Commerce department international trade
Delivery 5.1. Date, Place and Terms of Delivery
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5. Delivery 5.1. Date, Place and Terms of Delivery Delivery of the Goods shall be made ...............(agreed Incoterms); the schedule date of Delivery shall be ...............( Agreed date of delivery); Risk and title to the Goods shall pass from the SELLER to the BUYER on Delivery The place of Delivery under this Contract is ..............................(Agreed place of delivery. Note: In FOB, FCR, CIF and CIP.(etc.) contract, this is part of shipment).
The BUYER shall advise the SELLER of the name of the vessel not later than ...........(Number of days). Days before the agreed Delivery date If the vessel named by the BUYER fails to arrive on or before ...................( Date of arrival of ship). then the SELLER may at his discretion deliver the Goods to a bonded warehouse in the port of ................( Port of shipment). and shall be deemed to have fulfilled his Delivery obligations under this Contract; In this event, the SELLER must notify the BUYER of the full circumstances of the Delivery to the warehouse. With Delivery to the warehouse, all costs, including but not limited to cost of storage and insurance are to the buyer's account 5.3. Shipping Marks and Packaging (NOTE: The following two subclauses are examples; reword as appropriate). 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 positions the letter of credit number, the words RIGHT SIDE UP, HANDLE WITH CARE,': KEEP DRY, and the mark .....................................( Shipping mark) Goods are to be packed in ...................( Description of required packing) 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 (NOTE: The following subclause is relevant only to deliveries in Germany). 5.4. Disposal of Packaging Responsibility for the disposal of any packaging shall be the buyer's . 6. Notification of Delivery (NOTE: This clause applies largely to contracts under which delivery takes place in the country of the seller). lmmediately on Delivery, the SELLER shall notify the BUYER of delivery by .................. (Means of notification, e.g., FAX). This notification shall include ……..(List of documents and information required) 7. Inspection before shipment 7.1. Inspection by the Buyer The BUYER may, at the buyer's option, inspect the Goods prior to shipment. At least .............. (Number of days). Days before the actual Delivery date, the SELLER shall give notice to the BUYER, or to any agent nominated by the BUYER, that the Goods are available for inspection. The SELLER shall permit access to the Goods for purposes of inspection at a reasonable time agreed by the parties (NOTE: Customs requirements for importation of goods into Indonesia and the Philippines require inspection by SGS prior to shipment from the Seller's country. The following clause is recommended for sales to these countries). 7.2. Inspection by Inspection service The parties understand that importation into ............(Name of country) requires inspection of Goods by SGS before shipment from the seller's country; The SELLER agrees to cooperate fully with the SGR' in providing access to and necessary information about the Goods for the purpose of such inspection 8. Early Delivery, Partial Shipment, Delay in Delivery 8.1. Early Delivery (NOTE: The three sub-clauses below, are alternatives. Delete as necessary). Early Delivery is not permitted under this Contract Delivery up to .........(Number of days). Days early is permitted; however, payment shall not become due until the date agreed for payment in this Contract. Delivery up to .......... (Number of days) Days early 'is permitted; in this case payment shall fall due as though the actual Delivery date were the Delivery date agreed in the Contract. 8.2. Partial Shipment (NOTE: The two sub-clauses below are alternatives. Delete as necessary). Partial shipment is not permitted under this Contract Partial shipment, is permitted under this Contract, subject to the agreement of both parties; however, any costs arising from partial shipment shall be to the account of the .........(BUYER or SELLER).
