Реферат: Топик для менеджеров

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GUARANTEE CLAUSE OF A CONTRACT

The Guarantee Clause is one of the most important points of the Contract made on the sale and purchase of different machinery and equipment. Guarantee clauses may differ but they have features. Here is a typical Guarantee Clause. The Sellers guarantee:

1. a) that the equipment supplied corresponds to the highest achievements of the world technics for the given type of equip­ment;

b) high quality of the materials being used for the manufacture of the equipment (spare parts); first-rate workmanship and high quality of the technical performance and assembly;

c) that the equipment supplied (spare parts) is manufactured in full conformity with the conditions of the present Contract;

d) completeness of the delivered equipment in accordance with the conditions of the Contract.

2. The guarantee period of the normal operation of the equipment is to be 12 months from the date of putting the equipment into operation, but not more than 24 months from the time of its delivery.

3. If during the guarantee period the equipment proves to be defective or not in conformity with the terms and conditions of the Contract, the Sellers undertake immediately, at the Buyer’s request, to eliminate free of charge the detected defects by repairing or replacing the defective parts of the equipment with the new ones.

In this case the Sellers should pay the agreed and liquidated damages in accordance with the Contract terms at the rates stipulated in the contract starting from the date of the claim and up to the date when the defects have been eliminated or the new equipment has been supplied.

However, the amount of the penalty shouldn’t exceed 10% of the contractual price of the equipment.

4. The defective equipment will be sent back to the Sellers at their request and for their account within the dates agreed by the parties.

5. All transport expenses, insurance and other expenses, con­nected with return or replacement of the defective goods on the territory of the Buyers’ country and of a transit country as well as on the Sellers' territory are to be borne by the Sellers.  

6.The above-said guarantee period in regard to the repaired equipment or newly supplied equipment will start again from the moment of putting it into operation.

7. If the Sellers fail to eliminate the claimed defects at the Buyers' request immediately or within 30 days after the date of the claim, the Buyers will have the right to eliminate the defects on their own account, the Sellers being charged with the normal actual expenses.

Small defects, the elimination ofwhich is urgent and does not require the presence of the Sellers, will be repaired by the Buyers charging the Sellers with the normal actual expenses.

8. If, while considering the claim or eliminating the defect, it will be stated that the defect cannot be eliminated or the replacement of the goods cannot be done within the dates acceptable to the Buyers the goods may be used by the Buyers without the elimination of the defect, the claim may be settled at the request of either party by means of downward revision of the price of the equipment within the rates agreed by the parties.

In case of impossibility for the Buyers to use the supplied equipment the Buyers will have the right to cancel the Contract in part of the said equipment or in whole.
INSPECTION AND TESTS

Inspection and tests play a very important role in business relations. They help to avoid many problems, which can arise in respect of the quality of the goods in future. Therefore before shipment the Sellers are to test the goods and the Buyers have the right to inspect and check the goods. They usually test theworkmanship and quality of the contractual equipment and the materials used.

Inspection and tests are carried out at the expense of the Sellers or their subcontractors. It is stipulated in the Contract.

The Buyers have the right to send their inspectors to the Sellers their subcontractors and their subcontractors' premises.

Before the inspection and test the Sellers can provide an opportunity for the Buyers' inspectors to study the similar operating equipment manufactured by the Sellers.

The Seller is to notify the Buyer of the readiness of the goods (equipment, machines) for the inspection and test. The Notification of  Readiness is to be sent, for example, to the Trade Mission in the Sellers' country, and the Buyer is to be provided with a copy. The Sellers must notify the Buyers not later than 15 days, for example, before the beginning of the test.

The Contract is to stipulate that if the Buyers or their representatives within 15 days from the date of receipt of the Sellers' notification that the goods are ready for shipment, inform the Sellers that the Buyers' inspector cannot be present at the test, or if the Sellers fail to receive any information within the said period, the Sellers are entitled to perform the test without the Buyers' inspector. Sometimes the Buyers can supply the Sellers with the certificate stating that the goods are released for shipment without inspection.

