Chapter 1: Negotiating Delivery

1. The five steps in Negotiating Delivery.

To deal with problems arising if there is a delay or if delivery is not as planned the Buyer and the Seller should negotiate delivery systematically. That means making sure all foreseeable problems are discussed and approaches to solving such problems are agreed. An overview of the five negotiating steps is suggested to simplify discussion of the ideas and to avoid problems: Timing, Location, Transport, isk Title and !nsurance, Terms of Trade.
2. Timing: When must Delivery take place ?

" #ood negotiators should mention a delivery date in negotiating the timing of an e$port deal and then other issues relating to coming into force, delay and compensation for delay. %elay might be classified into two categories, e$cusable and non"e$cusable. &$cusable one involves a 'grace period( and is mostly sub)ect to a force ma)eure provision. Any losses to the buyer caused by non"e$cusable delay must be compensated. The amount of compensation is usually set in advance and called 'li*uidated damages( " +se a straightforward calendar date to name the delivery date: ,-th September ./,/, for e$ample. The parties often plan for the contract to come into e$istence in two steps: the signature date and the date of coming into force. The date of coming into force is not usually a calendar date, but the date on which the last precondition is met. 0ommon preconditions are: 1 eceipt of import and2 or e$port approval 1 eceipt of foreign e$change approval from a central bank 1 !ssuance of a letter of credit or bank guarantee. 1 3aking of a down"payment by the buyer 1 !ssuance of an insurance policy 1 !ssuance of a certificate of origin 1 %elivery by the buyer of plans, drawings or other documentation. " 4egotiators may agree on a cut"off date: if the contract has not come into force within a certain time, then it becomes null and void.

0oming !nto 5orce This agreement shall come into force after e$ecution by both parties on the date of the last necessary approval by the competent authorities in the country of the Seller and the Buyer. !f the contract has not come into force within ninety days of e$ecution, it shall become null and void. 6i7u kho8n hi9u l:c Th;a thu<n n=y s> c? hi9u l:c sau khi @ABc th:c hi9n bCi c8 hai bDn v=o ng=y phD duy9t cEn thiFt cuGi cHng cIa cJ *uan c? thKm *uy7n tLi nAMc ngANi bOn v= ngANi mua. 4Fu hBp @Png khQng c? hi9u l:c trong vRng chSn mAJi ng=y kT tU ng=y th:c hi9n, n? s> trC nDn vQ hi9u.

" The delivery date is normally fi$ed for a certain number of days after the contract has come into force. The date of delivery shall be twenty"eight days after the date of coming to force of the contract. 4g=y giao h=ng s> l= .V ng=y sau ng=y hBp @Png c? hi9u l:c

" Time is of the essence of the contract. !f the time is not kept, the buyer has the right to return the goods and refuse payment. Time is and shall be of the essence of the contract ThNi gian l= v= s> l= vWn @7 cGt lXi cIa hBp @Png.

" &$cused %elay and #race Yeriod: 5or each week of late delivery the Seller shall pay the Buyer /., Z of the contract price. 6Gi vMi m[i tuEn giao h=ng ch<m ch\ ngANi bOn s> ph8i tr8 ngANi mua /., Z tr] giO hBp @Png.

A grace period is the time e$ceeding the deadline for an obligation during which a late penalty that would have been imposed is waived. !f delivery is not effected within one month of the agreed delivery date, then the Seller shall pay
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the Buyer /., Z of the contract price. 4Fu giao h=ng khQng @ABc th:c hi9n trong vRng , thOng kT tU ng=y giao h=ng @^ @ABc th;a thu<n th_ ngANi bOn s> ph8i tr8 cho ngANi mua /.,Z tr] giO hBp @Png.

Sometimes the e$porter can(t deliver the goods on time because of natural disasters called 'acts of #od(, which is unavoidable. !t is the force ma)eure, which is negotiable. The parties can decide what e$cuses and what does not e$cuse the performance in the contract. !f either party is prevented from, or delayed in, performing any duty under this 0ontract by an event beyond his reasonable control, then this event shall be deemed force ma)eure, and this party shall not be considered in default and no remedy, be it under this 0ontract or otherwise, shall be available to the other party. 5orce ma)eure events includes, but are not limited to: war `whether war is declared or nota, riots, insurrections, acts of sabotage, or similar occurrences, or #overnment regulations, delay due to #overnment action or inaction, fire, e$plosion, or other unavoidable accident, flood, storm, earth*uake, or other abnormal natural event. 4Fu mbt trong hai bDn b] ngcn c8n, hodc ch<m tr\ trong th:c hi9n bWt ke nghfa vg theo hBp @Png n=y v_ mbt s: ki9n ngo=i tEm kiTm soOt hBp li cIa m_nh, th_ s: ki9n n=y @ABc coi l= bWt kh8 khOng, v= mdc @]nh l= bDn n=y s> khQng @ABc $em $jt v= khQng c? bi9n phOp khkc phgc, c? thT l= theo hBp @Png n=y hodc cOch khOc, s> c? sln cho cOc bDn khOc. S: ki9n bWt kh8 khOng bao gPm, nhAng khQng giMi hLn: chiFn tranh `cho dH l= tuyDn bG chiFn tranh hay khQnga, bLo loLn, nmi d<y, h=nh vi phO hoLi, hodc cOc s: cG tAJng t:, hodc *uy @]nh cIa 0hSnh phI, ch<m tr\ do h=nh @bng hay khQng h=nh @bng cIa 0hSnh phI, chOy, nm, hodc khOc khQng thT trOnh kh;i: tai nLn, ln lgt, b^o, @bng @Wt, hodc s: ki9n t: nhiDn bWt thANng khOc..

5orce ma)eure events do not include monsoon rains. S: ki9n bWt kh8 khOng khQng bao gPm mAa gi? mHa.

!f a force ma)eure condition continues for long time, contracts may regulate the force ma)eure period, in particular the right of one or both parties to terminate the contract. !f either party is prevented from or delayed in, performing any duty under this 0ontract, then this party shall immediately notify the other party of the event, of the duty affected, and of the e$pected duration of the event. !f any force ma)eure event prevents or delays performance of any duty under this 0ontract for more than si$ty days, then either party may on due notification to the other party terminate this
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0ontract. 4Fu mbt trong hai bDn b] ngcn c8n hay ch<m tr\ trong th:c hi9n bWt ke nghfa vg theo hBp @Png n=y, th_ bDn n=y s> ngay l<p toc thQng bOo cho bDn kia v7 s: ki9n, cOc nghfa vg b] 8nh hACng, v= thNi gian kjo d=i d: kiFn cIa s: ki9n 4Fu bWt ke s: ki9n bWt kh8 khOng n=o ngcn c8n hodc tr_ ho^n vi9c th:c hi9n cOc nghfa vg n=o theo hBp @Png n=y trong hJn sOu mAJi ng=y, th_ mbt trong hai bDn sau khi thQng bOo cho bDn khOc c? thT chWm dot hBp @Png n=y.

Three outcomes of force ma)eure: resumption of delivery, termination of the 0ontract, unclear and dangerous situation. " +ne$cused delay and Buyer(s emedies: when delivery cannot take place as planned, this causes some loss or damage to the Buyer. There are two remedies: a decree of specific performance orders the e$porter to deliver or an award of damages makes the e$porter pay compensation to the Buyer. !n addition, the court may allow the Buyer to cancel the 0ontract. " Li*uidated %amages: is a lump sum to be paid per day, week or month of late delivery for compensation. Yayment of li*uidated damages avoids e$pensive discussion. &ven if the Buyer(s losses are lower or higher than anticipated, nothing changes. The e$porter pays the agreed sum, and the matter is settled. Li*uidated damages are enforceable everywhere but sub)ect to increase or decrease in some legal systems. " Yenalties: is the amount to be paid for late delivery. !t is used as a threat of punishment to achieve acceptable performance and is not enforceable in &nglish law or other common law systems. " puasi"indemnity: is to relieve the e$porter of liability for delay in delivery. !t is enforceable everywhere but open to challenge as 'unconsionable(. Li*uidated %amages !f the Seller fails to supply any of the #oods within the time period specified in the 0ontract, the Buyer shall notify the Seller that a breach of contract has occurred and shall deduct from the 0ontract price per week of delay, as li*uidated damages, a sum e*uivalent to one half percent of the delivered price of the delayed #oods until actual delivery up to a ma$imum deduction of ,/Z of the delivered price of the delayed #oods Thanh kho8n thi9t hLi 4Fu ngANi bOn khQng cung cWp bWt ke h=ng h?a trong kho8ng thNi gian *uy @]nh trong hBp @Png, ngANi mua ph8i thQng bOo cho ngANi bOn l= mbt s: vi phLm hBp @Png @^ $8y ra v= s> khWu trU
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giO hBp @Png trDn m[i tuEn tr_ ho^n, l=m thi9t hLi thanh kho8n, mbt kho8n ti7n tAJng @AJng vMi mbt nqa mbt phEn trcm giO @ABc giao cIa h=ng h?a b] ch<m ch\ cho @Fn khi h=ng th:c tF lDn @Fn mbt moc khWu trU tGi @a l= ,/Z giO @ABc giao cIa h=ng h?a b] ch<m ch\.

r. Place of delivery: is the point at which the e$porter passes responsibility for the #oods to the Buyer. %elivery can take place at a number of places between manufacturer(s factory and the Buyer(s warehouse. A contract for the sale of #oods abroad `transportation by shipa is normally considered as an 5sB `5ree on boarda contract: delivery takes place when the #oods cross the rail of the ship nominated by the Buyer. Another is 0!5, the e$porter pays the full costs plus the freight charges plus insurance up to the named place of destination, usually a port. %elivery of the #oods shall be made 5sB `3ombasaa #iao h=ng s> @ABc th:c hi9n theo giO 5sB 3ombasa.

%elivery of the #oods shall be made 0!5 %urban. #iao h=ng s> @ABc th:c hi9n theo giO 0!5 %urban

%elivery of the #oods shall be made `!ncoterma. The schedule date of %elivery shall be `date of deliverya. isk and title to the #oods shall pass from the Seller to the Buyer on %elivery. The place of %elivery under this 0ontract is `port of shipmenta #iao h=ng @ABc th:c hi9n `!ncoterma. 4g=y giao h=ng theo l]ch tr_nh s> l= `ng=y giao h=nga. Ii ro v= *uy7n sC htu cOc h=ng h?a @ABc chuyTn tU ngANi bOn @Fn ngANi mua khi giao h=ng. 6]a @iTm giao h=ng theo hBp @Png n=y @ABc `c8ng giao h=nga !f the vessel named by the Buyer fails to arrive on or before the agreed delivery date, then the seller may at his discretion deliver the #oods to a bonded warehouse in the port of 3ombasa, and shall be deemed to have fulfilled his delivery obligations under this 0ontract. 4Fu t=u @ABc chu @]nh bCi ngANi mua khQng @Fn v=o hodc trAMc ng=y giao h=ng @ABc th;a thu<n, th_ bDn bOn theo s: suy $jt cIa m_nh c? thT giao h=ng h=ng h?a @Fn kho ngoLi *uan tLi c8ng 3ombasa, v= @ABc coi l= @^ ho=n th=nh nghfa vg giao h=ng cIa m_nh theo hBp @Png. n=y

4. Transport. " 4egotiators should mention the type of packaging and the shipping marks in the 0ontract. #oods are to be packed in new, strong, wooden cases suitable for long"distance ocean transport and are to be well protected against dampness, shock, rust or rough handling. The Seller shall be liable for any damage to or loss of the #oods attributable to improper or defective packaging. h=ng h?a s> @ABc @?ng g?i trong thHng g[ chkc v= mMi thSch hBp cho v<n t8i biTn @ANng d=i v= ph8i @ABc b8o v9 chGng lLi @b Km, va @<p, gu hodc $q li thQ. 4gANi bOn ph8i ch]u trOch nhi9m cho bWt ke hA h;ng, mWt mOt cIa cOc h=ng h?a do bao b_ khQng @vng hodc b] l[i.

sn the surface of each package delivered under this 0ontract shall be marked: the package number, the measurements of the package, gross weight, net weight, the lifting position, the letter of credit number, the words !#hT S!%& +Y, hA4%L& w!Th 0A &, x&&Y % y, and the mark: %4Y2rz2p TrDn b7 mdt cIa m[i ki9n hang @ABc giao theo hBp @Png n=y s> @ABc @Onh dWu: sG g?i, cOc kSch thAMc cIa g?i, tr{ng lABng, tr{ng lABng t]nh, v] trS m?c cKu, sG thA tSn dgng, cOc tU $Fp theo chi7u n=y, $Fp d| nh} tay, git hang khQ, v= @Onh dWu: %4Y2rz2p " sn delivery, the e$porter receives from the carrier the most important of all the shipping documents, the bill of lading `consignment notea. &ach mode of transport has a characteristic shipping of document: the marine bill of lading, the airway bill, the rail consignment note, the road consignment note. 0ombined transport uses a combined transport bill of lading " The 3arine bill of lading is the special document used for shipment by sea. !t can be made negotiable, which means it can be bought or sold. The word 'srder( makes the bill of lading negotiable. That means the shipper must endorse the bill by signing it on the back. To be acceptable as a shipping document under a letter of credit, it must bear the notation that the goods have been shipped on board a named vessel. " Yayment under a letter of credit depends largely on the correctness of the shipping documents. To be acceptable under a letter of credit, all shipping documents must be 'clean(, free notes about defects. !t is the carrier who notes any defects in packaging, weight, or general appearance of the goods on accepting them from the &$porter. 5. isk! Title and "nsurance

isk passes on delivery. Two risks are involved in the sale of goods: the risk of the goods in)uring a third party and the risk of loss or damage. These risks are covered by insurance. !n international trade, ownership `titlea is of doubtful value and passes from e$porter to buyer. Title to the goods passes with risk. puy7n sC htu h=ng h?a gkn li7n vMi rIi ro.

