17/07/2023

FOREIGN
TRADE
OPERATIONS

PHAN VŨ NGỌC LAN – MDE

International Business Administration Department
lanpvn@huflit.edu.vn

INTERNATIONAL
SALES
CONTRACT

CHAPTER 3
PART 2

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IN THIS CHAPTER
1. Concept of International sales contract

2. Requisites to the effect of an international sales

contract

3. Main contents of an international sales

contract

4. Major terms and conditions in international

sales contracts

5. Execution of International sales contracts

4. MAJOR TERMS AND CONDITIONS IN INTERNATIONAL

SALES CONTRACTS
1. [Description of ] Goods/Commodity/Scope of supply
2. Quality and specifications
3. Quantity
4. Packing and marking
5. Price
6. Terms of delivery/Shipment
7. Transportation
8. Insurance
9. Terms of payment and documents
10. Non-conformity/Inspection and claims
Jul-23 BY PVNLAN 4

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4. MAJOR TERMS AND CONDITIONS IN INTERNATIONAL

SALES CONTRACTS
11. Warranty
12. Force majeure (excuse for non-performance) iu khon bt kh kháng
13. Dispute resolution/Arbitration disptue settlement iu khon gii quyt trang chp
14. Applicable law lut áp dng ca hp ng
15. Damages/Penalty
16. Performance guarantee bo lãnh thc hin hot ng do ngân hàng cp cho ngi bán
17. Transfer of risk and title/Transfer of property/Retention of title
(optional) iu khon chuyn giao quyn s hu , " quan trng '
18. Entire agreement & effectiveness (optional) iu khon v tha thun toàn b và hiu lc hpk ônhf
19. Non-performance (optional)
20. Pre-shipment inspection [Inspection of the Goods] (optional)
21. Limitation of liability (optional) gii hn trách nghim
22. Avoidance of contract and restitution (optional) iu khon hp ng vô hiu
Jul-23 BY PVNLAN 5

5 non conformity : giao hàng ko úng cht lng

4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS – IMPORTANT NOTES
The goods should be clearly spelled out

Scope of work should be included

carefully consider the wording of goods

description

specify its specifications

technical specifications incorporated into the

main contract gn kt vào hp ng
Jul-23 BY PVNLAN 7

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS – IMPORTANT NOTES
1. The goods to be sold should be clearly spelled out in the
contract.
2. There is also a need to include the scope of work to be
performed by the exporter, such as installation, training, and
other services.
3. Should carefully consider the wording of goods description
(since it is directly relevant to the range of tariff and non-
tariff barriers)
4. Should specify its specifications
5. The technical specifications should be incorporated into the
main contract (by listing it with the other documents intended
to form the contract).

Jul-23 BY PVNLAN 8

4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS
xut s ca mt hàng

1. Origin

7. HS 2. Main quy cách

code specificat
ions

Commodity
6. 3. Brand
Certificat name
es

5. 4.
Intended Scientific
purpose/ name
Jul-23 usage BY PVNLAN 9

9 tên hàng rt quan trng , phi càng rõ ràng càng tt

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS
Goods name + Origin

• Usage: for those goods

affected by their origin,
agricultural products
• Example: Vietnamese
white rice/Vinh Chau
purple onions/Phu Quoc
fish sauce/
• Japanese motorbike
• “CARRIER” 30 HXC100A
Water-cooler liquid
chillers, France origin
Jul-23 BY PVNLAN 10

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS

Goods name + the most important

specifications/content

• Example: Vietnamese white rice long grain, crop

2015, 10% broken
• 100% polyester hand bags
• 12 inch coloured TV

Jul-23 BY PVNLAN 11

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS

Goods name + manufacturer name/brand name

• Usage: for those goods by well-known manufacturers

(industrial products)
• Example: “CARRIER” 30 HXC100A Water-cooler liquid
chillers, ISO 9001 certified
• Samsung Galaxy Note
• Sony Trinitron TV

Jul-23 BY PVNLAN 12

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4.1 GOODS/COMMODITY/SCOPE
OF SUPPLY
Goods name (common name) +
scientific name

• Usage: for agricultural products,

chemical substances, seeds,
creatures
• Example:
• Frozen black tiger shrimps
(Pennnues Monodon)
• Pitaya (Hylocereus undatus):
white-fleshed dragon fruit
• Pitaya (Hylocereus polyrhizus):
red-fleshed dragon fruit
• Pitaya (Hylocereus megalanthus):
yellow-fleshed dragon fruit
Jul-23 BY PVNLAN 13

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS

Goods name + intended purpose/usage

• Usage: for agricultural products

• Example:
• Cashew husk for tanning purpose
• Wheat powder for human consumption

Jul-23 BY PVNLAN 14

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS
Goods name + certificates

• Usage: for those goods certified by well-known

organizations
• Example: “CARRIER” 30 HXC100A Water-cooler liquid
chillers, ISO 9001 certified

Goods name + HS code

• Usage: for those goods difficult to specify by other

ways
• Example: Clothing button HS code 9606210000
Jul-23 BY PVNLAN 15

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS
Commodity + HS code

0210 Meat and edible meat offal, salted, in

brine, dried or smoked; edible flours
and meals of meat or meat offal

- meat of swine (pork):

0210 11 00 00 - - Hams, shoulders and cuts thereof,
with bone in

0210 12 00 00 - - Bellies (streaky) and cuts thereof

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

COMBINATION OF DIFFERENT WAYS - EXAMPLE

Goods name + ?

