Tiếng anh chuyên ngành 2
Class
TAN
Created
@August 11, 2021 9:55 AM
Lecturer
ThS. Phạm Minh Hiền
Materials
Rating
Type
Semister 1
Chapter 1: NEGOTIATION DELIVERY
@những câu hỏi được thi vào cuối kỳ. please taking note after every lesson
Step 1: Timing ( date of delivery, delay, and results of delay)
Excuseable Delay: giao hàng muộn miễn trách nghiệm (Do sự kiện bất khả kháng)
Non-excusable delay: giao hàng muộn không miễn trách
1. What factors do exporters consider in choosing the right date of
delivery?
Exporters must know how long it takes to:
- Obtain supplies
- Manufacture the goods
- Package the goods
- Arrange pre-shipment inspection
- Transport goods to the agreed point of delivery
2. What might be the consequences of miscalculating the date of delivery?
An exporter would pay a heavy penalty if he sets a too early date of delivery
A buyer would have his money tied up in unused goods in case of too early
delivery while too late delivery also results in big financial losses especially if
goods are to be resold.
3. How important is the date of delivery?
Tiếng anh chuyên ngành 2
1
The delivery date triggers many contract events.
- The exporter must complete primary duties under the contract.
- Payment becomes due
- Risk and title pass to the Buyer
- Exporter must pay compensation to the Buyer in case of late delivery
4. How to fix (choose, pick) the date of delivery?
Date of delivery is fixed for a number of days after the date of contract
coming into force.
Date of delivery can be any calendar date.
5. When does the contract come into force? (khi nào hợp đồng có hiệu lực)
The date of contract coming into force is not usually a calendar date but the date
on which the last precondition is met.
Preconditions for the sale include:
- Receipt of import and/or export approval (nhận được giấy phép xuất nhập
khẩu)
- Receipt of foreign exchange approval from a central bank (nhận được sự phê
duyện ngoại hối từ NHTW)
- Issuance of a letter of Credit or bank guarantee (Người mua được ngân hàng
cấp thư tín dụng hoặc bảo lãnh ngân hàng)
- Making of a down-payment by the buyer ( người mua phải thanh toán đợt đầu)
- Issuance of an insurance policy (lấy được hợp đồnh bảo hiểm)
- Issuance of a Certificate of Origin (lấy được giấy chứng nhận xuất xứ của hàng
hóa)
- Delivery by buyer of plans, drawings or other documentation (bên mua gửi cho
bên bán bản vẽ kỹ thuật hoặc các chứng từ khác
Preconditions for the sale include:
- Receipt of import and/or export approval (nhận được giấy phép xuất nhập
khẩu)
- Receipt of foreign exchange approval from a central bank (nhận được sự phê
duyện ngoại hối từ NHTW)
- Issuance of a letter of Credit or bank guarantee (Người mua được ngân hàng
cấp thư tín dụng hoặc bảo lãnh ngân hàng)
- Making of a down-payment by the buyer ( người mua phải thanh toán đợt đầu)
- Issuance of an insurance policy (lấy được hợp đồnh bảo hiểm)
- Issuance of a Certificate of Origin (lấy được giấy chứng nhận xuất xứ của hàng
hóa)
Tiếng anh chuyên ngành 2
2
- Delivery by buyer of plans, drawings or other documentation (bên mua gửi cho
bên bán bản vẽ kỹ thuật hoặc các chứng từ khác
6. When must delivery tale place?
The date of dispatch from the factory
The date of loading onto a ship
The date when the goods should arrive in destination
7. When does the contract come into force?
The date of contract coming into force is not usually a calendar date but
the date on which the last precondition is met .
Preconditions for the sale include :
- Receipt of import and/or export approval
- Receipt of foreign exchange approval from a central bank
- Issuance of a Letter of Credit or bank guarantee
- Making of a down payment by the buyer
- Issuance of an apply Issuance of a Certificate of Origin
- Delivery by buyer of plans drawings or other documentation
Date of conclusion/execution: ngày ký hợp đồng
The contract is binding: có hiệu lực ràng buộc
Effective date: ngày hợp đồng có hiệu lực.
Preconditions: điều kiện tiên quyết
Negotiators often agree a cut off date; if the contract has not come into force
within a certain time, for example three months from signature, then it
becomes null and avoid.
A cut-off date: is a common in fixed-price contract because a long delay can make
the price unrealistic. (đến ngày thứ bao nhiêu mà 2 bên vẫn không thực hiện thì hợp
đồng coi là vô hiệu)
"Time is of the essence" clauses : điều khoản thời gian thiết yếu
null and void: vô hiệu
COMING INTO FORCE
This Agreement shall come into force after execution by both parties on the date of
the last necessary approval by the competent authorities in the country of the seller
and the buyer .
Tiếng anh chuyên ngành 2
3
If the Contract has not come into force within ninety days of execution , it shall
become null and void . The date of delivery shall be twenty - eight days after the
date of coming into force of the Contract .
"Time is of the Essence" Clauses
If punctual delivery is essential , the contract will include the following clause:
"Time is and shall be of essence of this contract"
If the time is not kept , the buyer has the right to send back the goods and refuse
payment .
Delivery with and without grace period
Grace period (ân hạn):
is extra time allowed for meeting with a requirement, satisfaction of an
obligation or implementation of an agreement
is the period between delivery date and penalty period
Excused delay and force majeure (bất khả kháng) năm nào cũng thi
Force majeure means a superior power (bất khả kháng)
= Act of God (law) - An event caused by natural forces beyond human control
= Contingency/contingencies - A future event or circumstance that is possible
but cannot be predicted with certainty or an event that may or may not happen
What is force Majeure?
" Unexpected and unavoidable events such as a war , crime , or an earthquake
which prevent people from doing something that is required in a legal agreement
A force majeure clause:
If either party is prevented from , or delayed in performing any duty under this
Contract by an event beyond his reasonable control , then this event shall be
deemed force majeure , and this party shall not be considered in default and no
remedy , be it under this contract or otherwise , shall be available to the other
party .
Force majeure events include , but are not limited to : war ( whether war is
declared or not ) riots , insurrections , acts of sabotage , or similar occurrences ,
strikes or other labor unrest newly introduced laws or government regulations :
delay due to government action or inaction ; fire , explosion , or other
unavoidable accident : flood , storm , earthquake , or other abnormal natural
event .
Tiếng anh chuyên ngành 2
4
Three outcomes of force majeure
Unexcuse Delay and Buyer's remidies
When unexused delay occurs, there are TWO remedies for Buyer:
- The course isssues a decree of specific performance (sắc lệnh yêu cầu thi
hành nghĩa vụ hợp đồng) requiring the exporter to make delivery as agreed
(civil-law countries/các nước áp dụng dân luậ
The court requires the exporter to pay the buyer compensatory damages.
(common-law countries/ các nước áp dụng thông luật)
damages : tiền bồi thường
the injured party: bên thiệt hại
fine: khoản phạt
What are damages?
Sums of money paid to compensate the injured party.