In the event of late Delivery for reasons other than force majeure as defined in Clause 17 below, the SELLER shall pay as liquidated damages and not as a penalty the sum of .........(Figure). of the value of the undelivered part per Day of late Delivery up to a maximum of ......... (Figure). of the Contract Price; Payment of liquidated damages shall be due without the BUYER having to furnish proof of any loss, damage or injure
Payment of liquidated damages shall constitute full and complete satisfaction of any claim of the BUYER against the SELLER arising from the or in connection with late Delivery of any Goods; In particular the SELLER shall not be liable for any indirect loss or damage, as defined in Clause 2.7 above, arising from or In connection with late Delivery of any Goods. Payment of liquidated damages by the SELLER shall not preclude the BUYER from seeking compensatory damages from the SELLER for any loss, injury or damage arising from or in connection with late Delivery of any Goods; In particular the BUYER shall be entitled to compensation from the SELLER for any indirect or consequential loss or damage, including but not limited to loss of profit, loss of use or loss of contract, arising from or in connection, with late Delivery of any Goods; However, payments made as liquidated damages shall be offset against any compensatory damages recovered from the SELLER for the late Delivery of any Goods. 8.4. Termination for Delay In the event that the SELLER becomes liable to pay the maximum sum payable as liquidated damages under Clause 8.3 above, then the BUYER shall, upon due notice, have the rignt to terminate the Contract ' 9. Price The Price for the Goods to be delivered under this Contract is ........ Currency symbol and figure. (...................Currency and figure in words.) 10. Terms of Payment Payment shall be made by means of an irrevocable, confirmed letter of credit; The BUYER shall open the letter of credit on or before .........( Date of opening of letter of credit). on the terms agreed by the parties and annexed to this Contract a? Appendix .......... .........(Appendix number). This Contract shall not come into force under Clause 16 below until the SELLER has received advice that the letter of credit has been opened in his favour and has ascertained that the terms are in accordance with those agreed between the parties; Any discrepancy between the terms agreed by the parties and the letter of credit as issued shall be notified by the SELLER to the BUYER immediately 11. Inspection of the Goods 11.1. Duty to Inspection and Notify Discrepancies The BUYER shall inspect the Goods on their arrival at the place of destination. If the Goods fail to conform with the Contract in either quality or quantity, then the BUYER shall notify the SELLER of any discrepancy without delay
If the BUYER does not notify the SELLER of any such discrepancy within ......... (Number of days). Days of the arrival of the Goods, then the Goods shall be deemed to have been in conformity with the Contract on arrival.
If a material discrepancy in quantity exists and is duly notified to the SELLER, the BUYER at his discretion and subject to Clause 8.2 above may either: a. Accept the delivered portion of the Goods and require the SELLER to deliver the remaining portion forthwith; or b. Accept the delivered portion of the Goods and terminate the remaining portion of the Contract upon due notice given to the SELLER. If any material discrepancy in quantity exists such that ………..….(Description of fundamental discrepancy) and if such discrepancy is duly notified to the SELLER, the BUYER may at his discretion: a. Adopt either of the remedies prescribed above in this clause; or b. Reject the delivered portion of the Goods and recover from the SELLER all payments made to the SELLER as well as all costs, expenses and customs duties incurred by the BUYER in association with the shipment, movement through customs, insurance or storage of the Goods (NOTE: Clause 11.4 below may not be necessary if SGS inspection takes place before shipment). 11.4. Buyer's Rights in the Event of Discrepancy in Quality Discrepancies in quality shall be considered as defects and shall give rise to claims under the defects liability provision of this Contract in Clause 12 below However, a fundamental discrepancy in quality shall give the BUYER the right to refuse Delivery of the Goods in whole or in part and to recover from the SELLER all payments made for the unaccepted portion of the Goods as well as all costs, expenses and customs duties incurred by the BUYER in association with the shipment, movement through customs, insurance or storage of the unaccepted portion of the Goods 12. Defects Liability 12.1. Seller's Liability for Defects The SELLER warrants that the Goods supplied under this Contract shall at the date of their Delivery: a. Be free from defects in material b. Be free from defects in workmanship c. Be free from defects inherent in design, including but not limited to selection of materials, and be fit for the purpose for which such Goods are normally used If any defect provably present in any of the Goods on the date of Delivery comes to light during the defects liability period, then the BUYER shall forthwith notify the SELLER; The SELLER, without undue delay, shall at his own risk and cost and at his discretion repair or replace such item or otherwise make good the defect The seller's liability for defects is subject to the BUYER having adhered to all procedures and instructions applicable to the .......... Condition of use (e.g., "storage, installation, use or operation")l of the item, and expressly excludes damage to the Goods caused by fair wear and tear or by misuse occurring after Delivery
The SELLER shall be liable for defects which come to light during a period of .......... days from ...........2 ; After the end of this period, the BUYER shall have no right to raise claims of any kind against the SELLER for any defect in any Goods of the seller's supply The defects liability period shall be prolonged by the length of any period during which the Goods cannot be used by the BUYER because of a defect. However, if new Goods are delivered to replace defective Goods, the defects liability period shall not begin again on the replacement Goods 12.3. Limitation of Defects Liability (NOTE: The two clauses below are alternatives. Delete as necessary) The duty to repair and replace or otherwise to make good defects is the only duty of the SELLER in the event of the Delivery of defective Goods; In particular the BUYER shall not be entitled to compensation from the SELLER for an}' indirect loss or damages as defined in Clause 2.7 above, arising from or in connection with Delivery of defective Goods The SELLER'shall indemnify and hold harmless the BUYER against any loss or damage however arising whether direct or indirect which shall be suffered by the BUYER as the result of defective or faulty Goods delivered by the SELLER.
