Chapter 4 Terms of Contract

CHAPTER 4
TERMS OF CONTRACT
706021- Chapter 4: Terms of contract

CONTENTS
1
Definition
2
Features
3 Terms in Contract
706021- Chapter 4: Terms of contract 2

LEARNING OUTCOMES
1 Outline the obligation of the seller and the buyer
2 Identify the structure of the sale contract
Understand the key clauses and provisions of the

3
sale contract

Definition
Contract for the International Sale of Goods
Goods & Documents

Basa fish
Deal
Money

Definition
Model of the type of contract to be used by
parties whose places of business located in
different countries for the sale and
purchasing of goods. The Seller (the
“Exporter”) is obliged to deliver the stated
products, and the Buyer (the “Importer”)
shall acquire them under the agreed
conditions of payment, delivery and
transaction schedule.

Obligations of the Seller
The seller must (Art. 30):
Deliver the goods: conformity/when/

where?
Hand over any documents relating to
them
Transfer the property in the goods

Obligations of the Buyer
The buyer must (Art. 53):
Pay the price for the goods:

where/ when?
Take delivery of the goods

Deliver the Goods
Conformity (Article 35/ CISG)?
The seller must deliver goods:
• Be of the quantity, quality and description
required by the contract
• Be contained or packaged in the manner
required by the contract  in a manner
adequate to preserve and protect the
goods
• Guarantee that the goods are free from any
right or claims by third parties (Art.41/42)
Deliver the Goods
When (Article 33/ CISG)?
If a date is fixed  on that date
If a period of time is fixed  at any

time within that period
If absence of such a date  within

a reasonable time
Deliver the Goods
Where (Article 31/ CISG)?
Stated in the contract/a term of trade
If not +the contract involved to carriage

the first carrier
If not  at the place of manufacturing
If not  at the place of business of the

seller
Hand over documents
The seller must hand documents

over (Art.34)
• At the time and place
• In the form

Payment
Where ( Art.57):
Stated in the contract / a method of
payment
If not, at the seller’s place of business
If not, at the place where the handling

over of the goods/ documents takes
place.

Payment
When ( Art.59):
• On the date fixed by or
determinable from the
contract without the need for
any request or compliance
with any formality on the part
of the seller
Features
The trading parties  in different
countries  the fundamental
principle of international contract law
Goods  crossing over the seller’s

border
Foreign Currency  can be exchange

in the world currency markets

Applicable law
Freedom of contract  at liberty to agree
• The exporter’s country law  most stated
• The importer’s country law
• The third country law
• The international rules
If not:
• The place of negotiation of the contract
• The place of performance/ location of the subject
matter
• The place of business

Applicable law
Country of
Seller
Vietnam commercial
Domestic law law 2005
Country of
buyer
Applicable law
International Law

GOODS
Tangible goods, with the aspect: movable and
material goods.
Four categories:
• Existing goods: owned by seller at time

contract made
• Future goods: manufactured or acquired by
seller after contract made
• Specific goods: agreed and identified at time
contract made
• Unascertained goods: cannot be identified
with certainty at time contract made
EXCLUSION
Intangible goods
Do not apply to sales:

• of goods bought for personal, family or
household use;
• by auction;
• on execution or otherwise by authority of law;
• of stocks, shares, investment securities,
negotiable instruments or money;
• of ships, vessels, hovercraft or aircraft;
• of electricity.

EXCLUSION
The lists of goods banned: ref. APPENDIX 1
Decree 187/2013/NĐ-CP dated 22 Nov 2013

Decree making detailed provisions for
implementation of the Commercial Law with
respect to international purchasers and sales
of goods; and agency for sale and purchase,
processing and transit of goods involving
foreign parties

FORMS OF CONTRACT
Export
Import
Temporary import for re-export
Temporary export for re-import
Transfer through border-gates
Conducted on the basis of

written contracts or other forms At least having 6
of equal legal validity (telegraph, articles: commodity/
telex, facsimile, data message quantity/quality/price/
and other forms provided for by payment/shipment
law)

MODEL OF CONTRACT
Model Contract contains the substantive
rules for an international sales contract:
• The main rights and obligations of the Parties
• The remedies for breach of contract by the Buyer;
the remedies for breach of contract by the Seller
• The general rules that apply equally to both parties
• It also contains the boilerplate clauses broadly
accepted in international commercial contracts
The Model Contract is greatly influenced

by CISG, widely accepted by lawyers of
different traditions and backgrounds.
MODEL OF CONTRACT
 Model Contract for the International

Sale of Goods: two versions– the
“standard” and the “short”;
 The short version is more practice-
oriented.