The amount of damages is decided after three questions are answered
- Did the loss provably follow from the breach?
- Was the loss reasonably close to the breach in the chain of events?
- Was the loss mitigated or Did the buyer take reasonable steps to keep the loss as
small as possible?
What might be a better solution to late delivery?
Tiếng anh chuyên ngành 2
5
A. Liquidated damages (tiền bồi thường định trước)
- The lump sum to be paid per day (week or month) of late delivery
- The court might increase or decrease the figure for damages, depending on the
country's law
B. Penalties (Tiền phạt vi phạm)
- A type of punishment given to a party for not performing its duty.
- The amount of penalty is usually very high.
C. Quasi - indemnity ( tiền tương đương bồi thường)
- An amount of compensation fixed by exporter to relieve his responsibility for
late delivery.
- The compensation is usually very low
A. Liquidated damages (tiền bồi thường định trước)
- The lump sum to be paid per day (week or month) of late delivery
- The court might increase or decrease the figure for damages, depending on the
country's law lump-sum compensation is set right
B. Penalties (Tiền phạt vi phạm)
- A type of punishment given to a party for not performing its duty.
- The amount of penalty is usually very high.
C. Quasi - indemnity ( tiền tương đương bồi thường)
- An amount of compensation fixed by exporter to relieve his responsibility for
late delivery.
- The compensation is usually very low
PHÂN BIỆT 3 TỪ (CÓ THỂ THI)
Liquidate damages
- MOTIVE: To
compensate the
buyer fairly for any
delay in delivery
- Enforceable
everywhere but
subject to increase or
Penalty
- MOTIVE: to
terrorize the
exporter into
punctual delivery
- Not enforceable
in English law or
other common law
Quasi - indemnity
- MOTIVE: To relieve
the exporter of
liability for delay in
delivery.
- Enforceable
everywhere but open
to challenge as
decrease in some
legal systems
systems
"unconscionable"
6. What is Force Majeure?
Unexpected and unavoidable events such as a war, crime, or an earthquake
which prevent people from doing something that is required in legal agreement
Tiếng anh chuyên ngành 2
6
be in default: vi phạm nghĩa vụ hợp đồng
remedy: bồi thường, biện pháp khắc phục
perform + duty: thực hiện nghĩa vụ hợp đồng
be deemed = consider
7. Should the parties wait for the force majeure event to last forever?
A party might choose to terminate the contract if a force majeure continues
for months with the following clause:
- ...
terminate: chấm dứt
Cancel: hủy
on due notification: sau khi thông báo kịp thời
without delay: ngay lập tức
as the case may be: tùy trường hợp
Liquidated damages
If the Seller fails to supply any of the goods within the time period specified in the
Contract , the Buyer shall notify the Seller that a breach of contract has occurred and
shall deduct from the contract price per week of delay , as liquidated damages , a
sum equivalent to one half percent of the delivered one of the delayed goods until
actual delivery up to a maximum deduction of 10 % of the delivered price of the
delayed goods .
Step 2. LOCATION (Place of delivery and alternatives)
What is the Place of delivery?
Delivery is normally supposed to be the arrival of goods at destination but
this is not accepted in contract language.
The parties have to clarify what they mean by place of delivery.
Place of delivery is the point at which exporter passes responsibility for the
goods to buyer.
Place of delivery may vary depending on the terms of trade chosen by both
parties.
What is place of delivery important?
Tiếng anh chuyên ngành 2
7
Place of delivery is the point at which exporter passes responsibility for the
goods to buyer.
Place of delivery may vary depending on the terms of trade chosen by both
parties.
transfer risk from seller to buyer when:
FOB (Free on board): delivery takes place when goods cross the rail of ship
nominated by buyer.
the seller is obligated to pay the freight and insurance necessary to
be named by: được chỉ đinh bởi
put the goods on board of the designated vessel by the buyer.
a bonded warehouse: kho ngoại quan, kho chứa khi hàng chưa được thông quan
at sb's discretion: tùy theo ý của mình
Step 3. Transport (Model of transport to be used)
What mode of transport is most appropriate? (phương thức vận tải)
The choice of transport is subject to the nature of goods, customer's wishes,
speed, cost, safety, terms of export sales contract...
Inland transport: by road, by rail, by barge, by mail or by mixture.
Overseas transport: by air, by sea
Transportation of goods requires proper packaging, shipping marks, and
documentation.
Why is place of delivery important?
Control and responsibility go together
Place of delivery is important because date of payment depends on the
place and time delivery
Risk and ownership often pass at the place of delivery
Transportation of goods requires proper packaging, shipping marks, and
documentation.
PACKAGING - A typical clause:
Goods 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 goods
attributable to improper or defective packaging
Shipping mark: (ký mã hiệu)
Tiếng anh chuyên ngành 2
8
Three aspects of transportation:
Physical safety of goods which means:
- Appropriate packaging
- Correct marking
- Correct documentation
Three common packaging problems:
Packaging of dangerous goods is subject to special regulations in all
countries
Some nations require fumigation all containers
Some packaging materials are strictly forbidden in agriculture-based
countries such as hay, straw and rice husks (trấu)
SHIPPING MARK
SHIPPNG MARK CLAUSE
On the surface of each package delivered under this Contract 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 right side up handle with care ,
keep dry , and the mark : DNP / 36 / 0 .
Physical safety of the goods which mean:
-1
- 2......
be to be: phải (are to be)
Tiếng anh chuyên ngành 2
9
attributable to = due to : do
defective: khuyết tật
shipping mark: ký mã hiệu hàng hóa
package: kiện hàng
gross weight: trọng lượng gộp
net weight: trọng lượng tịnh
letter of credit: số thư tín dụng
bill of landing: vận đơn
shipper (cargo owner) : người chủ hàng
carrier: người vận chuyển, chuyên chở
SHIPPING DOCUMENT
The most important shipping document is the Bill of Lading:
shipping company
A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper
that details the type, quantity, and destination of the goods being carried.
Three function of Bill of Landing (hỏi liên tục)
- B/L is the Contract of carriage entered into between the "carrier" and the
"shipper or cargo owner" in order to carry out the transportation of the cargo.
- B/L is the Receipt of Goods issued by the carrier or their agent to the shipper or
their agent as proof of RECEIPT of the cargo.
- B/L is the Document of Title to the Goods
Three (3) originals Bill of Lading constitutes a full set
There are different types of Bill of Landing:
- A marine bill of landing: vận đơn đường biển
- An air waybill: vận đơn hàng không
- A rail consignment note: chứng từ vận tải đường sắt
- A road consignment note: chứng từ vận tải đường bộ
- A combined transport bill of landing: vận đơn vận tải liên hơp
Marine Bill of Landing:
- must indicate that goods have been loaded on a named vessel. (on board notation)
- negotiable (chuyển nhượng): consignee is blank
- To transfer the negotiable Bill of landing, the consignor must stamp and sign the bill
- A negotiable bill of lading must be written to the order of the consignee. It must be
a clean bill of lading to order - blank endorsed
- Non-negotiable BL: Straight bill
- Negotiable BL: 'to order' bill and Bearer bill
Tiếng anh chuyên ngành 2
10
(Claused/Foul = Unclean)
UNCLEAN / CLEAN SHIPPING DOCUMENTS
Goods , packaging and general appearance are inspected by a carrier . Common
notes ( phê chú ) include
Contents leaking Packaging soiled ( ban ) by contents.