The ..........3 shall compensate and hold harmless the .......... ''from any award of damages, reasonable costs, expenses or legal fees, in the event of any action or lawsuit by a third party resulting from any injury, loss or damage to the third party caused by a defect in the Goods delivered under this Contract In the event of such Lawsuit, the ........' shall immediately notify the ..........: and shall fully cooperate with the ..........' in taking any necessary legal action. In the event of any action or lawsuit by a third party resulting from any injury, loss or damage to the third party caused by a defect in the Goods delivered under this Contract, the party against whom the action or lawsuit is brought shall bear all costs, expenses, awards of damages or legal fees arising therefrom
All income taxes, value added taxes, customs duties, excise charges, stamp duties or other fees levied by any Government, Government agency or similar authority shall be borne exclusively by the party against whom they are levied. 15. Assignment of Rights and Delegation of Duties The rights under this Contract may not be assigned nor the duties delegated by either party without the prior written consent of the other party. 16. Coming Into Force This Contract shall come into force after signature by both parties and after: a. The issuance of a letter of credit in accordance with the terms of Clause 10 above; b. .................................................................2 If the Contract has not come into force within ..........3 Days of its signature by both parties, all its provisions shall become null and void.
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. (NOTE: The subclause below contains examples only. It should be modified as necessary). 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 labour unrest; newly introduced Laws or Government regulations; delay due to Government action or inaction, or inaction on the part of any inspection agency; Fire, explosion, or other unavoidable accident; flood, storm, earthquake, or other abnormal natural event. (NOTE: The subclause below on non-force-majeure events is Optional) Force majeure events do not include .......... .......... .......... .......... If either party is prevented from or delayed in, performing any duty under this Contract, then this party shall immediately notify the other party of the event, of the duty affected, and of the expected duration of the event. If any force majeure event prevents or delays performance of any duty under this Contract for more than ..........2 Days, then either parties may on due notification to the other party terminate this Contract.
Notice of Termination as defined in Clause 2.9 of this Contract shall be in writing and shall take effect ..........3 Days from the receipt of such notice by the party notified. In the event of Termination, the duties of the parties shall be as incurred up to the date of Termination; In particular, the SELLER shall receive the full Price of any Goods delivered and accepted by the BUYER; The provisions of this Agreement dealing with defects liability, arbitration, and such other provisions as are necessary in order to resolve any post-Termination disputes shall survive Termination.
