lOMoARcPSD|7676357

ICC MODEL CONTRACT FOR THE SALE OF GOODS

CONTRACT FOR THE SALE OF GOODS

BETWEEN
………………………………… hereinafter called “the SELLER”
AND
……………………………........ hereinafter called “the BUYER”
PREAMBLE
(NOTE: The Preamble is optional)
The agreement between the parties to this Contract is based on the following
understandings:
(NOTE: The following clauses are examples only. Delete as appropriate)
1. The BUYER is acting partly on its own behalf and partly as a purchasing
agent for other companies
2. The BUYER is acting as purchasing agent for.......................1
3. Both parties understand that Goods made to meet the BUYER’s special
specifications may have no value or very limited value on the open market.
4. The SELLER understands that the BUYER in specifying the Goods has
relied to a large extent on the expertise of the SELLER
5. The SELLER understands that the BUYER is under contract to resell the
Goods are defective or non-conforming in quality or quantity, the BUYER
may be liable for damages in an amount exceeding.....................2
6. The SELLER understands that the BUYER intends to install the Goods as
a component part in equipment to be resold, and that if the Goods are defective or
non-conforming in quality or quantity, the BUYER may be liable for substantial
damages
7.………………………………………………3
1. Applicable Law
1
Name of Principal
2
Currency and amount
3
List of additional background understandings between the parties
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This Contract and all questions relating to its formation, validity, interpretation of
performance shall be governed by the law of………4
(NOTE: The subclause below is optional)
This Contract shall not include, incorporate or be subject to the provisions of the
“United Nations Convention on Contracts fot the International Sale of Goods”
2. Definition
In this Contract the words below have the meanings ascribed to them unless the
context otherwise clearly dedicates:
2.1. Unless expressly modifies by the parties, “FOB”, “CIF” and other trade
terms have the meanings and obligations ascribed to them in Incoterms 2000,
Publication 460 of the International Chamber of Commerce, Paris
2.2. “Contract” means this Contract, its Preamble and Appendices, as well as all
documents expressly mentioned in this Contract
2.3. “Goods” means the Goods specified in Clause 4 below
2.4. “Price” means the Price as specified in Clause 9 below payable to the
SELLER for the Goods
2.5. “Delivery” means Delivery as specified in Incoterms 1990 under the
Incoterms or Incoterms agreed in this Contract
2.6. “Day” means a calendar Day. For the purposes of this Contract, Saturdays,
Sundays and all holidays are considered as Days
2.7. “Direct” costs and losses are costs and losses arising in immediate
connection with any failure to deliver, any delay in Delivery or any defect in Goods
delivered under this Contract. Such costs and losses must have an immediate,
foreseeable and provably causal connection with the delay or defect. All other costs
and losses are deemed by this Contract to be “indirect”; In particular, loss of profit,
loss of use, and loss of contract are considered indirect losses
2.8. “Government” means national Government, local Government, local
authorities, and their agencies. In particular customs and/or excise departments are
considered as Government agencies
2.9. Termination” means the discharge of the Contract by one of the parties under
any right expressly granted by this Contract. The discharge of the Contract by ant
4
Name of country
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other right arising from the applicable law or any other source is deemed to be
“cancellation” of the Contract
2.10. ………………………………………………..5
3. Entire Agreement and Contract Documents
This Contract constitutes the entire agreement and understanding between the
parties. There are no understandings, agreements, conditions, reservations, or
representation, oral or written, that are not embodied in this Contract or that have
not been supersede by this Contract
(NOTE: The sub-clause and list below are optional)
In addition to the text of this Contract itself, the documents listed below shall form
part of the Contract. All listed 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 for the provisions and documents which constitute this agreement shall
be as follows:
(NOTE: The list below contains examples only. Delete as appropriate)
a. Any alterations made on the face of the printed Contract
b. The Contract itself
c. Specifications
d. Manufacturing drawings
e. The BUYER’s Special/General Conditions of Purchase
f. The SELLER’s Special/General Conditions of Sale
g...................................................................................... 6
4. Scope of Supply
The Goods to be delivered under this Contract are specified………………..
……………………………………………………………………………….7

