Contracting

Şefik Ergönül
İstanbul
 What is a contract?

•Sufficient information
•Rights &responsibilities
•Mutual
•Legally acceptable form
 What is the aim of a contract?

•Meeting at maximum mutual benefit

•Persons & establishments
•Different countries
•With different commercial,legal,social
structures and cultures
•Minimizing the conceptual
& operational differences
 What kind of contract?
•Clearly defined
•Covering the full nature of the transaction,
•Containing all commercial & technical details,
•Meeting international liabilities,
•Not contradicting domestic laws
•Written by mutually understood and accepted
terms
 Parties

•Identify parties
•Clarify degree of authority
•Identify legal communication address
 Products

•Product specifications
•Quantities
Unit of measurement
Place & time of measurement
Deviations from
agreed delivery quantities
Independent inspection
 Delivery

•Delivery I
N
Place C
Means of transport O
T
Expenses E
•Delivery period R
M
•Delays S
 Price

•Unit of measurement
•Foreign currency (contract & payment)
•Pricing time & method
•Costs covered
 Payment
•Cash in advance (fully or partially),
•Cash against goods or services
•Open account,
•Bank transfer
•Against documents (L/C,C.A.D,etc)
•Deferred payment(fully or partially)
•Bank guarantee against
goods & services
paid &/or tobe paid advance payments
 Time for payment

Cash in advance
•How long before the transaction
•How long after signing the contract
•Cash,against L/C or bank guarantee

Deferred payment
•Periods of payment &/or due dates
•How to specify periods of payment
•Tolerances tobe applied to these periods
Documents for payments

•Commercial invoice
•Packing list
•Bill of lading
•Certificates of origine or
certificates of movement
•Inspection reports
•Insurance policies
•Other documents
 Delay in payment
•Delay in
Advance payments
Opening L/C’s
due payments for shipped goods
•In case of delays
Interest rates tobe applied
How to fix interest rates
Rights of seller to cancel the contract
Compensation for losses of seller
 Failure in performances
Buyer,
•Delays in providing guarantees
• Delays in opening L/C
•Fails in payment (totally or partially)
Seller
•Fails in delivering the goods
One of the parties
•Terminates her operations due to
Bankrupcy, liquidation, etc.
 Party facing the losses

• May cancel the contract

• May buy and sell the goods
from and to third parties
•May recover consequential losses due to
Cancellation of the contract or
Replacing or reselling the goods
Delivery of non confirming goods

Buyer
•Should promptly inform seller
•Keep the goods for sellers inspection
•Should take necessary precautions
in order to prevent or reduce to minimum
the possible losses of seller
Delivery of non confirming goods

Seller
•Without any expenses to buyer
Repairs the goods
Replaces with the conforming goods

•Applies a certain discount

•Cancels the contract
 Disputes

•Peaceful negotiations
•Arbitration establishments
•Expert establishments
•International courts
•Dometic courts
 Force majeure

•Reasons beyond her control

•Reasonably not tobe able to expect the

impediment and
its effects on her business
•Reasonably not tobe able avoid it
or overcome its effects