Write your own agreement following the form (task 3). You may choose any other type of contracts although
SECTION 3:
BUSINESS CONTRACTS
Before you read
Discuss these questions:
1. What type of contract can business contracts be referred to? (Methods of creation, formality, extent of performance)
2. Can you give a definition of a business contract ?
3. What do you know about part of a business contracts?
Key vocabulary:
merchantable quality, misrepresentation, standard contracts, to be altered and supplemented, standard clauses and conditions, to be part and parcel, legal title, sale and purchase, specific commodities, bulk cargo, stipulation, permitted quantity tolerance, firm / fixed /sliding prices, to be stipulated in the Specifications, Warranties and Claims, breakage and leakage, Force Majeure, to conform to the requirements, to be final and binding, to be considered null and void.
Read and translate the text:
Business Contracts
The Union Commercial Code defines a business contract as the “total legal obligations which results from the parties’ agreements as affected by this Act and other applicable rules of law”.
The Sale of Goods Act, 1979 and Supply of Goods and Services Act, 1982 enact requirements of the sale and supply of goods and services which are obligatory for all business contracts. These are follows:
1/ the seller must have title;
2/ goods/services must be of merchantable quality;
3/ goods/services must fit a particular purpose;
4/ there must be no misrepresentation.
Standard contracts are not a must. Some articles may be altered and supplemented, but there are also standard clauses and conditions which are part and parcel of any business contract. These are follows:
1. Legal Title of the Contracting Parties.
2. Subject of the Contract.This section names the product for sale or purchase. It also indicates the unit of measure generally employed in foreign trade for specific commodities. Contracts for bulk cargo contain a stipulation 'about' or 'plus or minus... per cent', denoting the permitted quantity tolerance.
3. Price and Total Amount of the Contract.The price stated in the Contract may be firm, fixed or sliding. Firm prices are not subject to change in the course of the fulfillment of the Contract. Fixed price is the price governing in the market on the day of delivery or for a given period. Sliding prices are quoted for machinery and equipment which require a long period of delivery.
4. Time and Date of Delivery.The goods are to be delivered in the time stipulated in the Specifications attached to the Contract. Delivery before the time stipulated in the Contract as well as partial delivery of the goods without accessories is not allowed without the Buyers' consent.
5. Quality.The quality of the goods is to be in conformity with the requirements given in the Specifications attached to the Contract. The goods are to be of the latest design and manufactured of the first grade materials.
The quality of raw materials and foodstuffs is determined, as a rule, by standards, by sample, and by description.
6. Payment.A cheque is a written order to a Bank given and signed by someone who has money deposited there to pay a certain amount mentioned in the cheque to a person named on it. Like a cheque, a draft is an order to pay. It is made out by an exporter and presented to the importer. It is also called a bill of exchange.
7. Transport and Delivery Terms.Multimodal transport is wide-spread in shipping now. It involves a transfer of the goods from one mode of transport to another. The main carrier often prefer to assume through responsibility for the cargo he carries. In a through movement of the goods a combined transport document a Receipt for the Consignment is issued instead of traditionally Bill of Lading.
8. Guarantees (Warranties) and Claims.The Sellers guarantee that the quality of the goods conform to the requirements of the Contract and in particular guarantee that: a/ the delivered goods and all the accessories conform to the latest achievements of techniques and the highest standards existing in the Sellers' country at the time of execution of the present Contract; b/ the material of which the goods and all the accessories have been manufactured are of the highest quality, and so on.
9. Insurance of Goods.As soon as the goods are in transit they are insured against pilferage, damages by water, breakage or leakage. Other risks may also be covered.
10. Contingencies (Force Majeure).Should any circumstances arise preventing any of the parties to fulfill their obligations under the Contract partially or in full, namely: natural disasters (earthquake, flood, fire), war, military operations of any character, blockades, prohibitions of exports or imports, the time of delivery under this Contract is to be extended for the period equal to that during which such circumstances will remain in force.
11.Sanctions ( Penalty).If the Sellers fail to deliver the goods in the time stipulated by the contract, they are to pay to the Buyers a penalty at the rate of the definite per cent of the total contract value for every week of delay. The sum of the penalty is to be deducted by the Buyers from the Sellers' invoices. The payment of the penalty does not free the Sellers from their obligation to deliver the goods under the present Contract.
12. Arbitration.The Seller and the Buyer will take all possible measures to settle any disputesand differences arising from the Contract or in connection with it. Should the Parties fail to reach any agreement, the case is to be referred to the International Commercial Arbitration Court. The decisions of the Court are final and binding on both Parties.
13. Other Terms and Conditions (Miscellaneous).Any previous negotiations and correspondence should be considered null and void upon the signing the present Contract. ( And other conditions).