- •6.2.7. Essential Features of Contract
- •Assignments
- •Terms of Payment
- •Assignments
- •I. Memorise the following words and phrases:
- •Terms of Delivery
- •Incoterms
- •Insurance of Goods
- •Assignments
- •I. Memorise the following words and phrases:
- •Force Majeure
- •Assignments
- •I. Memorise the following words and phrases:
- •Claims and Sanctions
- •Claim Procedure
- •Ways of Settling a Claim
- •Assignments
- •I. Memorise the following words and phrases:
- •6. Packing and Marking
- •7. Terms of Payment
- •8. Sanctions and claims
- •9. Force majeure
- •Settlement of disputes and arbitration
- •11. Miscellaneous
- •Legal Addresses of the Parties
- •Assignments
- •I. Memorise the following words and phrases:
- •Sample Contract 2
- •Article 1
- •Article 2
- •Article 3
- •Article 4
- •Article 5
- •Article 6
- •Article 7
- •Article 8
- •Article 9
- •Article 10
- •Article 11
- •Article 12
- •Assignments
- •I. Memorise the following words and phrases:
- •Article 4
- •Article 5
- •Article 6
- •Article 7
- •Article 8
- •I. Memorise the following words and phrases.
Claims and Sanctions
A contract defines rights and obligations of the parties involved. In case of breach of Contract the sufferer makes a claim on the party which fails to meet its contract obligations. It is more often the case that it is the Buyer who makes a claim on the Seller. Most often the Buyer makes quality and quantity claims on the Seller. The cause for complaint may be poor quality, breakage, damage, short weight, leakage etc.
Claim Procedure
The Buyer must write a statement of claim and mail it to the Seller together with the supporting documents. Bill of Lading, Airway and Railway Bill, Survey Report, Quality Certificate may serve as documentary evidence. If necessary, drawings, photos, samples are enclosed as proofs of claims. The date of a complaint is the date on which it is mailed.
Claims can be lodged during a certain period of time, which is usually fixed in a Contract. During the claim period the Seller is to enquire into the case and communicate his reply. He either meets the claim or declines it. The Seller has a full right to decline a claim if the goods are disorderly stored, mishandled or misused by the Buyer. If a claim has a legitimate ground behind it the parties try to settle it amicably.
Ways of Settling a Claim
In case of short-weight it is recompensed by a load sent separately or at the time of follow-up shipments. In case of damage or faults, the goods at the Buyer's option can be repaired or replaced, all at the Seller's expense. If the goods are missing the Seller must necessarily locate them. Sometimes it is quite a problem as consignments may be lost when transshipped at some intermediate port or if sent at a wrong address. If the goods are not recovered compensation must be paid by the party directly responsible for it.
Sanction against the Seller
If the Seller fails to deliver the goods by the date due, he is penalized. If the delay is longer than 2 months the Buyer has the option of cancelling the Contract altogether but the Seller is to compensate for the loss incurred.
Complaints coming from the Seller
The Seller in his turn is entitled to make a claim on his counterpart if the Buyer fails to meet his contractual obligations.
The Seller may inflict penalties on the Buyer if there is a default in payment. In an FOB transaction the Seller is entitled to compensation for extra storage expenses if the Buyer's vessel bound to pick up the goods fails to call at the port in time. In a CIF transaction the Seller may claim the demurrage if his own vessel stays idle at the port awaiting unloading.
Assignments
I. Memorise the following words and phrases:
breach of contract |
порушення контракту |
the sufferer |
сторона, яка постраждала |
claim |
претензія |
supporting documents |
супровідні документи |
statement of claim |
позовна заява |
survey report |
акт огляду |
to make/to lodge the claim |
висунути скаргу |
to meet the claim |
задовольнити претензію |
to decline the claim |
відхилити претензію |
to settle the claim amicably |
урегулювати претензію по-дружньому |
at the Buyers'/Sellers' option |
на розсуд покупця / продавця |
tranship, transship
|
перевантажувати (з одного судна на інше) |
transshipment, transhipment |
перевантажування |
penalty |
штраф |
to penalize |
штрафувати |
to compensate smb for smth |
компенсувати, відшкодовувати |
to entitle |
уповноважувати |
to be entitled |
мати право, бути уповноваженим |
expenses |
витрати, видатки |
at someone's expense |
за чийсь рахунок |
demurrage |
простій судна, вагона |
Bill of Lading |
коносамент |
Airway/Railway Bill |
авіаційна/залізнична накладна |
Survey Report |
акт огляду |
Quality Certificate |
сертифікат якості |
to enquire into |
розслідувати |
legitimate ground |
законна підстава |
II. Answer the questions:
1. What kind of claims are made by the Buyer?
2. What sort of claims are lodged by the Seller?
3. What is the procedure for making claims?
4. When does the Seller decline a claim?
5. How are claims settled?
6. What are the sanctions against the defaulter?
6.2.8. Sample contracts
Sample Contract 1
Kyiv, December 11, 20…
Firm ............, hereinafter referred to as the "Seller" on the one part, and ……hereinafter referred to as the "Buyer" on the other part have concluded the present Contract to the effect that:
1. Subject of the Contract
Seller shall sell, and the Buyer shall buy the merchandise (FOB Kyiv) .............which quantity, assortment, and quality are indicated in Specification, Appendix to the present Contract, forming its integral part.
2. Price and Total Cost of Contract
The price for the merchandise supplied in accordance with the present Contract amounts to ……, (FOB Kyiv). The total cost of the Contract shall amount to……
3. Quality of the merchandise
Quality of the merchandise to be delivered under the present Contract shall be in full conformity with the standards in force in Ukraine or with norms of the plants, manufacturing the merchandise and shall be confirmed by manufacturer's certificate of quality.
4.Guarantees
The Seller shall guarantee the quality of the delivered merchandise for.....months from the date of the beginning of its operation, but for not more than .. months under favourable conditions of its operation.
5. Dates and terms of delivery
The Seller shall deliver the merchandise to the Buyer in dates, indicated in Appendix № to the present Contract.
Delivery of the merchandise under the present Contract shall be effected under the shipping documents, indicated in Appendix № to the present Contract.
The Seller shall notify by cable the Buyer not later than……. days after the ….(vessel's) departure from the Seller's (port) about the shipment of merchandise with indication of…. (data of waybill or Bill of Lading etc).