The Sellers may render any assistance that can be required in obtaining visas by the Buyers' inspector and may at their expense furnish the Buyers' inspector with flats or apartments at the hotels during their stay. The Sellers are to place at their expense at the disposal of the Buyers' inspector all the facilities required for inspection of the equipment and materials as well as an interpreter if necessary.

If the tests have proved that the equipment meets the requirements specified in the Contract, the Sellers shall present to the Buyers the Test Report. One copy of the above Report is to be sent by the Sellers to the Buyers' representatives at the Trade Mission in the Sellers' country to obtain the Release Note for Shipment.

If during the tests and inspection any infringements in the technical conditions of the Contract or poor quality of the goods manufactured are found, the Sellers shall eliminate all the defects detected without delay or replace the defective goods at their expense. When the defects have been eliminated, the equipment shall be tested again if required by the Buyers.

The final tests and acceptance of the goods are to be performed in the Buyers' country after finishing the installation and adjustment of the equipment and achieving quantity and quality requirements stipulated in the Contract.

After the tests have been performed, «Report on the Final Test and Putting the Equipment into Operation» is made and signed by the Sellers and the Buyers' representatives, the detailed  results of the tests performed being put in this report.

The date of signing the «Report on the Final Test and Putting the Equipment into Operation» is considered to be the date of putting the equipment into operation.

INSURANCE OF GOODS

The export trade is subject to many risks. Ships may sink or collide; consignments may be lost  or  damaged.   All   sensible businessmen now insure goods for the full value. The idea of insurance is to obtain indemnity in case of damage or loss. Insurance is against risks.

While the goods are in a warehouse the insurance covers the risk of fire, burglary, etc.

As soon as the goods are in transit they are insured against damage by water, breakage or leakage. Other risks may also be covered.

The insured is better protected if his goods are insured against all risks. The goods may also be covered asainst general and particular average.

In the insurance business the word «average» means loss.

Particular average refers to risks affecting only one shipper's consignment.

 General average refers to a loss incurred by one consignor but shared by all the other consignors who use the same vessel on the same voyage.  

To insure the fulfillment of the basic contracts successfully and profitably a number of auxiliary agreements are to be concluded:

1. Marine Insurance Policies and Certificates

2. Charter Parties   

3. Agency and Distributorship Agreement.

There is some difference between Marine Insurance Policy and Marine Insurance Certificate. The first is a document, which contains the terms of insurance and can be given for such a durable period of time (as usual for a year) and for a big quantity of the goods. The goods can be delivered in several lots. Marine Insurance Certificate is given for each consignment of goods. Charter Parties is a treaty on chartering the vessel. It can be concluded for one voyage and it's named «Voyage Charter Party». A treaty on a certain period is named «Time Charter Party”.

Goods can be insured with one of the insurance companies.

CLAIMS

Unfortunately as in other walks of life in trade, too, error may occur and the goods may be mishandled. Accidents may usually happen because of hurryand lack of sufficient supervision and mistakes in carrying out orders may creep in.

These may be caused by mistyping of figures, misreading of numbers or for more serious reasons.

One of the parties to the Contract may consider that the other party has infringed the terms of the Contract and may write aletter of complaint containing a claim for damages, for a reduction in the price, etc.

There are various reasons for complaints. The following kinds of claims are often made by Buyers:

1) claims arising from the delivery of wrong goods, damaged or substandard goods;

2)     claims connected with delays of one kind or another;

3) claims owing to goods missing from delivery (short-­shipment or short-delivery);

4)     claims that concern errors in carrying out an order, etc.

If the Buyer has to face a claim, he must write a statement 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 declines liability if the B/L is “clean”, that is the shipping company hasn't made any remarks about the quantity or condition of the cargo shipped. The Seller has also a full right to decline a claim if the goods are disorderly stored, mishandled or misused by the Buyer.

The parties do their best to settle their differences and claims amicably, but if they fail to agree, in accordance with the corresponding clause of the Contract, the claim is submitted for arbitration in Russia to the Arbitration Commission at the Russian Chamber of Commerce and Industry.

