Contract and its features

ESSENTIAL CLAUSES OF CONTRACT

Basic Vocabulary

essential clauses - существенные условия контракта

strike a deal - заключить сделку

standard contract - типовой контракт

part and parcel - неотъемлемая часть

legal title - юридическое наименование

contracting parties - договаривающиеся стороны

unit of measure - единица измерения

commodity - товар

tolerance - допустимое отклонение

stipulation - условие

bulk cargo - насыпной или наливной груз

in conformity with - в соответствии с

by sample - по образцу

quote a price - назначать цену

subject to - подлежащий

firm prices - твердые цены

fixed prices - фиксированные цены

sliding prices - скользящие цены

Reading

A contract is a legal agreement between two or more parties for an exchange of goods or services. It helps safeguard all the parties involved by ensuring that the transaction is carried on the terms which are mentioned clearly so that there is no breach of contract.

By law contracts are made by Russian foreign trade organiza­tions in writing. When striking a deal standard contracts are widely used, standard contracts are not a must. Some articles may be altered and supplemented.

Here are some of the items which are part and parcel of any contract: legal title of the contracting parties, subject of the cont­ract, quality, price, delivery and payment terms.

Subject

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.

Quality

The quality of machines and equipment is to be in conformity with the technical specification of the contract.

The quality of raw materials and foodstuffs is determined, as a rule, by standards, by sample, by description.

Price

The price stated in a contract may be firm, fixed or sliding.

Firm prices. Firm prices are not the subject to change in the cour­se of the fulfillment of the contract.

Fixed prices. The price governing in the market on the day of delivery or for a given period.

Sliding prices. These prices are quoted for machinery and equipment which require a long period of delivery.

Taking into account that all the details, including negative situation, are stipulated in the contract, it usually contains some more obligatory items: Terms of Payment, Date and Terms of delivery, Packing and Marking, Shipping Instructions and Notifications, Insurance, Sanctions, Force Majeure, Arbitration and other additional clauses if necessary.

Practice

Answer the questions:

1. Why are standard contracts widely used?

2. What are the essential items of a contract?

3. What information is contained in different sections of a contract?

4. How is quality determined in a contract?

5. What sort of prices may be indicated in a contract?

TERMS OF DELIVERY

Basic Vocabulary

terms of delivery – условия поставки

ex-works – франко-завод

FOT – франко-платформа

FOR – франко-вагон

FOB – франко-борт

FAS – франко- вдоль борта судна

SIF – цена, страховка, фрахт

to cover insurance expenses – включать расходы по выплате страховки

mode of transportation – способ транспортировки

freight - фрахт

road carriage bill – автомобильная накладная

to be attached – прилагаться к…

consignor - грузоотправитель

consignee - грузополучатель

port of loading – порт погрузки

port of discharge – порт разгрузки

gross weight – вес брутто

vessel - судно

contents - содержимое

dirty B/L – грязный коносамент

to issue an invoice – выписать счет-фактуру

Reading

When sellers quote prices in their offers they usually state on what terms, at this price, they will deliver the goods. – The price will certainly depend on the terms of delivery. The most popular terms of delivery in foreign business transactions are:

• fob (free on board)

• cif (cost, insurance and freight)

• с & f (cost and freight)

• for (free on rail)

If the goods are offered on fob terms - the price will practically include the cost of the goods and transportation expenses to the port of shipment. If the goods are offered on cif terms - the price will cover the cost of the goods, insurance expenses and freight or transportation expenses, to the port of destination.
If the goods are offered on с & f terms - the price will cover the cost of the goods and freight to the port of destination.
If the goods are offered on for terms - the price will include the cost of the goods and transportation expenses to the railway station only. These terms are similar to fob terms. The only difference is the mode of transportation. In case of fob terms the goods are shipped on board ships. In case of for terms the goods are transported by railway.

Here are a few examples of how terms of delivery can be mentioned
in offers:

· The price is USD 2.000.00 per ton fob New York.

· The quoted price is GBP 1,200.00 each cif Murmansk.

· We can offer the goods at the price of GBP 78.00 per meter
с & f Liverpool.

· The goods are offered on a for basis.