InternationalTradePracticesChapter4

SubjectMatterofContract4.1NameofCommoditiesThenameofthecommoditiesshouldbespecificandadoptthewidelyacceptednameagreedonbybothpartiesEg:rice,Shangdongpeanut4.2QualityofCommodities1.Definition:Itisacombinationoftheintrinsicattributesandtheouterformorshapeofcertaincommodity.AccordingtotheUnitedNationsConventiononCotractsfrotheInternationalSaleofGoods(CISG),ifthequalityofthegoodsreceiveddoesnotconformtothecontract,thebuyerhastherighttolodgeaclaimoreventodeclarethecontractnullandavoid.Nomatterthequalityishigherorlowerthanstipulatedinthecontract,itisconsideredtobebreachofcontract4.2QualityofCommodities2.MethodsofShowingQualityofCommodities2.1SalebyactualgoodsSalesbyactualgoodsareusuallydisplayedatthetradefairorthegoodsatthepremises.Eg:specialcrafts,antique,jewelry,calligraphy,etc…2.2SalebySampleItmeansasalemadeonthebasisoasample.Thepartiesagreedthatthequalityandconditionofthebulkofthegoodswillbeatleastasgoodasthatofsample.Whenthesellersuppliesthesample,itisasalebyseller’ssample;whenthebuyeroffersthesample,itisasalebybuyer’ssample.4.2QualityofCommodities2.2.1DuplicateSample(復(fù)樣）Thesamplekeptbytheselleriscalledaduplicatesamplewhichcanserveasproofofqualityifthereisadisputeaboutthequalityofthegoodslateron.2.2.2CounterSampleorConfirmingSample回樣、確認(rèn)樣Thesamplemadebytheselleraccordingtothebuyer’ssampleiscalledcountersampleorconfirmingsample.

2.2.3SealedSample封樣Thesamplekeptbythethirdpartyiscalledasealedsamplewhichcanbeaproofofqualityindisputes4.2QualityofCommodities2.3SalebyDescriptionItisthewaytoexpressqualityofgoodsincludingspecification,grade,standard,illustration,brandandplaceoforigin.2.4QualityLatitudeandQualityTolerance

Qualitylatitudemeansthatthesellerandthebuyeragreethatqualityofthedeliveredgoodscanvarywithinanagreedrangeincludingthefollowingthreeways:Bysettingtherangeofdeviation:“cloth,width35-36inches”Bysettingtheupperlimitorlowerlimit:“ChinaSoybean,Moisture14%(max).Oilcontent18(,in).”4.2QualityofCommodities2.4QualityLatitudeandQualityToleranceC.Bysettinganalloweddeviation,“GreyDuckFeatherDownContent18%,1%moreorless”.Qualitytoleranceisanalloweddeviationinqualitystipulatedbyaninternationalorganizationandacceptinternationally.Eg:Chinasesameseedsmoisture(max)8%,admixture(max)2%,oilcontent52%basis,shouldtheoilcontentofthegoodsactuallyshippedbe1%higherorlower….4.3QuantityofCommoditiesQuantityofCommodities

Itshowsthespecificamountinweight,length,width,areaandvolume,etc..4.3.1SystemofMeasurementTherearefoursystemsofmeasurement:metricsystem,theBritishsystemtheUSsystemandInternationalsystem4.3QuantityofCommodities4.3.1.1MetricSystemThemainunitiskilogram(kg),meter(m),squaremeter(sq.m),liter(l),metricton(M/T),kilometer(km).4.3.1.2BritishSystemTheprimaryunitsarepoundandyard.4.3.1.3USSystemgallon,bushel,pound,yard4.1.3.4InternationalSystemItispublishedbytheInternationalStandardMetricalOrganizationandisbasedonmetricsystem.4.3QuantityofCommodities4.3.2WeightMeasurement

A.Grossweight:isthetotalweightofthecommodityandthetarewhichisthepackageweightB.Netweight:istheweightofthecommodityexcludingthetareC.Conditionalweight:istheweightobtainedbydeductingactualmoisturecontentandaddingstandardizedmoisturecontent.Therawsilk,woolandcottonisusuallycalculatedbyconditionalweight.D.Theoreticalweight:istheweightintheory,theindividualweightofoneitemmultipliesthenumberofitems.4.3QuantityofCommodities4.3.3QuantityAllowance

Quantityallowanceisthealloweddeviationinquantityondeliveryfromthestipulatedinthecontract.Thequantityclauseinasalescontractusuallyspecifiesthequantityallowance.Eg:Moreoreless…10%....4.4PackingandPackagingofCommoditiesPackingMethodsA.Corrugatedcarton紙箱B.Plywoodbox爽板箱C.Woodencrate木條箱:itisforheavybulkygoodsandmaybeopenorclosedD.Bale捆包、大包E.Multi-wallbag多層紙袋:itisforpowdersandgranularmaterials,suchasdrychemicals..F.Barrel桶G.Container4.4PackingandPackagingofCommodities2.MarkingandLabelingA.Shippingmark:containsnameorcodeofreceiver,referencenumber(ordernumber,invoicenumber…),destinationandserialnumber.B.Indicativemark:HANDLEWITHCARE,THISWAYUP,KEEPDRY,USEONHOOK.C.Warningmark3.SalesPackageofCommodity4.5EssentialElementsofanExportContract

