Prices and Total Value of the Contract

ACTIVE VOCABULARY

Transaction угода, банківська операція;

To be drawn up бути складеним;

Intention намір;

Obligations зобов’язання;

To be fulfilled бути виконаним;

To state зазначати, вказувати;

According to згідно з …;

To cover охоплювати, покривати;

To sign підписувати;

Signature підпис;

Clause стаття (контракту);

Party (of the Contract) сторона (контракту);

Total cost (amount, sum) ` загальна вартість (сума);

Packing and marking пакування та маркування;

Guarantees гарантії;

Sanctions санкції;

Claims претензії;

Insurance страхування;

Force- Majeure circumstances форс-мажорні обставини;

Payment оплата;

To require вимагати;

To meet the requirements виконувати вимоги;

Currency валюта, грошова одиниця;

To protect against захищати від;

Indelible paint незмивна (водостійка) фарба;

In conformity with за згодою (у відповідності) з;

To be penalized бути оштрафованим;

In favor (of) на користь (кого, чого);

Alteration зміна, переробка;

Amendment поправка, виправлення;

Transfer передача (чогось комусь).

Exercise 1. Translate the following word-combinations and expressions into Ukrainian:

1. Business transaction; trade transaction; useful transaction.

2. The Buyer stated all the obligations.

3. Number of clauses; a lot of clauses; few clauses; the following clauses.

4. Names of the parties; number of the parties; parties of the contract.

5. Guarantees are stated in this contract.

6. The Seller makes insurance; insurance is made in favor of the Buyer.

7. Terms of the payment; time of the payment; terms of delivery; exact terms; currency of the payment.

8. To protect the goods; to protect against any damage; to protect nature against the pollution.

9. To meet the requirements of the parties; to require goods in time; to meet the stated requirements.

10. Any alterations; alterations and amendments are made by the contracting parties.

Exercise 2. Read and translate the text about the contract:

CONTRACT

In foreign trade transactions a contract is drawn up to give legal expressions to the intention of the partners and guarantee that the obligation contained in the contract will be fulfilled.

The contract forms the basis of transactions between the Buyer and the Sellers and great care is exercised when the contract is being prepared that all the legal obligations have been stated.

According to the purpose and contents, contracts can cover: goods, services, technology, know-how, etc.

By law contracts are made in written and signed by the contracting parties.

As a rule the contract contains a number of clauses (articles) arranged in definite sequence.

Here you can see some clauses of the contract:

1. Names of the Parties;

2.Subject of the Contract;

3.Price and Total Cost (Amount, Sum) of the Contract;

4.Dates and Terms of Delivery;

5.Terms (Conditions) of Delivery;

6.Packing and Marking;

7.Guarantees or Warranty;

8. Sanctions and Claims or Penalty;

9. Insurance;

10. Force-Majeure Circumstances;

11. Arbitration;

12. Other Conditions (Terms);

14. Legal Addresses and Signatures of the Parties.

Exercise 3. Work in 3 groups, read silently and translate the information about some clauses of the contract. Then try to retell this information to the rest of your classmates.

GROUP 1:

1. The article “SUBJECT OF THE CONTRACT” names the product for sale or purchase.

2. “PRICE AND TOTAL COST OF THE CONTRACT”. The price stated in a contract may be fixed, firm and sliding. Fixed price is the price governing in the market on the day of delivery or for a given period. Firm prices are not subject to change in the course of the fulfillment of the contract. Sliding prices are quoted for machinery and equipment which require a long period of delivery.

3. The exact dates and terms of “DELIVERY” are defined in this clause of the Contract.

GROUP 2:

1. The clause “PAYMENT” includes terms of the payment, defines the currency of payment and the order of the payment between contractors.

2. “PACKING AND MARKING”. The packing must protect the goods against any damage during the carriage. The marking should be clearly made with indelible paint on the top of the box and on its two opposite sides (ex. Handle with care; Do not drop; Keep dry; etc.).

3. The article “GUARANTEES” says, that the Seller guarantees the quality of the delivered merchandise in conformity with the latest technical achievements and the period of guarantee will meet the requirement mentioned in the Contract.