SETTLING COMMERCIAL DISPUTES

A Contract defines rights and obligations of the parties involved. In case of breach of the Contract the sufferer makes a claim on the party, which fails to meet their contractual 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 complaints may be poor quality, breakage, damage, short-weight, leakage, etc.

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 all at the Seller's expense.

Sometimes if deviation in quality is within certain limits, the goods can be retained but with an allowance proportionate to the discrepancy in quality. This is usually the case with raw materials, foodstuffs or any other goods sent in bulk.

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 to a wrong address. If the goods are not recovered, compensation must be paid by the party directly responsible for it.

If the Seller fails to deliver the goods by the date due, he is penalized. The rate of penalty is fixed in the Clause of Agreed and Liquidated Damages.

If the delay is longer than 2 months, the Buyer has the option of canceling the Contract altogether but the Seller is to compensate for the loss incurred.

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 compensate 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.

The demurrage claims may emerge from the Buyer as well if a Contract is signed on FOB terms of delivery. If it is a CIF contract, the Buyer is liable to extra storage expenses when through the Seller's fault he cannot clear the goods from the customs within the certain period.  

Financially, legitimate claims are in large part settled by debit or credit notes.  

Settling commercial disputes by arbitration is practiced if the parties cannot reach mutual understanding. In this case in accordance with the corresponding clause of the Contract the claim is submitted for arbitration, in Russia to the Arbitration Commission at the Russian Chamber of Commerce and Industry. Its Statute says that it is a standing arbitration tribunal, which shall settle disputes resulting from contractual and other civil-law relations in foreign trade, and other international economic and scientific-technological contacts.

If the parties do not agree upon a single arbitration, each of them appoints (or chooses from the list of Arbitrators) their own. In this case the latter should elect the chairman from the same List.

The three of them form the arbitration tribunal, which considers the case and makes an award by a majority of votes. The awards ofthe Arbitration Commission are final and binding upon both parties and are not subject to appeal.  

Arbitration expenses, which are sometimes very high, are usually borne by the loser unless otherwise agreed upon.  

THE ARBITRATION CLAUSE

The Arbitration Clause is an obligatory clause of every contract in international business transactions. It includes the terms ofsettling commercial disputes, which may arise out of making the Contract. This clause also contains indications about the proper law of the Contract applied.

The Arbitration Clause is drawn up most frequently in the following way: „Should the Sellers or the Buyers fail to settle in an amicable way any dispute or difference, which may arise out of or in connection with the present Contract the same shall be referred, without recourse to law courts, to arbitration in Stockholm” (for example). That may be the Seller or the Buyer's country; the parties may also apply to arbitration in third countries. The choice depends on the amount of the arbitration expenses. Then the clause usually stipulates that the arbitration tribunal shall consist of two arbitrators and an umpire. The party, which wishes to refer the dispute for arbitration, shall notify the other party of it by a registered letter stating the name and the seat of the appointed arbitrator who may be the citizen of any country, as well as the subject of the dispute, date and number of the Contract. The other party within 30 days of the date of the said letter shall appoint the second arbitrator who may also be the citizen of any country and shall notify the first party by a registered letter of the name and the seat of the arbitrator appointed by it.

Should the party, which has received the notification of the dispute being submitted for arbitration, fail to appoint the second arbitrator, within the period indicated, the latter at the request of either party shall be appointed by the President of the Chamber of Commerce. The arbitrators shall appoint an umpire.

If the arbitrators within 30 days after their appointment fail to come to an agreement in respect of the umpire, the President of the Chamber of Commerce shall appoint the latter at the request of either party.

If the arbitrator or the umpire appointed are not able or refuse to fulfil their duties, a new arbitrator or an umpire should be appointed instead within 30 days in the same way as the other replaced.

The arbitration award shall be adopted in accordance with the conditions of the present contract by a majority of votes within 3 months of the date of the appointment of the umpire. The award should be made out in written form, state its reasons, the distribution of arbitration costs and be signed by all the members of the arbitration tribunal.