Opening
Terms and
conditions
Final
24
PERTINENT CLAUSES
MANDATORY OPTIONAL
Article 1: Commodity Article 7: Packing and
Article 2: Specification/ marking
Quality Article 8: Penalty
Article 3: Quantity Article 9: Insurance
Article 4: Price Article 10: Force majeure
Article 5: Payment Article 11: Claim
Article 6: Shipment Article 12: Arbitration
Article 13: Other terms and
conditions

ARTICLE 1: COMMODITY
It is a main component of the description
of goods.
It concerns the rights and obligations of

the buyer and the seller.
If the goods delivered by the seller are not in

accordance with the agreed name of
commodity, the buyer reserves the right to
lodge a claim, reject the goods or even
cancel the contract.

Points for attention when drawing up
the clause:
• Must be clear and specific
• True to the facts and do not include
impracticable and unnecessary
descriptions
• Apply the commodity name that is
universally accepted.
• Selection of the most appropriate name
for the best/lowest duty/tariff and
lowest freight to our advantage 27
Trade name + scientific name  Cooking Oil Sailing
Boat, Urea Fertilizer
Utility  Rice paste (base element for preparation of
spring roll)
Origin  Korean Ginseng, Bordeaux Wine
Name of
goods Specification  10 tons Truck, 14 inches Television
can be set
specified
Producer name  Honda Motorcycle, Ford Car
with:
Harmonized System (HS) code  65061010 Safety
Headgear
Combined  Sony 14” color TV set

ARTICLE 2: QUALITY
The quality of the goods is among the

main terms upon which a sales contract
is based and constructed.
Quality of goods refers to the intrinsic

attributes and the outer form or shape
of the goods.
Quality can be specified in any one of a

number of ways

Methods of Stipulating
Quality of the Goods
Sale by sample
• Sale by specification, Grade or

Standard
Sale by • Sale by F.A.Q.
• Sale by brand name or trade mark
description • Sale by name of origin
• Sale by description

QUALITY BY SAMPLE
The sample refers to the article which can

be used to represent the quality of the
whole lot.
• Sale by the seller’s sample

• Sale by the buyer’s sample
Examples: handcraft articles, clothes or

native products etc.
QUALITY BY SAMPLE
The goods will correspond with the sample in quality
The buyer will have a reasonable opportunity of

comparing the goods with the sample
A small quantity of a product  taken out from a

whole lot as the representative of the whole
The seller provide  seller’s sample or representative

sample, original sample , or type or standard sample
The buyer provide  buyer’s sample  seller
duplicate  counter sample or return sample or
confirming sample.
Making 3 samples: 1st-seller, 2nd-buyer, 3rd-nominated
third party (commercial inspection bureau)
Goods hardly to describe or standardize, ex: Fine Art,

some Agricultural products 32
Quality by Category/ Grade
or Standard
The same kind of goods might

also be classified into different
grades.
Standards are the specifications

or grades  recognized by the
governmental department or
commercial organizations of a
country
EXAMPLE
Vietnamese bean coffee, crop 2004, Grade

I as per TCVN 4193:2005

Quality by Specification
Specifications are detailed descriptions

of the goods to be sold. They include
the composition, content, purity,
strength, size, etc. of the goods.
• Broken 10% max
• Moisture 14% max
• Chalky grain 7% max
• Damaged grain 0.5% max
• Yellow grain 1% max
• Foreign matter 0.2% max

Example
Commodity: Love set wooden furniture
Specification:
Table
(1.150mm x 6010mm x 840mm) x 2 pcs
Lounge armchair
(1.040 x 600 x 450)mm x 2 pcs
Love armchair
(590 x 610 x 840)mm x 2 pcs

Quality by a standard
in the trade
 FAQ (Fair Average Quality): upon discharge
at destination, an average sample is drawn
(by buyer/ B/L holder) from the vessel
 GMQ (Good Merchantable Quality): means

the goods is free from defects and is good
enough for use or consumption

EXAMPLE
 Vietnamese peanut, 2012 crop,
F.A.Q.,
 Moisture (max.) 13%
 Admixture (max.) 5%
 Oil content (min.) 44%

Quality by technical documents
In the sales of
machines, precision
instruments, complete
sets of equipment and
the like.

