent moisture vapor
resistance.
It also coordinates the comfort with your floorings.
EVA underlay’s specifications:

 Thickness: 1.5mm
 Colors: black

=> Comment:
- The contract clearly stated the name together with the main specifications and the use
of the commodities but does not mention the HS code (Harmonized Commodity
Description and Coding System). The Harmonized System is a standardized numerical
method of classifying traded products. It is used by customs authorities around the
world to identify products when assessing duties and taxes and for gathering statistics.
Recommendation: The name of the goods should also be added with the HS code to
make the customs clearance process become easier.

Name of the commodities HS Code

PVC Wear-Resisting Layer 39204900
PVC Decor Film 39204900
IXPE underlay 1.5mm Blue Color 39189090
EVA underlay 1.5mm Black Color 39189090

- The goods in this contract are not prohibited. They are all legal to import and export

b) Quantity: The quantity is a compulsory term in every sales contract

No. Description Quantit Unit Unit Price Amount

 y (USD) (USD)
1 PVC Wear-Resisting Layer 14,400 KG
2 PVC Decor Film 78,000 M
3 IXPE underlay 1.5mm Blue 6,000 M2
Color
4 EVA underlay 1.5mm Black 10,000 M2
Color
TOTAL FOB SHANGHAI

In this contract: The quantity of each commodity and unit of quantity measurement
is specified in the Quantity and Unit column of the table above (14,400 kg of PVC
wear-resisting layer; 78,000 m of PVC decor film; 6,000 m2 of IXPE underlay 1.5mm
Blue Color and 10,000 m2 of IXPE underlay 1.5mm Blue Color).
- Units of measurement: Metric system (Kg, m , m2)
- Method of quantity stipulation : Stipulation method with tolerance (10% more
or less in quantity)
- The quantity is expressed in metric system (kg, m, m2) and generally accepted
commercial tolerances (+/- 10% at the seller’s option). The order for the
commodities shall be deemed to have been fulfilled in accordance with the
contract if the seller delivers goods that do not deviate from the contract
quantity by more than the tolerances
- The place of quantity identification of the goods is in China due to the FOB
terms of the contract (FOB Shanghai Port, China)
=> Comments: In general, this term is detailedly stated. Therefore, the process for
quantity checking will be made easier

c) Price: Depending on the nature of the product and the degree of precision that
can be applied to quantity and delivery, the price may or may not expressed in
fixed terms. In situations where the price depends on other factors, all such factors
and their relationship to the price should be clearly recited so as to leave no doubt.
Any applicable currency should be specified.
 No. Description Quantity Unit Unit Price Amount
(USD) (USD)
1 PVC Wear-Resisting Layer 1.36 19,584
2 PVC Decor Film 0.511 39,858
3 IXPE underlay 1.5mm Blue 0.56 3,360
Color
4 EVA underlay 1.5mm Black 0.32 3,200
Color
TOTAL FOB SHANGHAI 66,002

In this contract:
- The unit price: PVC Wear-Resisting Layer – $1.36/kg
PVC Decor Film - $0.511/m
IXPE Underlay - $0.56/m2
EVA underlay - $0.32/m2
- The total price in figure: USD 66,002 (+/- 10%) FOB Shanghai Port
- In word: US Dollars Sixty-six Thousand and two Only (Ten percent more or less
allowed at the seller’s option)
Total value of this contract is FOB Shanghai port