Packaging broken / holed / torn / damaged .
Packaging contaminated .
Goods damaged / scratched .
Goods chafed ( trầy xước ) / torn / deformed .
Packaging badly dented ( lõm )
Packaging damaged contents exposed Insufficient packaging
Step 4. RISK, TITLE AND INSURANCE (Transfer of risk,
ownership and insurance?)
Ownership = title : sở hữu
Insurer/underwrite/insurance company: người / công ty bảo hiểm
Insure/ Assured: người được bảo hiểm
Subject matter insured: đối tượng bảo hiểm
Risk insured against: rủi ro được bảo hiểm
Insurance premium: phí bảo hiểm
What risk is passed on the delivery of goods?
The risk of loss and damage
The risk of goods doing harm to a third party
When is risk transferred from exporter to importer?
At the point of delivery
Risk and insurance go hand and hand, the party facing a risk shall arrange
insurance.
Transfer of ownership/title can take place at any point btw, signature of
contract and final of contract and final payment of the goods
Two risks are involved in the sale of goods:
- Risk of the goods injuring a third party
- Risk of loss or damage (more significant)
Tiếng anh chuyên ngành 2
11
Transfer of Title
- National laws do not agree on the point of passing ownership of goods.
Passing ownership of goods is disposive
- Many exporters expect to keep legal ownership until the full payment is made but
this ownership until the full payment is made but this ownership is of little value.
WHY?
It's too complicated and costly to bring the goods home.
⇒
⇒
Who is responsible for arranging insurance cover? Exporter or Buyer?
There are two schools of thoughts on this matter.
- Point of delivery is decisive:
→ Up to the delivery, the exporter insures; after the delivery the buyer insures.
- Exporter should insure:
* They have standing arrangement with an insurance company.
* They can declare the details of their product
Important Notes:
- It's up to the sides to reach an agreement on the terms that best meets their needs.
- Insurance cover under CIF and CIP contracts is for the value of the goods plus
In CIF and CIP contracts, the exporter must pay for insurance
10% (the expected profit of the buyer)
from the point of delivery to the named point of arrival.
- Cover is in the currency of the contract
- By endorsing the certificate of insurance, the exporter can assign/transfer the full
right to the buyer. This can be done after .....
Policy, Certificate or Letter of Insurance? (hợp đồng bảo hiểm đơn, giấy
chứng nhận bảo hiểm, thư bảo hiểm)
Insurance Policy
- It is time-consuming to prepare an insurance policy, especially when a number
of underwriters are involved.
Uncommon and impracticable to take out an insurance policy
⇒
Certificate of Insurance
- Many exporters have an agreement with an insurance company covering all
their shipments over a period of time
- Each individual shipment is covered by a Certificate of Insurance, not by a full
policy
- A certificate of insurance:
→ States in outline the cover offered;
→ Gives the details of the individual shipment.
Tiếng anh chuyên ngành 2
12
Letter of Insurance
- This is simply a letter from exporter to buyer stating that the goods are insured.
- It has no legal force except as evidence in a law suit against the exporter
Bases on the description of insured ship, goods or insured subject matter
- Floating Policy (Hợp đồng bảo hiểm thả nổi)
- Open cover ( Hợp đồng bảo hiểm nhiều chuyến)
Based on the value of the insured subject matter
- Valued Policy (Hợp đồng bảo hiểm định giá)
- Unvalued Policy (Hợp đồng bảo hiểm không định giá)
Based on time period
- Voyage Policy (Hợp đồng bảo hiểm chuyến)
- Time Policy (Hợp đồng bảo hiểm thời hạn)
What do Float Policy and Open Cover have in common?
- Both offer exporter insurance cover on all shipments over time period. (ký kết
một lần, mỗi chuyến hàng trừ dần)
- A ceiling is set on the overall figure - for example, $1 million
- As each individual shipment is made, exporter declares the value of the
shipment and the ceiling is automatically reduced by that amount and that
shipment is covered by a Certificate of Insurance. Exporter has a pad of these
certificates and simply fills out a new one for each shipment.
Floating Policy and Open Cover are different in the following aspects (cũng
hay thi, nói gạch đầu dòng trên là được rồi)
disadvantage
- Floating Policy is set up for a particular time and automatically expires unless
being renewed. Open cover is open-ended. It does not expire although there are
provisions for cancellation on due notice
Open cover is more convenient.
⇒
- Open Cover is not an insurance policy at all. It is an agreement by an
insurance company to issue an insurance policy if the insured asks for one.
Normally he only creates a Certificate of Insurance with the knowledge that if he
wants a policy, he can get one at any time, even after a loss
Open Cover is
less formal, less time-consuming but extremely reliable.
⇒
Types of Insurance Policy
Insurers have various ways of limiting claims under such cumulative agreements .
Generally claims are kept down by :
A limit per bottom ( a ' bottom ' is a ship ) ;
Tiếng anh chuyên ngành 2
13
A limit per locality . ( the exporter's warehouse is a ' locality ' . A warehouse may
contain several consignments awaiting shipment . If they are all destroyed , the
locality limit will probably bite . )
Valued Policy vs. Unvalued Policy
- Valued policy (hợp đồng bảo hiểm định giá) is the policy in which the exporter
states the value of the goods on the insurance document.
- Unvalued policy (hợp đồng bảo hiểm không định giá) is the case where the
exporter did not state the value of the goods being insured with the insurer. Them
the value of the goods can be established after a loss. The exporter must prove his
figures precisely. As long as the figure is less them the total cover under the policy,
the insurer shall pay.
→ Valued policy is preferred today because the pre-stated figure can include not
only the cost of the goods but also the profit the exporter hoped to make on them.
(có thể thi phần này)
renewed: gia hạn
CARGO CLAUSE A, B , C
- War risk is not included in Institute Cargo Clause A, B, C
- General Average is included in ICC A, B, C
Developed by the International Chamber of Commerce as a means of
insurance for cargo in transit from original location to its final destination.
Institute Cargo Clause A is considered the widest insurance coverage
insure pays the highest premium for total coverage
Institute Cargo Clause B is considered a more restrictive coverage
⇒ The
⇒ The
insured expects to pay a moderate premium because only the more valuable
items in the cargo is covered or only partial cargo coverage.
Institute Cargo Clause C is consider the most restrictive coverage
insured pays the lowest premium
⇒ The
→ Only difference between Institute Cargo Clauses B and Institute Cargo Clauses C
is the additional risks covered under ICC (B) cargo insurance policies
→ Cargo A almost everything covers wide range of risks
→ Cargo C cover very limited risks
Cargo Clauses ( A ) Versus Cargo Clauses ( C )
Institute Cargo Clauses ( C ) covers very limited risks as a result it is called as a
minimum cover cargo insurance policy .