5. Delivery
5.1. Date, Place and Terms of Delivery

5
List of additional definitions argeed between the parties
6
Further contract documents
7
Use “below” or the name of the annex where the goods are specified

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Delivery of the Goods shall be made…..8; the schedule date of Delivery shall be
…….9; Risk and title the Goods shall pass from the SELLER to the BUYER on
Delivery.
The place of Delivery under this Contract is............................10
5.2. Naming the Arrival of Vessel
(NOTE: This clause is intended primarily for use in FOB and FAS contracts).
The BUYER shall advise the SELLER of the name of the vessel not later than
………11. Days before the agreed Delivery date
If the vessel named by the BUYER fails to arrive on or before……… 12 then the
SELLER mat at his discretion deliver the Goods to a bonded warehouse in the port
of............13 and shall be deemed to have fulfilled his Delivery obligations under this
Contract. In this event, the SELLER must notify the BUYER of the full
circumstances of the Delivery to the warehouse. With Delivery to the warehouse,
all costs, including but not limited to cost of storage and insurance are to the
BUYER’s account
5.3. Shipping Marks and Packaging
(NOTE: The following two sub-clauses are examples. Reword as appropriate).
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 positions the letter the credit number, the words RIGHT SIDE UP, HANDLE
WITH CARE, KEEP DRY, and the mark...............14
Goods are to be packed in ……………15 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.
(NOTE: The following sub-clause is relevant only to deliveries in Germany).

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Agreed Incoterm
9
Agreed date of delivery
10
Agreed place of delivery. Note: In FOB, FCR, CIF and CIP (etc.) contract, this is part of shipment.
11
Number (of days)
12
Date of arrival of ship
13
Port of shipment
14
Shipping mark
15
Description of required packing
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5.4. Disposal of Packaging

Responsibility for the disposal of any packaging shall be the BUYER’s
6. Notifications of Delivery
(NOTE: This clause applies largely to contracts under which delivery takes place in
the country of the seller).
Immediately on Delivery, the SELLER shall notify the BUYER of Delivery by
………16 This notification shall include................17
7. Inspection before Shipment
7.1. Inspection by the Buyer
The BUYER may, at the BUYER’s option, inspect the Goods prior to shipment. At
least …………18 Days before the actual Delivery date, the SELLER shall give
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
(NOTE: Customs requirements for importation of goods into Indonesia and the
Philippines require inspection by SGS prior to shipment from the Seller’s country.
The following clause is recommended for sales to these countries).
7.2. Inspection by Inspection service
The parties understand that importation into ……….19 requires inspection of Goods
by SGS before shipment from the SELLER’s country. The SELLER agrees to
cooperate fully with the SGR in providing access to and necessary information
about the Goods for the purpose of such inspection

8. Early Delivery, Partial Shipment, Delay in Deliver

8.1. Early Delivery
(NOTE: The three sub-clauses below are alternatives. Delete as necessary).

16
Means of notification, e.g., FAX
17
List of documents and information required
18
Number (of days)
19
Name of country

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Under this Contract Delivery up to …… 20 Days early is permitted. However,