" Since merchandise is at risk at all times during its )ourney, it is advisable to insure the goods. !t is easier for the e$porter to arrange insurance. 3inimum coverage is 0argo clause 0. !n 0!5 and 0!Y contracts, the e$porter normally assigns the insurance agreement to the buyer. &$porters have an agreement with an insurance company covering the shipments over a period of time. &ach is covered by a certificate of insurance, which states in outline the cover offered and gives the details of the individual shipment. There is a so"called letter of insurance. This is a letter from the e$porter to the buyer stating that the goods are insured and it has no legal force but as evidence in a law suit against the e$porter. " !n some situation the e$porter negotiates special insurance policies: floating policy and open policy. Both offer the e$porter insurance cover on all shipment over a period of time. spen cover is not a policy, the insurer will write a policy if re*uired. The normal insurance document under an open cover is the 0ertificate of !nsurance, which is, in principle, the e*uivalent of a policy. " !f the e$porter insures the #oods and states on the insurance document `valued policya, he has some decisive advantages: the pre~stated figure can include not only the cost of the goods but also the profit the e$porter hoped to make on them. !f the value is not stated `unvalued policya, then the value can be established after a loss, the e$porter must prove his figures precisely. " A marine insurance policy has three variant clauses: 0argo 0lause A, B and 0. 0lause A covers anything not e$cluded, 0lause B and 0 e$clude anything not e$pressly covered. &ven an 'all risks( policy `0lause Aa e$cludes many risks. " #oods must be correctly and fully describe on the insurance document or cover may be withdrawn and a 'held cover( clause offers some protection against innocent misdescription: under given conditions the goods are held to be covered. The main principle of insurance is 'utmost good faith( #. Terms of Trade " The !00 publication, !ncoterms ,/, gives full and clear information about the rights and duties of buyer and e$porter in !ncoterm contract. The ,r terms are classified in groups: &" terms, 5"terms, 0"terms, and %"terms. The &"terms deals with deliveries at the e$porter(s factory. The 5"terms all concern delivery within the e$porter(s country. The 0"terms involve
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delivery in the e$porter(s country, with e$tra costs for e$porter after delivery. %"terms take care of delivery outside the e$porter(s country. The e*uipment listed in Anne$ , shall be delivered 5sB `Beiraa `!ncoterms ,/a 0Oc thiFt b] li9t kD trong Yhg lgc , @ABc giao theo @i7u ki9n 5sB `Beiraa `!ncoterms ,/a

5or the e*uipment listed in Anne$ , the price is for delivery free on board carrying vessel designated by the Buyer at the port of Beira including the cost of packing, as well as e$penses incurred before loading the e*uipment on board the carrying vessel. 6Gi vMi cOc thiFt b] @ABc li9t kD trong Yhg lgc , giO l= giO giao h=ng mi\n phS trDn boong t=u chC theo chu @]nh cIa ngANi mua tLi c8ng Beira bao gPm chi phS @?ng g?i, cnng nhA cOc chi phS phOt sinh trAMc khi t8i cOc trang thiFt b] lDn boong t=u chC.

The contract should always specify that terms such as 5sB, 0!5 and so on are !ncoterms under the rules set out in !ncoterms ,/. The contract should regulate what happens if !ncoterms ,/ and the terms of the contract conflict. 4ormally, the contract prevails. !ncoterms apply only to international trade, for trade within a country, !ncoterms are not appropriate. !ncoterms ,/ as used in this contract means the publication !ncoterms ,/, being the international rules for the interpretation of their terms published by the !nternational 0hamber of 0ommerce. when a term from '!ncoterms ,/( is used in this 0ontract, the rules and definitions applicable to that term in !ncoterms ,/ shall be deemed to have been incorporated in the 0ontract e$cept insofar as they may conflict with any other provision of the 0ontract, in which case the 0ontract provisions shall prevail. !ncoterms ,/ nhA @ABc sq dgng trong hBp @Png n=y l= Wn b8n !ncoterms ncm ,/, l= cOc *uy tkc *uGc tF cho vi9c di\n gi8i cOc @i7u kho8n cIa chvng do YhRng ThAJng mLi *uGc tF $uWt b8n. xhi mbt @i7u kho8n tU !ncoterms ,/ @ABc sq dgng trong hBp @Png n=y, cOc *uy tkc v= @]nh nghfa Op dgng cho thu<t ngt @? trong !ncoterms ,/ s> @ABc coi l= @^ @ABc kFt hBp trong hBp @Png ngoLi trU trANng hBp chvng c? thT $ung @bt vMi bWt ke @i7u kho8n khOc cIa hBp @Png, trong trANng hBp @? *uy @]nh cIa hBp @Png s> @ABc Op dgng.

0hAYT& .: 4&#sT!AT!4# Y !0& A4% YAy3&4T 1. EXPORT PRICING STRATEGIES Th& Y sBL&3 how can the e$porter avoid the price trap occured in many negotiations when the buyer demands concessions about delivery time, method of payment,etc

Th& Y !40!YL&

The e$porter should guarantee that the contract price reflects any change in a set of assumptions about delivery, payment and warranty terms.

!4 3s & %&YTh

Any terms of a contract relate to each other. Therefore, as items in the contract are negotiated, the e$porter should assess the influence of each factor on price, and ad)ust the price accordingly. 5or e$ample, a longer warranty period creates higher costs, it should be reflected in the contract price. !n fact, the most common term negotiated with the two sides is on price.

Scenario: erbena &lectric hopes to e$port its best"selling product, small domestic electric fans, from erbena to &sperana. 4egotiations begins. assumptions: " " " The sie of the order is r/// items. %elivery is 5sB. The warranty period on the fans is three months from the date of delivery. oyalstone, the manager of erbena &lectric, begins discussions with the purchasing manager of &sperana &lectrical !mporting, Alice Smart. oyalstone offers a unit price of .. based on some main following

$rder %i&e: r/// units is one container load, the unit price will increase on a smaller order. An order of ,/// fans, for e$ample, would cost .- each not ... "ncoterm: the cost of insurance and freight between Yort erbena and &sperana 0ity is -./ on an order of r/// items. Warranty Period: oyalstone knows that a three"month warranty on an 5sB delivery

produces very few claims for defects. !f Smart asks for a si$"month warranty, it will add r/ cents per fan to oyalstone(s costs.

This e$ample shows that the negotiating decisions bear directly on the price of the product. And a good manager knows that almost every decision made during a negotiation incluences price.

. T!E "I#E STPES IN NEGOTIATING PA$%ENT !n negotiating payment, the e$porter should follow these five steps: Step 1: Mode of Payment This determines how payment will be made. There are four common mode of payment: payment on open account with no security: this type is seriously risky to the e$porter payment on open account secured by e$port credit insurance: the e$porter pays money to an insurance company to buy an e$port credit insurance payment on open account secured by a paymenr guarantee: the buyer pays money to a bank to receive a bank guarantee. payment by letter of credit.: the buyer must position the money with a bank in the coutry of the e$porter and the e$porter can collect that money when the goods are delivered.

Step 2: Timing
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This step determines the date of payment. The importer often wants to delay the time of payment but the e$porter suffers from delay because late payment is sub)ect to payment of interest so mosts sellers offer discount for early payment. This helps the buyer save on the invoce price and the seller *ickly collect his money. The date of payment may be regulated date or a chain of dates. !t is also calendar dates or interval times.

Step 3: Place of payment This step determines where the money must be before payment is to be completed

Step 4: Delay - what delay in payment is excusa le! %elay in payment may be e$cused during a grace period `not commona or a force ma)eure event `more commona. But most e$porters do not want to e$cuse these delays and any payment made after the agreed date of payment is in delay.

Step ": #esults of delay when delay in payment happens the e$porter is usually compensated for losses due to late payment. The e$porter may ask for a payment guarantee which makes sure payment be made on time. The best solution to get risk of delay is to create a payment article in the sale contract which makes late payment is impossible. 0u trong sOch " trang 0u d]ch

Yayment shall be deemed to have been i9c thanh toOn @ABc cho l= @^ ho=n th=nh made only when the contract sum is paid chu khi sG ti7n hBp @Png @^ @ABc chuyTn into the Seller(s bank account and is at the @Fn t=i kho8n ngn h=ng cIa ngANi BOn v=
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Seller(s full disposal. 0u trong sOch "trang V/

do ngANi BOn to=n *uy7n @]nh @oLt 0u d]ch

!f payment of any sum payable is delayed, Thanh toOn ch<m the Buyer shall be entitled to receive 4Fu ch<m thanh toOn bWt co kho8n ti7n n=o interest on the amount unpaid during the theo hBp @Png, bDn 3ua s> ph8i ch]u trOch period of delay. The interest shall be at an nhi9m vMi kho8n ti7n l^i tSnh trDn kho8n annual rate three percentage points above ti7n chAa thanh toOn trong suGt kho8ng thNi the discount rate of the central bank in the gian tr_ ho^n @?. L^i suWt s> @ABc tSnh cao Seller(country. hJn r Z so vMi l^i suWt chiFt khWu do 4gn h=ng Trung AJng nAMc ngANi bOn *uy @]nh

&. T!IRD'PART$ SEC(RIT$ "OR PA$%ENT !n the international trade, the e$porter may face a lot of risks and one of the significant ones is non"payment. There are two main way that the e$porter can use to reduce this risk. sne is e$port credit insurance and the other is bank guarantee. E)port cre*it in+,rance

&$port credit insurance allows e$porter to recover the ma)or part of the contract price if the buyer fails to pay after si$ months. To buy such insurance, the e$porter must e$plain the detail of the busineess to an insurance company and receive a *uotation. !f the insurer refuses to pay, its may mean that there are some problems in the e$porter or importer. The e$porter has to pay e$port insurance premiums which depends on many factors, such as: the type of goods e$ported, the creditworthiness of the buyer, the political stability of the importer country. Although this way is attractive, it has some limitations: the e$porter has to wait for a long time to be compensated and the compensation is unlikely to cover ,//Z of the invoce price. Pay-ent g,arantee

!n this method, the buyer may ask for a bank guarantee which means that the bank will pay the contract price if the buyer fails to do so.
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#uarantees are comonly used in four business situations, as the following: isk ': Non(payment )*Payment guarantee A payment guarantee makes sure that the e$porter will receive payment. !t commits the bank which issuses the payment guarantee to pay if the buyer defaults. The payment guarantee is ussually for ,//Z of the contract price.

isk +: evocation )* Tender guarantee This type of guarantee is used in case that the e$porter who bids on a contract to supply goods or materials to a goverment department or agency is withdrawn. A normal figure for tender guarantee is usuallly between ,.-Z to -Z of the contract price

isk ,: Non(performance)*Performance guarantee Yerformance guarantee makes sure that if the e$porter works badly or not at all, the guarantor will pay, within stated limits, the costs of the e$porter(s failure to perform. A figure for performance guarantee is between -Z to ,/Z of the contract price.

isk 4: -osing Prepayment)*Prepayment guarantee This guarantee promises the buyer that the bank will return advance payments if the e$porter fails to deliver. The guarantee is often for ,//Z of the prepayment.