"Minimum Coverage"
Tiếng anh chuyên ngành 2
14
Institute Cargo Clauses ( A ) covers wide range of risks as a result it is called
as a " All Risks " cargo insurance policy .
Insurance premium , would be substantially different between these two policy
types Institute Cargo Clauses ( C ) is the cargo insurance policy type which is
requested by the Incoterms 2010 rules .
Institute Cargo Clauses ( A ) is the cargo insurance policy type which is
requested by the issuing banks under letter of credit transactions .
underwrite: bảo hiểm, bảo lãnh, đảm bảo
on due notice: sau khi được thông báo kịp thời
endorse : ký hậu
underwriter: insurance company (tùy văn cảnh)
Step 5. Terms of Trade (Incoterm to be used)
Incoterms were first conceived by the ICC in 1921 , and the first Incoterms rules
were created in 1936. They were officially designated as Incoterms in 1936. Since
then , Incoterms have evolved into a codifies worldwide contractual standard . They
are periodically updated when international trade events require attention .
Amendments and additions were made in 1953 1967 , 1976 , 1980 , 2009 , 2010
and 2020
The Incoterms ( abbreviation of International commercial terms ) rules developed
by the International Chamber of Commerce was created as an industry standard
to facilitate international trade and for the interpretation of the trade terms that
the parties to a contract of sale could agree to apply .
Incoterms rules were first introduced in 1936. As global trade developed and
evolved , the Incoterms® rules were revised in 1957 , 1967 , 1976 , 1980 , 1990
, 2000 , 2010 and 2020 to accommodate changes in global trade
The ICC publication , INCOTERMS 1990 , gives full and clear information about the
rights and duties of buyer and exporter in Incoterms contract .
Incoterms 1990 of ICC includes 13 terms on the basis of 3 variables:
Where along the transportation route delivery takes place ;
What means of transport is used ;
What costs the exporter might pay after the point of delivery
Tiếng anh chuyên ngành 2
15
13 terms are grouped in 4 categories :
E - term
F - term
C - term
D - term
The number of Incoterms has been reduced from 13 to 11
Rules for any mode of transport include (nếu dịch có thể viết tắt, đã viết thẳng
ra thì không được viết sai) - freight paid by... (plus...)
- EXW (EX works) giao hàng tại xưởng - buyer
- FCA (Free carrier giao hàng cho người chuyên chở - buyer
- CPT ( Carriage paid to) - seller/ exporter (CPT the buyer)
- CIP (Carriage and insurance paid to) - seller (plus 10%) (CIP the buyer)
- DAT (Delivered at terminal) - seller
- DAP (Delivered at place) - buyer
- DDP (Delivered duty paid) - seller (risk is transferred when goods are at the buyer's premise)
"door to door" service
Rules for sea and island waterway transport
- FAS (Free alongside ship) - buyer (FSA the seller)
- FOB (Free on board) - buyer (risk is transferred when goods across the ship's rail)
- CFR (Cost and freight) - seller
- CIF (Cost insurance and freight) - seller (plus 10%)
Group E is EXW (the most pro-seller term) buyer
Group F terms make the buyer liable for main carriage
Group C terms make the seller liable for main carriage.
Group D terms make the seller liable for arrival
insofar: trong chừng mực
prevail : ưu tiên (dominate)
CHAPTER 2: NEGOTIATION PRICE AND
MAKING PAYMENT
Objectives
Tiếng anh chuyên ngành 2
16
1.
2.
Export pricing strategies
The principle
The exporter
......
A case study
Date of delivery
- Seller expects to deliver Goods three weeks after the opening of LC
- Buyer wants sooner delivery
⇒ Price increases as seller pays more for labor
Warranty period
- Three month
Terms of payment
- Buyer prefers to trade on open account - 30 days net, with 2% discount for
payment within ten days.
.....
LESSON TO BE LEARNED
In negotiating price and payment, exporter should quote that relates to the
complete set of contract terms, size off order, terms of delivery, terms of
payment, warranty provisions and so on.
fff
THE FIVE STEPS IN NEGOTIATING PAYMENT
Step 1: Modes of payment (cô có thể hỏi các phương thức thanh toán này)
open account: thanh toán ghi sổ (người mua nhận hàng trước, khoảng 4 tháng sau
người bán phải thanh toán tiền)
cash in advance: thanh toán trước
letters of credit: nhờ thu (nhờ ngân hàng thu hộ)
Documentary collections: thư tín dụng
Step 2: Timing
Tiếng anh chuyên ngành 2
17
To speed up payment, most exporters offer a discount for early payment.
Buyer saves on the invoice price, Seller improves his cash flow.
⇒
Parties must negotiate a chain of date if delivery ...........
Step 3: Place of payment
This step determines where the money must ne when payment is to be completed.
Several risks might occur if the two parties don't specify this condition:
It is very easy to be mistaken
It could ..................
To avoid the danger of slow payment, exporters try to be protect themselves with
the following clause:
"Payment shall be deemed to have been made only when the contract sum is
paid into the Seller's bank account and is at the Seller's full disposal"
Step 4: Delay
Delay in payment might be excused during a grace period or when force
majeure event occurs
When delay in payment happens the exporter is usually compensated for losses
due to late payment
The exporter may ask for a payment guarantee which makes sure payment is
made on time
The best solution to get rid of delay is to create a payment article in the sales
contract which.........
Step 5: Results of delay
discount rate: lãi suất chiết khấu (lãi suất ưu đãi của ngân hàng trung ương dành
cho ngân hàng thương mại, khi NHTM vay tiền NHTW)
sum payable: khoản phải trả
outstanding amount: khoản tiền chưa được thanh toán
interest on : lãi suất đối với (receive, charge, impose + interest on: dùng đối vs người
bán)
three percentage points above: cộng thêm 3%
THIRD PARTY SECURITY FOR PAYMENT
Two forms of Third-party Security (Export Credit Insurance & Bank Guarantee)
Tiếng anh chuyên ngành 2
18
Export credit insurance (bảo hiểm tín dụng xuất khẩu)
The seller → Insurance company → Insure its contract
- Offered by insurance companies.
- Governmental export credit agencies.
.............
* Export credit insurance varies to (CÂU HỎI HAY THI)
- The type of goods exported
- The creditworthiness of the buyer (khả năng thanh toán của người mua)
- The political stability of the buyer's country.
- Normally between o.5% and 1% of the invoice price
* The disavantages:
- Long wait to be compensated by insurance company. (6 months)
- Compensation is unlikely to cover 100% of the original invoice price.
* The advantages:
- Protection against unfamiliar customers.
- Protection for high-stake transactions.