Quality by content
Two kind of content of quality:
• useful  % min
• extraneous % max
Example
• Urea
• Nitrogen 46% min
• Moisture 0.5% max
• Biuret 1.0% max
• Color white
Quality by inspected and approved
 The buyer inspect the goods before

delivered
 If approved, the buyer has to receive and

pay for the goods
 Auction, Trade Fair, EXW

Quality by tale quale
The seller is selling, and the buyer is buying an

item in whatever condition it presently exists,
and that the buyer is accepting the item "with
all faults“
Ex: As it is/ As is sale/ to arrive sale

Quality by trademark
Sales by brands or trade

marks are conducted
mostly for goods with fixed
quality. It is unnecessary
to inquire much about the
quality of these products
in business negotiation.
But you should state the
types and specifications of
the products you want

ARTICLE 3: QUANTITY
Quantity clause is one of the necessary
conditions for the conclusion of a sales
contract.
4 Main features noted:
• Units of weight/quantity
• Tolerance (If any)
• Option (If any)
• Weighted Place (If any)
Example
• QUANTITY: 10,000 MTS ± 5% AT THE SELLER’S
OPTION AT INTAKEN QUANTITY
• EX: QUANTITY: 10,000 PCS
ARTICLE 3: QUANTITY
Units of Weights and Lengths:

• Metric system: 1 MT = 1000 kilograms = 1000,000
grams
• British system: 1 LT =2,240 pounds
=2,240x16=35,840 ounces
• American system: 1 ST=2,000
pounds=2,000ⅹ16=32,000 ounces
• 1LT (long ton) = 1,016.04kg
• 1ST (short ton) = 907.18kg
• 1 mile = 1,760 yards = 5,280 feet
• 1 meter = 1.094 yards = 3.288 feet = 39.37 inches
ARTICLE 3: QUANTITY
Units of Measures:
- Area  in the calculation of plank, board, or leather,
etc.
1 square meter = 1.1956 square yards = 10.7639 square
feet
- Volume  in the trade of wood, and the like.
1 cubic meter = 1.308 cubic yards = 35.315 cubic feet
- Capacity
1 liter = 0.22 British gallon = 0.264 American gallon
1 British gallon = 4.546 liters = 1.201 American gallons
1 American gallon = 3.785 liters = 0.833 British gallon
1 American barrel= 31.5 American gallons=31.5ⅹ3.785 = 99.03
liters
1 British barrel = 36 gallons = 36ⅹ4.546 = 163.66 liters
ARTICLE 3: QUANTITY
More or Less Clause

• The contractors are usually
required to state clearly the
quantity of the deal in a
contract  expressions like
“about”, “approximately”
should not be allowed.
ARTICLE 3: QUANTITY
About 5,000 MTS /

Approximately 5,000 MTS
From 4,500 MTS to 5,500 MT S
Example: 5,000 MTS ± 10% at seller’s option
5,000 MTS more or less 10% at

buyer’s option

The Calculation of the Weight of Goods
GROSS WEIGHT = NET WEIGHT + TARE WEIGHT
G.W: the over-all weight of the commodity, including the

tare, i.e. the package weight.
N.W: the weight of the commodity alone, the tare is not
counted in.

Four ways are used to calculate the tare of the
goods.
-Actual tare or real tare: the package is weighed to
have its actual weight
-Average tare: the packages of a number of the
goods are weighed to get their average weight,
then the total tare is got by multiplying the average
tare with the total number of the packages
-Customary tare: Certain standard packages have
generally recognized weight, which is used as the
customary tare to denote the weight of such
packages
-Computed tare: the tare previously agreed upon
by the seller and the buyer.
COMMERCIAL WEIGHT WC
- The weight of the goods derived from such a process with
which the moisture content of the commodity is removed
and standardized moisture content is added by scientific
means.
- Commercial weight is chiefly applicable in the calculation
of the weight of such commodities like raw silk, wool, etc.,
which are of high value and with unsteady moisture
content
100  M S
WC  WA 
Where as: 100  M A
WC : commercial weight
WA: actual weight
MS: standard moisture 706021- Chapter 4: Terms of contract 51
EXAMPLE
Contract for 120MTS of Wool with agreed
standard rate of water as 10%. When receiving
the goods, the actual rate of water as 15%.
Calculate the weight that the buyer has to pay
for?
WC = 120 MTS x (100 + 10)/(100+ 15)= 114.78 MTS