The arbitration award shall be final and binding upon both parties and without appeal. The parties undertake to fulfill the award in time and without enforcement.

FORCE MAJEURE

Force majeure is a force against which you cannot act.

Every contract has a force majeure clause. It usually includes natural disasters such as an earthquake, flood, fire, etc. It can also list such contingencies as war, embargo, and sanctions. Along with this there are some other circumstances beyond the Seller's control. The Seller may find himself in a situation when he can't fulfill his obligations under the Contract. It may happen if there is a general strike in the country, a strike of coal-miners, transport workers, etc. Production may be suspended, if there is a shortage of the energy supply. When negotiating aContract a list of contingencies must be agreed on and put into the Contract.

When a manager makes up a contract he must not think only of his one-sided interest. He must think in terms of common interest with his counterpart. Only then will he prove loyal to his partner.

In case of a contingency the Seller must notify the Buyers of a force majeure. The Clause of the Contract to this effect may run:

“Should the Seller fail to notify the Buyers of a contingency the Seller is denied a right to refer to these circumstances». The Seller is to notify the Buyer of a contingency right away. If it's done in due time, the Buyer may take immediate action to protect his interest. He may sign a contract with another supplier on similar terms or if it's impossible, he will secure the best possible terms he can have at the moment. If prices are rising, he will be quick to act and will do everything possible to negotiate the best price obtainable at the moment.

A force majeure must be a proven fact. The Seller is to submit to the Buyer a written confirmation issued by the Chamber of Commerce to this effect. The certificate testifies that a contingency really took place. It describes its nature and confirms its duration.

In a dispute between the Buyer and the Seller not only the fact of a contingency is to be ascertained. The Seller must have evidence that non-execution of a Contract or its partial fulfillment is a direct result of a contingency. If it is proved, the Seller is not liable and the execution of a Contract is postponed until all the after-effects causing damage are eliminated. A natural disaster may last only a few minutes but it'll take a lot of time to recover the loss.

The duration of a force majeure is, as a rule, 4 or 6 months. After that the Buyer has the right to cancel the Contract. The Seller in this case has no right to claim any compensation for his losses.

amendments to
the contract


It is common for Buyer's representatives to visit Seller's premises for technical or commercial discussions, either before or after a Contract has been made. Pretty often the engineering department of the Seller finds it necessary to improve the model, which the Buyer ordered under the Contract, by making a few modifications (usually shown in the attached drawings). The modifications can be very slight or considerable, but, as a rule, they are very effective and improve performance.

Any alterations to the Contract become valid if they are made in writing and signed by authorized representatives of both parties as per appropriate Clause of the Contract.

Therefore in order to finalize the matter the Seller invites the Buyer to visit his premises. And if the Customer approves of the modifications, the Seller makes an appropriate amendment to the Contract.

If the Buyer has to go abroad, the Seller usually assures him that there will be no difficulties in issuing a visa through providing an official invitation in support of the Customer's application for a visa.

The Seller reequips his workshops from time to time. As a matter of fact they may be the latest word in technology. The level of automation is usually increased and the output becomes considerably higher. As a rule the Buyer's representatives find the modifications reasonable and the Buyer doesn't object to them. After the visit the Seller sends the Buyer a draft amendment for signature.

The following Clauses of the Contract are usually more liable to changes: terms of payment, price, inspection and tests, time of delivery.

So judging from the above information you can get the procedure of making amendments to the Contract which contains 5 points:

1. Amendments to the Contract are necessary if any modifications were made after signing the Contract.

2. The Seller invites the Buyer or his authorized representatives to his premises to make sure these modifications are necessary, effective and improve performance or design.

3. If the Buyer gives his approval for these modification and finds them reasonable, both parties draw up a draft amendment

4. This draft should be coordinated and agreed on.

5. Appendices, addenda and amendments to the Contract are only valid and shall make an integral part of the Contract if issued in a written form and signed by authorized representatives of both parties.
    продолжение
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