- Give exporter a competitive edge when buyers are reluctant to spend money
on payment guarantee or tie up money in a LC
Payment guarantee (bảo lãnh thanh toán)
The buyer → The bank → Guarantee its payment obligation
- Risk : non-payment by the Buyer
- Purpose : the bank pays if the Buyer defaults
- Value of guarantee : 100% of the contract price
* Tender Guarantee
- Risk : Revocation
- Purpose : protect a company against the risk of a project falling behind
because a tender is withdrawn
- Value of Guarantee : 1.5% and 5% of the contract price
* Performance Guarantee
- Risk non-performance
- Purpose makes sure the exporter works badly or not at all
- Value of Guarantee the cost of exporter's failure to perform (usually 5%-10% of the contract price)
* Prepayment Guarantee
- Risk losing prepayment
- Purpose bank will return the advance payment to the buyer if the exporter fails to deliver goods
- Value of guarantee 100% of the contract price
invoice price: giá trị hợp đồng
Tiếng anh chuyên ngành 2
19
Four business situation risks
Non-payment
Recovation (wirhdraw , thu hồi, rút lui)
Non-Performance (không thực hiện nghĩa vụ hợp đồng)
Losing Prepayment: mất khoản tiền trả trước
Bank Guarantee
1. Demand guarantee (bảo lãnh theo yêu cầu)
No serious, objective conditions the beneficiary must meet before claiming payment
of the guarantee
→ Subject to abuse
(If a bank issues a demand guarantee, it must pay the guarantee sum on
the first submission of a claim without question)
2. Conditional Guarantee (bao lanh co dieu kien)
The bank pays if the claim is supported by:
A decision of the court of first instance ( a decision bt a judge)
An arbitral award ( a decision by a court of arbitration) (phán quyết của trọng tài)
The approval of the Principal in writing to the claim.
CHAPTER 2: NEGOTIATING PRICE AND MAKING
PAYMENT
NEGOTIATION
Order size
Specification
Packaging
Incoterm
- Buyer prefers CIF delivery
- Buyer suggests EXW delivery
Date of delivery
- Seller expects to deliver Goods three weeks after the opening of LC
Tiếng anh chuyên ngành 2
20
- Buyer wants sooner delivery
→ Price increases as Seller pays more for labor.
Warranty Period
Terms of Payment
LESSON TO BE LEARNED
In negotiation price and payment, exporter should quote a price and payment,
exporter should quote a price that relates to the complete set of contract terms,
size of order, terms of delivery, terms of payment, warranty provisions and so on.
Exporter should assess the influence of each factor on price, and adjust the
price accordingly
Exporter improves his terms without adjusting price to create goodwill for future
deals
THE 5 STEPS IN NEGOTIATION PAYMENT
STEP 1: MODE OF PAYMENT
How will payment be made
Definition
The way that a buyer chooses to compensate the seller of goods or service that
is also acceptable to the seller. Typical payment methods used in a modern
business context include cash in advance, collection, documentary credit and
open account.
Four common approaches to payment
Payment on open account with no security
Payment on open account secured by export credit insurance.
Payment on open account secured by a payment guarantee
Payment by letter of credit
STEP 2: TIMING
What is the date of payment?
To spend up payment, most exporters offer a discount for early payment.
→ Buyer saves on the invoice price, seller improves his cash flow
Tiếng anh chuyên ngành 2
21
Parties must negotiate a chain of date if delivery involves partial shipments,
periodic shipments, or spare parts supply contract.
STEP 3: PLACE OF PAYMENT
Where must the money be before payment is considered complete?
This step determines where the money must be when payment is to be
completed. Several risks might occur if two parties don't specify this condition:
- It is very easy to be mistaken
- It could cause disputes if not made clearly
- Delayed payment often triggers compensation with a lot of money.
POINT AT WHICH MONEY IS DEEMED TO BE PAID
When the
buyer instructs
When the
buyers pays
When the
buyer's
When funds
reach the
the bank to
pay
the money
into his
bank
transfers
seller's bank
account
bank
funds
⇒ Both parties must work out the place of payment carefully because late payment
is subject to payment of interests and the cost of any delay along the payment route
properly belongs to the buyer.
To avoid the danger of slow payment, exporters try to protect themselves with
the following clause
Delay in payment might be excused during a grace period or when force
majeure event occurs.
In principle, any payment made after the agreed date of payment is in delay
funds: dich la tien
STEP 4: DELAY
What delay in payment is excusable?
When delay in payment happens the exporter is usually compensated for losses
due to late payment
The exporter may ask for a payment guarantee which makes sure payment is
made on time.
The best solution to get rid of delay is to create a payment article in the sales
contract which makes late payment impossible.
Tiếng anh chuyên ngành 2
22
payment guarantee: bao lanh thanh toan
STEP 5: RESULTS OF DELAY
What are the results of non-excusable delay in payment?
THIRD PARTY SECURITY FOR PAYMENT
Two forms of Third-party Security
Exporter credit insurance allows the exporter to recover the major part of the
contract price if the buyer fails on due date
The buyer may also approach a bank and ask for a bank guarantee. The bank
will pay the contract price if the buyer fails to so do
1. INSURANCE
The seller
Insurance Company
⇒
⇒ Insure its contract
2. GUARANTEE
The Buyer
⇒ The Bank ⇒ Guarantee its payment obligation
Export Credit Insurance
Offered by insurance companies.
Governmental export credit agencies
The exporter has to pay insurance premium
Protects the exporters from the risk of non-payment, including Commercial risks
and political risks
Tiếng anh chuyên ngành 2
23
Export credit insurance varies to:
The type of goods exported
The creditworthiness of the buyer
The political stability of the buyer's country
Normally between 0.5% and 1% of the invoice price
The disadvantages:
Long wait to be compensated by insurance company (6 months)
Compensation is unlikely to cover 100% of the original invoice price.
The advantages:
Protection against unfamiliar customers.
Protection for high-stake transactions
Give exporter a competitive edge when buyers are reluctant to spend money on
payment guarantee or tie up money in a LC
Tiếng anh chuyên ngành 2
24
Guarantee Triangle:
The guarantee triangle is the relationship of the principal,
guarantor and beneficiary in terms of guarantee.
Four business situation risks
1. Non-payment
2. Revocation
3. Non-performance
4. Losing Prepayment
Payment Guarantee
RISK
PURPOSE
VALUE OF
Non-payment by the
Buyer
The bank pays if the
Buyer defaults
GUARANTEE
Revocation
Protect a company
against the risk of a
project falling behind
because a tender is
1.5% and 5% of the
contract price
100% of the contract
price
withdrawn
Non-performance
Tiếng anh chuyên ngành 2
25
Losing Prepayment
Ensure prepayment to
the Importer of an
agreed percentage of
the contract amount
100* prepayment,
decreasing as deliveries
are made
Bank Guarantee
1. Demand Guarantee
No serious, objective conditions the beneficiary must must meet before claiming
payment of the guarantee.
→ Subject to abuse
2. Conditional Guarantee
The Bank pays if the claim is supported by
- A decision of the court of first instance (a decision by a judge)
- An arbitral award (a decision by a court of arbitration)
- The approval of the Principle in writing to the claim
MODES OF PAYMENT
1. Cash in advance / prepayments
Wire transfer
Credit cards
Check
Overview
With cash in advance payment terms, the exporter can avoid the risk of bad debt
or late payment because payment is received before the ownership is
transferred.