The Calculation of the
Weight of Goods
THEORICAL WEIGHT WT
- Commodities such as galvanized iron and steel plate have
regular specifications and regular size. They are often
subject to the use of theoretical weight. Their unit weight is
the same and the theoretical weight is calculated as:
Where as: n
WT : theorical weight
WT   Vi mi S i
Vi : volume of 1 unit
i 1
mi: natural weight
Si: the total number of goods

The Place identified of
the Weight of Goods
Intaken quantity/ B/L

quantity  at the port of
loading
Delivered quantity  at the

port of discharge  Anglo-
American system countries

ARTICLE 4: PRICE
The contract should specify:

• The currency in which payment is to be made 
foreign and free currency
• The unit price / the total amount  in figure +
words
• The trade term
Example:
• Unit price: USD 120.00/MT CIF Cat Lai port, HCMC,
Vietnam, Incoterms 2010
• Total amount: USD 180,000
• Say: US Dollars One Hundred and Eighteen
thousand only
ARTICLE 4: PRICE
The methods of calculation of price:

1. Fixed price
2. Flexible price/ Revisable price
3. Deferred price
4. Sliding price

ARTICLE 4: PRICE
Fixed price:
• The price has been set in the contract
when the agreement concluded, and is
held constant for a specified period of
time
• Normally, the price is not subject to any
adjustment unless certain provisions
(such as contract change, economic
pricing, or defective pricing) are included
in the agreement
ARTICLE 4: PRICE
Flexible price:
• The price has been set in the contract
when the agreement concluded, but
• The price is open to negotiations
between buyers and sellers, and
allow for bargaining within a certain
range (ex: the market price is
escalate over 10%).

Code 706021
ARTICLE 4: PRICE
Deferred price: (No price established)

• The price is not set in the contract
when the agreement concluded
• The price is only determined on
the contract date when the seller
deliver the goods and transfer
ownership to the buyer
• Commodity exchange market?
ARTICLE 4: PRICE
Sliding price:  b c 
P1  P0   A  B   C  
1 1
 b0 c0 
Where as:
C: rate of wage cost
A+B+C=100% c0: cost of wage on the signing
P1 : the payment price date
P0 : the contract price c1: cost of wage on the contract
A : rate of fixed cost date
B : rate of material cost
b0: cost of material on the signing date
b1: cost of material on the contract date
ARTICLE 5: PAYMENT
- The currency of payment

- The time of payment
- The method of payment: T/T, D/P, D/A,
CAD,L/C
- The required documents

ARTICLE 5: PAYMENT
The time of payment:
 Advance Payment
 Prompt Payment
 Time Payment
 Mixed payment

ARTICLE 5: PAYMENT
Required documents:
 Bill of Exchange
 Commercial Invoice
 Packing List
 Bill of Lading
 Certificate of Origin
 Insurance Policy
 Certificate of Quality/ Quantity/ Weight

EXAMPLE
Payment: 100% by CAD at Vietcombank

Vietnam HCMC branch.
Required documents:
• Commercial invoice in triplicate
• 3/3 clean on board B/L original
• Certificate of weight, quality issued by S.G.S: 1
original, 1 copy
• Certificate of origin issued by the Chamber of
Commerce and industry of Vietnam: 1 Original
• Certificate of fumigation issued by the Fumigation
Company: 1 original, 1 copy
EXAMPLE
Payment: 100% by L/C at 120 days sight
Required documents:
• Full set of clean on board Ocean Bill of Lading
made out of to order of issuing bank, marked
“freight prepaid” and notify the applicant.
• Signed Commercial invoice: 03 originals
• Packing list: 03 originals
• Certificate of Origin form A issued by Vietnam
Chamber of Commerce and Industry (VCCI): 01
original
• Insurance Policy: 02 originals
ARTICLE 6: SHIPMENT