• Usage: For clearly identifying the contract

object/subject matter => for facilitation of
contract performance and avoid
misunderstanding/disputes
• Example: “CARRIER” 30 HXC100A Water-cooler
liquid chillers, France origin, ISO 9001 certified,
operation 400V/3PH/50HZ
• White rice with long grain, Vietnam origin, 2022
– 2023 spring crop
Jul-23 BY PVNLAN 17

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4.1 GOODS/COMMODITY/SCOPE OF SUPPLY

DESCRIPTION OF THE GOODS

1. Origin

7. HS 2. Main
code specificat
ions

Commodity
6. 3. Brand
Certificat name
es

5. 4.
Intended Scientific
purpose/ name
Jul-23 usage BY PVNLAN 18

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF THE

GOODS – WHAT IS QUALITY?
For a mechanical or
• defined firstly in electronic product:
terms of parameters performance, reliability,
Quality or characteristics, safety and appearance.
which vary from
product to product. For pharmaceutical
products: physical and
• Different goods are chemical characteristics,
of different criteria to medicinal
taste and
effect, toxicity,
shelf life.
Complic identify their quality
ated • Positive/negative
due to: criteria For a food product: taste,
nutritional properties,
• New products with texture, shelf life and so on.
new quality criteria (UNIDO, 2006)
Jul-23 BY PVNLAN 19

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS –
CAN BE SPECIFIED IN ANY ONE OF A NUMBER OF WAYS OR IN COMBINATION OF DIFFERENT
WAYS

1. By sample
2. By category or standard
3. By specification
4. By common criteria
5. By major contents
6. By commodity existing conditions
7. By prior inspection (Inspected – approved)
8. By technical documents
9. By trademark
10. By collected output
11. By description

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – 1. BY SAMPLE

With agricultural or mining products

Ex: The rice shall be of quality as per sample No…,
provided by the seller on April 24th 20… with two parties’
signatures. The sample shall be made into three pieces, each
party keeps one and the remaining shall be kept by a third
party appointed by the two parties.
Jul-23 BY PVNLAN 21

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – EXAMPLE
By sample

• “The seller must submit before loading 3 sets of

1-kg samples which will be used as reference in
case of any dispute in quality for the items not
mentioned above such as shape, colour, taste.
• The said samples should be sealed, signed and
stamped by the buyer’s representative after
being approved by them. One of the sample
will be retained by the seller, one by the buyer
and one by the inspection company.” (Doan Thi
Hong Van et al, 2016)
Jul-23 BY PVNLAN 23

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 2. BY STANDARD
2. By category or standard

TCVN 4193:2001 Vietnamese coffee standard

TCVN 6213:2004 Bottled natural mineral water
TCVN 6096:2004 Bottled drinking water

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 2. BY STANDARD

National
standards:

International Regional
standards: standards:

Jul-23 BY PVNLAN 25

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NATIONAL
STANDARDS

VN STANDARDS (TCVN)
The Federal Communications
Commission (FCC) tieu chun of hoa Số
k hiệu tiêu chuẩn/Standard Number
 TCVN 5644:2008
The FCC Declaration of
Conformity or the FCC mark is Tên tiêu chuẩn/Title (Vietnamese)
a certification mark employed  Gạo trắng. Yêu cầu kỹ thuật
on electronic products Năm ban hành/Publishing Year
manufactured or sold in  2008-12-30, 2942/QĐ-BKHCN
the United States Tiêu đề (tiếng Anh)/Title
The FCC certification mark is  White rice. Specifications
mandatory for IT equipment Thay thế/Replace
like computers, mobile phones  TCVN 5644:1999
Jul-23 Tình trạng/Status Active BY PVNLAN 27

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REGIONAL STANDARDS –
CE MARKING
CE marking is mandatory for certain
product groups within the European
Economic Area.
CE Marking on a product is a
manufacturer's declaration that the
product complies with the essential
requirements of the relevant
European health, safety and
environmental protection legislation.
European Standards adopted by one of the
three recognized European Standardization
Organizations (CEN, CENELEC or ETSI)
(https://www.cen.eu/work/products/ENs/
Pages/default.aspx)
Jul-23 BY PVNLAN 28

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International standards –
GLOBALG.A.P

International
standards –
THE CODEX

INTERNATIONAL STANDARDS –
ISOJul-23STANDARDS & HACCP BY PVNLAN 29

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 3. BY SPECIFICATION
3. By specification
Brand-new motobikes, 110cm3,
maximum speed 150km/h, fuel
consumption of 1,6l/100km, automatic
start, available in 3 colours of blue, red
and yellow as illustrated in the enclosed
pictures.
By trade mark/trade name
- Honda Spacy 125cm3
 With industrial products 34

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – 3. BY SPECIFICATION: EXAMPLE
VIETNAM LONG GRAIN WHITE RICE, CROP 2022, 5% BROKEN
-Broken: 5% Max
-Moisture : 14%Max
-Foreign Matter : 0.1% Max tp cht
-Chalky Kernels : 6.0% Max
-Yellow Kernels : 0.5% Max
-Damaged Kernels : 0.75% Max
-Red/red streaked kernels : 1.0% Max
-Mill degree : well milled
-Paddy per one kg : 15 Max
-Live insect: Nil after Fumigation

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 4. BY COMMON CRITERIA

Case:
For those goods
difficult to be
standardized such
as agricultural
products
Jul-23 BY PVNLAN 37

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 4. BY COMMON CRITERIA
FAQ (Fair Average Quality): Quality of the goods to
be shipped shall not be lower than the average
quality at the port of loading at a specific time.
GAQ (Good Average Quality): GAQ > FAQ.
GMQ (Good Merchantable Quality): GMQ is the
level of quality acceptable to common customers in
the market. tiêu chun chung dùng cho nhng sp khó
tiêu chun hóa such as : mt hàng nông
sn ....