If any provision or provisions of this Contract are invalid or become invalid, then this shall have no effect on the remaining provisions. Further, the parties agree to replace any invalid provision with a new, valid provision having, as far as possible, the same intent as the provision replaced. 20. Modification and Waiver Modification of the terms and conditions of this Contract shall be binding on both parties even without consideration if the modification is in writing, is signed, and is expressly stated to be a modification of this contract. Any waiver of any right under this Contract is binding on the party making the waiver even without consideration provided the waiver is in writing, is signed and is expressly stated to be a waiver of the said right;
The language of the Contract, of all Contract Documents, and of all correspondence and other communication between the parties shall be English. 22. Notices Notices served by one party to the other under this Contract shall be made, in the first instance by facsimile transmission (hereinafter called "FAX"). A further copy of each notice shall be sent by registered mail and signed. The effective date of the notice shall be the date of FAX transmission. In the event of a dispute about the receipt of a FAX, however, the effective date of the notice shall be the date of receipt of the registered letter or a date seven days after the registered mailing, whichever is earlier. Notices shall be sent to the following addresses and FAX numbers: SELLER: .......... .......... .......... .......... .......... .......... .......... Address:.......... .......... .......... .......... ...'.....,. .......... .......... FAX Number: .......... .......... .......... .......... .......... .......... .......... BUYER: .......... .......... .......... .......... .......... .......... .......... Address:.......... .................... .......... ..........'.......... .......... FAX Number: .......... ...'....... .......... .......... .......... ..---- - Any change in an address or FAX number shall be the subject of a required notice under this Contract. 23. Settlement of Disputes All disputes arising in connection with this Contract shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by .......... Number (of arbitrators)' arbitrators appointed in accordance with the said rules. The place of arbitration shall be .......... Name of the place (city) of arbitration. The language of arbitration shall be English. (NOTE: The three sub-clauses below are alternatives. Delete as necessary). In the event of arbitration, each party shall bear its own costs. In the event of arbitration, the court shall assess the amount of the costs to be borne by each party In the event of arbitration, the party against whom the award is made shall bear the entire costs of both parties to the action. The parties agree that any award made in accordance with the provisions 5f this clause is final and binding on both parties. • Execution The parties, intending to be legally bound, have signed this Contract on the dates and at the places stated below: For and on the behalf of: For and on the behalf of: SELLER BUYER
Date: Date: Place: Place:
Witness of seller's Signature Witness of buyer's Signature 3. MODEL CONTRACT FOR THE SALE OF GOODS AND THE CIVIL CODE OF VIETNAM ' The are three main types of contract, under CCVN (see appendix 2 for the, English and Vietnamese versions). • Sales/Procurement Contract (421-442) • Contract to Manufacture (550-561) • Contract for Services (521-529) The model Contract is a pure Sales Contract - an exchange of "assets" for "money". In -the following parts some principal clauses from the model Sales contract are compared with the stipulations regarding civil contracts by the civil code of the Socialist Republic of Vietnam with a view to offering the reader an insight into the subject - matter. 3.1. Structure of the Model contract What you should know before reading the contract Preamble Clause 1 : Applicable Law Clause 2 : Definitions Clause 3 : Entire Agreement and Contract Documents
Clause 4 : Scope of supply How the good will be supplied Clause 5 : Delivery Clause 6: Notification of Delivery Clause 7: Inspection before Shipment Clause 8: Early Delivery, Partial Shipment, and Delay in Delivery
What the Buyer will give Clause 9; Price ; How the Buyer will pay Clause 10: Terms of Payment What if the goods are not as ordered ? Clause 11: Inspection of tlic Goods Clause 12: Defects Liability
Clause 13: Liability to Third Parties Clause 14: Taxation
Clause 15: Assignment of Rights and Delegation of Duties Clause 16: Coming Into Force Clause 17: Force Majeure Clause 18: Termination Clause 19: Partial Invalidity Clause 20: Modification Clause 21: Language Clause 22: Notices Clause 23: Settlement of Disputes Execution
Appendices Clause 7: Inspection before Shipment Clause 8: Early Delivery, Partial Shipment, and Delay in Delivery What the Buyer will give . Clause 9: Price How the Buyer will pay Clause 10: Terms of Payment What if the goods are not as ordered ? Clause 11: Inspection of the Goods Clause 12: Defects Liability . • .