• Date of shipment
• Place of shipment
• Shipping advice

ARTICLE 6: SHIPMENT
Date of shipment:
On certain date: on 12 Jan 2013
Latest date: Not later than 12 Jan 2013/ latest shipment date: 12
Jan 2013
Period of time: from 1 to 12 Jan 2013
Note: pls careful of using the expressions
• Prompt delivery
• Immediately delivery
• As soon as possible
• First available vessel
• When L/C is opened
Code 706021
ARTICLE 6: SHIPMENT
• Port of Loading/ Place

of Receipt
• Port of Discharge
Place of • Port of Destination/
shipment: Place of Delivery
• Partial shipment
• Transshipment

ARTICLE 7: Packing and Marking
To protect the contract equipment from

moisture, rain, rust, corrosion, shock and
other damages according to their different
characteristics
To withstand numerous handling, loading

and unloading as well as long distance
sea and inland transportation
Legal requirement

Packaging materials
• Thùng (case, box)/ wooden case/ plywood case/ double case/

crate/ Metallized case/ fiberboard case
• Bao (bag)/ bao tải (gunny bag)/ bao vải bông (Cotton bag)/
bao giấy (Paper bag)/ bao bằng cao su (Rubber bag).
• Kiện hay bì (bale)
• Thùng (barrel, drum) (wooden barrel), gỗ dán (plywood
barrel), thùng tròn bằng thép (steel drum), thùng tròn bằng
nhôm (aluminium drum) và thùng tròn gỗ ghép (fiberboard
drum).
• Sọt (crate), bó (bundle), cuộn (roll), chai lọ (bottle), bình
(carboy), chum (jar).. 70
Code 706021
To identify cargo
To help in moving it rapidly,

smoothly and safely without delays
or confusion to its final destination
To enable the checking of cargo

against documents.

Simpler marking:
• Lengthy and detailed that the sides of
packages can no longer hold them.
• It has been said that packages
become documents.
• The result is unnecessary costs,
mistakes, confusion and shipment
delays
Simpler marking: 4 main parts
Abbreviations of consignee or buyer  to reduce the
risk of pilferage as potential criminals or receivers
cannot easily relate the contents.
Reference number the number of sales confirmation,

order, or letter of credit.
Port of destination
Package number  Should list: the total number of the

whole lot of consignment + the number of the individual
packages consecutively 73
Code 706021

Code 706021

Shipping marks:
• Be made boldly with waterproof/
saltproof ink
• Be easily read
• Be in black normally  red/dangerous 
orange/toxic
• Be ≥ 2cm (5cm)
• Be made on the consecutive sides 75
Seafreight

Airfreight

The specifications should be clear and
avoid ambiguous phrases
Consider statutory requirements
Specify the party who is to bear the

packing charges
The quantity or weight for each package
Specify shipping marks
78
In contract
1. To be packed in new strong wooden cases /

cartons suitable for long voyage and well
protected against dampness, moisture, shock,
rust and rough handling. The Seller shall be
liable for any damage to the goods due to
improper packing and for any damage
attributable to inadequate or improper
protective measures taken by the Seller. In
such case all losses and/or expenses incurred
shall be borne by the Seller.
In contract
2. Packing must be suitable for ocean shipment

and sufficiently strong to withstand rough
handling. Bales must be press-packed and
hooped with adequate inside waterproof
protection and the outer wrapping must comprise
good quality canvas. Cases or other outside
containers must be externally of the smallest cubic
dimension consistent with adequate protection of
the goods. Packages must bear full marks and
shipping numbers stenciled in good quality stencil
ink in large plain characters on two sides and one
end of each package. All bales must be marked
“use no hooks”.

In contract
4. To be packed in double polythene bags

of 20 kgs net, overpacked with a carton
5. Each package shall be stenciled with

gross and net weights, package number,
measurement, port of destination, country
of origin and the following shipping mark:

ARTICLE 8: PENALTY
In case one party fails to implement the

contract:
 Non-delivery
 Delayed delivery
 Delayed opening of L/C, payment…
 Must pay a fine:
 A certain amount
 A certain percentage of contract value
 VN law < 8%
ARTICLE 9: INSURANCE
 Assured ?
 Document: Insurance Policy/
Certificate?
 Insured Value ?
 ICC(A), ICC(B), ICC(C)
 War risk? SRCC ?