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FAIR AVERAGE QUALITY [FAQ] &

GOOD MERCHANTABLE QUALITY [GMQ] – EXAMPLE

Fair average quality [FAQ]

• Thai white rice long grain 5pct broken of
2016/2017 crops, and fair average quality.

Good merchantable quality [GMQ]

• Ben Tre green skin pomelos, and merchantable
quality cht lng có th tiêu th c trên th trng
i vi máy móc hn ch su dng cách này
Jul-23 BY PVNLAN 39

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 5. BY MAIN CONTENT
da vào các hàm lng chinnhs
5. By main ingredient/content
(min/max) The content of useful
 Case: mines, chemicals, substance: the min
processed foods… percentage required
Ex: Malaysian white urea
- Nitrogen: 45% min
- Kali: 15% min The content of harmful
- Moisture: 15% max substance: the max
- Mixture: 1% max percentage allowed

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – 6. BY COMMODITY EXISTING
CONDITIONS iu kin bình thng

6. By commodity existing The term ’as

conditions is’ gives notice to the buyer that
“Sale as is” basis the seller offers goods in their pr
- As it is esent, existing conditions and the
buyer is taking a risk on the
- As it is and where it is quality of the goods.
The buyer is free to inspect the
goods before purchase to
find any obvious deficiency
but the buyer has NO right to
complain if any hidden defects
are discovered after purchase.42

42 rt là ri ro cho ngi mua

dùng cho hàng 2 hnd , or bt ng sn , hàng xách tay
máy móc ko nên dùng cách này

4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 7. BY PRIOR INSPECTION
7. By prior inspection/examination kim tra trc

Case: Commodity with small quantity, not standardized like: liquidated goods,
auctioned ones

- Inspected – approved

i vi cac hàng kon th chun hóa , or hàng u giá

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 8. BY TECHNICAL
DOCUMENTS
8. By technical documents: Technical drawings, technical
specifications, features,
“Motobikes with specification as parameters, etc.
quy nh stipulated in the technical
document No 345, published in
20.., provided by the
manufacturer, including design,
manual/instructions.
Those technical documents are in
English and Vietnamese and are
an integral part of the contract.”
 Case: for industrial
products
44
hp ng rõ ràng c th
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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF THE

GOODS – 8. BY TECHNICAL DOCUMENTS

“The quality is pursuant to

the technical document
herein as attached which has
been approved by the buyer
and is an integral part of
this contract”

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – 9. BY TRADEMARK da vào thng hiu
9. by trademark/brand name Trademark:
(manufacturer’s standards) BrE / tre dmɑːk/ ; NAmE / tre
dmɑːrk/
a name, symbol or design that
a company uses for its products
and that cannot be used by
anyone else
Ex. ‘Big Mac’ is McDonald's
best-known trademark

Jul-23 BY PVNLAN 47

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BY TRADEMARK/BRAND NAME
(MANUFACTURER’S STANDARDS)
Case: Used for well-known goods

International regulations:

• Paris Convention for the Protection of Industrial

Property 1883
• Madrid Agreement 1891 (a multilateral treaty
concerning the International Registration of
Marks)
Jul-23 BY PVNLAN 48

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BY TRADEMARK/BRAND NAME - EXAMPLE

Commodity and specifications:
• “CARRIER” 30 HXC100A Water-cooler liquid
chillers, France origin, ISO 9001 certified,
operation 400V/3PH/50HZ
• Semi-hermetic, twin screw POWER
• Shell and tube with internally finned coppertubes
• PRO-DIALOG global numerical control system
• The long-stroke electronic expansion valve (EXV)
• Fusible plug safety features device on condenser
• Integrated safety features
• Factory refrigerant charged (HFC 134a)
• Testing and commissioning
• Not including any other items not specifically
mentioned above.
Jul-23 BY PVNLAN 49

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – 10. BY COLLECTED OUTPUT
10. By collected output :
 Case: materials
Note:
+ The collected output also depends on the
relevant technology
+ Output with different quality

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS – 11. BY DESCRIPTION
Case: for all goods that can be described, not
standardized products with quality rather stable

Usually used in combination with other methods

for specifying goods quality

Describe all the characteristics of the goods such

as shape, color, size, intended pupose, taste, and
so on

However, this method is not specific enough

because descriptive parameters generally are
open to varying interpretations.
Jul-23 BY PVNLAN 51

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION OF
THE GOODS –
CAN BE SPECIFIED IN ANY ONE OF A NUMBER OF WAYS OR IN COMBINATION OF DIFFERENT
WAYS

1. By sample
2. By category or standard
3. By specification
4. By common criteria
5. By major contents
6. By commodity existing conditions
7. By prior inspection (Inspected – approved)
8. By technical documents
9. By trademark
10. By collected output
11. By description

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xác inh cht lng hàng hóa thng dùng nhêiuf cachs

BY COMBINATION OF DIFFERENT METHODS - EXAMPLE

Example 1: By description + FAQ + origin +

specification

• “Vietnamese white rice long grain, 5pct broken

FAQ (fair average quality) of season 2014/2015
crop as to grain procurable at the time and place
of shipment and shall conform to the specification
laid down in the schedule attached hereto (Schedule
A) and shall be in sound condition” (Doan Thi Hong
Van et al, 2016)

Jul-23 BY PVNLAN 53

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BY COMBINATION OF DIFFERENT METHODS - EXAMPLE

Example 2: By description + FAQ + origin +

specification

• “Thai white rice long grain 5pct broken of

2016/2017 crops. The rice shall be of fair
average quality and free from live infestation at
the time of shipment. The rice shall strictly
conform to the specifications as per Thai format
standards.’’ (GAFTA)

