The Exchange of rights and duties
1. Scope of supply
- Scope of supply refers to the clauses of commodity, quality, quantity, packaging and marking.
1.1 Commodity
The principal format:
Trade name + scientific name/origin/name of manufacturer/brand name/major content/usage
Examples:
- Frozen black tiger shrimp - Pennnues Monodon
- Dalat wine, Bordeaux wine
- Honda motobike, Matshushita washing machine, Motobike Future brand
- Urea fertilizer, nitrogen 46%
- Cereals as food for human consumption
1.2 Quality and Specifications
Sale by sample
“The specifications shall be about as per sample No. 12FTS approved by both sides on 01/04/20…, sealed
and signed by both parties; such sample forms an integral part of this contract. The samples are made into
three (3) versions, to be preserved by Seller, Buyer and The Vietnam Superintendence and Inspection Joint
Stock Company (VINACONTROL) as basis for dispute settlement. Parties shall preserve these samples
until the stipulated limitation of claim expires.”
Sale by national category or standard
- In accordance with TCVN 4193:2001 Vietnamese coffee standard
Sale by specifications
E.g. sale of furniture
Love set wooden furniture
01 table (1.150 x 610 x 840) mm
01 lounge armchair (1.040 x 600 x 450) mm
02 love armchairs (590 x 610 x 840) mm
Sale by commonly accepted trade criteria
- FAQ (Fair Average Quality):
- GAQ (Good Average Quality): GAQ is a level of quality which is higher than FAQ.
- GMQ (Good Merchantable Quality): GMQ is the level of quality acceptable to common customers in the
market.
Sale by major contents of the product
E.g. Sale of rice
Broken:
10% Max
Moisture:
Chalky grain:
14% Max
7% Max
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Damaged grain:
Yellow grain:
Foreign matter:
0.5% Max
01% Max
0.2 Max
Sale by “As is/seen”
E.g.: The Goods shall be supplied on the basis of “As is/seen”
Sale by “Inspected and approved”
E.g.: The Goods shall be supplied on the basis of “inspected and approved” by the Buyer”
Sale by technical documents
E.g.
“The Goods specifications shall be in conformity with Technical Document No…, signed by both parties
attached herein. This document shall serve as an integral part of the present contract.”
1.3 Quantity
Unit of measurement
Quantity: 500 sets of computers, each includes 1 CPU, 1 monitor, 1 keyboard, 1 mouse and 2 speakers.
Tolerance: UCP 600: the words "about" or "approximately": 5% more or less.
E.g.:
Quantity: 50,000 MT, 5% more or less at Seller’s option, price applied to the optional quantity as one
stipulated in the Contract.
tỉ lệ hao hụt cho phép
Franchising: the allowable loss of quantity should also be added.
1.4 Packaging and shipping marks
Packaging
E.g.:
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 Marks
E.g.:
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/Q
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2. Provisions concerning price and payment
2.1 Price
Points to mention:
- Price currency (Abbreviation accepted: USD, EUR, HKD, SGD, CHF …)
- Unit of calculation
- Reference to Incoterms
- Packaging (if any)
- Spare parts or accessories (if any)
E.g.:
Unit price: USD 10/ unit
Total value: USD 10,000.00
In words (Ten thousand United States Dollars only)
The above price shall be understood as CIF price, subject to Incoterms 2020, including packaging, spare
parts and accessories.
2.2 Payment
- Major provisions relating to payment term: Time of payment and mode of payment
Examples:
(i) Advance payment by T/T:
Within one week since the receipt of delivery notice from the seller, the Buyer shall transfers 100 % of
payment amount from bank X to bank Y to the account of the Seller by telegraphic transfer (T/T).
(ii) Payment by T/T on receipt of documents
Payment shall be made by telegraphic transfer (T/T) within 7 days, from the date of receiving the full set of
original shipping documents, the amount of Contract value shall be paid into the account Number ….. of
Kolon International Co. at Vietcombank, Hochiminh City branch.
Payment shall be settled when the Buyer receives the following shipping documents:
- Full set (3/3) of Clean Bill of Lading, on board, mentioning “ freight prepaid”.
- 03 originals of Commercial Invoice.
- 03 originals of Packing List.
- 02 originals Certificate of Origin issued by Korean Chamber of Commerce.
(iii) Payment by DP
Payment shall be made by D/P, telegraphic transfer immediately on the receipt of the shipping documents
from Eximbank Vietnam, Hochiminh City branch. Total value of the contract is transferred to the account
of the seller, number …. at Eximbank.
The collecting bank: Rabobank Landgraaf, Bangkok, Thailand, address :….
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Documents required shall include:
+ Clean Bill of lading, on board, mentioning freight prepaid.
+ 3 originals of Commercial Invoice.
+ 3 originals of Packing List.