 Comments:
+ Price currency:
Exporting country currency: Yuan ( CNY)
Importing country currency: Viet Nam Dong (VND)
Third parties country currency: US Dollars (USD)
Both exporting country currency and third parties currency are strong and substantially
stable. But in this contract, the 2 parties involved (Havitech and Romeroca) have
decided that prices are denominated in US dollars which is a third country rate and
fixed price. It is because that USD is stronger and its stability is more sustainable and
most commodity transactions in the world use the USD as the currency of exchange
and payment. It is also more convenient for payment between banks when using US
dollars
+ Price stipulation: The unit price, the total price and the price links with an
international commercial term are all specified clearly and completely
+ The total amount is written both in figure and in word => Mistakes and
misunderstandings can be reduced
+ The range of tolerance is specified as 10% of the total amount of the goods and
allowed at the seller’s option. But the term should also specify if the tolerance price is
determined by the contract price or not so as to avoid any misunderstandings which
can occur
+ Method of price identification: Fixed price
In the contract, only one type of price is stated, so the given price is understood as a
fixed price determined at the time of signing the contract and unchanged upon
delivery.
+ The price in this contract is quoted FOB Shanghai Port. Under FOB shipping terms,
the seller/exporter is responsible for all costs involved in the process up until the goods
are on a vessel at the designated port (Shanghai port). Once goods have been loaded
onto the vessel the buyer/importer is responsible for any costs and risks involved in the
onward shipment. Most buyers choose FOB because it’s arguably the most affordable
or cost-effective option. With FOB, the buyer has more flexibility and control of the
terms, the cost, freight shipping planning, and more.
When the businesses actively decide to hire means of transport and buy insurance for
goods, they will easily negotiate freight costs, insurance fees and shipping time to
achieve more favorable prices, saving costs for businesses.
In addition, when importing under FOB terms, the businesses are proactive in the
transport, they can select and clearly grasp the train schedule to make negotiations so
that the goods are delivered at the time they want.
+ The contract states that the price is quoted FOB but does not specify whether this
term is made under Incoterms 2000 or Incoterms 2010?
=> Recommendation: The two parties should add which version of Incoterms is used
in this contract so that every term is clearer and stricter

 Overall comments:
 - This article of the contract specify quite detailedly about the name, quantity and
price of the goods.
- However, there is no mention of origin, quality and packing terms. Such terms
should be included in the contract so that trading regulations between the two
parties become stricter, minimizing risks for both buyer and seller.
-

2. Payment terms:
Payment terms are the conditions surrounding the payment part of sale, typically
specified by the seller to the buyer

The payment method in this contract is Telegraphic Transfer (TT) payment. T/T
means telegraphic transfer, or simply wire transfer. It's the simplest and easiest
payment method to use. It is also one of the most popular payment methods today.
This method is used a lot because of the convenience in trading activities and often
suitable for small value contracts, the two partners trust each other and have a long
trading period, or in the case of parent-subsidiary companies

Usually, T/T payments have both advantages and limits:

* Advantages:
+ A simple method of payment with easy and fast process
+ The cost of T/T payment via bank is more economical than L/C payment
+ Documents of goods do not have to be done as carefully as L/C payment.
- Pre-paid money transfer is convenient for exporters because they receive money
before delivery, so they are not afraid of risks or damages caused by late payment or
no payment of importers.
- Post-paid money transfer at X days is convenient for importers because they receive
goods before payment, so there is no fear of damage caused by late delivery of goods
or poor-quality goods from exporters.
- The bank is just an intermediary making the payment according to the authorization
to receive commission, not subject to any obligations at all.
* Limits:
- This payment method contains the greatest risk because the payment depends on the
goodwill of the buyer. Therefore, if using this method, the interests of the exporting
organization are not guaranteed. Therefore, this method is only used in cases where the
two parties have long-term cooperation, having mutual trust or paying for relatively
small orders
- The pre-payment method brings many risks to the buyer because the exporter may
not ship the goods even after the payment has been made, causing the importer to fall
into a passive state. This method causes many difficulties in cash flow and increases
the risk for the buyer, so they usually rarely accept to pay before receiving the goods.
- For T/T after shipment:
+ It is a disadvantage for the exporter because if the importer delays in making a
money transfer order (due to financial difficulties or lack of goodwill) to send to the
bank, the exporter will be slow to receive the payment even though the goods have
been shipped and the importer can already receive and use the goods.
+ In case the importer does not receive the goods, the exporter must pay the cost of
transporting the goods, must sell them cheaply or re-export.
+ Therefore, exporters suffer losses due to slow capital recovery that affects future
production while the bank has no responsibility as well as no approach for urging
importers to quickly make payment to ensure benefits for the exporter.
- For pre-payment method:
+ It is a disadvantage for the importer who has made payment to the exporter but has
not received the goods and is waiting for the exporter to deliver the goods.
+ If for some reason the exporter delays in delivery, the importer will receive the
goods late.
 In short, it can be seen that although this is a payment method that brings many
benefits in terms of time and costs, it also poses risks for both exporters and
importers (whether it is). So how to fix the problem and reduce the risk? The
answer is that:
Combine shipping method and T/T payment method.
Distribution of payment value.
Our group call this a combined payment method