ARTICLE 10: FORCE MAJEURE
Force majeure or "hardship" clauses that

excuse the parties from performance
when their failure is due to impediments
beyond their control or which were
reasonably unforeseeable

ARTICLE 10: FORCE MAJEURE
Natural disasters or other “Acts Of God”

(earthquakes, hurricanes, floods)
Wars, riots or other major upheaval
Government restrictions
Performance failures of parties outside the

control of the contracting party
(subcontractors, suppliers and/or carriers)
86
In contract
◎ The Force majeure (exemption)

clause of the International
Charmber of Commerce (ICC
publication No.421) is hereby
incorporated in this contract

86
Code 706021
87
In contract
◎ Sellers shall not be responsible for delay in shipment

of the goods or any part thereof occasioned by any Act
of God, strike, lockout, riot or civil commotion,
combination of workmen, breakdown of machinery, fire
or any cause comprehended in the term "force
majeure". If delay in shipment is likely to occur for any
of the above reasons, the Shipper shall give notice to
his Buyers by telegram, telex or by similar advice within
7 consecutive days of the occurrence, or not less than
21 consecutive days before the commencement of the
contract period, whichever is the later. The notice shall
state the reason(s) for the anticipated delay. ..
87
In contract
 Neither Party shall be liable or responsible for any
failure or delay in performance under the present
Contract if such failure or delay is caused by Act of
God, Government restrictions (including the denial
or cancellation of any export or other necessary
license), riots, civil commotions, wars, insurrections
and/or any other cause beyond the reasonable
control of the Party whose performance is affected.
 The Party experiencing the difficulty to meet the
obligations under the present contract due to the
causes beyond its control shall give the other Party
prompt written notice, with full details following the
occurrence of the cause relied upon. Dates by which
performance obligations are scheduled to be met will
be extended for a period of time equal to the time
lost due to any delay soChapter
706021- caused.”
4: Terms of contract
88
ARTICLE 12: CLAIM
When disputes arise:

• quality, quantity, weight
• loss or damage during transportation
The injured party claim for

compensation:
• form  written + documents
• the time limit
•  amicable settlement
89
ARTICLE 12: CLAIM
Claim resolution
Claim for the shortage of quantity
• Offset delivery in a separate shipment
• Consolidate in next shipment
Claim for quality
• Equipment: repair or replace
• Agro product: replace or reduce

ARTICLE 13: ARBITRATION
If not friendly negotiation  third party for

mediation
 Court
 Arbitration:
+ Trọng tài vụ việc / Ad hoc
+ Trọng tài thường xuyên / Institutional

ARTICLE 13: ARBITRATION
Place / Applicable Law Exp country

Imp coutry
3rd country
Process 1. Board of Arbitration

2. Mediation
3. Adjudgment
4. Arbitration Cost

In contract
◎ All disputes arising out of or in

connection with the present contract
shall be finally settled under the Rules of
Arbitration of the International Chamber
of Commerce by one or more arbitrators
appointed in accordance with the said
Rules.

EXAMPLE
 Date of shipment: 20 Sept 2012

 Port of Loading: HCMC port
 Port of Discharge: Singapore port
 Port of Destination: Hamburg port
 Partial shipment: not allowed
 Transshipment: allowed
 Where is the shipment on 20 Sept 2012?
a. If trade term is FOB Cat Lai port, Incoterms
2010
b. If trade term is CIF Hamburg port, Incoterms
2010 94
EXAMPLE
 Where is the shipment on 20 Sept 2012?

a. If trade term is FOB Cat Lai port,
Incoterms 2010
b. If trade term is CIF Hamburg port,
Incoterms 2010
c. If trade term is DDP Hamburg, Incoterms
2010

Other terms and conditions
 Any amendments or modifications to the

contract shall be made by fax or in writing
with the confirmation of the two parties
 The contract is made in English in 4 equal

copies, 2 copies for each party
 The contract comes into force upon the date

of signature and shall be valid until 10th Jan,
2012 706021- Chapter 4: Terms of contract 96
WORKED EXAMPLE
Here are below the draft articles for a

sale contract between the seller in VN
and the buyer in Singapore. Pls check
and correct the drafts if any:
◎ Price: dollars 325/ pcs CIF Cat Lai
port, Viet Nam
◎ Quantity: 100 pcs
◎ Shipment: as soon as possible
◎ Payment: D/P after 30 days
WORKED EXAMPLE
Here are below the draft articles for a import contract

for Urea Fertilizer between the seller in Indonesia
and the buyer in VN. Pls check and correct the drafts
if any:
◎ Quantity: 10,000 Tons

