DRAFTING CONTRACTS FOR THE INTERNATIONAL

SALE OF GOODS
Some common clauses in international sale contracts

 Parties
 Definitions
 Subject of the contract: Name, Quantity, Quanlity of the goods, Packaging
 Price of payment
 Shipment of goods
 Price variation
 Penalty
 Warranty
 Force majeur
 Confidentiality
 Indemnity
 Notice
 Language
 Applicable law
 Dispute settlement
 Termination

AVOIDING LEGAL RISKS WHEN DRAFTING CONTRACTUAL CLAUSES

I. PARTIES TO THE CONTRACT

 Name: The business registration name, abbreviation name next to full name
 Address: stated as in the business registered
 Capacity: the company must be registered, the person signed must have capacity

→ Check capacity

II. NAME OF GOODS

Use the precise name of the goods

 Name of goods + trade name/ scientific name

 Name of goods + place of origin
 NOG + manufacture’s name
 NOG + major specification
 NOG + main use purpose

III. QUANTITY OF GOODS

 There must be a unity on the unit of measurement

Ex: metre, inch, mile, kg, pound,..

 Method of drafting
o A precise quantity: countable
o A precise quantity + tolerance: 10k MT rice +- 10%

IV. QUALITY OF GOODS

 Clearly define main characteristics of the good

 Use one of or a combination of the following methods:

→ As per national standard: it must clearly state which country’s standard, the standard number,
year of issuance

→ As per general customary criteria: FAQ, GMQ,…

→ as per description of goods: it must describes as many details as possible

→ As per sample: The parties must preserve the sample for comparison

→ As per inspected and approved: Place of inspection, inspecting agency, method of inspection,
quality certificate (preliminary/final)

V. PRICE AND PAYMENT

 Price:
o Select the currency
o Pricing method
 The price is specified at the time of signing the contract and cannot be
modified if otherwise specified
 The price will be determined after signing the contract and during the
performance of the contract

Ex: 500 USD/MT corn-

→ To protect parties’ interest in the event of price fluctuation in the market

Ex: Product price adjustment

 Payment: Clearly specify date of payment, method of payment

o Cash payment
o Bank transfer
o Letter of credit (LC): the parties double check the LC whether the LC is
consistent with the contract

Ex: contract shipment in Sep, LC shipment before 20/9, seller delivered goods on 25/9
the buyer can not suit seller, seller deliver good on Sep → still valid contract → but not LC

→ seller must ask buyer to adjust the LC → double check or else bank will not pay seller

of buyer do not adjust the LC → breach the payment obligation in contract

 Shipment (art 34 cisg)

o Clearly specify the date of delivery, the place and the shipment method
o Time:
 Select a specific date
 Specify a time period
o Place of delivery: clearly specified in the contract, otherwise the place of delivery
will be determined by the law
 Language:
o Usually, an international sale contract is drafted in two languages
o To avoid conflicts which may arise from inconsistency in the contents of the two
versions, the party must select a preffered language in the two languages
o Ex: This contract
 Force Majeure clause
o Give a definition of force majeure
o Draw up an open list of typical force majeure events
o Clearly specify the obligations of the parties in breach
o Stipulate the legal effects

EXCERCISE:

 Review a contract