Clause 13: Liability to Third Parties Clause 14: Taxation
Clause 15: Assignment of Rights and Delegation of Duties Clause 16: Coming Into Force ... ^ Clause 17: Force Majeure ' Clause 18: Termination Clause 19: Partial Invalidity Clause 20: Modification Clause 21: Language Clause 22: Notices Clause 23: Settlement of Disputes Execution
• Article 135. Interpretation of Civil Transactions 1. The interpretation of a civil transaction must be based upon the actual desire of the parties at the time of establishing such transaction an on the objectives of such transaction. 2. Where a civil transaction may be interpreted as having different meanings, the civil transaction must be interpreted in accordance with a meaning consistent with the objective of the transaction, and shall be in accordance with the customs of the place where the transaction was established; if the party which is economically stronger includes in the civil transaction points 'which are disadvantageous to the weaker party, the interpretation of the civil transaction must be such that favors the weaker party. • Article 408. Interpretation of contracts 1. If a contract contains unclear provisions, the interpretation of such provisions shall not only rely upon the wording of the contract but also shall be based upon the common intentions of the parties. 2. If a clause of the contract susceptible of many meanings, shall be chosen the meaning, which would allow the implementation of the clause to most benefit the parties. 3. If a contract contains a wording with many different meanings the contract shall be interpreted according to the, meaning which best conforms to the characteristics of the contract. 4. If a contract contains clauses or words which are difficult to understand, those shall be explained according to the customs at the appointed place for the execution of the contract. 5. When a contact lack some provisions not belonging to the essential substance, the contract shall be supplemented according to the customs in regard of such types of contracts at the appointed place for the execution of the contract. 6. The clauses of contract shall be interpreted in relations to each other so that each is given the meaning derived from the contract as a whole. • Remark:
•Article 834: Civil contracts 1. Forms of civil contracts shall be governed by the law of the country where contracts are concluded. The contracts that are concluded in a foreign country with violations of law governing forms of contracts shall be valid in Vietnam if the form of those contracts does not violate the law of the Socialist Republic of Vietnam. 2. The rights and obligations of parties in a civil contract shall be determined by the law of the country where performance of the contract takes place. The contracts that are concluded and performed wholly in Vietnam shall be governed by the law of the Socialist Republic of Vietnam. If the place of performance of a contract is not indicated then the place of performance shall be determined by the law of Socialist republic of Vietnam. 3. The civil contract having has immovable property in Vietnam as its subject-matter shall be governed by the law of the Socialist Republic of Vietnam. • Remark: Article 834 is in need of clarification by the courts. 3.4. Applicable Law of the Contract under the Model Contract. 1. Applicable law This contract, and all questions relating to its formation, validity, interpretation or performance shall be governed by the law or.................... (Note: The subclause below is optional). This contract" shall not include, incorporate or be subject to the provisions of the "United Nations Convention on Contracts for the International Sale of Goods. ' • Remark
Notes for preparing the Technical Specification A set of precise and clear specifications is-a prerequisite for bidders to respond realistically and competitively to the requirements of the Purchaser without qualifying their bids. In the context of International Competitive Bidding (ICB), the specifications must be drafted to permit the widest possible competition and, at the same time, present a clear statement of the required standards of workmanship, materials, and performance of the goods and services to be procured. Only if this is done will be objectives of economy, efficiency, and fairness in procurement be realised, responsiveness of bids be ensured, and the subsequent task of bid evaluation facilitated. The specifications should require that all goods and materials to be incorporated in the goods be new, unused, and of the most recent or current models, and that they incorporate all recent improvements in design and materials unless provides for otherwise in the contract ... Care must be taken in drafting specifications to ensure that they are not restrictive. In the specification of standards for equipment, materials, and workmanship, recognised international standards should be used as much as possible. Where other particular standards are used, whether national standards of the Borrower's country or other standards, the specifications should state that equipment materials, and workmanship that meet other authoritative standards, and which ensure at least a substantially equal quality than the standards mentioned, will also be acceptable. '
• Remark: Technical specifications must • be prepared to allow absolute certainty as to the scope of contract, 3.6. Legal Families and the Applicable Law • The total agreement between the parties is their written contract (the fish) plus the applicable private law (the water) • In principle, the parties to a contract are free to decide the private law that will supplement their contract; i.e., the parties are free to choose the water their fish swims in. • Each country has its own national law. These laws belong to one of three families. - The Civil Law Family: legal systems based on codified laws. The aim is consistency and predictability. The judge applies the written law. Examples: France, Germany, Spain. - The Common Law Family: legal systems aimed at achieving the most just result in the individual case. There is no written law - only precedents to guide decision- making. Examples: England, United State, Malaysia. - The Religious Law Family: legal systems based on Moslem principles. For contracts, there laws tend to adopt international common law or civil law principles. Examples: Saudi Arabia, Pakistan.
- The United Nations .Conventions, on Contracts for the International Sale of Goods (The Vienna Sales Convention) is the law of any country that adopts it. Where the Convention conflicts with existing national law, the Convention prevails. • The Convention applies to international sales only. — - The parties to a contract can "opt out" of the Convention with a clause such as: This contract, and all questions concerning its validity, interpretation and performance shall be governed by the law of the Republic of Verbena. This contract shall not include, incorporate or be subject to the provision of the "United Nations Convention on Contracts for the International Sales of Goods". • Many questions about the meaning of the Convention must be answered in the courts. So far the answers have been slow in coming. - Even so, the importer might wish to accept the Convention if the law applicable to the contract is weak or underdeveloped, or if it favours the seller too strongly.