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.. T!E /ETTER O" CREDIT Letters of credit are issued in many forms for many purposes. Some letters of credit offer first class security for the e$porters, some are little better than a personal check The most ideal type of letter of credit from the e$porter(s point of view is irrevocable, comfirmed, at sight letter of credit. The +niform 0ustoms and Yractice for %ocumentary 0redits `+0Ya by the !nternational 0hamber of 0ommerce is the most universal set of practices rulling over payment by letter of credit. Besides, parties to a contract can also use the rules of the +nited States.

/etter o0 cre*it: The Gro,n* R,le+ Documents a$e exchanged fo$ money% 5irstly, the letter of credit is issued by an issuing bank at the re*uest of the buyer. The issuing bank, then, istructs the advising bank to advise the e$porter that the letter of credit has been opened. 4ormally, the issuing bank is in the buyer(s country and the advising bank is in the country of the e$porter. 4e$t, the e$porter ships the goods, passes them to the carrier and receives shipping documents from the carrier. Then, presents these documents to the bank as evidence that the goods have been shipped. The bank checks the correctness of the documents and sets the payment procedure in motion.

Two p$inciples that ma&e a lette$ of c$edit wate$tight: Principle ': .utonomy

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The letter of credit is an agreement by a bank to pay money against documents !t is a separate agreement from the sale contract and is unconnected with it. This means the bank is obliged to pay whatever the disputes between the buyer and the e$porter are.

Princile +: %trict compliance The bank will pay only if the shipping documents are e$actly in line with the buyer(s instructions. !n case of discrepancies in one or some aspects of the documents presented, the bank will refuse to pay. !n this situation, to proceed payment, the e$porter can: Yrovide missing payper or correct errors. Ask the buyer to instruct the bank to change the terms of the letter of credit. Ask the bank to process the letter of credit with the discrepancies but to pay only when and if the issuing bank permits payment. !f the letter of credit is near its e$piry date and there may be no time for the e$porter to provide the missing pieces, he `or the advising banka must contact the buyer asking the buyer to instruct the issuing bank to e$tend the date of credit. 'The expo$te$ should p$o(ide sc$upulous ca$e in p$o(iding the documentation called fo$ y the lette$ of c$edit% Yage V: The Buyer, on receipt of the 4gANi mua, khi nh<n @ABc 0hWp nh<n 6Jn 0onfirmation of srder from the Seller, shall h=ng tU phSa ngANi bOn, ph8i mC mbt thA tSn at least ./ days prior to the date of delivery dgng @^ $Oc nhn, khQng thT hIy ngang mubn open a confirmed, irrevocable letter of credit. nhWt l= ./ ng=y trAMc ng=y giao h=ng. ThA tSn This credit shall be sub)ect to +niform dgng n=y @ABc @i7u chunh bCi 0Oc pui tkc v= 0ustoms and Yractice for %ocumentary Th:c h=nh thGng nhWt v7 TSn dgng 0hong tU 0redits, ,r evision, !00 Yublication 4o SG -// cIa !00, b8n sqa @mi ncm ,r. ./Z -//. ./Z of the credit shall be available giO tr] thA tSn dgng n=y ph8i @ABc thanh toOn against the Seller(s draft accompanied by khi ngANi bOn $uWt tr_nh hGi phiFu v= h?a invoice the remaining V/Z shall be available @Jn V/Z cRn lLi ph8i @ABc thanh toOn khi
15

against the Seller(s draft accompanied by the ngANi bOn $uWt tr_nh hGi phiFu v= cOc chong shipping documents. tU v<n t8i.

Yage /: 0redits, by their nature, are separate 7 b8n chWt, tSn dgng l= mbt giao d]ch riDng transactions from the sales or other contracts bi9t vMi cOc hBp @Png mua bOn hodc cOc hBp on which they may be based and banks are in @Png khOc m= cOc hBp @Png n=y c? thT l= cJ no way concerned with or bound by such sC cIa tSn dgng. 0Oc ngn h=ng khQng liDn contracts, even if any reference whatsoever to *uan tMi hodc b] r=ng bubc bCi cOc hBp @Png such contracts is included in the credit!n nhA thF, th<m chS ngay c8 c8 trong tSn dgng c? credit operation all parties concerned deal in bWt co s: dn chiFu n=o @Fn cOc hBp @Png nhA documents and not in goods, services and2or thF.Trong thanh toOn bng tSn dgng, cOc other performances to which the documents bDn chu chWp nh<n chong tU cho khQng ph8i l= may relate. h=ng h?a, d]ch vg hay bWt k_ nghi9p vg n=o khOc c? liDn *uan @Fn cOc chong tU n=y. Yage /: A letter of credit is like a bill of 3bt thA tSn dgng cnng giGng nhA mbt tN hGi e$change given for the price of goods. !t phiFu @ABc kS phOt @T tr8 ti7n h=ng. 4? cnng ranks as cash and must be honored. 4o set off l= ti7n v= ph8i @ABc thanh toOn. 4? khQng thT or counterclaim is allowed to detract from it. b] l=m gi8m giO tr] bCi bWt k_ yDu cEu tr8 ti7n hay vi9c ph8n @Gi tr8 ti7n cIa bWt k_ bDn n=o.

/etter o0 Cre*it: Revoca1le an* Irrevoca1le A revocable letter of credit can be canceled at any time by the buyer or by the issuing bank. 5ew e$porters will accept such an arrangement, so the plain e$pression letter of credit generally means the irrevocable kind. +0Yz// says that the letter of credit will be taken as irrevocable if nothing is mentioned in the credit.

/etter o0 cre*it: Con0ir-e* an* (ncon0ir-e* A confirmed Letter of 0redit is understood as the letter of credit to which a confirmation is added by a nominated confirming bank. 0onfirming bank means the bank that is asked to
16

confirm the credit by an issuing bank. By adding its confirmation to an L20, it has an absolute obligation to pay the e$porter according to the terms of credit. The payment are made without recourse, which means that if the issuing bank finds a problem with the documents and refuses to send funds to cover the payment, the confirming bank has no way of recovering the money it has paid to the e$porter. !t is different from an advising bank which always makes payment with recourse if it agrees to pay the value of the credit over the counter. This helps the advising bank get its money back from the e$porter if the problems occur. Sometimes, problems can arise when very small banks or banks in countries with severe foreign currency shortages try to instruct a bank in e$porter(s country to confirm a letter of credit. The issuing banks may delay in sending funds to cover the payment. The sign of a confirmed letter of credit is usually the cross in the confirmation bo$.

The At'+ight /etter o0 Cre*it an* the Alternative+ %ettlement /y sight Payment +nder this method of payment, if the documents the e$porter presents are in order, the paying bank immediately pays the full face value of the letter of credit.

%ettlement /y Deferred Payment !n settlement by deferred payment, the letter of credit is not payable until a number of days after delivery. The seller presents the documents to the paying bank, and the paying bank agrees to pay the seller the face value of the credit when it matures. !f the e$porter needs ready money, he can e$change the letter of credit for cash `at a discounta with any agreeable bank.

%ettlement /y .cceptance

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The seller presents to the accepting bank the documents and a bill of e$change `time drafta drawn usually on the buyer, and the bank will accept the bill of e$change and agree to pay it at full face value when falls due. This is obviously a danger for the seller. A bill of e$change that is accepted can be sold at a discount to an agreeable bank if the seller needs money immediately.

%ettlement /y Negotiation 4egotiation means the selling of a financial instrument to a bank for `usuallya less than its face value. !n this method of settlement, the seller presents to the negotiating bank the documents and a bill of e$change drawn usually on the buyer, and the negotiating bank negotiates the bill.

The /etter o0 Cre*it an* it+ A++ociate* Doc,-entation !. The letter of credit contains a list of the documents which must be presented and is also the basis for bank checking that the documents are in perfect order and correct or not. !!. Associated %ocumentation ,. 0ommercial invoice must be made out to the applicant for the L20 about the description and the amount of the goods, and specific demands. .. Transport documentation is the document issued by the carrier to the e$porter, and includes five types: sea transport, air transport, rail transport, road transport and combined transport. The type re*uired is stated in the L20.

Special p$o lems $elated to t$anspo$t document. There are some problems arising in specific circumstances when transport document is used as follows:

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%hipment /y sea: The carrier could issued a marine bill of lading, or a sea waybill to the e$porter. And in some case some types of sea transport are not allowable without the agreement by the paties and being worded in the L20. when the parties use this method of transportation, a sea waybill can be the alternative of a marine bill of lading.

%hipment /y air: The carrier could issued an Air waybill, which must be issued in r originals and copies. That the L20 calls for a full set of original air waybill is a mistake because it is an impossible demand. Also, a correctly completed waybill can not show the date of the flight.

%hipment /y rail: The carrier could issued a ail consignment note. L20, in this method of transportation, must not demand the original of a rail consignment note, otherwise it can delay the payment. r. The !nsurance %ocument: is usually re*uired when the shipment is made on 0!5 or 0!Y terms. !f the L20 does not stated otherwise, insurance coverage must be for ,,/Z of the 0!5 or 0!Y value of the goods. . sther %ocuments includes 0ertificate of srigin, 0ertificate of !nspection and Special e*uirements.

0ertificate of $rigin`02sa is re*uired for import to the buyer(s country under a preferential tariff or other agreement.

0ertificate of "nspection can make importing easier. The parties should make a note in their contract if this document is re*uired. The parties must clear that details in inspection certificate must correspond e$actly with the details in the transport document and the commercial invoice. Special e*uirements should be agreed e$actly about what and who should issue and shown clearly in the L20. when wording in the L20, the parties should not use unspecific words such as appropriate, it could make difficulty in satisfying the bank for the payment.
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Negotiating the Ter-+ o0 a /etter o0 Cre*it " .greement: the e$porter and the buyer discuss and list all re*uired documentation. The two parties may have to talk to their 0hambers of 0ommerce, to their bank or to the carrier to establish the complete list. " "ncorporation: the list is incorporated into the contract. " %pecification: the buyer applies for the letter of credit specifying the agreed documentation. !00 form can be used to apply for a letter of credit. The e$porter and the buyer can complete this application form during their negotiations and append a copy of the form to their contract, then passsing it to the bank. This is to make sure that the credit once issued should be e$actly as agreed by the parties with no nasty surprise for the e$porter. " 1erification: the e$porters checks the credit as soon as he receives the advice of the L20 being opened to make sure it complies with the agreement negotiated with the buyer. !mmediate discussion with the advising2confirming bank is essential since amendments are always time consuming, which can lead to the delay in payment. " 0ompliance: the e$porter rigorously checks documentation and submits it to the bank. emember that timely payment depends on the compliance by the e$porter with the terms of credit.

Doc,-entary Cre*it Application "orSegment 1: Applicant: full name, address, account number with issuing bank of the buyer. Segment 2: !ssuing bank: name `can be left blanka

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Segment 3: Application date: the date on which the application form is submitted to the bank `can be left blanka Segment 4: %ate and place of e$piry: 1 The last date for presentation of documents to the bank 1 The place of e$piry: often at the counter of the confirming bank Segment ": Beneficiary: full name, address `the e$porter in most casesa Segment ): 3ethod of issue: 1!ssue by mail: slower 1!ssue by teletransmission `normally tele$a 1 !ssue by mail and brief advice by teletransmission. Segment *: Transfer of the 0redit " !n case the e$porter wants to hide the actual supplier. " !n principle, a L20 is not transferable unless it is permitted. Segment +: 0onfirmation: &$porters prefer confirmation. Segment ,: Amount 1the amount of the credit is e$pressed both in figures and in words. 1The currency of the credit: using the !Ss currency code. &g: +S%, %&3, #BY 1 About, Appro$imately: the actual payment can be 12" ,/Z the stated amount. 13i$ed payment: must state what percentage of the invoice price is covered by the credit. Segment 1-: Pa$tial Shipment !n principle, partial shipments are allowed unless the not allowed bo$ is crossed.
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%istinguish carefully between partial shipments and shipment in installments.