Jul-23 BY PVNLAN 54

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4.2 QUALITY/SPECIFICATIONS/DESCRIPTION
OF THE GOODS – NOTE
Note: Choice of ways to stipulate quality depends on:
Goods nature
Trade practice
Relevant power between the parties

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4.3 QUANTITY – EXAMPLE

Ex1: • 1,920kg (192kg per drum * 10 drums)

Ex2: • 200,000MT (Tolerance percentage: ±10%

quantity and value are acceptable) không xác nh c

• 10,000 litres (the quantity is subject to a

Ex3: variation of plus or minus two percent
(2%) at seller’s option) ch có li cho ngi bán khi ghi seller's option
seller có quyn la chon giao hàng ít hay nhiu hn

• Total quantity: 1,500MT

Ex4: • Per delivery instalment: 500MT shall be
delivered by end of each month from
Jul-23 October to December 2022 BY PVNLAN 56

56 giao hàng thành tng t

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4. 3 QUANTITY

Total quantity • . . .. . . . . . . . . . . .
• Metric ton (MT), kg, metre, trong thng mi quc t thfi phài

Calculation unit square metre, cubic metre, litre, àm metric ton

n v o lng piece, set, bag, bushel, barrel,
etc.
Per delivery • (if appropriate).. . . . . . . . . . .
instalment
• Plus or minus/More or less .. . . .
. % at seller’s option/buyer’s
Tolerance option
percentage: • Plus or minus/More or
less…..quantity and value are
Jul-23
acceptable) BY PVNLAN 57

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4.3. QUANTITY

Alternatives name: Quantity, amount of goods, weight.

Calculation unit:
- Piece unit....
- Measurement unit (customary & international system units):
MT, gallon, metre, yard, kilogram, pound…
- Group unit: dozen, barrel (liquid), bushel, bag, bottle, set
(machine), pcs (piece), bag, carton, roll (film packaging)….

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4.3 QUANTITY – UNITS OF MEASUREMENT

Jul-23 BY PVNLAN 59

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4.3 QUANTITY – UNITS OF MEASUREMENT

• metric ton (MT), kilogram (kg)
Unit of weight: • 1 metric ton (MT) = 1,000 kilograms

• metre (m)
Unit of length:

• square metre (m2)

Unit of area:

• litre (l), cubic metric (cbm)

Unit of volume:
Jul-23 BY PVNLAN 60

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4.3 QUANTITY – UNITS OF MEASUREMENT

Barrel
Crude oil: quantity identified at certain temperature
(normal standard: 150C, 600F)
1 US oil barrel = 42 US gallons = 158,98 liters
1 tonne = 1 MT = 7,33 barrel
MMCFD: million cubic feet per day (energy industry)
MMBOE: million barrels of oil equivalent
Bushel
1 bushel = 35.2 litres
A bushel of wheat
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4.3. QUANTITY –
METHOD OF DETERMINING QUANTITY
4.3.1. By exact figure
Quantity: 100 motobikes
-> with valuable and countable goods
4.3.2. By approximate figure
With tolerance:
Quantity: 500 Metric Ton (+/-5% at Buyer’s Option)

Tolerance: Associated stipulation:

- Party to choose tolerance dung sai
- Price of the tolerated quantity
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QUANTITY OF THE GOODS –

TOLERANCE PERCENTAGE % (DUNG SAI)
CASE 1: Delivered quantity

Ordered quantity

CASE 2: Delivered quantity

Jul-23 BY PVNLAN 63

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QUANTITY OF THE GOODS –

TOLERANCE (PERCENTAGE %) (DUNG SAI)

Tolerance:
the permissible variation of an object in some
characteristic such as hardness, weight, or quantity.

• Ex. Calculate the tolerance where:

• The ordered q’ty of Aquafina pure water: 4 bottles
(Tolerance: ±10% against PO)
• The actual delivered q’ty: 5 bottles

deliveredq' ty  orderedq' ty 5  4
Tolerance%   x100%  25%
orderedq' ty 4
Jul-23 BY PVNLAN 64

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QUANTITY OF THE GOODS –

TOLERANCE (PERCENTAGE %) - EXERCISE
• The contract quantity of coffee bean:
200,000 MT
Contract • (Tolerance in quantity: ±10% against the
contract at seller’s option).
• The actual delivered quantity: 220, 779
MT

• Please calculate the actual tolerance

percentage of this shipment.
Question
• Is it within the allowed tolerance of the
contract?
Jul-23 BY PVNLAN 65

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4.3 QUANTITY OF THE GOODS –

PER DELIVERY INSTALMENT
Instalment delivery: delivery of goods in stages.

• NOTES:
Unless otherwise agreed, the buyer of goods is
not bound to take delivery by instalments
• Ex.
• Total quantity: 1,500MT
• Per delivery instalment: 500MT shall be delivered
by end of each month from October to December
2022

Jul-23 BY PVNLAN 67

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4.3 QUANTITY – TYPES OF WEIGHT

Gross weight (GW) = net

weight (NW) + tare

Net weight (NW) = 10 kg

Tare (weight) = 1 kg
Gross weight (GW): = ?
Jul-23 BY PVNLAN 68

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4.3 QUANTITY – TYPES OF WEIGHT

Gross weight Net weight Tare (weight)

(GW) (NW)
refers to the • refers to • refers to
total weight the weight the weight
of a product of the of the
and its product packaging
alone alone
packaging (quantity of
the Goods)

Jul-23 BY PVNLAN 69

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4.4. PACKING AND MARKING – 4.4.1.