• Article 435: Obligations to provide information and User's Guide. The seller is bound to provide the purchaser with necessary information on the assets sold, and guidelines for using those assets. If the seller fails to perform this obligation, the purchaser shall have the right to request the seller to perform the obligation; If the seller still does not perform it, the purchaser shall have the right to annul the contract and claim for compensation of damages. * Remark: The buyer's right to annulment for failure to produce a user's guide would not normally be acceptable in a seller. 169
3.9. Transfer of Risk, Transfer of Title. • 'Article 432: Moment of Transfer of the Ownership 1) The ownership over purchased items shall pass to the purchaser from the moment when the purchaser receives the object, except for cases where parties agree or law stipulates otherwise. • Article 43: Moment of Passage of Risk.
• Remark: The concepts of "deliver^'" and "receipt" will require some definition by the courts. Under an Incoferm contract, both terms could mean delivery. 3.10. Transfer of Risk and Title under the Model Contract. 5. Delivery 5.1. Date, Place and Terms of Delivery Delivery of the Goods shall be made ............... The scheduled date of Delivery shall be ................ Risk and title to the Goods • shall pass from the SELLER to the BUYER on Delivery.
• Article 426: Place of Delivery of Assets Parties shall agree upon the place of delivery of assets; If there are no agreement on this then the provision of Article -289 [residence or headquarters of Buyer] of this Code shall be applied. The place of Delivery under this Contract is .............................;5 5. Agreed place of delivery. Note: In FOB, FCR, CIF and CIP (etc) contracts, this is the port/place of shipment, 'Remark: Place of Delivery should be stated. In C-term contracts it is the port of shipment, not the port of arrival. 3.12. Time of Delivery under CCVN and under the Model Contract. • Article 425: Time of performance of a Sale Contract 1. The time for performance of a sale contract shall be agreed upon by parties. The seller must deliver the assets to the purchaser at the time as agreed. The seller can deliver the assets before the Fixed time only if the purchaser agrees. In cases where parties do not fix the time for delivery of assets, the purchaser shall have the right to request the seller to deliver assets and the seller shall have the rights to ask the purchaser to receive assets at any time, provided that parties shall inform to each other within a reasonable period of time, and provided further that parties do not have other agreements. 2. If parties have not agreed upon a. term of payment, the purchaser shall have to pay upon receipt of the assets. 5. Delivery 5.1. Date, Place and Terms of Delivery Delivery of the Goods sliall l(e made ...... The scheduled date of Delivery shall be •Remark: •' .. .
2. The obligor, who cannot fulfils the obligation due to force majeure events, shall not bear civil liability, unless otherwise provided for by agreements or stipulated by the law. 17. Force Majeure 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 considered in default and no remedy, be it under this Contract or otherwise, shall be available to the other party. [NOTE: The subclause below contains examples only. It should be Modified as necessary]. Force majeure event include, but are not limited to: war (whether war is declared or not), riots, insurrections, acts of sabotage, or similar occurrence's; strikes, or other labor unrest: newly introduced laws or Government regulations; delay due to Government action or inaction, or inaction on the part of any inspection agency, fire, explosion, or other unavoidable accident; flood, storm, earthquake, or other abnormal natural event.
Force Majeure events do not include If either party is prevented from, or delayed in, performing any duty* under this Contract, then this party shall immediately notify the other party of the event, of the duty* affected, and of the expected duration of the event. If any force Majeure event prevents or delays performance of any duty* under this Contract for more than ... 2 days, then either party may on due notification to the . other party terminate this Contract. • Remark: •
• Article 377: Punitive damages. 1. Punitive damages is measure that shall be applied by the agreement or the parties or by law to secure the fulfillment of an obligation by which the defaulting party must pay an amount of money to the injured party. 2. An agreement or punitive damages, must be filed in an act which may be .separated from included into the main contract. • Article 378; Rate of punitive damages. The rate of punitive damages may be a certain sum of money or may be terminated by percentage of the value of the breached part of the obligation, but must not exceed 5%.