Segment 11: T$ansshipment Transshipment means moving the goods from one conveyance to another. 4ormally transshipment is allowed e$cept for goods travel by sea under a sea waybill or marine B2L or some other special reasons for prohibition.

Segment 12: .(aila ility 0redit available with this is sometimes followed by the name of the advising bank chosen by the e$porter or left blank, and the issuing bank is free to decide a bank will act for it in the e$porter(s country The various types of payment are by sight payment, by acceptance,etc.

Segment 13: /nsu$ance co(e$ed y the 0uye$ The bo$ is normally checked when the delivery term is 5sB, 05 .

Segment 14: T$anspo$t /nfo$mation Shipment from 2precise places 3 ha/ors! airports45 To 2precise places 3 ha/ors! airports45

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C!APTER & Negotiating In+pection an* De0ect+ /ia1ility 1. EXPORTING AND T!E PRO2/E% O" 3(A/IT$ ' The Pro1le-: when things go wrong with the e$ported products, repair and replacement can be ruinously e$pensive. There are some special steps that the e$porters can take to minimie the risk of the goods being re)ected or of heavy defects liability claims. ' The Principle: 1 The e$porter should ensure that all e$ported goods meet or e$ceed the *uality specified, that marking and packaging are correct and that delivery is on time. 1 The agreement between the parties should contain specific *uality specifications. ' In -ore *epth: The *uality of the product is a key issue, and customer satisfaction is essential to successful business. 3any companies have *ualities assurance programs to ensure that customers get what they pay for. +ntil things are going well in the local market, it makes little sense to e$port, because *uality assurance and customer satisfaction are much tougher when the customer is in another country, and distance makes communication, transport, inspection, payment and verification of claims e$pensive and time"consuming. 4 Speci0ication. 4egotiation of specifications can be a difficult process. . well-designed set a specifications offe$s (ital p$otection the oth sides% The importer is protected against inferior products" it can re)ect any e*uipment that fails to meet specification. 3oreover, the seller is protected also"through more subtly. !f the products are fully specified and the consignment meets the specifications, the buyer will be unable to find any e$cused for re)ection or for e$aggerated defects liability.
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4 Pre'*elivery In+pection 3any importers re*uire inspection of their goods in the manufacture(s factory before delivery. with sophisticated items or capital e*uipment, the buyer may also want to inspect the goods at pre"agreed times during manufacture. Some countries, !ndonesia for e$ample, re*uire that all imported goods are inspected by an inspections service immediately before shipment. This inspection prevents e$porter and buyer agreeing an unrealistically low invoice price in order to avoid customs duties in the buyer(s country. This also prevents shipments of patently defective goods. The ne$t step, assuming 5sB delivery, is e$amination of the goods by the carrier. The carrier does not unpack the goods or check their *uality, although leaks and obvious damage as well as incorrect shipping marks, defective packaging or discrepancies in weight and sie are noted on the shipping documents. 4 In+pection an* Acceptance The principle is clear" the buyer has the right to inspect the goods when they arrive and to re)ect them if they are incorrect. At this point, exact specification is of g$eat (alue to expo$te$ if the goods confo$m to specifications1 the uye$ is o ligated to accept them% 4 De0ect+ /ia1ility Perio* snce the goods are accepted by the buyers as apparently correct, they must )ump to the final hurdle the defect liability period. The manufacturer accepts liability for defects the come to light after acceptance: if anything is wrong with any item, they will repair or replace it. Such defects are called 2latent defects3% The defects liability period is negotiable, this is likely to be several months from the date of delivery or the date of arrival. Yrotection against dishonest claims or e$cessive demands should be written into the contract. To sum up, in negotiating the terms of the contract, we can look at the process in steps.
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 Step ,. !nspection: when are the goods inspected And when can the buyer to re)ect

them
Step .. Terms: warranty or guarantee Step r. %efinitions: what is, and what is not, a defect Step . Timing: how long is the defects liability period when does it begin what about

other timings
Step -. 0orrective action: what must the seller do to cure defects

. INSPECTION5 ACCEPTANCE AND RE6ECTION n a contract, both the parties, the buyer and the e$porter run risks. sbviously, the goods delivered are not always perfect. Thus, the buyer stands the risk of receiving inferior goods when inspecting the goods on arrival. The e$porter may have a disaster when the buyer

decides to cancel the contract if the deviation amounts to a fundamental breach of contract. The defects liability provision gives double protection. This warranty protects the buyer from receiving inferior goods and the e$porter from losing the contract right away. %elivery can be re)ected from two kinds of defects: the patent one ` which can be found when being inspecteda, the latent one `which only comes to light during usagea. +nder most laws, a buyer can make certain assumptions about goods even if the e$porter gives no e$press warranty. These assumptions are legally called implied warranties, which come in three types: 6 /mplied wa$$anty of 4onfo$mity with 4ont$act: 3ost laws provide a way to grade non"conformity: while ma)or discrepancies allow the buyer the right to re)ect the goods and cancel the contract, minor discrepancies do not. The ienna Sales 0onvention `Article a says:

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7The /uyer may declare the contract advoided 2)canceled54 if the failure /y the seller to perform any of his o/ligations under the contract4amounts to a fundamental /reach of contract.8 5 /mplied wa$$anty of Me$chanta le 6uality: #oods can well conform with the contract but they can be of serious inferior *uality which make them inappropriate for sale. 3ost laws have a provision on this warranty of merchantability which allows the buyer to reiect goods and cancel the contract 5 /mplied wa$$anty of 7itness fo$ /ntended Pu$pose: #oods can conform with the contract, be merchantable but useless to the buyer. !n the case when the e$porter knew the buyer(s intented purpose and the buyer trusted the seller with the correct goods then the buyer has the legal right to re)ect unusual items. 5 #e8ection: Total o$ Pa$tial: The buyer can re)ect the consignment wholly or partially. 4ational laws take one of three choices. while &nglish law re*uires re)ection of all contract goods, #erman law and ienna Sales 0onvention `Article -,a both allow total and partial re)ection. when goods are re)ected, the buyer most notify the seller within a reasonable period. Then, on assuming that the re)ection is )ustified, the e$porter has the additional cost to dispose the unwanted goods. 5 The 9xpo$te$:s #ight to cu$e: %oes the e$porter have the right to cure sr it is simply a duty re*uested by the buyer The ienna Sales 0onvention says the following: 74the seller may! even after the date for delivery! remedy at his o9n e:pense any failure to perform his o/ligations! if he can do so 9ithout unreasona/le delay and 9ithout causing the /uyer unreasona/le inconvenience or uncertainty of reim/ursement /y the seller of e:penses advanced /y the /uyer.8 !f the seller wants the right to cure, the contract should contain the necessary provision.

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&. 7ARRANT$ AND G(ARANTEE: TER%INO/OG$

re a warranty and a guarantee the same thing why do some contracts replace a warranty with a defects liability provision.

A warranty is a promise you make about your own perfomance. A product 9arranty is a promise by the e$porter to cure defects in his products. There are two parties to a warranty: /uyer and seller. A guarrantee is a promise about somebody else(s performance. !t involves three parties: principal! /eneficiary and guarantor. The guarantor makes a promise to one party at the re*uest of another. !n strict legal usage, a warranty is an absolute undertaking on the part of the warrantor, and the contract is void unless it is strictly and literally perfomed, while a guarantee is a promise `a not imposing any primary liability on the guarantor, but binding him to be answerable for the failure or default of another. !nternationally, the distinction between warranty and guarantee is often blurred. 3any contracts avoid the problem by speaking of defects lia/ility rather than warranty this is the right concept. .. T!E DE"ECTS /IA2I/IT$ PERIOD: A C!ANCE TO P(T T!INGS RIG!T

he e$porter is liable for defects in his products. what is a defect And what liability for defects must the e$porter accept

There is one thing that everyone knows: not all products are perfect on delivery. So the warranty covers defects that are present at the moment of delivery. The defects that give rise to the most serious problems between e$porter and buyer are hidden or latent defects. There are three kinds of defects: workmanship, materials and design. 4 Three type+ o0 De0ect: A product with defective 9orkmanship is incorrectly built. 5aults are often hidden and do not come to light until the product is used.

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%efective materials are materials or parts of a product that are inferior or somehow incorrect. 3any such hidden defects take time to come to light. %efective design means that a product does not meet specifications. The design is defective, again, is not apparent until the product is used. 4 7hat i+ Not a De0ect: A defects liability provision does not cover: two common e$clusions are fair wear and tear and misuse by the buyer. 5air wear and tear is the result of normal use. 3isuse is seriously incorrect handling by the buyer. Sometimes misuse is e$pressly defined in the contract: opening a sophisticated machine. 4 "a,lt+ Not Pre+ent on Delivery: The defects liability period is the period during which the e$porter is liable for and must make good defects that are apparent on delivery or that come to light later. The buyer must prove that the defects was present in the goods at the date of delivery. when two sides negotiate contract, both sides must understand that a defect is a fault prova/ly present in the goods on delivery. 4 Speci-en 7arranty Cla,+e+: A standard provision mentions the three types of defect, it states a date on which the products were free of defects, it e$cludes problems caused by misuse or wear and tear, and it establishes the e$porter(s duty to cure the fault. Sometimes, the parties decide on a totally different kind of obligation. An interesting e$ample is the Disclaimer of Warranty common in software contracts. Such a disclaimer is often printed in capital letters because it is unusual and because it denies the purchaser some of his normal rights. Any attempt to hide or subordinate such a disclaimer makes it invalid under most laws. The purchaser has given up certain rights: but in e$change for what what is the )ustification of this whole proceeding The answer is: without such a %isclaimer of warranty, the contract price would be far higher.
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T
period.

8. TI%ING O" T!E DE"ECTS /IA2I/IT$ PERIOD he defects liability period presents four separate timing problems. 3any contracts regulate only one. what are the other problems, should the e$porter regulate them, and if so, how Let(s now look at each timing problem in more detail.

4 Ti-e0ra-e 1: The De0ect+ /ia1ility Perio* The parties first agree the length of the defects liability period. we can note that many legal systems allow a si$"month period if the two sides agree nothing. The e$porter should know how many defects liability claims does he generally e$perience within a three"month, a si$" monthperiod, in order to calculate the cost of e$tending `or reducinga the defects liability

having agreed the length of the defects liability period, the two sides then ask: When does it start? The contract must regulate this problem. !t is generally accepted as fair that the period is e$tended by the down"time. 4 Ti-e0ra-e : The Noti0ication Perio* !f a defect occurs, the buyer must notify the e$porter. !f both parties act in good faith, such a soft"edged timeframe works well. !f a problem arises, the )udge sets a fair period for undue delay, a reasonable time, or forthwith. 4 Ti-e0ra-e &: The Recti0ication Perio* snce the e$porter has learned of the defect, he must cure it as soon as practicable and at his own cost. 4 Ti-e0ra-e .: The /egal Action Perio* !f the e$porter has failed to repair under warranty, the buyer must start a legal action. This legal action period differs under applicable laws `0ivil law or 0ontinental lawa. This period also varies greatly from country to country and from one type of contract and2or duty to another. "n practice! contracts rarely regulate the legal action period! leaving the matter to the applica/le la9. "f you foresee a pro/lem! take legal advice.
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9. CORRECTI#E ACTION 6 The Pro1le-: Some contracts do not point out corrective action that the e$porter must take, which is dangerous for both e$porter and importer. 6 The Principle: The e$porter used to correct the defects. !n case the buyer has this right, it must be indicate e$actly in the contract. 6 In -ore *epth: The defects liability provision allows the e$porter to correct problems without losing the contract. There are five steps that the manufacturer of goods can normally take to cure defects: 5 8 option+ 0or c,ring *e0ect+: sption ,: epair.

To the domestic manufacturer, this is the most saving but this is very e$pensive to the e$porter because he has to send a mechanic together with many tools and spare parts to the buyer(s country. sption .: Allow the Buyer to repair at &$porter(s cost.