PACKING

Art. Packaging - EXAMPLE

• Ex: Packing shall be suitable for transportation

by sea/ rail / air /road
• Ex: Seaworthy packing

Jul-23 BY PVNLAN 72

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4.4. PACKING AND MARKING – 4.4.1.

PACKING
Art. Packaging - EXAMPLE
• The Goods are to be packed properly, strengthened
in new, strong, wooden case and containerized for
its safe long-distance ocean transportation to the
Buyer’s site in [ex. Hochiminh City] 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.

Jul-23 BY PVNLAN 73

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4.4. PACKING AND MARKING – 4 ASPECTS OF

TRANSPORT
Mode of transport Road, rail, air, sea

Must be appropriate
Packaging and safe for distant
transportation

Shipping mark Must be correct

Documentation Must be correct

Jul-23 BY PVNLAN 74

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4.4. PACKING AND MARKING – 4.4.1. PACKING

Purpose of packaging

• Meet international and national shipping regulations

• Protect the goods against damage and pilferage to
get to the intended final destination safely
• Meet the Buyer’s requirements

This article stipulates the following details:

• The specific required quality of packing

• Who shall be liable if the Goods are damaged due to
improper packaging?
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4.4. PACKING AND MARKING – 4.4.1.

PACKING

Shipping regulations

• Dangerous goods subject to special regulations

(ex. IMO/IATA)
• Some national laws require fumigation of
wooden packaging
• Australian restrictions on packaging materials.
Hay, straw, and rice husks are forbidden

Jul-23 BY PVNLAN 77

77

4.4. PACKING AND MARKING – 4.4.1.

PACKING
4.4.1. Packing
Specific stipulation:
Material : by polyetylen thin layer, by newly exploited wood,
by knitted bamboo …
Form : case, bale, drum, roll, gunny bag…
Size, capacity : 60kgs each bale, jute bag 100 kgs/unit…
Number of packing layers or layers specification.

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PACKING METHODS

CARTONS CASES OR BALES

CRATES

SACKS DRUMS PALLETS

(BAGS)
79

4.4. PACKING AND MARKING – 4.4.2. MARKING

Jul-23 BY PVNLAN 80

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4.4. PACKING AND MARKING – 4.4.2.

MARKING

Shipping Marks

• “CONTRACT NO. 01/XI-19/DVNG MADE IN

INDONESIA DESTINATION: HOCHIMINH CITY”
will be stenciled in large letters for easy
identification on all sides of the packing cases
in fadeless paint.

Jul-23 BY PVNLAN 81

81

4.4. PACKING AND MARKING – 4.4.2. MARKING

Purpose of marking:

• Meet shipping regulations

• Get to the intended final destination safely
=> must bear the marks which enable the
goods to be identified
• Be eligible for preferential tariff (if thu u ãi
applicabe) => must show their country of
origin.
• Show how to handle, forward, transport
and preserve the goods.
Jul-23 BY PVNLAN 82

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4.4. PACKING AND MARKING – 4.4.2. MARKING

This article stipulates the following
details:

• P/O or contract number

• Place of destination
• Country-of-origin
• Net weight (kg), gross weight (kg), and
dimensions (metre)
• Package no. and total (x of x)
• Any precaution markings like “This Side Up”
or “Use No Hooks” and/or special handling
symbols
Jul-23 BY PVNLAN 83

83

MARKING [SHIPPING MARK] –

IMPORTANT NOTES
1. Markings must be clear enough to be read and located in an obvious place
where they can be seen with a casual eye in the handling of the goods.
2. They should be capable of remaining permanently on the product during
transportation or handling.
3. The parties should seriously consider whether the naming of the consignee
and/or shipper poses any problems (but this is called labelling, not marking)
4. They should be sufficient, simple and not include irrelevant information.

Jul-23 BY PVNLAN 84

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4.5 PRICE
Work in pair, read the contract sample and answer the following
questions:
1. What is the contract’s trade term?
2. What is its total price and unit price?
3. What is its currency for payment?
4. What are the main contents should be included in the art.
Price?
5. This article is good or bad for the seller?
6. This article is good or bad for the buyer?

Jul-23 BY PVNLAN 90

90

4.5 PRICE – EXAMPLE

RBD WINTERISED COCONUT OIL

• Specifications
• Free fatty acid (as oleic) 0.1% max
• Moisture & impurities: 0.1% max
• Iodine value (wus) 120-143
• Color 1.5 red/20Y max
• Saponification value 186-195
• Packing: 192 kg in new drums * 10 drums
• Unit price: 2.50USD/kg
• Quantity: 1,920kg
• Total price: 2.50 * 1,920kg = 4,800USD (In words: United
Stated Dollars Four thousand Eight hundred only)
• Trade terms: FCA Cat Lai port, Hochiminh City, Vietnam
Jul-23(Incoterms 2020) BY PVNLAN 91

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4.5. PRICE
• Currency (USD, EUR, GBP, JPY, HKD, SGD, etc)
1

• Unit price
2

• Method for determining the price

3

• Trade terms/Commercial terms (Incoterms)

4

• Discount
5
Jul-23 BY PVNLAN 92

92

4.5 PRICE – IMPORTANT NOTES

IMPORTANT NOTES

• Must include a specific trade term (Incoterms)

• Must include a particular geographic location
• Must state clearly what version of Incoterms is
applied.
• Ex. 500USD/MT CIF Long Beach port, California, USA
(as per Incoterms 2020)
• The true price must be used.
• Discounts or rebates (if any) must be taken into
account when stipulating the contract price.
Jul-23 BY PVNLAN 93

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4.5 PRICE – METHODS FOR DETERMINING THE

PRICE

Fixed price

Price to be fixed (PTBF)/Deferred fixing

price

Fixed price with price escalation [Revisable

price]/flexible price

Fixed price with economic price

adjustment/Sliding scale price

Jul-23 BY PVNLAN 94

94

FIXED PRICE
Fixed price

Normally NOT
Determined at subject to any Both parties may
contract signing adjustment unless agree to
and remained certain provisions periodically revise
unchanged unless (such as contract the price of their
parties have other change, economic contract.
agreements. pricing, or
defective pricing).