Payment in advance is the least attractive option for buyer, because it creates
cash-flow problems
Foreign buyers are also concerned that the goods may not be sent if payment is
made in advance
The exporters who insist on this payment may lose to competitors who offers
more attractive payment terms
When to use cash in advance term?
Tiếng anh chuyên ngành 2
26
The importer is a new customer and/or has a less-established operating
history
The importer's creditworthiness is doubtful, unsatisfactory, or unverifiable
The political and commercial risks of the importer's home country are very
high
The exporter's product is unique, not available elsewhere, or in heavy
demand
The exporter operates an internet-based business where the acceptance of
credit card payments is a muse to remain competitive
2. Documentary Collection
Overview
A transaction whereby the exporter entrusts the collection of payment to the
remitting bank (exporter's bank), which sends documents to a collecting bank
(importer's bank), along with instructions for paymet.
D/C involves using a draft the requires the importer to pay the face amount
either at sight ( document against payment) or on a specific date (document
against acceptance)
presentation: xuất trình
Tiếng anh chuyên ngành 2
27
3. Open account
Over view
Goods are shipped and delivered before the payment is due, which is usually in
30 or 120 days
Most advantageous to the importer in terms of cash flow and cost, but it is
highest risk option foe an exporter
⇒ rarely used in international trade between independent exporter and importer
( often btw parent and subsidiary companies)
Often used to increase sales by assisting foreign distributors to start new or
expand existing product line .
Used when a seller wants to test - market a new product or try a new market in a
different country .
How to minimize the risk of open account?
Verify in the integrity of the buyers through a credit investigation.
Consider the political and economic conditions of the importer's country
Third party security for payment
4. Letter of Credit (or Documentary Credits)
One of the most secure instruments available to international traders
A L/C is a commitment by a bank on behalf of the buyer that payment will be
made to the exporter, provided that the terms and conditions stated in the LC
have been met, as verified through the presentation of all required documents
A LC protects both the buyer and seller
Parties involved
Applicant (nguoi yeu cau mo LC) - the importer, the party on whose request the
credit is issued
Beneficiary (nguoi thu huong) - the exporter, the party in whose favour a credit is
issued
Issuing bank (ngan hang phat hanh) - the importer's bank, the bank that issues a
credit at the request of applicant
Advising bank (ngan hang thong bao) - the bank that advises the credit at the
request of the issuing bank
Tiếng anh chuyên ngành 2
28
be subject to: chiu su dieu chinh
4 steps
6 steps
Tiếng anh chuyên ngành 2
29
TWO important principles of L/C.
1. Autonomy
L/C is an agreement by a bank to pay money against document.
⇒ It is a separate agreement from the sales contract and is unrelated to it.
⇒ The bank is obliged to pay whatever disputes between the buyer and the
seller
2. Strict compliance (tuan thu chat che)
Bank will only pay if the shipping documents are exactly in line with the buyer's
instructions
When a bank refuses to pay under a LC, it will cite a discrepancy, indicating the
aspects of documentation that is not in line with the terms of credit.
What can be done by the exporter when the bank refuses to under LC?
Provide the missing paperwork or correct errors
Ask the buyer to instruct the bank to change the terms of the LC (= issue an
amendment)
Ask the bank to process the letter of credit with the discrepancies but to pay
only when the issuing bank permits payment
Tiếng anh chuyên ngành 2
30
What can be done by the exporter when the LC is nearby its expiry date?
The exporter must contact the buyer and ask the buyer to instruct the issuing
bank to extend the date of credit
Extra bank costs are at the exporters expense .
⇒ The exporter should exercise scrupulous care in providing the documentation
required by the LC
Revocable LC and Irrevocable LC
Tiếng anh chuyên ngành 2
31
Revocable LC can be amended, cancelled by the issuing bank or the buyer
without prior notice to the beneficiary
Irrevocable LC can not be amended or cancelled without agreement of all parties
⇒ More popular, widely used international trade.
Confirmed LC and Unconfirmed LC
When a buyer arranges a letter of credit they usually do so with their own bank,
known as the issuing bank. The seller will usually want a bank in their country to
check that the letter of credit is valid.
For extra security, the seller may require the LC to be confirmed by the bank that
checks it. By confirmed by LC, the second bank agrees to guarantee payment
even if the issuing bank fails to make it
In case of unconfirmed LC, the advising bank forwards the unconfirm LC directly
to the exporter without adding its own undertaking to make payment or accept
responsibility for payment at a future date, but confirming authenticity
LC and its associated documentation
Commercial Invoice
Transport document
Insurance document
Other documents such as certificate of origin, packing list, certificate of
inspection, specification, certificate (kiểm dịch động vật), Phytosanitary
certificate (kiểm dịch thực vật) , santitary certificate.
Prompt payment of LC depends on the presentation of correct documentation by
exporter
→ Unfortunately, up to 90% of first applications for payment are rejected
because of discrepancies
Negotiating the terms of a LC 5 steps: Agreement, Incorporation, Specification, Verification, Compliance
Step 1. Agreement
Both parties agree on what documentation is required
The two parties may have to talk to the chambers of commerce, their bank, and
the carrier to establish the complete list
Step 2. Incorporation of the list into the contract
Tiếng anh chuyên ngành 2
32
The ICC publishes a form for both parties to fill in and attach it to their contract
The form is then passed to the bank as specification of the required
Step 3. Verification
When exporter is informed that LC has been opened, he should check that it
complies with the agreement negotiated with the buyer
Exporter should be aware that bank might list documents or make requirements
that he does not understand or agree to
Step 4. Compliance
Timely payment is subject to the exact compliance by the exporter with the terms
of the credit
CHAPTER 3: NEGOTIATING INSPECTION
AND DEFECTS LIABILITY
Exporting and the Problem of Quality
WHAT IS QUALITY?
The standard of something measured against the other things of
a similar kind, the degree of excellence of something
A measure of excellence, or state of being free form defects,
deficiencies, and significant variations, brought about by the
strict and consistent adherence to measurable and verifiable
standards to achieve uniformity of output that satisfies specific
customer or user requirements
THE PRINCIPLE
Exporters should make sure that
Exported goods meet or exceed the quality specified
Making and packaging are correct
Delivery is on time
Tiếng anh chuyên ngành 2
33
Agreement should contain specific qualifications
SPECIFICATION
SPECIFICATION is a set of documented requirements to be satisfied by a material,
design, product, or service. A specification is often a type of technical standard.
A well-designed set of specifications offers vital protection the both sides
The importer is protected against inferior products. It can reject any equipment
that fails to meet specification.
If the products are fully specified and the consignment meets the specifications,
the buyer will be unable to find any excuse for rejection or for exaggerated
defects liability.
PRE-DELIVERY INSPECTION
Who inspect the goods?
Which kind of goods needs pre-delivery inspection?
Sophisticated items
Capital equipment (tài sản cố định)
What are the functions of independent inspection?