payment shall not become due until the date agreed for payment in this Contract;
Delivery up to …….21 Days early is permitted. In this case payment shall false due
as though the actual Delivery date were the Delivery date agreed in the Contract.
8.2. Partial Shipment
(NOTE: The two sub-clauses below are alternatives. Delete as necessary).
Partial shipment is not permitted under this Contract, subject to the agreement of
both parties. However, any costs arising from partial shipment shall be to the
account of the ………22
8.3. Delay in Delivery
In the event of late Delivery for reasons other than force majeure as defined in
Clause 17 below, the SELLER shall pay as liquidated damages and not as a penalty
the sum of ……23 of the value of the undelivered part per Day of late Delivery up to
a maximum of ……24 of the Contract Price. Payment of liquidated damages shall be
due without the BUYER having to furnish proof of any loss, damage or injure
(NOTE: The two sub-clauses below are alternatives. Delete as necessary).
Payment of liquidated damages shall constitute full and complete satisfaction of any
claim of the BUYER against the SELLER arising from the or in connection with
late Delivery of any Goods. In particular the SELLER shall not
Be liable for any indirect loss or damage, as defined in Clause 2.7 above, arising
from or in connection with late Delivery of any Goods. Payment of liquidated
damages by the SELLER shall not preclude the BUYER from seeking
compensatory damages from the SELLER for any loss, injure or damage arising
from or in connection with late Delivery of any of Goods. In particular the BUYER
shall be entitled to compensation the SELLER for any indirect or consequential loss
or damage, including but not limited to loss of profit, loss of use or loss of contract,
arising from or in connection with late Delivery of any Goods. However, payments

20
Number (of days)
21
Number (of days)
22
BUYER or SELLER
23
Figure
24
Figure
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made as liquidated damages shall be offset against any compensatory damages

recovered from the SELLER for the late Delivery of any Goods
8.4. Termination for delay
In the event that the SELLER becomes liable to pay the maximum sum payable as
liquidated damages under Clause 8.3 above, then the BUYER shall, upon due
notice, have the right to terminate the Contract.
9. Price
The price for the Goods to be delivered under this Contract is...........................25
(…………. 26)
10. Terms of payment
Payment shall be made by means of an irrevocable, confirmed letter of credit. The
BUYER shall open the letter of credit on or before . On the terms agreed by
27

the parties and annexed to this Contract as Appendix… 28

This Contract shall not come into force under Clause 16 below until the SELLER
has received advice that the letter of credit has been opened in his favour and has
ascertained that the terms are in accordance with those agreed between the parties.
Any discrepancies between the terms agreed by the parties and the letter of credit
as issued shall be notified by the SELLER to the BUYER immediately.
11. Inspection of the Goods
11.1. Duty to Inspect and Notify Discrepancies
The Buyer shall inspect the Goods on their arrival at the place of destination. If the
Goods fail to conform with the Contract in either quality or quantity, then the
BUYER shall notify the SELLER of any discrepancy without delay.
11.2. Failure to notify Discrepancies
If the BUYER does not notify the SELLER of any such discrepancy within 29

Days of the arrival of the Goods, then the Goods shall be deemed to have been in
conformity with the Contract on arrival.

25
Currency symbol and figure
26
Currency and figure in words
27
Date of opening of letter of credit
28
Appendix number
29
Number (of days)
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11.3. Buyer’s Rights in the Event of Discrepancy in Quantity

If an material discrepancy in quantity exists and is duly notified to the SELLER, the
BUYER at his discretion and subject to Clause 8.2 above may either:
a. Accept the delivered portion of the Goods and require the SELLER to
deliver the remaining portion forthwith; or
b. Accept the delivered portion of the Goods and terminate the remaining
portion of the Contract upon due notice given to the SELLER.
If any material discrepancy in quantity exists such that …… 30 and if such
discrepancy is duly notified the SELLER, the BUYER may at his discretion:
a. Adopt either of the remedies prescribed above in this clause; or
b. Reject the delivered portion of the Goods and recover from the SELLER
all payments made to the SELLER as well as all costs, expenses and customs duties
incurred by the BUYER in association with shipment, movement through customs,
insurance or storage of the Goods.
(NOTE: Clause 11.4 below may be necessary if SGS’s inspection takes place before
shipment).
11.4. Buyer’s Rights in the Event of Discrepancy in Quality
Discrepancies in quality shall be considered as defects and shall give rise to claims
under the defects liability provision of this Contract in Clause 12 below.
However, a fundamental discrepancy in quality shall give the BUYER the right to
refuse Delivery of Goods in whole or in part and to recover from the SELLER all
payments made for the unaccepted portion of the Goods as well as all costs,
expenses and customs duties incurred by the BUYER in association with the
shipment, movement through customs, insurance or storage of the unaccepted
portion of the Goods.
12. Defects Liability
12.1. Seller’s Liability for Defects
The SELLER warrants that the Goods supplied under this Contract shall at the date
of their Delivery:
a. Be free from defects in material
b. Be free from defects in workmanship
30
Description of fundamental discrepancy
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c. Be free from defects inherent in design, including but not limited to