(iv) Payment clause by letter of credits:
- Points to mention: Type of L/C/ Currency/ Name of the beneficiary/ Name of issuing bank/ Name of
advising bank/ Value of L/C/ Validity of L/C/ Number of documents required
Examples of payment by L/C:
The Buyer shall apply for an irrevocable at sight L/C in United States Dollar at UFJ Bank – Japan in the
Seller’s favour for the total value of the goods to be shipped, and advise the Seller through the Bank for
Foreign Trade of Vietnam. L/C shall reach the Seller no less than 15 days prior to and be valid for 30 days
from the expected date of shipment and be against the presentation of the following documents:
- At sight Bill of Exchange, drawn on the issuing bank.
- A full set of received for shipment Bill of Lading (3 originals), marking freight preppaid, issued by the
carrier.
- Signed Commercial Invoice with signature in quadruplicate.
- Packing list in duplicate.
- Certificate of Origin issued by Indonesian Chamber of Commerce.
- Certificate of Quality issued by ABC inspection company.
3. Provisions concerning delivery
- Provisions concerning delivery: Date of delivery/ place of delivery/advice of delivery/ other stipulations
3.1 Date of delivery
3.1.1 Specific time
- Fixed date: Delivery shall be made on August, 20-- A period of time: Delivery shall be made not later than May 10th, 20--/ in September, 20—
Notes:
- Under UCP 600 (ICC), unless required to be used in a document, words such as "prompt", "immediately"
or "as soon as possible" will be disregarded.
- The expressions "on or about" or similar: 05 calendar days (both start and end dates included)
- The words "to", "until", "till", “from” and “between” include the date or dates mentioned
- The words “before” and "after" exclude the date mentioned.
- The words “from” and "after" exclude the date mentioned.
- The terms "first half" and "second half" of a month shall be construed respectively as the 1st to the 15th
and the 16th to the last day of the month, all dates inclusive.
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- The terms "beginning", "middle" and "end" of a month shall be construed respectively as the 1st to the
10th, the 11th to the 20th and the 21st to the last day of the month, all dates inclusive.
3.1.2 Unspecific time
- “Delivery shall be subject the to availability of the vessel or vessel’s space”
- “Delivery shall be made 21 days after the date of the L/C”
- “Delivery shall be subject to the availability of import/export license”
3.2 Place of delivery:
Subject to the use of a rule under Incoterms:
- a fixed place: Saigon port, HCM City, Vietnam
- or an optional place: Main port of Japan
3.3 Advice of Delivery
Under F-Rules: Buyer must send an advice to seller about the particulars of the vessel/ vehicle: ETA,
ETD, vessel’s name/tonnage….
Under C or D rules: Seller must send 02 advices to buyer
- Pre-delivery advice: information about the readiness of goods, and shipment particulars and delivery
instructions.
- After delivery advice: Information about the result of delivery, actual quantity of goods shipped,
particulars of goods, bill of lading (B/L) No., the estimated date of departure and arrival of the
vessel/vehicle.
3.4 Other stipulations relating to delivery
- Partial shipment: allowed or not allowed.
- Transshipment: allowed or not allowed
- Stale bill of lading: acceptable (in case the arrival of documents is later than that of goods).
- Third party B/L: acceptable; it is used when the shipper is not the seller.
For example:
Delivery
- Time of delivery: August 20th 20…
- Place of Delivery
+ Port of Shipment: Yokohama Port
+ Port of Destination: Saigon Port
- Delivery in one lot, transshipment not allowed
- Advice of Delivery
+ First time: 10 days before the expected date of delivery, the seller shall notify by fax the availability of
the goods for delivery, including: Commodity, Quantity, Specification, Packing, Marking.
+ Second time: 7 days after receiving NOR, the buyer is to inform by fax the vessel sent, including: vessel’s
name, nationality, flag, carrying tonnage, ETA.
NOR: Notice of Readiness
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+ Third time: After delivery, the seller notify by fax the delivery, including: Commodity, quantity,
specification, packing, markings, vessel’s name, nationality, vessel’s flag, carrying tonnage, B/L No., ETD,
ETA.
- Stale B/L acceptable.
Vận đơn đến chậm
Practices
Practice 1. Read the clause of “Delay in delivery” below and decide if the statements are True or False
Delay in delivery
(a) If the Seller fails to meet the ETD of any shipment as specified in the Schedule, the Seller must
immediately give the Buyer a written notice of such delay and shall use all reasonable endeavors to
ensure that such shipment will meet the relevant ETA.
(b) If any shipment is delayed beyond the relevant ETA as specified in the Schedule through the Seller’s
sole fault, the Seller shall at its own costs use all reasonable endeavors acceptable to the Buyer, including
but not limited to the use of another sources of supply and/or the use of alternative methods of
transportation (such as airplane), to ensure that the arrival of the delayed Commodity at the Port of
Destination shall be no later than ten (10) days as from the agreed ETA.
(c) In case the Seller has failed to cause the delayed Commodity to arrive at the Port of Destination within
the period of ten (10) days as mentioned in Article 1.3(b), the Buyer shall, at its own discretion, be entitled
to:
(i) Request the Seller to indemnify and hold the Buyer harmless from and against all losses, damages,
costs and expenses suffered by the Buyer as a direct result of such delay of shipment, including but not
limitation to the transportation cost, price discrepancy in case the Buyer purchases the Commodity from
other sources of supply; and
(ii) Impose the Seller a penalty at the amount of eight percent (8%) the total value of the Contract; and
(iii) Unilaterally terminate the Contract or a part of the Contract by a written notice with immediate
effect, without being liable to the Seller for such termination.