The risk that the e$porter may easily encounter can be an e$pensive repair bill or the repair may not properly be carried out which make the e$porter has to fi$ under the warranty. Almost every e$porters try to avoid this or allow it only in e$ceptional cases and then only with the e$porter(s e$press approval. sption r: eplace `Yart or whole !tema

By this way, the e$porter can keep the goodwill of the customer. however, it is very e$pensive especially, when the customer want to send back the defective item, which leads to the
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same problems as option ,: . sets of customs, air mail or air freight. Sometimes, skilled technican must be at hand, gqi thB @Fn nAMc 4x @T lkp @dt thiFt b]. And the e$porter(s e$pense is much more higher than the local trader. sption : educe the price.

This is the replacement of option , and option r. !f the buyer pay by L20, the seller must reduce price directly. !f payment is on open account, and the invoice has not yet been settled, the payment due is simply reduced. 3oreover, comple$ item include retainer provision `normally -Za which is kept by the buyer until the end of the defects liability period to negotiate price reductions. sption -: eturn the #oods and efund the Yrice.

The e$porter do not want to use this option this is the same as lose the contract. The value of defective goods is not as high as the cost of return shipment to the e$porter(s country. This means the deal is a total loss for the e$porter. So, if the buyer insists on including a return and refund clause in the contract. The e$porter must protect himself by allowing this option only in e$ceptional cases and with his e$press agreement. 6 7ho choo+e+: 3ainly e$porter depends on what kinds of defects that the e$porter must be fle$ible in repairing to save money. Let us look at a clause that mentions all five options, but still allows the e$porter the necessary freedom: Trang 0u gGc 0u d]ch

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,r

!n the event of a defect coming to Trong trANng hBp sai s?t @ABc t_m thWy v= light and being notified to the Seller, thQng bOo @Fn ngANi bOn, ngANi bOn ngay the Seller shall, without undue dalay, l<p toc v= khQng ch<m tr\ ch]u m{i rIi ro v= make good the defect at his own risk chi phS @T sqa chta sai s?t @? mbt cOch tHy and cost and at his discretion in one i theo nhtng cOch sau: of the following ways: a. epair the defective item a. Sqa chta h=ng h?a khiFm khuyFt b. 0ho phjp ngANi mua hodc bDn tho ba

b. Allow the Buyer or a third party @ABc ngANi mua Iy *uy7n sqa chta h=ng appointed by the Buyer to repair the h?a khiFm khuyFt v= tSnh chi phS cho ngANi defective item at the seller(s cost c. eplace the defective item d. educe the contract price bOn c. Thay thF h=ng khiFm khuyFt d. #i8m giO hBp @Png

e. Allow the Buyer to return the e. 0ho phjp ngANi mua gqi tr8 h=ng khiFm defective goods and refund all sums khuyFt v= ho=n to=n bb sG ti7n h=ng paid for the goods.

3any e$porters like option , or r because the rests need the negotiation of both the e$porter and importer. !n this case, the clause runs: Trang ,r 0u gGc 0u d]ch

!n the event of a defect coming to TrANng hBp sai s?t @ABc t_m thWy v= thQng light and being notified to the Seller, bOo @Fn ngANi bOn, ngANi bOn ph8i ngay l<p the Seller shall, at his discretion and toc l:a ch{n phAJng On sqa chta hodc thay without undue dalay, repair or thF h=ng h?a sai s?t, ch]u m{i rIi ro v= chi replace the defective item at his own phS. risk and cost.

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4 /i;,i*ate* *a-age+: A *i00erent <in* o0 c,re The e$porter, sometimes, cures a defect by offering a reduction. The sie of the discount is clearly open to negotiation and more comple$ deals benefit from this area. 6 Co+t+5 De0ect+5 an* the Re+,lt+ o0 *e0ect+ The defects liability provision usually re*uires the e$porter to cure defects at his own risk and cost. !n fact, the ma)or risk for the seller is not the cost of repairing and replacing defective goods. The biggest risk that the e$porter has to compensate for the importer is conse*uential damage( orconse*uential loss. #iven the wording, the e$porter must take responsibility for the repair cost. Another cost is not mentioned. This means the e$porter has no duty. This is not true. whenever the contract says nothing about a problem, we look for the answer in the applicable law, which has a close connection to the contract. 4early all applicable laws divide the buyer(s losses from defects into two categories: direct losses and indirect `often called conse*uentiala losses. 4ational laws differ in their approach to conse*uential loss. !n #ermany, the B#B allows a claim for all direct costs including uncovering, making good, and so on. !n America, the +00 allows recovery of all losses including incidential and conse*uential damages. sn the other hand, the loss must closely result from defect. 0ourts have made decisions in many thousands of cases. however, like all relationship of all deals, the e$porter(s liability for the buyer(s loss is disposive. 0onse*uently, most e$porters try to reduce their responsibility to direct loss only. 5or an e$ample please refer to table ,/ on page .. 0onversely, the e$porter is re*uired to accept such risks clearly stated in table ,, on page ..

33

/IST O" TA2/ES AND T!EIR TRANS/ATIONS: Ta le 1 ;page 11*<: C=, trong +>ch ' trang 11? C=, *@ch

34

!nspection before %elivery The Buyer may, at the Buyer(s option, inspect the #oods prior to shipment. At least fourteen days before the actual delivery date, the Seller shall give the notice to the Buyer, or to any agent nominated by the Buyer, that the #oods are available for inspection. The Seller shall permit access to the #oods for purposes of inspection at a reasonable time agreed by the parties.

xiTm tra trAMc khi v<n chuyTn 4gANi mua c? *uy7n, trong s: l:a ch{n cIa m_nh, kiTm tra h=ng h?a trAMc khi chWt h=ng lDn t=u. 4gANi bOn ph8i thQng bOo cho ngANi mua hodc bWt ke mbt @Li li n=o do ngANi mua chu @]nh v7 vi9c h=ng h?a @^ sln sang @T kiTm tra, St nhWt , ng=y trAMc ng=y giao h=ng th:c tF. 4gANi bOn s> cho phjp h=ng h?a @ABc kiTm tra v=o thNi @iTm hBp li m= hai bDn @^ th;a thu<n.

Ta le 2;page 123<:

35

Ta le 3 ;page 12"<:

!Ang BCDc giao

T!J% TRA #K LIM( NION 2PO !KN! S($ DIQN

4gANi mua c? kiTm tra h=ng h?a khQng

CR N!SNG

h=ng h?a c? phH hBp vMi hBp @Png khQng S: sai l9ch c? b] coi l= vi phLm cJ b8n khQng

CR N!SNG CR c? @I chWt CR thAJng mLi

khQng lABng h=ng h?a

N!SNG CR N!SNG h=ng h?a CRvMi mgc

@Sch sq khQng c? phH hBp

N!SNG dgng CR

N!SNG

4gANi bOn c? thT hay @Png i sqa chta vi phLm khQng

4gANi mua c? chWp nh<n h=ng h?a giao theo bb ph<n khQng

36

ChEp nhFn

ChEp nhFn giao hAng tGng phHn

TG chIi

phEn. V. puy7n cIa ngANi bOn @T sqa chta bWt co khiFm khuyFt n=o trong vi9c giao h=ng vn l= vWn @7 gy tranh c^i nFu nh= $uWt khKu muGn c? *uy7n n=y, hBp @Png ph8i cung cWp @i7u kho8n cEn thiFt.

Ta le 4 ;page 12*<: 0u trong sOch trang ,. G,arantee 0u d]ch 2To lUnh

All material, e*uipment and perfomance of TWt c8 cOc v<t li9u, thiFt b] v= cOch hoLt @bng cIa goods supplied shall be guaranteed by the h=ng h?a @ABc cung cWp s> @ABc b8o l^nh bCi cOc Supplier against any defect or failure for the nh= cung cWp vMi bWt k_ khuyFt t<t hay sai s?t n=o period of one year from the date of delivery. trong thNi gian mbt ncm kT tU ng=y giao h=ng. The Supplier must replace defective parts as 4h= cung cWp ph8i thay thF phEn b] l[i c=ng nhanh *uickly as possible. eplaced parts will be c=ng tGt. 0Oc phEn @ABc thay thF s> @ABc b8o l^nh guaranteed by the Supplier for si$ months bCi ngANi cung cWp trong z thOng kT tU ng=y thay beginning from the date of replacement, and thF, v= @ABc ho=n lLi to=n bb chi phS cOc bb ph<n the whole e$pense of returning and replacing thay thF. the parts will be at his cost

Ta le " ;page 12+<: 0u trong sOch trang ,.V 7hat yo, +ho,l* <noV 0u d]ch NhWng BiX, cHn 1iYt
37

1.

3ost

contracts

contain

an

,. hEu hFt cOc hBp @Png c? mbt @8m b8o rng ngANi $uWt khKu s> sqa chta tGt bWt ke mbt khiFm khuyFt n=o trong cOc s8n phKm cIa m_nh: b8o @8m @ABc biFt nhA l= mbt s: b8o h=nh, mbt trOch nhi9m cung cWp cOc khiFm khuyFt, hodc khQng ho=n to=n chSnh $Oc mbt s: b8o l^nh.

assurance that the e$porter will make good any defects in his products: the assurance is variously know as a warranty, a defects liability guarantee. .. The term guarantee, in strict provision, or incorrectly~a

2. i9c b8o l^nh, trong vi9c Op dgng phOp

legal usage, means a promise about somebody else(s perfomance it is , therefore, not incorrect in the conte$t of defects liability.
3.

lu<t nghiDm ngdt, c? nghfa l= mbt lNi hoa v7 hoLt @bng cIa ngANi khOc, do @?, khQng ph8i khQng @vng trong nbi dung l= trOch nhi9m cho s8n phKm l[i.
3. TU /;o l<nh c? thT gy ra mbt kFt *u8

The word guarantee might

produce a dangerous result for the e$porter under certain applicable laws.
4.

nguy hiTm cho cOc nAMc $uWt khKu theo *uy lu<t Op dgng. . S: b8o h=nh l= `chSnh $Oca @ABc sq dgng trong nhi7u ngt c8nh khOc hJn b8o h=nh s8n phKm.

The term warranty is `correctlya

used in many other conte$ts than the product warranty. -. with an Yrobably e$clusive the and best term is

-. 0? thT @i7u kho8n tGt nhWt l= trOch nhi9m cho khuyFt t<t v_ @y l= @i7u kho8n duy nhWt vMi i nghfa @bc *uy7n v= khQng thT nhEm ln.

defects liability since this is the only term unmistakable meaning.

38

Ta le ) ;page 13-<: 0u trong sOch trang ,r/ The Supplier warrants that each !tem supplied shall at the date of its acceptance: `ia Be free from defects in material `iia Be free from defects in workmanship `iia including manufacturing processes 0u d]ch 4gANi cung cWp @8m b8o cho m[i m?n h=ng chWp nh<n: `ia 3i\n trU khiFm khuyFt nguyDn li9u 3iFn trU khiFm khuyFt tay ngh7 nhAng

under this contract ` and each part thereofa @ABc cung cWp chiFu theo hBp @Png tLi thNi @iTm

but not limited to all khQng hLn chF cho tWt c8 *uO tr_nh s8n $uWt `iiia 3i\n trU khiFm khuyFt v7 thiFt kF nhAng

`iiia Be free from defects inherent in design khQng hLn chF @Fn vi9c l:a ch{n nguyDn li9u v= including but not limited to selection of ph8i @Png nhWt vMi cOc kho8n thQng thANng materials, and be fit for the purpose for which the !tem is normally used. 4Fu c? khiFm khuyFt hay thiFu hgt @ABc t_m ra trong cOc m?n h=ng hay cIa c8i, th_ bDn cung cWp

!f any defect or deficiency is discovered in s> sqa chta, thay thF nhtng m?n h=ng hodc bH the !tem or in any part thereof, then the @kp h=ng thiFu hgt. Supplier shall either repair or replace such !tem or rectify such deficiency. 6i7u kho8n trDn l= mgc cho ngANi mua tOn th=nh vMi ngANi s8n $uWt hodc chu dn chi tiFt khi sq

The warranty above is sub)ect to the dgng, lAu kho, lkp @dt hodc *uO tr_nh h{at @bng Yurchaser having adhered to the procedures cIa h=ng h?a v= ngcn chdn nhtng tmn thWt phOt or instructions applicable to the use, storage, sinh tU vi9c hao mRn t: nhiDn khi sq dgng. installation or operation of the !temand e$pressly e$cludes all damage arising from wear and tear to the !tem in normal use.