1. The parties may agree upon that the defaulting party shall have to pay only punitive damages but not compensatory damages, or both, either punitive damages and compensatory damages; " if the rate of compensatory damages was not agreed upon in advance, the entire damages must be compensated. 2. If the parties have agreed upon the choice between punitive damages or compensatory damages, the right to choose shall be granted to the injured party. 3. In case where punitive da infixes rather compensatory damages have been agreed upon by the parties or stipulated by law, the defaulting party must pay only punitive damages. • Remark: The 5% rate for punitive damages is stringent is, but it is unclear. The possible of paying both compensatory and punitive damages is highly unattractive to the seller: few contracts will allow it. 3.15. Liquidated damages under the Model Contract 8.3. Delay in Delivery * In the event of late Delivery for reason other than force majeures defined in Clause 17 below, the SELLER shall pay as liquidated damages and not as a penalty the sum of and of the value of the undelivered part per Day of late Delivery up to a maximum of and of the Price payable Clause 9 below. Payment of liquidated damages shall be due without the BUYER'having'to furnish proof of any loss, damage or injury.
[NOTE: r/ic too subclauses below are alia-natives.} " Payment of liquidated damages shall constitute full and complete satisfaction of any claim of the. BUYER against the SELLER arising from or in connection with late Delivery of any Goods. In particular the SELLER shall not be liable for any indirect or consequential loss or damage, as defined in Clause 2.7 above, arising from or in connection with late Delivery of any Goods. Payment of liquidated damages by the SELLER shall not preclude the BUYER from seeking compensatory damages from the SELLER for any loss, injury or damage arising from or in connection with late Delivery of any Goods. In particular the BUYER shall be entitled to compensation from the SELLER for any indirect or consequential loss or damage, including but not limited to loss of profit; loss of use or loss of contract, arising from or in connection with late Delivery of any Goods. However, payments made as liquidated damages shall be offset against any compensatory damages recovered from the SELLER for the late Delivery of and Goods.
In the event that the SELLER becomes liable to pay the maximum sum payable as liquidated damages under Clause 8.3 above, then the delay shall be deemed breach of contract and the BUYER may, upon due notice, terminate the Contract and/or seek any other remedy available to him.
• Article 428: Liability for delivery of assets in improper quantify 1. In cases where the seller delivers things in quantity exceeding that outnumbered the quantity which has been agreed upon, the purchaser shall have the right to refuse the excess, or to receive it and pay for it at agreed price. 2. In cases the seller party delivers things in quantity less than the quantity which has been agreed upon, the purchaser shall have either of following rights. a. To terminate the contract and request compensation for damages. b. To receive the quantity which was delivered and request compensation for damages. . c. To receive what has been delivered and extend a period of time for the seller to deliver the rest. • Article 429: Liability due to Delivery of Incompleted Things. 1. In cases where things which have been delivered are not completed and thus causing the usefulness to be failed, the purchaser shall have either of following rights: a. To cancel the contract and request compensation for damages: b. To receive what has been delivered and ask the seller party to deliver component or parts which have not been delivered and to request compensations for damages and to suspend the payment until the things becomes complete. • Article 430: Liability for delivery of things of the Wrong category. In case where the things-have... been .delivered, in improper [assortment], the purchaser shall have either of the following rights 1. To terminate the contract and request compensation for damages. 2. To receive what has been delivered any pay for it at the price as agreed upon by parties. ' 3. To request the seller to deliver •tbinp in proper assortment.
If a material discrepancy in quantity exists and is duly noticed to the SELLER, the BUYER hi. his discretion and subject to clause 8.2 above may either. a. Accept the delivered portion of the Goods and required the SELLER to deliver the remaining portions forthwith; or b. Accept the delivered portion of the Goods and terminal of the remaining portion of the Contract upon the due notice given to the SELLER. If any material discrepancy in quantity exists such that may at his discretion. a. Adopt either of the remedies prescribed in tins clause above;
b. Reject the dclivored portion of the Goods and recover from the SELLER all payments made to the SELLER as well as all costs, expenses and customs duties incurred by the BUYER in association with the shipment, movement through customs, insurance or storage of the Goods. 11.4. Buyer's rights in the event Discrepancy in quality Discrepancies in quality shall be considered as defects and shall give rise to claims under the Defects Liability provision of this Contract in Clause 12 below. However, a fundamental discrepancy in quality shall give the BUYER the right to refuse Delivery of the Goods in whole or in part and to recover from the SELLER all payments made for the …… and customs duties incurred by the BUYER in association with the shipment, movement through customs. Insurance coverage of the unaccepted portion the Goods/Further a refusal to accept delivery in whole shall be considered termination under Clause 18 of this Contract and refusal to accept delivery in part shall be considered termination of that part of the Contract affected by such refusal.