Prevent exporter and importer from agreeing an unrealistically low invoice
price to avoid customs duties
Prevent shipment of patently defective goods
What is the purpose of customs inspection?
Customs inspection reveal discrepancies in weight, size and description.
INSPECTION AND ACCEPTANCE
The buyer can inspect goods and they can reject them if the goods do not conform
with the contract .
At this point , exact specification is of great value to exporter if the goods
conform to specifications , the buyer is obligated to accept them .
Inspection: Right or Duty?
Inspection is subject to national law.
In Germany, inspection is a duty.
Tiếng anh chuyên ngành 2
34
In the USA, inspection is a right
DEFECTS LIABILITY PERIOD
What is defects liability period (warranty period)?
It is the period during which the Seller / Supplier / Contractor is liable for dealing with
any defects found in the Goods sold to the Buyer . Defects Liability Period is also
known as a rectification period .
Any defects or faults which arise during this period ( for example due to defective
materials or workmanship ) must be put right by the Seller at its own expense .
Negotiating the Defects Liability Period
STEP 1: INSPECTION
STEP 2: TERMS
STEP 3: DEFINITION
STEP 4: TIMING
STEP 5: CORRECTIVE ACTION
INSPECTION, ACCEPTANCE AND REJECTION
PATENT DEFECTS: khuyết tật hiện rõ
A fault in a product that could be noticed/discovered by careful examination and is
usually noticed before a sale.
LATENT DEFECTS : khuyết tật ẩn tì
"A defect or problem with a product that is hard to notice and may not be noticed
before it is bought"
"Hidden defect in material and / or workmanship of an item which may cause failure
or malfunction , but is not discoverable through general inspection . Also called
hidden defect."
IMPLIED WARRANTIES
What is implied warranties? (bao hanh mac dinh)
"An implied warranty is an unwritten guarantee that a product or service
works as expected."
Tiếng anh chuyên ngành 2
35
"Assumptions a buyer can make about goods even if the exporter/seller
gives no express warranty"
Implied warranty of Conformity with contract
Goods meet specifications in the contract.
What is wrong if goods do not conform with the contract?
Most laws have a way of "grading non-conformity": Major discrepancies
allow the buyer the right to reject the goods and cancel the contract; minor
discrepancies do not
Implied Warranty of Merchantable Quality (Bảo hành mặc định về phẩm chất
tiêu thụ)
To be " merchantable the goods must reasonably conform to an ordinary buyer's
expectations , i.e. , they are what they say they are.
For example , a fruit that looks and smells good but has hidden defects would
violate the implied warranty of merchantability if its quality does not meet the
standards for such fruit " as passes ordinarily in the trade " .
Implied Warranty of Fitness for Intended Purpose
This implied warranty means that the buyer has approached the seller with the need
for a product that performs a certain function , and by providing a product in
response to the need , the seller is implying that the product is fit for that specific use
.
REJECTION
English law requires rejection of all the contract goods unless contract expressly
allows part rejection.
German law and the Vienna Sales Convention both allow rejection of only
defective or non-conforming goods
UCC ( Uniform Commercial Code) offers buyer some choice:
reject the whole, or
accept the whole, or
accept any commercial unit or units and reject the rest
Parties are free to decide the degree of rejection and under what condition.
Tiếng anh chuyên ngành 2
36
If rejection could be a problem, the parties must clarity the position in the
contract.
Buyer must notify the exporter that goods have been rejected within a
reasonable period.
If the exporter wants the right to cure, the contract should contain the necessary
provision
STEP 2. GUARANTEE OR WARRANTY
A guarantee is a promise about somebody else's performance.
A warranty is a promise about your own
STEP 3. WHAT IS NOT A DEFECT?
Three types of defect:
Defective workmanship: A product with defective workmanship is incorrectly built
Fair Wear and Tear - the result of normal use .
E.g : The plastic handle on an electric drill is scratched after six months use .
Misuse seriously incorrect handling by the buyer
E.g : the use of acetone to clean plastic components is misuse .
Tiếng anh chuyên ngành 2
37
Faults not present on delivery
Defective material: Defective materials are materials or parts of a product that are
inferior or somehow does not meet specifications
STEP 4: TIMING OF THE DEFECTS LIABLITY PERIOD
THE PRINCIPLE
The length of the defects liability period must be agreed by the parties including:
The starting point of the period
The tine allowed to the buyer to notify the exporter of a defect
The time the exporter has to correct the defect
The period during which the buyer can begin a legal action
CHAPTER 4. THE LEGAL FRAMEWORK
SIX STEPS OF LEGAL FRAMEWORK
STEP 1. THE APPLICABLE LAW
CONTINENTAL LAW = CIVIL LAW (Luật dân sự)
Civil law is derived from a code developed by Roman Emperor Justinian 1500
years ago
Many different laws in the Empire and was compiled and made into a Code
⇒ Known as Roman Law or Civil Law
The Code states what is legal and what is not
China, Japan, Germany, France and Spain are countries that introduce
Continental Law
1. Goal
Consistency and uniformity of enforcement
2. Predictability and consistency of court decision
Decisions in almost all cases are predictable with some accurancy.
3. Length and Detail of Contract
Tiếng anh chuyên ngành 2
38
Contracts can be short and lacking in detail
4. International acceptance
Continental laws do not have the prestige of Anglo-American laws in
international practice. They tend to focus on national rather than international
issues
ANGLO-AMERICAN LAW
The goal of this law was to achieve justice in the individual case by taking all the
circumstances into account.
The king tried to decide each case in line with earlier decisions, or precedents
⇒ Anglo-American law is known as Case Law or Common Law
Case-law systems avoid strict codification because rigid laws limit the judges to
find a just solution on the individual case.
Anglo-American legal thinking influences international contract practice
Popular in the USA, England and ex-colonies of England
1. Goal
Justice in the individual case
2. Predictability and consistency of court decision
Unless matters are carefully regulated in the contract , the decision of the judge
is not fully predictable .Different judges may give widely different judgment.
3. Length and Detail of Contract
To be clear, contracts must regulate many issues, so they tend to be long and
detail
4. International acceptance
English and American law have been revised over the centuries to cope with
issues of international trade. The principles are widely understood and
respected.
VIENNA SALES CONVENTION
The UN promulgated UN Conventions on Contracts for the International Sale of
Goods in 1980
Approved by USA, China, Germany and other important transportation nationns
Tiếng anh chuyên ngành 2
39
If there is any contradiction between the national law and the Convention , then
the Convention rules .
STEP 2. CONTRACT OR NO CONTRACT
The principle: a contract is enforceable only
if the parties achieve a "meeting of minds" through a process of offer and
acceptance
if both sides are capable of entering a contract
if the purpose of the contract is legal.
Anglo-American law requires that the contract must give both sides the rights
and duties
One-sided contracts are no contract
⇒
THE MEETINGS OF MINDS (THONG NHAT Y CHI)
Duress (ep buoc)
Contract must be established under no pressure
Unconscionable agreement is no contract
Mistake and Fraud:
A mistake about the goods or a deliberate fraud can mean that there was no
meeting of minds
THE RULES OF OFFER AND ACCEPTANCE
Tiếng anh chuyên ngành 2
40
THE POWER TO SIGN A CONTRACT
Some people are unable to sign contracts including children, the
feebleminded, and the drunks. Why?