Jul-23 BY PVNLAN 95

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FIXED PRICE – EXAMPLE

Price – EXAMPLE

• Vietnam Robusta Coffee Grade 2, 5% black and broken

beans
• Packing: 0.06MT per new jute bag * 960 bags per 20’
container * 1 container 20’
• Unit price: 560USD/MT
• Quantity: 57.60MT (+/-3%)
• Total price: 57.60MT * 560USD/MT = 32,256 USD (In
words: United Stated Dollars Thirty two thousand Two
hundred Fifty six only)
• Trade terms: CIP Hamburg port, Germany (as per Incoterms
2020)
Jul-23 BY PVNLAN 96

96

PRICE TO BE FIXED (PTBF)/DEFERRED

FIXING PRICE
PTBF
The formula
to
The price to
NOT be set/fixed
identify/dete  Case: price
rmine the fluctuates,
determined later based price
at contract on a pre- market power
signing including: belongs to
determined agreed
formula buyer
market &
delivery time

Jul-23 BY PVNLAN 97

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PRICE TO BE FIXED
In many cases in commodity trade, parties conclude a
contract for sale without setting the price.
The price is left to be fixed/set later by one of the
parties according to a pre-determined formula.
This formula is in terms of some agreed market (ex.
futures market) or other standard as set or recorded
by a third person or agency.
A relevant delivery period (ex. month) of
the futures market is specified/chosen in the contract,
and its price at a given moment will determine (or fix)
the price of the physicals contract.

Jul-23 BY PVNLAN 98

98

PRICE TO BE FIXED – EXAMPLE

Price – EXAMPLE

• Vietnam Robusta Coffee Grade 2, 5% black and broken

beans
• Packing: 0.06MT per new jute bag * 960 bags per 20’
container * 1 container 20’
• Unit price: 560USD/MT
• Quantity: 57.60MT (+/-3%)
• Total price: 57.60MT * 560USD/MT = 32,256 USD (In
words: United Stated Dollars Thirty two thousand Two
hundred Fifty six only)
• Trade terms: CIP Hamburg port, Germany (as per Incoterms
2020)
• Coffee price shall be identified as the trading price at
London Commodity Exchange at the time of delivery.
Jul-23 BY PVNLAN 99

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FIXED PRICE WITH PRICE

ESCALATION/FLEXIBLE PRICE
Fixed price with price escalation

However, if the price

Determined at on the market Adding: time, place,
contract signing with exceeds a limited identification of
a price escalation rate, the price shall price difference and
clause be revised in a allowed tolerance
specific way.

Jul-23 BY PVNLAN 105

105

FIXED PRICE WITH PRICE ESCALATION – EXAMPLE

Price change/Price escalation – EXAMPLE 1

• Vietnam Robusta Coffee Grade 2, 5% black and broken

beans
• Packing: 0.06MT per new jute bag * 960 bags per 20’
container * 1 container 20’
• Unit price: 560USD/MT
• Quantity: 57.60MT (+/-3%)
• Total price: 57.60MT * 560USD/MT = 32,256 USD (In
words: United Stated Dollars Thirty two thousand Two
hundred Fifty six only)
• Trade terms: CIP Hamburg port, Germany (as per Incoterms
2020)
• At the time of delivery, if coffee price on the London
market is more than 5% different from this price then
Jul-23
market price shall be applied. BY PVNLAN 106

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FIXED PRICE WITH PRICE ESCALATION – EXAMPLE

Art. Price change/Price escalation – EXAMPLE 2

• Under circumstances in which Seller is unable to obtain

raw materials or energy on terms Seller deems
commercially acceptable, Seller may increase the price
by giving Buyer at least seven (7) days prior notice.
• The increased price as notified by Seller will be deemed
accepted unless Buyer objects in writing before the
effective date as defined in such notice of Seller.

Jul-23 BY PVNLAN 107

107

FIXED PRICE WITH ECONOMIC PRICE

ADJUSTMENT/SLIDING SCALE PRICE
Fixed price with economic price adjustment
Subject to possibilities
of revising the price
have been Case: goods with long
Determined determined (an production period
at contract upward and and high value such
signing downward revision as industrial
based on a price equipment or vessels
scale such as
consumer price index)

Jul-23 BY PVNLAN 108

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FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

0
1 = ( + 1/ 0 + 1/ 0)
100
• Where:
• P1: final price for payment
• P0: basis price determined at the time of contract
conclusion
• a,b, c: weight of each price factors (a+b+c=100%) (price
structure by the percentage rate of factors)
• a: weight of fixed costs (administrative cost, profit margin)
• b: weight of material costs
• c: weight of labor costs
• M0: material price at the time of contract conclusion
• M1: material price at the time of payment
• S0: salary at the time of contract conclusion
• S1: salary at the time of payment
Jul-23 BY PVNLAN 109

109

FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT- EXAMPLE 1

“CARRIER” 30 HXC100A Water-cooler liquid chillers,
France origin, ISO 9001 certified, operation
400V/3PH/50HZ