Questions:
1. In case the seller does not make due delivery as specified in the Schedule, he must immediately give the
Buyer a written notice of such delay. T
2. The Seller is liable for any delay in shipment for whatever reasons. F
3. In case of delay in delivery by the seller due to his fault, the Seller shall replace the Goods supplied and
make sure that the replaced goods must reach the port of destination no later than 10 days from the agreed
ETA. T
4. In case of delay in delivery by the seller due to his fault, the Buyer is entitled to buy the Commodity
from another supplier, and all the differences in prices shall be for the Seller’s account. T
5. All losses, damages, costs and expenses arising from delay, except freight charge shall be for the
Seller’s account. F
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Luật Mỹ cho phạt 5%, Luận VN cho phạt 8%
6. If American law is applied to this contract, the fine for delay stipulated in this contract is allowed F
7. The Buyer is entitled to discharge this contract without any prejudices to his rights and duties in case
the replaced goods fail to arrive at destination 10 days from the date stipulated in the Schedule. T
Practice 2 Read the clause of Payment and Documents of a sale contract below and decide if the
statements are True or False.
ARTICLE 4: PAYMENT TERMS
Methods of payment : T/T within 60 days after Bill of lading date for 100% of the invoice value of each
shipment at the counters of:
Bank name
: Joint stock Commercial Bank for foreign trade of Vietnam – Ho Chi Minh City
Branch (the “Bank”)
Bank address
: 05 Me Linh Square, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
ARTICLE 5: DOCUMENTS
5.1 The Seller shall make available to the Buyer or shall present to the bank specified by the Buyer the
following shipping documents (the “Shipping Documents”):
No.
Name of shipping
document
1
Signed Commercial
Invoice
Mandatory content
Issued by
Date of
issuance
The Seller
As actual
date
The Carrier
…
The Seller
…
2
Bills of Lading
Marked "Freight
Prepaid", consignee
and notify party
“ABC Co., address
No.XXXXX
, HCMC,
VIETNAM”
3
Signed Detailed
Packing List
…
4
Quality Certificate
The
Manufacturer
5
Quantity/ Weight
certificate at loading
port
The Seller
6
Certificate of Origin
(FORM D for goods
from Thailand)
the Chamber
of Commerce
or Competent
Authority of
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Required
number of
originals/
copies
Three (03)
originals
Three (03)
originals
Three (03)
originals
One (01)
original +
One (01)
copy
One (01)
original +
One (01)
copy
One (01)
original +
Two (02)
copies
manufacturing
country
7
Certificate of
Analysis/ Conformity
The
Manufacturer
…
…
One (01)
original +
One (01) copy
covering "All risks"
One (01)
for 110% of invoice
Reputable
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…
original +
value claim payable
insurers
One (01) copy
in Vietnam
5.2 Within three (03) days as from the date of the bill of lading (B/L), the Seller shall be obliged to send all
documents mentioned in Article 5.1 in soft copies to the Buyer via the following email address (XXXXXX)
5.3 Within seven (07) working days as from the date of the bill of lading (B/L), the Seller shall be obliged to
send the originals of the Shipping Documents as mentioned in the Article 5.1 to the bank designated by the
Buyer.
5.4. If the Seller fails to send the originals of the Shipping Documents within the period as set out in Article
5.3, the Buyer shall have the right to delay the payment of any amount payable and due under this Contract
for a number of days in correspondence to the total days delayed by the Seller in sending the required
Shipping Documents. Additionally, the Sellers shall pay all fees and/or charges, including but not limited to
demurrage, detention and storage fees that the Buyer may suffer as a result of such delay in accordance
Valid Insurance
policy/certificate
with Article 9.2.
9. Delay in sending the documents by the Seller will result in delay in making payment by the Buyer.
Questions:
1. Payment is made by T/T within 60 days from the shipment date for 100% value of each shipment. T
2. The commercial invoice is required to be signed and made in triplicate by the manufacturer. F
3. If the Seller presents the Bill of Lading “marked freight to collect”, the buyer is entitled to refuse to
make payment to him. F
4. ABC Co. is the shipper of the goods. F
5. The Certificate of Origin FORM D must be issued by the Chamber of Commerce only. F
6. The insurance policy/certificate must indicate the goods are coved “all risks” for 100% invoice value. F
7. The buyer wants the presented insurance policy/certificate to be issued by a reputable insurer because it
will be easier and less risky in making claim for compensation in case of damage or loss to the goods in
transit. T
9. The time for sending the Shipping Documents by the Seller to the bank for payment is seven business
days. T
8. The time for the Seller to send all the originals shipping documents to the Buyer is 03 days from the date
of the bill of lading. F
10. In case of delay in sending original Shipping documents stipulated in Article 5.3, all costs, demurrage,
detention and storage fees shall be for the Seller’s account. T
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