Nameandaddressesoftheparties.Stateclearlyandfullythepartiestothecontract.Product,standardsandspecifications.Statetheproductname,aswellastechnicalnames(ifany);sizesinwhichtheproductistobesupplied(ifrelevant);applicablenationalorinternationalstandardsandspecifications;specificbuyerrequirements;andsamplespecifications.Quantity.Specifyunitsofmeasureinbothfiguresandwords.Inspection.Statethenature,mannerandfocusoftheenvisagedinspection,aswellastheinspectionagency.Anumberofgoodsarenowsubjecttopre-shipmentinspectionbydesignatedagencies,andforeignbuyersmaystipulatetheirowninspectionagenciesandconditionsforinspection.4.5EssentialElementsofanExportContractTotalvalue.Statethetotalcontractvalueinwordsandfigures,andspecifythecurrency.Termsofdelivery.Statethedeliveryterms,basedononeoftheIncoterms1990.Note:anewversionofIncotermswillbeapplicable1January2000.Taxes,dutiesandcharges.Clarifyresponsibilityforalltaxes.Thepricesquotedbythesellermaybeinclusiveoftaxes,duties,andcharges.Leviesinthecountryofimportation(ifany)maybethebuyer'sresponsibility.Delivery.Specifytheplaceofdispatchanddelivery.Alsostatewhethertheperiodofdeliverywillrunfromthedateofthecontract,fromthedateofnotificationoftheissueofanirrevocableletterofcredit,orfromthedateofreceiptofthenoticeofissuanceoftheimportlicencebytheseller.4.5EssentialElementsofanExportContract

Part-shipment,trans-shipmentandconsolidationofcargo.Statewhetherthepartiestothecontracthaveagreedonpart-shipmentortrans-shipment.Indicatetheportoftrans-shipmentandthenumber,ifany,ofpartialshipmentsagreed.Ifthegoodsarelikelytobeshippedundera"consolidationofexportcargos"scheme,mentionthisinthecontract.Packaging,labellingandmarking.Noteallpackaging,labellingandmarkingrequirementsinthecontract.Termsofpayment:amount,modeandcurrency.Whenquotingdifferentpaymentterms,theexportershouldspecifywhetherthepricesarebasedonthecurrentrateofexchangeofin-countrycurrency,oronthebasisofanothercurrency(suchasUSdollars).Addresspaymenttermsforexchangeratefluctuationsaswell.4.5EssentialElementsofanExportContract

Discountsandcommissions.Speci-fytheamountofdiscountorcommissiontobepaidandbywhom(bytheexporterorbytheimporter).Stipulatethebasisofcalculationofcommissionandratetobeapplied.Discountorcommissionratesmayormaynotbeincludedintheexportpriceagreeduponbytheexporterandimporter.Licensesandpermits.Statewhethertheexporttransactionwillrequireanyexportorimportlicenses,andwhoseresponsibilityandexpenseitwillbetoobtainthem.Importlicensesmaybedifficulttoobtaininthebuyer'scountry.Insurance.Acontractshouldprovidefortheinsuranceofgoodsagainstloss,damage,ordestructionduringtransportation.Specifythetypeofriskcoveredandtheextentofcoverage.4.5EssentialElementsofanExportContract

Documentaryrequirements.Documentsneededforinternationaltradetransactionsfallintofourcategories:-Documentsforexportandsubsequentimportofgoods.-Documentsforthebuyertotakedeliveryofthegoods.-Documentsrelatingtopayment.-Specialdocumentsrequiredbythenatureofthegoods,andconditionsofsale(e.g.,certainengineeringgoodsmayinvolvedocumentsrelatingtoconstruction,repairandmaintenance).4.5EssentialElementsofanExportContractCommonexportdocumentsincludethebillofexchange;commercialinvoiceandotherinvoices;billofladingorairwaybill;insurancepolicy;andletterofcredit.Productguarantee.Fixandspecifythelengthoftheperiodofguarantee.Delayindelivery.Definethedamagesduetothebuyerfromthesellerintheeventoflatedeliveryowingtoreasonsotherthanforcemajeure.4.5EssentialElementsofanExportContractForcemajeureorexcusefornon-performanceofcontract.Includeprovisionsinthecontractdefiningthecircumstanceswhichwouldrelievepartnersoftheirliabilityfornon-performanceofthecontract.Suchprovisionsarecalledforcemajeureandareintendedtoidentifythereliefwhichmaybeavailabletoeitherpartytothecontractshouldsuperveningcircumstancesoccurduringtheperiodofvalidityofthecontract.Remedialaction.Asdefaultsincontractualobligationsbyanyofthepartiescanoccur,itisalwaysadvisabletoincludeinthesaleorpurchasecontractcertainspecificremedialactions.Theseremedialactionsshouldreflectthemandatoryprovisionsofthelawapplicabletothecontract.4.5EssentialElementsofanExportContractApplicablelaw.Statethelawofthecountrywhichistogovernthecontract.Arbitration.Includeanarbitrationclausetofacilitateamicableandquicksettlementofdisputesordifferencesthatmayarisebetweentheparties.Signatureoftheparties.Thesigningofthecontractindicatestheagreementofbothpartiestothetermsandconditionsofthecontract.4.6ExportandImportProcedures4.6.1ExportProcedure(1)ExaminingL/C.(2)PreparationofProducts(3)Applyingmandatoryinspection(4)ReceivingImporter'sInspection(5)Book