Ta le * ;page 131<:
39

0u trong sOch trang ,r, %isclaimer of warranty A. The software provided under this A.

0u d]ch 6i7u kho8n tU b; YhEn m7m @ABc cung cWp dAMi s: @Png i

Agreement is furnished as is and without support of any kind whatsoever.

B.

n=y cung cWp giGng h9t v= khQng km theo bWt k_ s: h[ trB n=o. B. 4gANi cung cWp tU b; to=n bb nhtng @i7u

The supplier disclaims all warranties

with regard to any software licensed to the purchaser under this agreement, including all implied warranties of merchantability and fitness for a particular purpose. !n no event shall the supplierbe liable for any special, indirect or conse*uential damages whatsoever resulting from loss of use, data or profits, whether in an actionof contract, negligence or other tortious action, arising out of or in connection with use or performance of any software licensed under this agreement.
C.

kh;an vMi s: *uan tm @Fn cOc loLi giWy phjp @T mua bOn dAMi s: @Png i, bao gPm to=n bb cOc @i7u kho8n cIa kh8 ncng thAJng mLi v= phH hBp vMi nhtng yDu cEu @dc bi9t. xhQng c? vi9c nh= cung cWp c? trOch nhi9m vMi bWt ke tmn thWt @dc bi9t hay giOn tiFp n=o khi m= @? l= kFt *u8 cIa vi9c mWt mOt dt li9u hay lBi nhu<n, dH trong cOc h=nh @bng c? liDn *uan, sJ suWt hay h=nh @bng c? hLi khOc phOt sinh tU vi9c kFt n?i vMi sq dgng hay hi9u *u8 cIa bWt ke giWy phjp sq dgng n=o dAMi s: cho phjp. 0. #iO ngANi bOn d:a theo nguyDn li9u m= ngANi bOn sq dgng

The Supplier(s prices are based in

material part upon this limitation of the Supplier(s liability.

Ta le + ;a collection of chapte$ " ta les<:

40

Trang The

0u trong sOch %efects Liability

0u d]ch ThNi hLn trOch nhi9m phOp li v7 sai s?t s> @ABc gia hLn thDm mbt kho8ng thNi gian bng vMi thNi gian m= h=ng h?a khQng thT sq dgng do nhtng sai s?t @? gy ra, nhAng khQng gia hLn *uO . thOng kT tU ng=y giao h=ng @Eu tiDn cIa sG h=ng h?a @ABc sqa chta hay thay thF theo 6i7u kho8n n=y.

Yeriod shall be e$tended by a period e*ual to the period during which the #oods cannot be used by reason of any defect, but not so as to e$tend the %efects Liability Yeriod for more than twenty" four months from the date of first delivery of the #oods repaired or replaced under this provision. , rz Any Supplies furnished by way of replacement under warranty shall be sub)ect to the provisions of this 0lause to the same e$tent as Supplies initially accepted by the 0ontractor for a full further period of warranty. Any parts replaced under this waranty shall be sub)ect to the provisions of this clause for a full further period of warranty however, the total warranty period shall in no case e$ceed three years. 4otice of %efects The Buyer shall notify the Seller , r of defects without undue delay. 3aking #ood of %efects The Seller shall make good of the defect or damage as soon as practicable and at

BWt co h=ng h?a n=o @ABc cung cWp bng phAJng thoc thay thF trong thNi hLn b8o h=nh s> ph8i tun theo 6i7u kho8n n=y vMi cHng mbt moc @b nhA nhtng h=ng h?a m= ngANi kS kFt hBp @Png @^ chWp thu<n lvc @Eu trong mbt thNi hLn b8o h=nh @Ey @I nta.

BWt co phEn n=o @ABc thay thF trong thNi hLn b8o h=nh s> ph8i tun theo 6i7u kho8n n=y, ph8i ch]u mbt ThNi hLn b8o h=nh @Ey @I nta tuy nhiDn, tmng thNi hLn b8o h=nh trong bWt co trANng hBp n=o cnng khQng @ABc vABt *uO r ncm.

ThQng bOo v7 Sai s?t 4gANi 3ua s> thQng bOo cho 4gANi BOn v7 nhtng sai s?t m= khQng @ABc tr_ ho^n *uO moc.

Sqa chta sai s?t

41

4gANi BOn s> sqa chta sai s?t hay thi9t hLi ngay khi c? thT th:c hi9n @ABc v= ph8i t: ch]u m{i chi phS.

Ta le , ;page 143<: Trang ,r 0u gGc 0u d]ch

!n the event of a defect coming to Trong trANng hBp sai s?t @ABc t_m thWy v= light and being notified to the thQng bOo @Fn ngANi bOn, ngANi bOn ngay Seller, the Seller shall, without l<p toc ph8i bPi thANng m{i rIi ro v= chi phS, undue dalay, make good the sau @? t= do l=a ch>n , trong nhtng cOch defect at his own risk and cost sau: and at his discretion in one of the following ways: a. epair the defective item b. Allow the Buyer or a third party appointed by the Buyer to repair the defective item at the seller(s cost c. eplace the defective item d. educe the contract price e. Allow the Buyer to return the defective goods and refund all sums paid for the goods. a. Sqa chta h=ng h?a khiFm khuyFt b. 0ho phjp ngANi mua hodc bDn tho ba @ABc ngANi mua Iy *uy7n sqa chta h=ng h?a khiFm khuyFt v= tSnh chi phS cho ngANi bOn c. Thay thF h=ng khiFm khuyFt d. #i8m giO hBp @Png e. 0ho phjp ngANi mua gqi tr8 h=ng khiFm khuyFt v= ho=n to=n bb sG ti7n h=ng

Ta le 1- ;page 143< Trang ,r 0u gGc 0u d]ch

!n the event of a defect coming to TrANng hBp sai s?t @ABc t_m thWy v= thQng light and being notified to the Seller, bOo @Fn ngANi bOn, ngANi bOn ph8i ngay l<p the Seller shall, at his discretion and toc l:a ch{n phAJng On sqa chta hodc thay
42

without undue dalay, repair or replace thF h=ng h?a sai s?t, ch]u m{i rIi ro v= chi the defective item at his own risk and phS. cost.

Ta le 11 ;page 14)< Trang ,z 0u gGc 0u d]ch

The duty of the Seller to repair or 4ghfa vg sqa chta hodc thay thF h=ng h?a replace defective items is the Seller(s khiFm khuyFt cIa ngANi bOn l= nghfa vg duy only duty under this contract or nhWt cIa ngANi bOn c? trong hBp @Png mdt otherwise, and the Seller shall not be khOc, ngANi bOn s> khQng ph8i bPi thANng liable to compensate the Buyer for any cho ngANi mua bWt co tmn thWt n=o phOt sinh loss of use of any works beloing to the khi ngANi mua t: sqa chta `dH to=n bb hay Buyer `whether complete or partiala or bb ph<na, hodc bWt co s: thm hgt lBi nhu<n for any loss of any profit or for any n=o, bWt co thi9t hLi giOn tiFp hay thi9t hLi v7 direct or conse*uential damage that sau cIa ngANi mua. may be suffered by the Buyer.

Ta le 12 ;page 14)< Trang ,z 0u gGc 0u d]ch

The Seller shall indemnify and hold 4gANi bOn ph8i @7n bH v= ch]u nhtng thi9t harmless the Buyer against any los of hLi hay tmn thWt gy ra cho ngANi mua, dH @?
43

damge whether direct of indirect l= tr:c tiFp hay giOn tiFp, l= kFt *u8 cIa h=ng suffered by the Buyer as the result of h?a b] sai s?t hay thiFu hgt do ngANi bOn v<n defective or faulty goods delivered by chuyTn. the Seller.

sriginal `Yagea This contract, and all *uestions relating to its validity , interpretation or performance shall be governed by the law of The epublic of erbena P'54 This contract, and all *uestions relating to its validity , interpretation or performance shall be governed by the law of The epublic of erbena. This contract shall not include, incorporate or be sub)ect to the provisions of the +nited 4ations 0onvention on 0ontracts for the !nternational Sale of #oods P'55 0ancellation !f a merchant sells goods of such poor *uality that the number of claims under the warranty is clearly e$cessive, then the Buyer may return all the delivered goods to the Seller and receive back all sums of money paid for the goods on cancellation, only those

0u d]ch `Tranga hBp @Png n=y, cnng nhA nhtng vWn @7 liDn *uan tMi hi9u l:c, cOch di\n gi8i v= vi9c th:c hi9n hBp @Png @ABc @i7u chunh theo lu<t cIa nAMc 0bng hRa erbena Trang '54 hBp @Png n=y, cnng nhA nhtng vWn @7 liDn *uan tMi hi9u l:c, cOch di\n gi8i v= vi9c th:c hi9n hBp @Png @ABc @i7u chunh theo lu<t cIa nAMc 0bng hRa erbena. hBp @Png n=y khQng bao gPm, liDn *uan hay sq dgng cOc @i7u kho8n cIa 0Qng AMc liDn hBp *uGc v7 hBp @Png mua bOn h=ng h?a *uGc tF l=m tiDu chuKn. Trang '55 ?@y hAp BCng xhi BDn bOn giao h=ng *uO kjm phKm chWt @Fn moc vABt *uO hLn moc b8o h=nh th_ BDn mua @ABc *uy7n tr8 lLi to=n bb h=ng @^ nh<n tU BDn bOn v= @Ri lLi tWt c8 cOc kho8n @^ tr8 cho h=ng h?a khi hIy, chu nhtng @i7u kho8n trong hBp @Png @7
44

provisions of the contract concerning litigation, arbitration, and2or the payment of damages shall survive P'5# The Seller reserves the right to withdraw this offer at any time before acceptance by the Buyer P'#' This order is sub)ect to the Buyer(s #eneral 0onditions of Yurchase, as printed on the reverse P'#' This order is sub)ect to the Seller(s #eneral 0onditions of Sale, as printed on the reverse P'#' Yartial !nvalidity !f any provision or provisions of this contract are invalid or become invalid, then this shall have no effect on the remaining provisions. 5urther, the parties agree to replace any invalid provision with a new, valid provision having, as far as possible, the same intent as the provision replaced P'#, Severability !n the event that any provision of this Agreement is held to be illegal or otherwise unenforceable, such provision shall be deemed to have been deleted from this Agreement, while the remaining provisions of this Agreement shall be unaffected and shall continue in full force and effect P'##

c<p tMi vi9c ki9n ra tRa On, ki9n ra tr{ng t=i, v=2hodc bPi thANng thi9t hLi l= cRn hi9u l:c. Trang '5# BDn bOn c? *uy7n rvt lLi lNi ch=o h=ng bWt co lvc n=o trAMc khi BDn mua @Png i mua h=ng. Trang '#' 6Jn @dt h=ng n=y d:a trDn 6i7u kho8n chung v7 3ua h=ng cIa bDn mua, @ABc in C mdt sau cIa @Jn h=ng n=y. Trang '#' 6Jn @dt h=ng n=y d:a trDn 4htng @i7u kho8n chung v7 bOn h=ng cIa BDn bOn, @ABc in C mdt sau cIa @Jn h=ng n=y. Trang '#' hFt hi9u l:c mbt phEn xhi mbt hodc mbt v=i @i7u kho8n trong hBp @Png vQ hi9u hodc trC nDn vQ hi9u, th_ chvng khQng 8nh hACng g_ @Fn cOc @i7u kho8n cRn lLi. 4go=i ra, cOc bDn @Png i thay thF kho8n vQ hi9u bng @i7u kho8n mMi c? hi9u l:c th_ @i7u kho8n mMi n=y c? i nghfa tAJng @AJng vMi @i7u kho8n @ABc thay thF. Trang '#, 0kt gi8m @i7u kho8n 4Fu nhA bWt co @i7u kho8n n=o cIa hi9p @]nh n=y @ABc hiTu l= bWt hBp phOp hodc bWt kh8 thi, th_ @i7u kho8n @? s> b] $?a b;, cRn cOc @i7u kho8n khOc vn c? hi9u l:c ho=n to=n v= khQng h7 b] 8nh hACng.