selection of materials, and be fit for the purpose for which such Goods are normally
used.
If any defect provably present in any of the Goods on the date of Delivery comes to
light during the defects liability period, then the BUYER shall forthwith notify the
SELLER. The SELLER, without undue delay, shall at his own risk and costs and at
his discretion repair or replace such item or otherwise make good the defect.
The SELLER’s liability for defects is subject to the BUYER having adhered to all
procedure and instructions applicable to the …..31 of the item, and expressly
excludes damage to the Goods caused by fair wear and tear or by misuse occurring
after Delivery.
12.2. Defect Liability Period
The SELLER shall be liable for defects which come to light during a period of
……32 days from ……33 After the end of this period, the BUYER shall have no right
to raise claims of any kind against the SELLER for any defects in any Goods of the
SELLER’s supply
The defects liability period shall be prolonged by the length of any period of during
which the Goods cannot be used by the BUYER because of a defect. However, if
new Goods are delivered to replace defective Goods, the defects liability period
shall not begin again on the replacement Goods.
12.3. Limitation of Defects Liability
(NOTE: The two clauses below are alternatives. Delete as necessary)
The duty to repair and replace or otherwise to make good the defects is the only
duty of the SELLER in the event of the Delivery of defective Goods. In particular
the BUYER shall not be entitled to compensate the SELLER for any indirect loss or
damages as defined in Clause 2.7 above, arising from or in connection with
Delivery of defective Goods The SELLER shall indemnify and hold harmless the
BUYER against any loss or damage however arising whether direct or indirect

31
Condition of use (e.g., “storage, installation, use or operation”)
32
Number (of days)
33
Date of start of defects liability period
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which shall be suffered by the SELLER as the result of defective or faulty Goods
delivered by the SELLER
13. Liability to Third Parties
(NOTE: The two clauses below are alternatives. Delete as necessary)
The……..34 shall compensate and hold harmless the………35 from any award of
damages, reasonable costs, expenses or legal fees, in the event of any action or
lawsuit by a third party resulting from any injury, loss or damage to the third party
caused by a defect in the Goods delivered under this Contract
In the event of such Lawsuit, the…… 36shall immediately notify the……37and shall
fully cooperate with the…….38in taking any necessary legal action.
In the event of any action or lawsuit by a third part resulting from any injury, loss or
damage to the third party caused by a defect in the Goods delivered under this
Contract, the party against whom the action or lawsuit is brought shall bear all
costs, expenses, awards of damages or legal fees arising therefrom
14. Taxation
All income taxes, value added taxes, customs duties, excise charges, stamp duties or
other fees levied by any Government, Government agency or similar authority shall
be borne exclusively by the party against whom they are levied
15. Assignment of Rights and 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
16. Coming Into Force
This Contract shall come into force after signature by both parties and after:
a. The issuance of a letter of credit in accordance with the terms of
Clause 10 above;
b...................................................................................................................39