In this contract: The seller and the buyer have decided to apply this combined
method. In particular, the payment term is: 15% payment paid by TT within 10 days
after signing the contract and 85% paid by TT against B/L copy.
The total amount of the commodities is 66,002 USD.
Therefore, specifically, the buyer/importer - Havitech Production Joint Stock
Company will have pay the seller/exporter - Romeroca Industry Co., Limit 15% of
66,002 USD which is 9,900.30 in advance, within 10 days after signing this contract,
to the sell’s bank account. This means that the latest date for 15% payment is 5th June
2020 (the signing day is on 26th May 2020). The remain 80% which are 56,101.70 will
be paid once the buyer receives the draft Bill of lading (BL)
Moreover, this contract uses FOB shipping terms, that is, the seller ships the goods to
the port of export and clears export clearance procedures. Then the delivery process of
the goods to Viet Nam is the buyer’s responsibility. The buyer hires a carrier to pick
up the goods at the port from the seller and asks the seller to issue the draft bill. Then,
if any risk occurs, the carrier must be responsible and the risk is reduced to 15%.

=> Comments:
- In this contract, using the combined payment method is safer and more equal for both
buyer and seller than prepaid 100% or postpaid 100% method. Usually when two
parties of a contract apply this combined payment method, payment term is T / T 30%
in advance and 70% paid after having draft bill under FOB shipping terms. But in the
case of this contract, the rate is 15% and 85%. Maybe this makes the buyer get more
benefits. However, Havitech and Romeroca are two companies which have co-
operated with each other before so they have mutual trust. Therefore, our group is of
the opinion that their decision about the payment terms in this contract is quite
suitable.
- The terms clearly state the amount of money to pay, the type of currency to use, the
payment method but the time for payment is not quite clear. The latest date for 15%
payment has been determined on 5th June 2020. But 85% payment is only said to be
made after having draft bill. There is no mention of the deadline for 85% payment.
=> Two parties should make an agreement on a more specific period of time for
payment so that everything is under their control in the export and import process.
- Payment terms should include the requirements for the payment documents attached,
However, in this contract, the documents required are not mentioned in the article 2
(Payment terms) but in the article 6 (Documents)
- To ensure the rigor of the contract as well as reduce the risk in payment to the seller,
our group suggests adding provisions for costs incurred when paying as well as
penalties in case the buyer does not make payment or make late payment to the seller.
- The contract mentions full information about the seller’s bank: bank name, bank
address, bank account and swift code so it is easier and more convenient for the buyer
to make payment.
Seller’s bank information:
- Beneficiary: Romeroca Industry Co., Limited
- Bank infor: HSBC
- Bank code: 004
- Beneficiary bank address: Queen’s road central, Hong Kong
- Bank account: 801 261 272 838
- Swift code: HSBCHKHHHKH
- The two parties agreed to transfer the payment through the Society for Worldwide
Interbank Financial Telecommunication (SWIFT) for international transfers. The use
of these systems provides a level of security to the transaction as well as a set of
standards and regulations to control how the transfers take place.
 3. Delivery and shipment:
Delivery terms are the conditions in a sales or transportation contract that specify such
things as the carrier routing, freight charges, place of delivery, and time of delivery
In the contract: The delivery terms are dictated as below:

