Conclusion of Contracts
Negotiation Procedures to get a contract-example
1 As we are interested in your products
please quote your best price and indicate other terms
for 2,000 metric tons of walnut in shell for earliest shipment
This is called invitation to offer
2 We are in a position to supply Chinese Walnut in shell 2005 crop
If you are interested, please give us a bid
Invitation to bid
3 Dear sirs
Thanks for your enquiry dated June 5
We offer firm subject to reply on June 15 2005
3,000 pairs of Chinese shoes Grade A
3 dollars per pair CFR Montreal
shipment with one month after receipt of sight L/C
which must reach here by the end of August
Please make quick acceptance
Yours Faithfully
Ollie
A firm offer should be clear
complete and final
4 Your offer of 20th July acceptable
if the price could be lowered 15 cents per unit
Counter-offer
5 Your letter of July 20th has been received
and we can accept the terms and conditions of it
without any further negotiation
Please arrange the production as agreed
acceptance
By laws
a contract is concluded when an acceptance becomes effective
Therefore
a contract in writing with signature of both parties
is not requisite in international sale of goods
Contract made by oral statements and conduct
have a common shortcoming
If a dispute arises from any terms or conditions of the contract
the parties involved are rarely
impartial about what was the real situation
when the contract was made
So written contracts are preferred
or even required by laws in some special cases
For example
the Contract Law of China requires a written contract for loans
financial leasing
construction
technology
development
land
real estate etc
Are international sales contracts signed on spot
Most international sales contracts
are first drawn out by one party
either the seller or the buyer
on the basis of primary terms on
which the two have agreed during the previous negotiation
If the contracts are drawn out by the buyer
they may be named as Purchase Order(p/o)
or Purchase Conformation/Contract(p/c)
If it is the seller to draw out the contracts
they may be named as Sales Contract or Sales Conformation(S/C)
The contracts are at least in duplicate
and signed by the party who drafts them
Then the full set of the contracts
signed by one party will be sent to the other party
for countersignature
The recipient should
read the contracts
thoroughly to make sure that the terms are consistent with those
that have been agreed during negotiation
and the additional terms and conditions are acceptable
Then the recipient
should countersign and return one copy to the sender for his file
In business letters for sending contracts
and asking for countersignature
We enclosed our S/C No 123 in duplicate
one of whichplease sign and return for our file
In replies for sending back duplicate with countersignature
Enclosed please find the duplicate of
S/C No. 123 with our countersignature
Or expressions to that effect can be applied
Contracts with signatures of both parties
are clear and definite agreements that can help avoid
any disputes resulting from different
subjective interpretations of original intentions
Elements of International S/C
A sales contract in writing is a legally
binding agreement in detail between the seller and the buyer
which defines clearly rights and obligations of two parties respectively
A typical international S/C contains three parts
Beginning
Body
and Ending
The beginning part includes
title of the contract
serial number
date
and names
and addresses of both the buyer and the seller
as shown in Figure here
The body part is the most important part of a sales contract
It includes major terms, such as name and quality
quantity
price
packing
shipment
or delivery
payment
insurance etc
Conditions or remarks
whatever
they are named
are integral part of the body
but they are usually printed beforehand
on the back of contract forms
Conditions may include one party’s liability to the other
settlement of disputes etc
Last comes the ending
It includes names of both the seller and the buyer
and signatures and job titles of the authoritative persons
on behalf of both parties
That’s all for the session thank you