• Quantity: 20 sets
• Total price: The final price to be settled shall be based on
the following formula:
120,000
1 = 20 (30% + 40% 1/70,000 + 30% 1/30,000)
100

• Currency: USD
• Trade terms: FCA Long Beach port, USA (as per Incoterms
2020)

Jul-23 BY PVNLAN 110

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FIXED PRICE WITH ECONOMIC PRICE

ADJUSTMENT- EXAMPLE 2
Ex: The initial price of the ship is GBP 5 million, of which 50%
is for materials, 40% for manpower and 10% for fixed cost.
This price shall be recalculated upon delivery by the formula
given by European Economic Committee as follows:
0
1 = ( + 1/ 0 + 1/ 0)
100

Reference materials for parties are magazine of ABC,

published by XYZ Association within 20 days upon delivery of
the ship

111

111

4.5. PRICE

4.5.4. Commercial terms

Ex: The above price is understood as CIF Haiphong Port,
subject to Incoterms ®2020, including packing and
marking.

112

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4.5. PRICE

4.5.5. Discounts
Basing on reasons
Cash discount
Seasonal discount
Trade - in discount
Second-hand discount
Quantity discount

113

4.5. PRICE

4.5.5. Discounts
Basing on discount calculation :
Simple discount
Chain discount
Progressive discount
Bonus discount

114

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GENERAL CONSIDERATIONS OF
STIPULATIONS IN A CONTRACT
(1) Paying Currency
(2) Calculating currency (if any)
(3) Exchange Rate. (If any)
(4) Terms of delivery/ lncoterms
(5) Packaging (included/excluded)
(6) With or without spare parts/accessories/empty
boxes/bags

115

GENERAL CONSIDERATIONS OF
STIPULATIONS IN A CONTRACT
“Unit price: USD 20/unit.
Total value: USD 20,000.00
(In words: twenty thousand United States dollars only)
The above-mentioned price to be understood FOB Hiep
Phuoc Port, Hochiminh City, Vietnam subject to Incoterms
2020, packing included with the spare parts and
accessories (see Annex attached)”

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4.6 DELIVERY/SHIPMENT
What are the
applicable delivery When is delivery time?
terms?

Where does delivery By what mode of

occur? Where is the transport?
destination?
When must the Buyer When, How, What
notify the vessel information shall the
name/carrier name? Seller notify the Buyer
What if the vessel does of delivery?
not arrive?

Is partial shipment and

transshipment allowed?
Jul-23 BY PVNLAN 117

117

4.6 DELIVERY/SHIPMENT
1. Applicable terms of delivery/Trade terms (by reference to
most recent version of ICC Incoterms at date of conclusion
of the contract) . . . . . . . . . . . . . .
2. Time of delivery [Shipment period] . . . . . . . . . . . . .
3. Place of delivery & place of destination. . . . . . . . . . .
4. Mode of transport . . . . . . . . . .
5. Notice of vessel name and arrival time/Carrier name and
address . .. . . .
6. Notice/Advice of delivery . . . . . . . . . . . . . .
7. Partial shipment & transshipment . . . . . . . . . . . . .

Jul-23 BY PVNLAN 118

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4.6.2 TIME OF DELIVERY

Time of delivery

A fixed date/not later than A fixed period of time after

a fixed day the contract comes into
force/down payment

The date of delivery shall be Within four months (04) ex-

on the 1st of December works after the Seller’s receipt
2023/not later than the 1st of of the down payment made by
December 2023 the Buyer
Jul-23 BY PVNLAN 119

119

4.6.2. TIME OF DELIVERY

Customary time: should it be?
* Prompt delivery
* Quick delivery
* Immediate delivery
* As soon as possible

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4.6.3 PLACE OF DELIVERY

EX
W
Place of delivery DDP FCA
= point of risk
transfer DPU FOB
Place
of
DAP delivery FAS
?

CFR CPT
CIF CIP

Jul-23 BY PVNLAN 123

123

4.6.3. PLACE OF DELIVERY

A fixed place
E.g. Saigon port, HCM City, Vietnam
Optional
E.g. Main port of Japan.

Advantages and Disadvantages?

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4.6.3 PLACE OF DELIVERY

Terms, time, place of delivery & destination

– EXAMPLE

• Delivery of goods shall be made [INCOTERMS].

• The date of delivery shall be 28 days after the
date of coming into force of the contract. [or
CALENDAR DATE OF DELIVERY].
• The place of delivery under this Contract is
[PLACE/PORT OF SHIPMENT]
• The place of destination is [PLACE/PORT OF
DESTINATION]
Jul-23 BY PVNLAN 125

125

4.6.3 PLACE OF If the vessel named by the

Buyer fails to arrive on or
DELIVERY before the agreed delivery
date, then the Seller may at
his discretion to deliver the
goods to a bonded
What happens warehouse in the port of
if the ship [NAME OF PORT], and shall
named by the be deemed to have fulfilled
buyer is late? his delivery obligations under
the contract.

