13.1.2.1 Contract合同
A contract is the conclusion of a successful negotiation and the basis for preparing many other documents.Regardless of the form,some terms are common to most import or export contracts.For this reason,exporters tend to draft standardized contract for almost all their customers.However,an oversimplification may breed disputes with the importer when things go wrong.As wisely pointed out by an exporter,“problems… are more easily avoided than rectified after they occur.”Therefore,you need to handle the contract with discretion.Some notes are given as follows for each term listed below.
♦Names and addresses of both parties
♦Date and location of signing the contract
♦The willingness and guarantee of both parties to conclude this contract and fulfil their respective contractual obligations
♦Product description:name,model,quality,quantity,packaging and marking,etc.of the goods
(1)Remember to distinguish between the brand name and the name of origin of the merchandise.For instance,the commodity name of “Yantai Apple”might be confusing—is “Yantai”the brand name or the place of origin?
(2)Remember that you can contain a quality tolerance clause in the contract if agreed to by the importer.
(3)Remember that you can contain a quantity tolerance clause in the contract for bulk cargoes that are prone to shortage inloading,unloading or storage,such as minerals,foodstuffs and farm produce,but also remember that this clause does not apply to cargoes or packing units that can be counted in numbers,such as computers or printers.
(4)Package the goods properly as claims for damages due to poor packaging is not supported by the underwriter.
♦Unit price and total amount
(1)Fix the currency with discretion.
(2)Specify the Incoterms rule employed,following the right syntax for the chosen rule,which requires a precise specification of the point when and where responsibility transfers,and an express indication of the version of the Incoterms Rules,as Incoterms 2010 and Incoterms 2020 are currently coexistent and equally valid.
♦Terms of payment
(1)Prepare different versions of the contract by adjusting certain terms,particularly the terms of payment.
(2)In case a letter of credit is required for payment,don’t forget to set a deadline for the opening of L/C in order to guard against the importer’s intentional or unintentional delay of such a behavior,which might cause a number of negative consequences to you,such as a tight schedule for shipment and for presenting documents.
(3)Specify the date and place of expiry of the L/C with discretion.The date must be adequately calculated and the place must be in China.If the place of expiry is not in China,it is beyond your control whether you can make sure that the documents will be presented before the expiry date in a foreign country.
♦Time of shipment
It should be adequately calculated.
♦Port of loading and port of destination
Specify a precise port of loading and port of destination.Avoid vague terms such as “European Main Port”.
♦Partial shipment and transshipment
Specify whether partial shipment or transshipment is allowed.
♦Insurance
(1)When you or the importer is expected to buy insurance at your or his/her option,a simplified insurance clause is enough,such as:insurance to be effected by the exporter/importer.
(2)When you are obliged to buy insurance,a complete insurance clause is necessary,such as “Insurance to be effected by the exporter for 110% of the invoice value against the WPA and TPND as per Ocean Marine Cargo Insurance Clause of the People’s Insurance Company of China Jan.1,1981.”
♦Inspection
You should reach an agreement with the buyer concerning the following aspects:
(1)inspection institution
(2)inspection standard
(3)inspection contents and type of certificate required
(4)which inspection is taken as final
♦Documents required by the importer
Make sure you can get all the documents needed ready on your own.Do not accept any requirement for a document whose issuance is dependent on the importer,such as the importer’s confirmation or signature.By delaying the confirmation or signature,the importer may delay your documentation and presentation of the documents to your bank.
♦Complaint or Claim
You are suggested to reach agreement on the following aspects with the importer：
(1)The period allowed for lodging a complaint or claim
(2)The certificate needed as evidence and the institution that has the authority to issue the certificate
(3)Which inspection is final
♦Dispute Resolution
You are suggested to reach agreement on the following aspects with the importer:
(1)Methods for resolving the dispute:negotiation,mediation,arbitration or litigation
(2)Organization for resolving the dispute
(3)Ways to select the mediator or arbitrator/arbitral tribunal
(4)Location of the hearings or any meetings
(5)Language used for resolving the disputes
(6)Whether or not the resolution is final and binding on both parties
(7)Allocation of fees between the two parties
♦Force majeure
You are suggested to reach agreement on the following aspects with the importer:
(1)Scope of force majeure
(2)The period allowed for notifying the incident to the importer and the importer’s rights.
(3)Certificate to attest to the force majeure incident
(4)Organization that is authorized to issue the certificate
♦Remarks
Other terms such as asking the exporter to confirm all items of an L/C before the importer opens it
♦Signature
Your signature should be in handwriting and specify both your name and position in different lines.
Figure 13-1 is a sample export sales contract.