Trang '## Yartial !nvalidity hFt hi9u l:c mbt phEn !f any provision or provisions of this contract 4Fu mbt hodc mbt v=i @i7u kho8n trong hBp @Png are invalid or become invalid, this has no effect vQ hi9u hodc trC nDn vQ hi9u, th_ chvng khQng 8nh on the validity of the remaining provisions. hACng g_ @Fn cOc @i7u kho8n cRn lLi. !f any provision of this contract is invalid or 4Fu bWt ke @i7u kho8n n=o cIa hBp @Png n=y vQ become invalid, the parties have the duty to hi9u hodc trC nDn vQ hi9u, cOc bDn ph8i c? trOch replace the invalid provision with a new valid nhi9m thay thF @i7u kho8n vQ hi9u bng mbt @i7u provision that fulfills the original intent of the kho8n mMi, c? hi9u l:c @8m b8o nguyDn v}n i invalid provision nghfa ban @Eu cIa @i7u kho8n vQ hi9u m= n? thay P'## thF. Trang '##
45

will you please change our order to ,r, cartons of pineapple )uice, ,,/ cartons of pineapple chucks, and .// cartons of pineapple rings. According to the price list you sent us, the total invoice price is now e$actly the same as the original price. Ylease confirm the new agreement immediately P'#D we hereby confirm your change of order. we shall now sent ,r, cartons of pineapple )uice, ,,/ cartons of pineapple chucks, and .// cartons of pineapple rings. There is no change in the price P'#D &ntire Agreement This 0ontract constitutes the entire agreement and understanding between the parties. There are no agreements, agreements, conditions, reservations or representations, oral or written, that are not embodied in this contract or that have not been superseded by this contract P'DE This Yrocurement 0ontract between The Styropak 0ompany of 4onamia and erbena Yackaging Ltd. sf erbena witnesseth that whereas the parties have for many years successfully traded together And whereas Styropak has recently developed biodegradable Styrofoam packaging The parties hereby agree P'DE whereas the parties have successfully cooperated in a number of pro)ects in the epublic of erbena during the last ten years whereas the Supplier has wide e$perience in supply of electronic products for use in tropical conditions whereas the parties concluded on .V 3ay ,- a 3emorandum of +nderstanding and intent to develop products for erbena

0hvng tQi muGn thay @mi @Jn @dt h=ng th=nh ,r, thHng cOc"tQng nAMc doa jp, ,,/ thHng cOc"tQng bOnh doa v= .// thHng cOc"tQng doa khoanh. Theo nhA b8ng giO *uS cQng ty @^ gqi th_ tmng giO tr] cIa @Jn h=ng hi9n tLi @vng bng giO tr] @Jn h=ng cn. xSnh mong *ui cQng ty $em $jt v= $Oc nh<n @Jn h=ng mMi ngay l<p toc. 0hvng tQi $Oc nh<n vi9c thay @mi @Jn h=ng cIa *ui cQng ty. 0hvng tQi s> gqi ngay ,r, thHng cOc" tQng nAMc doa, ,,/ thHng cOc"tQng bOnh doa v= .// thHng cOc"tQng doa khoanh. #iO c8 khQng c? g_ thay @mi. Trang '#D Th;a thu<n @Ey @I B8n hBp @Png n=y cWu th=nh to=n bb th;a thu<n gita cOc bDn. xhQng c? th;a thu<n, @i7u ki9n, vi9c b8o lAu hay @Li di9n, bng mi9ng hodc bng vcn b8n, l= khQng @ABc @7 c<p @Fn hodc b] loLi b; trong b8n hBp @Png n=y. Trang 'DE B8n hBp @Png giMi thi9u n=y @ABc l<p gita: 0Qng ty Styropak 4onamia v= 0Qng ty T4hh @?ng g?i erbena Oc nh<n rng: _ cOc bDn @^ c? giao thAJng tGt @}p trong nhi7u ncm = bCi v_ Styropak gEn @y @^ phOt triTn cQng ngh9 @?ng g?i s8n phKm Styrofoam bng v<t li9u c? thT tiDu hIy @ABc 0Oc bDn, do @?, thGng nhWt rng Trang 'DE _ cOc bDn @^ c? s: hBp tOc tGt @}p trong rWt nhi7u d: On tLi nAMc 0bng hRa erbena ,/ ncm *ua _ BDn bOn @^ c? nhi7u kinh nghi9m trong vi9c cung cWp cOc s8n phKm @i9n tq dHng trong @i7u ki9n khS h<u nhi9t @Mi _ cOc bDn @^ ki kFt B8n ghi nhM v7 hBp tOc v_ s: phOt triTn s8n phKm cIa erbana ng=y .V thOng ncm ,-
46

whereas the Supplier has developed and patented an electronic relay under the registered trade name hair Trigger whereas both parties are interested in introducing this new technology into the &ast Asian region whereas the Yurchaser wishes to incorporate the latest relay manufacturing technology in its own products And whereas the government of the epublic sf erbena actively supports the introduction of pioneer technology !t is hereby agreed that P'D' 0ontract %ocuments All contract documents and the clauses of this contract shall be read, if possible, so as to be consistent. !n the event of conflict, the order of precedence this agreement is as follow : ,. Any alterations typed on the face of the printed Yurchase Agreement .. The printed te$t of the Yurchase Agreement itself r. Specifications . Statement of work -. 3anufacturing %rawings z. The Buyer(s Special 0onditions of Yurchase . The Buyer(s #eneral 0onditions of Yurchase P'D+ Y.S By the way, we assume that 0hristmas and &aster are holidays in &sperana. And they The reply 4o. we are a 3oslem country so we don(t celebrate 0hristmas or &aster. But there(s no reason why your consultants shouldn(t have those day off. An e$change of notes like this has no validity once the contract is signed : a formal definition is the best way of clarifying what e$actly the two sides have agreed :

_ BDn bOn @^ phOt triTn v= @ABc cWp bng sOng chF cho thiFt b] @i9n tq rJle dAMi tDn @cng ki hair Trigger _ c8 hai bDn @7u *uan tm @Fn vi9c giMi thi9u cQng ngh9 mMi n=y tMi vHng 6Qng _ BDn mua mong muGn @ABc tSch hBp s8n phKm rJle mMi nhWt dHng cho vi9c chF tLo s8n phKm kf thu<t v=o cOc s8n phKm cIa h{ = v_ chSnh phI nAMc 0bng hRa erbena Ing hb v7 vi9c ra mkt cOc s8n phKm ki thu<t @i tiDn phong _ thF, tLi @y cOc bDn thGng nhWt rng Trang 'D' 0Oc chong tU liDn *uan 3{i chong tU liDn *uan v= cOc @i7u kho8n cIa hBp @Png n=y ph8i @ABc $em $jt @T c? thT nhWt *uOn vMi nhau. Trong trANng hBp c? tranh chWp, tho t: Au tiDn $em $jt gi8i *uyFt s> l=: ,. BWt co s: sqa @mi n=o trDn b7 mdt cIa b8n in h6 mua h=ng. .. r. . -. z. B8n thn cu cht cIa h6 mua h=ng 4htng chu dn trong h6 BOo cOo cQng vi9c 0Oc b8n v> s8n $uWt 4htng @i7u ki9n mua h=ng @dc bi9t cIa ngANi mua . 4htng @i7u ki9n chung v7 mua h=ng cIa ngANi mua Trang 'D+ 4hn @y, chvng tQi cnng cho rng tLi &sperana, L\ #iOng sinh v= L\ Yhgc sinh @ABc tSnh l= ng=y nghu. 0? ph8i v<y khQng Tr8 lNi: xhQng. 0hvng tQi l= @Wt nAMc hPi #iOo nDn chvng tQi khQng k ni9m L\ #iOng sinh hay Yhgc sinh. Tuy nhiDn, chng c? li do g_ @T chuyDn viDn cIa cOc ng=i khQng @ABc nghu v=o nhtng ng=y n=y. S: trao @mi v7 chv thSch nhA trDn @y khQng c? giO tr] mbt khi hBp @Png @^ @ABc ki: 3bt @]nh nghfa chSnh thoc l= cOch tGt nhWt @T $Oc @]nh chSnh $Oc @i7u m= hai bDn @^ @Png i :
47

!n this contract holiday shall mean all legal holidays in &sperana, and in addition, .th and .-th %ecember, #ood 5riday, &aster Saturday, and &aster Sunday P'D, %efinitions !n this contract the words below have the meanings ascribed to them unless the conte$t otherwise clearly dictates : .., +nless e$pressly modified by the parties, 5sB, 0!5 and other trade term have the meanings and obligations ascribed to the in "ncoterms 'FFE! Yublication z/ of the !nternational 0hamber of 0ommerce, Yaris. ... 0ontract mean this 0ontract, its preamble and appendices, as well as documents e$pressly listed as 0ontract documents or otherwise e$pressly mentioned in this contract. .nd so on P'D, whereas erbena Leather has a highly trained workforce and the most modern leather making machinery And whereas erbena Leather has wide e$perience is supplying products to all parts of the world And whereas erbena Leather is fully familiar with regulations regarding import of leather goods into the +nited States The parties hereby agree P'D4 0ontract %ocuments mean collectively the completed Tender %ocuments with possible supplements, the 0ontract Agreement, Tender %rawing, the 4otice of Award, the Yerformance Bond, the #uarantee for Advance Yayment, the 5orm of etention #uarantee, the 0opy of Yolicy for Third Yarty !nsurance, the Letter of Yower of Attorney and the oint enture Agreement `if anya with anne$ures and appendices included therein and any additions, supplemental, change orders and e$tra work orders `if anya

Trong h6 n=y ke nghu nDn @ABc hiTu l= tWt c8 nhtng ng=y nghu theo phOp lu<t cIa &sperana, thDm v=o @? l= ng=y . v= .- thOng 3ANi hai, v= cOc ng=y tho SOu, tho B8y, 0hI 4h<t cIa l\ Yhgc sinh Trang 'D, 6]nh nghfa Trong hBp @Png n=y, nhtng tU ngt dAMi @y, trU phi c? chv gi8i rX r=ng n=o khOc, @ABc hiTu l=: .., TrU phi c? s: th;a thu<n rX r=ng gita cOc bDn, 5sB, 0!5 v= cOc @i7u kho8n thAJng mLi khOc s> c? nghfa nhA trong "ncoterms 'FFE, Wn b8n sG z/ cIa phRng thAJng mLi *uGc tF, Yaris. ... xhOi ni9m hBp @Png bao gPm thn hBp @Png n=y, phEn mC @Eu v= chv gi8i liDn *uan, cnng nhA nhtng chong tU @ABc li9t kD l= chong tU hBp @Png hodc @ABc dn chiFu rX r=ng trong hBp @Png, .v..v Trang 'D, BCi v_ erbena Leather c? @bi ngn lao @bng tay ngh7 cao v= mOy m?c chF tLo @P thubc da hi9n @Li nhWt = bCi v_ erbena Leather c? nhi7u kinh nghi9m trong vi9c cung cWp s8n phKm thubc da trDn khkp thF giMi = bCi v_ erbena Leather ho=n to=n thQng thLo cOc *uy @]nh v7 nh<p khKu h=ng thubc da v=o hoa xe 0Oc bDn do @? @Png i rng Trang 'D4 0Oc chong tU hBp @Png @ABc hiTu l= to=n bb nhtng t=i li9u @Wu thEu v= cOc phg lgc, b8n hBp @Png, b8n v> @Wu thEu, thQng bOo trvng thEu, cam kFt thi h=nh hBp @Png, b8o l^nh thanh toOn tr8 trAMc, tN mu b8o l^nh, b8n sao hBp @Png b8o hiTm cho bDn tho ba, giWy Iy *uy7n v= hBp @Png liDn doanh `nFu c?a cHng vMi nhtng phg lgc km theo v= bWt ke bm sung, thay thF @Jn h=ng hay bm sung @Jn h=ng `nFu c?a.