3.18. Defect liability under CCVN • Article 437: Guarantee of the Quality of Goods. 1. The. seller shall guarantee the fitness and characteristics of things sold; If the purchase discovers in the purchased things the defects which devaluated it decreases its fitness of he/she must immediately notify the seller thereof and shall have the right to request the seller to repair, or to replace the things with the defects, or to reduce price and to compensate for damages, if parties have not agree otherwise. 2. The sale party shall guarantee that things sold are in accordance with description on covers Or appropriate with the sample that has been chosen by the purchaser. 3. The sale party shall not be liable for defects in the following cases: (a) Defect that the purchase party have already known and must have known when buying. (b) Things at auction; things second hand trade; (c) The purchase party at fault of causing defect to things. • Article 438: Warranty obligation The sale party shall have warranty obligation to things sold for a period of time to be called warranty period, if the warranty is agreed upon by parties or stipulated by Law. The warranty period shall be calculated from the time the purchase party has to receive things. • Article 439. Right to request for [remedy of Defect under] warranty During the warranty period, if the purchase party discovers any defects on things, it shall have the right to request the sale party to repair things free of charge or to reduce the price or to exchange the things with defects for the others or to return things and receive back the money. • Remark: The correct word is "warranty" The warranty period appears to run forever unless otherwise regulated by the contract. The buyer has the right to choose the remedy which is grossly unfair to the seller. 3.19. Defect Liability under the Model Contract. 12. Defects liability 12.1. Seller's Liability for defects The SELLER warrants that the Goods, supplied under this Contract shall at the date of their Delivery. a. Be free defects in material. b. Be free from defects in workmanship; c. Be free from defect inherent in design, including but not limited to selection of materials and be fit for the purpose for which such Goods are normally used. If any defect provably present it any of the Goods, on the date of Delivery comes to light during the defects liability period, then the BUYER shall forthwith notify the SELLER. The SELLER, without undue delay, shall at his own risk and cost and at his discretion repair or replace such item or otherwise make goods the defect. The seller's liability for defects is subject to the BUYER having adhered to all procedures and instruction applicable to the .... of the item, and expressly excludes damages to the Goods caused by fair wear and tear or by misuse occurring after Delivery.
The SELLER shall be liable for defect which come to light during a period of ........... days from ..... After the end of this period, the BUYER shall have no right to raise claims of any kind against the SELLER for any defect in any Goods of the seller's supply. The defect liability period shall be prolonged by the length of any period during which the Goods cannot be used by the Buyer because of a defect. However, it new Goods are delivered to replace defective Goods, the defects liability period shall not begin again on the replacement Goods. 1.2.3. Limitation of Defects Liability. [NOTE: The two clauses below are alternatives. Delete as necessary] The duty to repair and replace or otherwise to make good defects is the only duty of the SELLER in the event of the Delivery, of defective Goods. In particular the BUYER shall not entitled to compensation from the SELLER for any indirect loss or damage as defined in Clause 2.7 above, arising from or in connection with Delivery of defective Goods. The SELLER shall indemnify and hold harmless the BUYER against any loss or damage however arising whether direct or indirect which shall be suffered by the BUYER as the result of defective or faulty Goods delivery by the SELLER. 3.20. Payment under CCVN and the Model Contract • Article 295: Fulfilling the obligation of paying money. 1. The obligation to pay money shall be fulfilled in full, according to the time limit, at the appointed place and in the agreed upon procedures. 2. The money that must be paid shall be the Vietnamese Dong, except in cases where the law stipulates otherwise. • Article 424: Price and Modes of Payment 3. Modes of payments shall be agreed upon by parties or stipulated by law. • Remark:
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