⇒ The lack contractual capacity.
Some companies lack power to enter contracts
⇒ Ultra vires rules (Ultra Vires = Beyond power)
The company's actions in entering into a contract were ultra vires, and therefore the
contract was void
In countries that enforce Ultra Vires Rules, the exporter should check carefully on the
powers of the buyer's company by consulting the Commercial Attache' or the
Chamber of Commerce
LEGALITY OF PURPOSE
If the purpose or effect of an agreement is illegal, the agreement is unenforceable
Eg: The trade in elephant ivory is illegal
⇒ The contract is unenforceable
What might happen if a part of an agreement is illegal?
Tiếng anh chuyên ngành 2
41
Most international contracts includes a Partial invalidity Provision, saying that the
invalidity of one part of the contract does not invalidate the rest
Under Anglo-American systems, Agreements fall into two types:
Agreements in which one side has only rights and the other side has only duty
⇒ One-sided Agreement is not a contract, which is not governed by Contract Law
Agreements in which both sides have rights and duties
Continental Legal Systems do not observe this distinction.
⇒ An one-sided contract is enforceable in just the same way as a two-side contract
Step 3. The contract as the entire Agreement
THE PRINCIPLE
Most international contracts include an "entire agreement provision"
The background of the contract must be established
Important letters and memoranda must ben considered as contract documents
Definition is an important part of contract drafting
The entire agreement clause
Anglo-American law states the the final written version of the contract replaces all
previous agreement between the parties
The Whereas Recital
When the Contract is the "entire agreement", the lawyers include the
background of the Contract into through the whereas-recital.
The recital allows the court to discover the meaning of the contract through an
understanding of the expectations of the parties
A recital of preamble is not essential in a Continental Law
whereas: xét thấy
Contract Documents
International practice, the parties often wish to "incorporate" outside material into the
contract: letters, general conditions, the Incoterms, etc. To achieve this, the contract
lists such items as Contract Documents
Tiếng anh chuyên ngành 2
42
STEP 4. PROVISIONS CONCERNING THE PARTIES
THE PRINCIPLE
The exporter must know the exact name and address of the buyer-otherwise it
may be impossible to resolve any payment problems that arise
It is also important that the identity of the buyer does not change during the
course of the contract performance
The Names in Contract
On the first page of most contracts is the name of each party . When it first
appears , the name is normally the full , registered name of the company .
Some companies have complex names . To avoid endlessly repeating this
formula in the contract , a short - form follows the first use of the name . The
short - form may be a specific name .
Under a contract, each side has rights and duties. A right has some commercial
value-so it is possible to sell it, trade it, or give it away.
STEP 5. PROVISIONS CONCERNING THE STATUS OF
THE CONTRACT
THE PRINCIPLE
The life of a contract normally ends when the last under the contract is
performed
One side may have right to end it
One party may breach the contract allowing the other to cancel
The parties may simply agree to end their contractual relationship; or the whole
purpose of the contract may simply disappear
The lifetime of a contract
Discharge by Performance (giải kết hợp đồng)
Both parties perform their duties exactly according to the contract, the
contractual relationship ends when the last duty is fully performed
Termination
Termination occurs when either party pursuant to a power created by agreement
or law puts an end to the contract otherwise than for its breanch
Tiếng anh chuyên ngành 2
43
There are two kinds of termination
- Termination for convenience occurs when one party (usually the buyer)
simple decides to drop the contract. No reason is required. The buyer must pay
for all work performed or partly performed
- Termination for default: occurs when the contract names certain de-faults
which allow one side ( usually the buyer ) to terminate . The Seller shall be
entitled to receive full payment for all goods and services delivered by the Seller
at the date of termination.
CANCELLATION
Cancellation occurs when either party puts an end to the contract. In legal
theory, they enter a new contracts for breach
Not any breach allows cancellation by the other party. Only fundamental breach
leads to the contract cancellation.
RESCISSION (TU BO HOP DONG)
Rescission occurs when the two parties agree to end a contract. In legal theory,
the enter a new contract to annual the old contract.
The Language of the Contract
When the parties agreed on the language of the Contract making it clear that
translations do not have the sane authority as the original version on the
contract-language and no translation .........
STEP 6. SETTLEMENT OF DISPUTE
THE PRINCIPLE
Most negotiators prefer to take disputes to arbitration before specialist court
rather than litigation before a judge.
To avoid lengthy and expensive proceeding , a well drafted contract specifies an
acceptable arbitration procedure
Litigation (Kien tung)
Litigation before the court is internationally the least attractive: it is public,
expensive and time-consuming. The results are often legalistic rather than
business-like
⇒ Many contracts foresee a two-step process for dispute resolution:
Tiếng anh chuyên ngành 2
44
Amicable Settlement (Hoa giai)
Arbitration (trong tai)
Amicable Settlement and Conciliation
An amicable settlement calls for the friendly settlement of disagreements before
they turn into disputes .
Typical procedure for amicable settlement as follows:
The parties shall agree a date and place for an amicable settlement meeting
Attending the meeting shall be one executive representing each party and one
lawyer represent each party
The lawyer shall not be allowed to speak at the meeting
The meeting shall take place in three sessions.
- In the first sessions, each party shall state its position on the subject of the
disagreement
- In the second session the parties shall suggest ways of resolving the
disagreement
- In the third session the parties shall attempt to resolve the disagreement
Conciliator
An alternative non-binding procedure involves using an outsider, a conciliator
trusted by both sides
The conciliator suggests a fair solution or to bind the parties in any way
Arbitration
If the two sides cannot reach agreement between themselves, the resolution of
their dispute requires a forum that is a court of law unless the parties specify
otherwise
In practice, most contract do specify otherwise calling for arbitration.
The two main advantages of arbitration are:
Its tendency to be quicker than litigation.
The foresee ability of the costs
Tiếng anh chuyên ngành 2
45
Tất cả các tranh chấp, tranh cãi hoặc khiếu nại phát sinh từ hoặc
liên quan đến hợp đồng, bao gồm bất kỳ câu hỏi nào về sự tồn
tại, hiệu lực, chấm dứt, hủy bỏ, vi phạm hoặc khả năng thực thi
của hợp đồng cuối cùng sẽ được giải quyết trung thẩm bởi ba
trọng tài viên theo nguyên tắc tố tụng trọng tài của Phòng
Thương mại Quốc tế có hiệu lực kể từ ngày ký hợp đồng này.
Trọng tài sẽ được tổ chức tại Oviedo (Tây Ban Nha) sẽ được
thực hiện bằng tiếng Tây Ban Nha
exhibits: tài liệu dẫn chiếu
English and American law have been revised over the centuries to cope with issues
of international trade . The principles are widely understood and respected .
Tiếng anh chuyên ngành 2
46