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P'D4 The Amaryllis %ocklands and harbor Supply 0ompany Ltd., a company organied and e$isting under the law of the epublic of erbena, having offices in Yort 3ary, erbena, hereinafter call A3A yLL!S P'DD The Amaryllis %ocklands and harbor Supply 0ompany Ltd., a company organied and e$isting under the law of the epublic of erbena, having offices in Yort 3ary, erbena, hereinafter call S&LL& P'DD 4otices 4otices served by one party to the other under the contract are valid only if sent by registered mail and signed. Such notices are to be sent to following address: Seller : A%% &SS Buyer : A%% &SS P'DG Assignment of ights, %elegation of %uties The rights under this 0ontract may not be assigned nor the duties delegated by either party without the prior written consent of the other party P'DG Trang 'D4 0Qng ty T4hh Amaryllis %ocklands v= harbor Supply, th=nh l<p v= hoLt @bng theo phOp lu<t nAMc 0bng hRa erbena, c? trg sC tLi Yort 3ary, erbena, sau @y g{i l= A3A yLL!S Trang 'DD 0Qng ty T4hh Amaryllis %ocklands v= harbor Supply, th=nh l<p v= hoLt @bng theo phOp lu<t nAMc 0bng hRa erbena, c? trg sC tLi Yort 3ary, erbena, sau @y g{i l= B4 B4 Trang 'DD ThQng bOo ThQng bOo @Aa ra bCi mbt bDn cho bDn kia theo hBp @Png n=y c? giO tr] chu khi @ABc ki v= gqi bng thA @8m b8o. ThQng bOo s> @ABc gqi theo @]a chu dAMi @y: 4gANi bOn: 6A 0h 4gANi mua: 6A 0h Trang 'DG TrOch nhi9m v= *uy7n hLn cIa cOc bDn

puy7n lBi v= nghfa vg cIa cOc bDn trong hBp @Png n=y s> khQng @ABc chu @]nh hodc u *uy7n m= khQng c? s: @Png thu<n nhWt trS bng vcn b8n cIa bDn cRn lLi. Trang 'DG %ear Sir, ThAa *ui cQng ty, we have pleasure in informing you that we are 0hvng tQi lWy l=m vinh d: thQng bOo cho *ui cQng transferring the right to take delivery of the ty rng chvng tQi s> u *uy7n vi9c giao lQ h=ng latest consignment of goods to one of our skp tMi @y cho mbt trong sG cOc @Li li cIa chvng subsidiaries, Allpart 3ichigan. %elivery details tQi, Allpart 3ichigan. 0hi tiFt cIa vi9c giao h=ng will be sent to you in the ne$t few days. s> @ABc gqi tMi *ui cQng ty trong v=i ng=y tMi. 5uther, we are transferring the duty to pay the 4go=i ra, chvng tQi s> u thOc nghfa vg thanh toOn contract price to our subsidiary in 4onamia giO hBp @Png cho @Li li cIa chvng tQi C 4onamia, 5udge and #urgle. !f you will send your 5udge and #urgle. 4Fu *ui cQng ty gqi hoO @Jn invoice to them, we are confident that you will cho h{, chvng tQi tin rng *ui cQng ty s> nh<n receive payment from them in due time. @ABc ti7n thanh toOn @vng h}n. yours faithfully xSnh thA. P'DF Trang 'DF Termination for convenience of the Buyer i9c chWm dot hBp @Png v_ *uy7n lBi cIa BDn mua The delivery of #oods under this contract may Theo hBp @Png n=y, BDn mua c? thT chWm dot to=n be terminated by the Buyer in accordance with bb hodc mbt phEn nghfa vg giao h=ng bWt co khi
49

this clause in whole, or in part, whenever the Buyer shall determine that such termination is in his best interest. Any such termination shall be effected by delivery to the Seller of a 4otice of Termination specifying the e$tent to which supply of #oods under the contract is terminated, and the date upon which such termination becomes effective P'G, !n the event of termination for whatever reason, the Seller shall be entitled to receive full payment for all goods and services delivered by the Seller at the date of termination P'G, Termination for %efault The Buyer may be written notice of default to the Seller, terminate the whole or any part of this 0ontract in any one of the following circumstances `ia !f the Seller fails to make delivery of the #ood within the time specified herein `iia !f the Seller fails to perform any of the other provisions of this contract, or so fails to make progress as to endanger performance of this contract in accordance with its terms, and in either of these two circumstances does not cure such failure within a period of ,/ days P'G4 Language This agreement is written in &nglish and in Swahili. !n the event of a discrepancy, the &nglish language version shall prevail P'G5 Language This agreement is made in both Swahili and &nglish. The Swahili and &nglish versions

n=o BDn mua cho rng vi9c chWm dot n=y l= c? lBi nhWt. i9c chWm dot n=y ph8i @ABc gqi cho BDn bOn @T thQng bOo @Png thNi chu rX phLm vi v= thNi @iTm vi9c chWm dot c? hi9u l:c.

Trang 'G, Trong trANng hBp chWm dot hBp @Png v_ bWt co li do n=o, BDn bOn c? *uy7n nh<n to=n bb sG ti7n @^ thanh toOn cho tWt c8 h=ng hoO v= d]ch vg BDn bOn th:c hi9n trong ng=y chWm dot hBp @Png. Trang 'G, Q hi9u hBp @Png BDn mua c? thT thQng bOo vi9c vQ hi9u hBp @Png bng vcn b8n tMi BDn bOn, chWm dot to=n bb hodc mbt phEn cIa hBp @Png n=y trong bWt ke trANng hBp n=o dAMi @y:
`ia `iia

4Fu BDn bOn khQng th:c hi9n giao h=ng trong thNi gian *uy @]nh 4Fu BDn bOn khQng th:c hi9n bWt ke @i7u kho8n n=o khOc cIa hBp @Png, hodc khQng @Lt @ABc tiFn @b hBp @Png, gy nguy hLi @Fn vi9c th:c hi9n cOc @i7u ki9n cIa hBp @Png v= trong c8 hai trANng hBp nFu khQng khkc phgc sai s?t trong thNi hLn ,/ ng=y.

Trang 'G4 4gQn ngt: Th;a thu<n n=y @ABc viFt bng tiFng Anh v= tiFng Swahili. Trong trANng hBp c? s: khOc bi9t, vcn b8n bng tiFng Anh s> @ABc Op dgng. Trang 'G5 4gQn ngt: Th;a thu<n n=y @ABc viFt bng c8 tiFng Swahili v= tiFng Anh. 0Oc vcn b8n tiFng Swahili v= tiFng Anh c? tA cOch phOp li nhA nhau.
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have e*ual legal status

Trang 'G5

P'G5 This contract and the contract documents are hBp @Png n=y v= cOc chong tU cIa hBp @Png @7u written in &nglish. Any translation into another @ABc viFt bng tiFng Anh. BWt ke b8n d]ch sang language is for information only and has no ngQn ngt khOc chu mang tSnh thQng tin chu dn v= legal status. khQng c? tA cOch phOp li. 0orrespondence between the parties shall be conducted e$clusively in &nglish. The language of all designs, drawings, plans, specifications, and all other documentation provided by the Seller under this contract shall be &nglish however, the training materials and the maintenance manuals specified in Article ,, shall be supplied in both an &nglish language version and an Arabic version. !n the event of discrepancy between the two version, the &nglish language version shall prevail P'G# ThA tSn gita cOc bDn chu sq dgng ngQn ngt duy nhWt l= tiFng Anh. 4gQn ngt cIa tWt c8 cOc thiFt kF, b8n v>, kF hoLch, chu dn, v= tWt c8 cOc t=i li9u @ABc cung cWp bCi ngANi bOn theo hBp @Png n=y @ABc viFt bng tiFng Anh tuy nhiDn, cOc t=i li9u @=o tLo v= hAMng dn b8o tr_ @ABc *uy @]nh tLi 6i7u ,, @ABc cung cWp c8 hai phiDn b8n tiFng Anh v= tiFng <p. Trong trANng hBp c? s: khOc nhau gita hai phiDn b8n, phiDn b8n tiFng Anh s> @ABc Op dgng. Trang 'G# B8n sao cIa hBp @Png hai b8n sao cIa hBp @Png n=y, mbt tiFng Anh v= mbt tiFng Swahili, @^ @ABc ki bCi c8 hai bDn. 3[i bDn git mbt b8n vMi ngQn ngt tAJng ong. Trang 'G# Tranh chWp BDn mua v= BDn bOn s> th:c hi9n m{i n[ l:c @T gi8i *uyFt cOc tranh chWp n8y sinh gita hai bDn trong hodc liDn *uan @Fn hBp @Png bng hRa gi8i thQng *ua @=m phOn tr:c tiFp v= thn thi9n. Trang 'FE ThI tgc hRa gi8i @ABc th:c hi9n nhA sau: a. 0Oc bDn thGng nhWt thNi gian v= @]a @iTm cho cubc h{p hRa gi8i b. Tham gia cubc h{p gPm , ngANi @Li di9n v= , lu<t sA cIa m[i bDn c. Lu<t sA khQng c? *uy7n phOt ngQn tLi cubc
51

0opies of the 0ontract Two copies of this contract, one in &nglish and one in Swahili, have been signed by both parties. &ach party retains one copy in each language P'G# evolution of %isputes The Buyer and the Seller shall make every effort to resolve amicably by direct, informal negotiation any disagreement or dispute arising between them under or in connection with the contract P'FE Yrocedure for amicable settlement shall be as follow: a. The parties shall agree a date and place for amicable settlement meeting b. Attending the meeting shall be one e$ecutive representing each party and one lawyer representing each party c. The lawyer shall not be allowed to speak at the meeting d. The meeting shall take place in three

sessions. !n the first session, each party shall state its position on the sub)ect of the disagreement. !n the second session the parties shall suggest ways of resolving the disagreement. !n the third session the parties shall attempt finally to resolve the disagreement. !n the event that the parties fail to resolve their disagreement amicably, they shall proceed to arbitration on the terms specified here below P'FE

h{p d. 0ubc h{p di\n ra trong ba phiDn. YhiDn @Eu tiDn, m[i bDn @Aa ra *uan @iTm cIa cIa m_nh v7 vWn @7 bWt @Png. Trong phiDn tho hai, cOc bDn s> @7 $uWt cOc cOch gi8i *uyFt vWn @7. YhiDn tho ba, cOc bDn s> th:c hi9n n[ loc cuGi cHng nhm gi8i *uyFt bWt @Png. Trong trANng hBp cOc bDn khQng thT gi8i *uyFt bWt @Png bng hRa gi8i, tr{ng t=i s> @ABc mNi $jt $q d:a trDn nhtng @i7u kho8n dAMi @y. Trang 'FE #i8i *uyFt tranh chWp TWt c8 nhtng tranh chWp n8y sinh liDn *uan @Fn hBp @Png hi9n tLi @ABc phOn *uyFt cuGi cHng d:a trDn Lu<t hRa gi8i v= jt $q cIa YhRng ThAJng mLi puGc tF bCi mbt hodc cOc tr{ng t=i @ABc chu @]nh v= phH hBp vMi *uy @]nh cIa lu<t n=y. Trang 'F' SG lABng tr{ng t=i l= ba ngANi. 6]a @iTm $jt $q l= Th=nh phG erbena. 4gQn ngt @ABc sq dgng tLi phiDn tRa gi8i *uyFt tranh chWp l= tiFng Anh. Trong trANng hBp nhN tr{ng t=i, m[i bDn ph8i ch]u kho8n phS cIa m_nh. Trang 'F+ 08 hai bDn @Png i rng *uyFt @]nh cIa hbi @Png tr{ng t=i l= *uyFt @]nh cuGi cHng v= c? hi9u l:c vMi c8 hai bDn, khQng kT @Fn cOc n[ l:c gi8i *uyFt khOc. Trang 'F+

Settlement of %isputes All disputes arising in connection with the present contract shall be finally settled under the ule of 0onciliation and Arbitration of the !nternational 0hamber of 0ommerce by one or more arbitrators appointed in accordance with the said ules P'F' The number of arbitrators shall be three. The place of settlement of dispute shall be erbena 0ity. The language used by the court in the settlement of dispute shall be &nglish. !n the event of arbitration, each party shall bear its own costs P'F+ Both parties agree to accept the decision of the court of arbitration as final and binding on them both, to the e$clusion of all other remedies P'F+

52