Comments:
- The contract says that the delivery is made within 40 days against receipt of
30% down payment. But during the period of the contract, because Havitech
and Romeroca have a long-term co-operation relationship and have mutual trust
for each other, in fact they have made an agreement that when the buyer pays
15% in advance to the seller, the seller will start the delivery process to the
buyer. Therefore, in can be concluded that the requirement for 30% down
payment is only on the contract, in reality it is 15%.
So while this article says that delivery time is 40 days against receipt of 30% down
payment, in fact it is 40 days against receipt of 15% down payment. The latest date for
15% payment according to the article 2 is 5th June 2020. Hence, the latest date of
shipment is 40 days after 5th June 2020
The two parties did not do as what the contract stated but in fact, this is protected by
the international law because “trong điều kiện hai bên đã thực hiện hoạt động kinh
doanh buôn bán trong một thời gian dài dưới một hình thức tương đương nhưng lại
không được đề cập trong một hợp đồng chính thức … Nhưng khi thực hiện hợp đồng
nếu bên kia không có ý kiến hay phản hồi thì hợp đồng sẽ thực hiện như phương thức
cũ. Điều này, được mặc nhiên như một điều kiện ngầm của hợp đồng và khi xảy ra
tranh chấp vẫn sẽ được xem xét như một trong những điều khoản chính thức trong hợp
đồng”
 - About the trade term:

+ Port of departure: Main port of China

+ Port of destination: Main port of Haiphong, Vietnam

The trade term here only says that the port of departure is main port of China but does
not specify the port’s name. However, from the article 1, we can infer that it is
Shanghai port. Our recommendation is that in this trade term part, the contract should
state more specifically that the departure port is Shanghai port so that the information
is clearer and the term is stricter

Both ports of loading and unloading are major ports of Vietnam and China => risks
can be minimized

+ Mode of delivery: By sea

Transporting goods from China to Vietnam has many ways such as: air, road, rail or
sea transportation. In this contract, Havitech and Romeroca have decided to choose sea
freight shipping - an option that offers transportation services at an economical price
point, which helps both parties save costs for their businesses. The quantity of goods
traded this time is quite large so air or road transportation is not as convenient as sea
transportation. Vessels or containers are the ideal way to move high volumes of cargo.
Moreover, sea freight services also are very popular and familiar with business
partners of Viet Nam and China. A large amount of goods imported from China are
transported by sea. In particular, the method of transferring by container is
increasingly popular. China has the largest container ports in the world, to service its
exports to the world. Therefore, it is not surprising that their goods are imported to
Vietnam by ships in large quantities through major ports such as: Ningbo, Qingdao,
Shanghai, Xiamen, Shenzhen... Therefore, we think that Havitech and Romeroca’s
choice of sea freight shipping is quite suitable in this case

- In this contract, partial shipment and transshipment is all allowed.

+ Partial shipment is the delivery of an order in more than one shipment. Partial
shipment is allowed, which means that all the goods are not shipped at once, rather
they are sent to the buyer – Havitech in parts. Because the order of this contract is
quite large and the quantity is quite large too and in case the seller can’t do total
shipment, that partial shipment is allowed makes the seller have more time to prepare
the goods better.

+ Transshipment: Transshipment is when cargo or a container is moved from one

vessel to another while in transit to its final destination. You can see that shipping
cargo via a vessel making a single direct voyage can often be costlier as the ships may
not be fully utilized. So transshipping is usually done to save money on shipping costs.
But it leads to increased transport times. Damages or loss of container and cargo are
also more likely because of the loading and unloading of the container at the
transshipment hub

Therefore, during the period of the contract, Havitech and Romeroca should take into
consideration the financial situation, the actual quantity of goods, shipping costs,
freight forwarding costs as well as other external conditions to choose partial shipment
or not, transshipment or not.