◎ Quality: nitrogen 46% max, moisture 0.5%max
◎ Price: usd190/T CFR
◎ Shipment: prompt delivery to Khanh Hoi port
◎ Payment: by L/C
◎ Documents: Commercial Invoice, B/L, Insurance
policy

WORKED EXAMPLE
Here are below the draft articles for a export contract
for Rice between the seller in VN and the buyer in Hong
Kong. Pls check and correct the drafts if any:
◎ Q’TY:10,000 T SELLER OPTION
◎ QUALITY:
○ BROKEN 10%MIN
○ MOISTURE 14% MAX
○ DAMAGED GRAIN 0.5% MIN
○ YELLOW GRAIN 1% MAX
○ FOREIGN MATTER 0.2% MIN
◎ UNIT PRICE:USD255/T FOB HCMC PORT
◎ SHIPMENT: AS SOON AS POSSIBLE
◎ PAYMENT: 180 DAYS AFTER SHIPMENT
WORKED EXAMPLE
Here are below the draft articles for a export contract

for Coffee between the seller in VN and the buyer in
Osaka, Japan. Pls check and correct the drafts if any:
◎ Quantity: 1000 Ton delivered
◎ Quality:
○ On sieve screen 18 90% max
○ Moisture 8 % max
○ Foreign matter 0.2% max
○ Black & Broken 0.3% min
○ Foreign beans 0.1% min
◎ Unit Price:625 Dollar /T FOB
◎ Shipment: Before 15 July 2012
◎ Payment: By L/C

Chapter 4 Terms of Contract

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 4 Terms of Contract

Uploaded by

Copyright:

Available Formats

CHAPTER 4

706021- Chapter 4: Terms of contract

706021- Chapter 4: Terms of contract 2

1 Outline the obligation of the seller and the buyer

2 Identify the structure of the sale contract

Understand the key clauses and provisions of the

706021- Chapter 4: Terms of contract 3

Goods & Documents

706021- Chapter 4: Terms of contract 4

706021- Chapter 4: Terms of contract 5

The seller must (Art. 30):

Deliver the goods: conformity/when/

706021- Chapter 4: Terms of contract 6

Pay the price for the goods:

706021- Chapter 4: Terms of contract 7

When (Article 33/ CISG)?

If a date is fixed  on that date

If a period of time is fixed  at any

If absence of such a date  within

If not +the contract involved to carriage

If not  at the place of manufacturing

If not  at the place of business of the

The seller must hand documents

706021- Chapter 4: Terms of contract 11

If not, at the seller’s place of business

If not, at the place where the handling

706021- Chapter 4: Terms of contract 12

Goods  crossing over the seller’s

Foreign Currency  can be exchange

706021- Chapter 4: Terms of contract 14

706021- Chapter 4: Terms of contract 15

706021- Chapter 4: Terms of contract 17

• Existing goods: owned by seller at time

Do not apply to sales:

706021- Chapter 4: Terms of contract 19

The lists of goods banned: ref. APPENDIX 1

Decree 187/2013/NĐ-CP dated 22 Nov 2013

706021- Chapter 4: Terms of contract 20

Temporary import for re-export

Temporary export for re-import

Transfer through border-gates

Conducted on the basis of

706021- Chapter 4: Terms of contract 21

The Model Contract is greatly influenced

 Model Contract for the International

706021- Chapter 4: Terms of contract 23

706021- Chapter 4: Terms of contract 25

It concerns the rights and obligations of

If the goods delivered by the seller are not in

706021- Chapter 4: Terms of contract 26

706021- Chapter 4: Terms of contract 28

The quality of the goods is among the

Quality of goods refers to the intrinsic

Quality can be specified in any one of a

706021- Chapter 4: Terms of contract 29

• Sale by specification, Grade or

706021- Chapter 4: Terms of contract 30

The sample refers to the article which can

• Sale by the seller’s sample

Examples: handcraft articles, clothes or

The buyer will have a reasonable opportunity of

A small quantity of a product  taken out from a

The seller provide  seller’s sample or representative