Jul-23 BY PVNLAN 126

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4.6.4 MODE OF TRANSPORT

By air
By sea
By road
By rail
Multimodal

127

4.6.5 NOTICE OF VESSEL NAME & ARRIVAL TIME/

CARRIER NAME AND ADDRESS
Which trade terms EX
require the Buyer W
DDP FCA
notify the Seller of
vessel/carrier details?
DPU FOB
When, How, What Notice
information? What if the vessel of
does not arrive? DAP vessel/ FAS
carrier?
=> the parties should clarify:
Time of notice
Mode/means of notice CFR CPT
Content of notice CIF CIP
What if the vessel does not
arrive
Jul-23 BY PVNLAN 128

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4.6.5 NOTICE OF VESSEL NAME & ARRIVAL TIME/

CARRIER NAME AND ADDRESS

Content of notice

Vessel name, vessel Carrier name &

nationality [flag], address, time & point
vessel tonnage, of delivery where
loading point, the goods to be
delivery date [ETA] received
Jul-23 BY PVNLAN 129

129

4.6.5 NOTICE OF VESSEL NAME & ARRIVAL TIME/

CARRIER NAME AND ADDRESS
Time, • The BUYER shall advise the SELLER by fax/email of
mode, the vessel name, loading point, delivery date [ETA]
content NOT later than <NUMBER>
of Days before the agreed Delivery date.
notice

• If the vessel named by the BUYER fails to

arrive on or before <DATE>, then the SELLER
What may at his discretion deliver the Goods to a
if bonded warehouse in the port of <PLACE OF
DELIVERY> and shall be deemed to have
fulfilled his delivery obligations under
this Contract.
Jul-23 BY PVNLAN 130

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4.6.6 NOTICE/ADVICE OF DELIVERY

Which trade terms EX

require the Seller W
DDP FCA
notify the Buyer of
delivery?
DPU FOB
When, How, What Notice
information? of
=> the parties should DAP deliver FAS
y?
clarify:
Time of notice
Mode/means of notice CFR CPT
Content of notice CIF CIP
Jul-23 BY PVNLAN 131

131

4.6.6 NOTICE/ADVICE OF DELIVERY

Time of • Immediately on delivery, the Seller

notice shall
notify the Buyer of delivery

Mode of • by <MEANS OF
notice NOTIFICATION: by email, by fax,
or by fast courier>.
• This notification shall include
Content of <INFORMATION AND
notice DOCUMENTS TO BE INCLUDED>.
Jul-23 BY PVNLAN 132

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4.6.6 NOTICE/ADVICE OF DELIVERY – EXAMPLE

Identify time, mode, content of notice of

the following example:

• Immediately after delivery, the seller shall

notify [advise] the buyer of shipment
particulars [details] by fax/email including
B/L number, commodity name, quantity,
quality, packing, marking of the goods
dispatched [shipped out], shipment date/ETD,
ETA, vessel name, and voyage number.

Jul-23 BY PVNLAN 133

133

4.6.7 TRANSHIPMENT/PARTIAL SHIPMENT

Transshipment [ C or U ]
= the activity of moving good
s from one ship to another (for
further transportation):

Partial shipment = an order is

shipped in more than
one shipment.
For example, from an order for
100 units, you ship 40 units
immediately and 60 units later.
Jul-23 BY PVNLAN 134

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4.6 DELIVERY - EXAMPLE

Trade terms: CIP Cat Lai port, Mode of transport: By sea
Hochiminh City, Vietnam
Notification of delivery: Immediately
Shipment Date The Goods must after delivery, the seller shall notify
be shipped out from the Seller’s [advise] the buyer of shipment
warehouse within 3 months upon particulars [details] by fax/email
the Seller’s receipt of 40% of including B/L number, commodity
contract value by T/T in advance name, quantity, quality, packing,
(max. February 29th, 2023) marking of the goods dispatched
[shipped out], shipment date/ETD,
Port of delivery [Port of
ETA, vessel name, and voyage
shipment]: Surabaya Port,
number.
Indonesia
Partial Shipment Not allowed
Port of Destination: Cat Lai port,
Ho Chi Minh City, Vietnam Transhipment Not allowed

Jul-23 BY PVNLAN 136

136

4.6 DELIVERY – IMPORTANT NOTES

1. Should balance between attractive short lead time and
consequences of subsequent late deliveries (esp. if payment
by L/C).
Late delivery constitutes a breach of contract and is subject
to liquidated damages. (please refer to the upcoming clause
“Penalties”.
It is far better to promise 12 weeks and deliver in 10, than to
promise 10 but deliver in 12
 Ex. 12 weeks from the date of signing the contract
 45 working days from receipt of down payment

Jul-23 BY PVNLAN 137

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4.6 DELIVERY – IMPORTANT NOTES

2. Date or period of delivery must be specific (not vague).
 Ex. Vague: “prompt delivery”or “subject to export licence”
 Specific: “not later than 31 Dec 2017”
3. Where there is a delivery by instalments the Parties should
indicate every date of delivery for each instalment.
4. The type of delivery terms (trade term, time of delivery, partial
shipment or transshipment) that you choose affect not only the
price but also the risk of loss that you will have to bear
=> should think carefully before accepting the terms.

Jul-23 BY PVNLAN 138

138

Q&A THANK YOU FOR YOUR LISTENING

Jul-23 pvnlan 139

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References
1. International Trade Centre. Model Contracts For Small Firms: Legal
Guidance For Doing International Business. 2010. p35-p58. Retrieved
from http://www.intracen.org/model-contracts-for-small-firms/
2. United Nations Convention on Contracts for the International Sale of
Goods 1980 (CISG)
3. James R. Pinnells. Exporting and the export contract. Prodec. 1994
4. Belay Seyoum. Export-import theory, practices, and procedures (second
edition). Taylor & Francis, 2009
5. Jim Sherlock & Jonathan Reuvid. The Handbook of International Trade -
A Guide to the Principles and Practice of Export (2nd edition). GMB
Publishing Ltd., 2008
6. Donna L. Bade. Export/import procedures and documentation (fifth
edition). Amacom, 2015
7. GS. TS Đoàn Thị Hồng Vân & ThS. Kim Ngọc Đạt. Quản trị xuất nhập
khẩu, NXB Kinh tế Tp. HCM, 2016

Jul-23 by pvnlan 140

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