- There is no mention of the shipping terms in this article. But from the article 1,
we can infer that in this contract, delivery is performed under the terms of FOB
Hai Phong Port Viet Nam

+ Duties of the seller/exporter (Romeroca) under FOB:

 Supply the contracted goods in conformity with the contract of sale and deliver
the goods on board the vessel named by the buyer at the named port of
shipment;
 Bear all costs and risks of the goods until such time as they shall have
effectively passed the ship’s rail. In other words, once goods are placed on
ship’s rail, title to the property passes to the buyer and so risks too;
 Provide at his own expense the customary clean shipping documents as proof
of delivery of goods;
 Provide export license and pay export duty, if any ; and
 Pay loading costs.

+ Duties and responsibilities of the buyer/importer (Havitech) under FOB terms.

 Reserve the necessary shipping space and give due notice of the same to the
exporter;
 Bear all costs and risks of the goods from the time when they shall have
effectively passed the ship’s rail;
 Pay freight;
 Pay unloading costs and
 Pay the price as provided in the contract to exporter.

- This article mentions the responsibilities and obligations of the two parties
related to the delivery notification to make the contract clearer and easier to
resolve when a dispute occurs.

4. Insurance:
For shipment, the buyer must apply the Insurance policy

Under the FOB terms, the buyer is the one who is responsible for the buying
Insurance policy for the traded goods.

5. Warranty period:

Warranty period means a guarantee or promise which provides assurance by the

seller that specific facts or conditions are true or will happen. The buyer should
detect the disability of goods within the warranty period.

In this contract: The terms of warranty period are agreed as below

  Comments: The contract specifically mentions the terms of warranty period
that two parties involved have agreed with each other:
- Warranty period: 12 months (after signing acceptance delivered goods)
- Warranty problems: inferior materials or bad workmanship
- Rights and obligations of parties in the warranty period are clearly and
completely specified in case trade disputes can happen

6. Documents:

One of the most important things which can not be dispensable in every export-import
customs clearance the set of documents attached

In this contract: The requirements for all original shipping documents are specified as
below

Comments: The information about required documents are mentioned clearly

- Required documents:

7. Termination:
 =>

8. Force majeure:

Force majeure means that “superior force” also known as “chance occurrence,
unavoidable accident” is a common clause in contracts that essentially frees both
parties from liability or obligation when an extraordinary event or circumstance
beyond the control of parties such as a war, strike, riot, crime or an event described by
the legal term act of God (such as hurricane, flooding, earthquake, volcanic, eruption)
prevents one or both parties from fulfilling their obligations under the contract. In
practice, most force majeure clauses do not excuse a party’s non-performance entirely,
but only suspend it for the duration of the force majeure.

9. Arbitration:

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties,

to one or more arbitrators who make a binding decision on the dispute. In choosing
arbitration, the parties opt for a private dispute resolution procedure instead of going to
court. Arbitration is an out-of-court proceeding in which a neutral third party called an
arbitrator hears evidence and then makes a binding decision. Arbitration is the most
dispute resolution (ADR), and people will find an arbitration clause in the fine print of
all kinds of contracts these days.

In this contract:

Comments: Havitech and Romeroca have decided

- Place of arbitration: A third country - Singapore

- Applicable law: Rules and regulations of the Singapore International Arbitration

Centre

- Steps for arbitration procedure: If any disputes between Havitech and Romeroca can
not be resolved though negotiation, two companies will organize an arbitration
committee. Each party has to appoint their own arbitrator and both parties agree to
appoint the president of the arbitral tribunal. On an identified date, both parties are
present at the arbitral tribunal and free to argue, parties may conciliate. To make a
decision: Based on the principle of majority. The arbitrator’s decision (the Singapore
International Arbitration Centre should be final). And losing party will have to pay all
expenses for connected with arbitration

- Execution of referee’s decision

 10. General terms and conditions:

11. Others

The buyer shall at his own costs and expenses, obtain all necessary import permits,
undertake customs clearance, take delivery of the equipment to the site in time.

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