34
Name of the party giving the indemnity (BUYER or SELLER)
35
Name of the party receiving the indemnity (BUYER or SELLER)
36
Name of the party receiving the indemnity (BUYER or SELLER)
37
Name of the party receiving the indemnity (BUYER or SELLER)
38
Name of the party receiving the indemnity (BUYER or SELLER)
39
List of events which must occur before contract comes into
force
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If the Contract has not come into force within…. 40Days of its signature by both
parties, all its provisions shall become null and void
17. Force majeure
(NOTE: The word duty is marked by an asterisk in this clause. For contracts under
Philippines law, the word duty should be replaced by the word obligation)
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 considered in default and no remedy, be it
under this Contract or otherwise, shall be available to the other party
(NOTE: The subclause below contains examples only. It should be modified as
necessary)
Force majeure events include, but are not limited to: war, (whether war is declared
or not), riots, insurrections, acts of sabotage, or similar occurences, strikes, or other
labour unrest; newly introduced Laws or Government regulations; delay due to
Government action or inaction, or inaction on the part of any inspection agency,
fire, explosion, or other unavoidable accident, flood, storm, earthquake, or other
abnormal natural event
(NOTE: The subclause below on non-force-majeure events is optional)
Force majeure events do not include ……………………………… …………
…………………………………………………………………………….41
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 mejeure event preventsor delays performance of any duty under this
Contract for more than……Days, then either parties may on due notification to the
other party, terminate this Contract
18. Termination
Notice of Termination as defined in Clause 2.9 os this Contract shall be in writing
and shall take effect 42
Days from the receiptof such notice by the party notified
40
Number (of days)
41
List of events not considered to be “force majeure events”
42
Number (of days)
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In the event of Termination, the duties of the parties shall be as incurred up to the
date of Termination. In particular, the SELLER shall receive the full Price of any
Goods delivered and accepted by the BUYER. The provisions of this Agreement
dealing with defects liability, arbitration, and such other provisions as are necessary
in order to resolve any post-Termination disputes shall survive Termination
19. Partial Invalidity
If any provision or provisions of this Contract are invali or become invalid, then this
shall have no effect on the remaining privisions. 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
20. Modification and Waiver
Modification of the terms and conditions of this Contract shall be binding on both
parties even without consideration if the modification is in writing, is signed, and is
expressly stated to be a modification of this contract
Any waiver of any right under this Contract is binding on the party making the
waiver even without consideration provided the waiver is in writing, is signed and is
expressly stated to be a waiver of the sad right
21. Language
The language of the Contract, of all Contract Documents, and of all correspondence
and other communication between the parties shall be English.
22. Notices
Notices served by one party to the other under this Contract shall be made, in the
first instance by fascimile transmission (hereinafter called “FAX”). A further copy
of each notice shall be sent by registered mail and signed
The effective date of the notice shall be the date of FAX tranmission. In the event of
a dispute about the receipt of a FAX, however, the effective date of the notice shall
be the date of receipt of the registered letter or a date seven days after the registered
mailing, whichever is earlier
Notices shall be sent to the following addresses and FAX number: SELLER:
……………………………………………………………………..
Address: ………………………………………………………………………
FAX Number: ………………………………………………………………..
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BUYER: ………………………………………………………………………
Address: …………………………………………….………………………...
FAX Number: …………………………………..…………………………….
Any change in an address or FAX number shall be the subject of a required notice
under this Contract
23. Settlement of Disputes
All disputes arising in connection with this Contract shall be finally settled under
the Rules of Conciliation and Arbitration of the International Chamber of
Commerce by… 43
arbitrator appointed in accordance with the said rules
The place of arbitration shall be …….44 . The language of arbitration shall be
English.
(NOTE: The three sub-clauses below are alternatives. Delete as necessary).
In the event of arbitration, each party shall bear its own costs. In the event of
arbitration, the court shall assess the amount of the costs to be borne by each party.
In the event of arbitration, the party against whom the award is made shall bear the
entire costs of bpoth parties to the action
The parties agree that any award made in accordance with the provisions of this
clause is final and binding on both parties
Execution
The parties, intending to be legally bound, have signed this Contract on the dates
and at the places stated below:
For and on the behalf of: For and on the behalf of:
SELLER: BUYER:
Title: Title:
Date: Date:
Place: Place:
(NOTE: The witnessing of signatures is not required by all national laws).
Witness of SELLER’s Signature Witness of BUYER’s
Signature

43
Number (of arbitrators)
44
Name of the place (city) of arbitration
13