GROUP 3:

1. The clause “SANCTIONS AND CLAIMS” includes the cases of breach of the Contract. Most often the Buyer makes quality and quantity claims on the Seller. The Party which fails to meet its contract obligations is penalized.

2. The article “INSURANCE” includes three main terms of insurance:

a) what is insured what risks the goods are insured from

b) who insures

c) in whose favor the insurance is made.

3. The article “OTHER CONDITIONS” includes the order of the entry of any alterations and amendments, and the order of the transfer of the parties rights and obligations to a third party.

Exercise 4. Answer the questions:

1. What is the purpose of the contract?

2. What can the contract cover according to its purpose?

3. What are the main clauses (articles) of the contract?

4. Is the contract a written document?

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

6. What is indicated in the article “Dates of Delivery”?

7. What is included in the clause “Payment”

8. What are the packing requirements?

9. What are the requirements for marking the goods?

10. What is indicated in the article “Guarantees”?

11. What kind of claims are made by the Buyer?

12. Can the Seller be penalized for a delay of delivery?

13. What terms of insurance should be mentioned in the contract?

14. What does the article “Other conditions” include?

Exercise 5. Fill in the blanks with the necessary words given below:

1. The Seller sells and the Buyer buys the goods indicated in the specification which is an i… p… of the Contract.

2. The price for the merchandise supplied in a… w… present contract amounts to $10 million.

3. Quality of the merchandise shall be in c… w… the standards in force in Ukraine.

4. Payment under the present Contract shall be offered in 5 i… in the following manner.

5. The Seller shall d… the m… to the Buyer in dates indicated in a… to the present Contract.

6. With the equipment the Supplier shall send to the Customer the f… sh… d… .

7. Any a… and a… to the present Contract shall be made in written form and s… by both parties.

8. Neither party is entitled to transfer their rights and obligations to a third party without a written consent of the other c… p… .

contracting party; integral part; in accordance with;

in full conformity with; installments; deliver the merchandise;

appendix; following shipping documents; signed; alterations and additions.

CONTRACT (EXAMPLE OF THE CONTRACT)

VOCABULARY

Supply постачання, забезпечення;

Hereinafter тут і надалі;

Hereinafter referred to as що надалі іменується;

To conclude укладати;

For the following про наступне;

As listed in як перераховано у …;

Appendix додаток;

FOB (Free on Board) вільно на борту судна (одна з умов доставки,

зазначених у міжнародних правилах тлумачення комерційних термінів – “Incoterms” - International Commercial Terms);

Integral part невід’ємна частина;

Specified зазначений;

Within в межах;

Is to be має бути;

Letter of Credit Акредитив (банківський документ на отримання

кредиту);

Bill of Lading коносамент (супровідний документ);

To issue видавати;

Item пункт, одиниця (товару);

Expenses витрати;

Dispatch відвантаження;

Delay відстрочка;

To be entitled мати право, бути в праві;

Neither party жодна сторона.

Exercise 2. Read and translate the example of the Contract.

Brighton, England

April 10, 2012

Firm “Continental Equipment”, Brighton, England, hereinafter referred to as “the Seller”, on the one part, and firm “TST Systems” Ltd., Kiev, Ukraine, hereinafter referred to as “the Buyer”, on the other part, have concluded the present Contract for the following:

Subject of the Contract

The Seller has sold and the Buyer has bought the machinery, equipment, materials and services (“Equipment”) as listed in Appendix 1 being an integral part of this Contract.

Prices and Total Value of the Contract

The Total Contract value is as following: equipment and engineering FOB U.K. port and documentation.

The prices are understood to be FOB Odessa including the cost of packing, marking, loading on board of a ship, stowing and fastening the equipment in the hold, and the cost of the materials used for this purpose.

Time of Delivery

The Equipment specified in Appendix 1 of the present Contract is to be delivered within 2 (two) months from the date of opening the Letter of Credit specified in Clause 4 of this Contract.

The delivery date is understood to be the date of the clean Bill of Lading issued in the name of the Buyer, destination Odessa port of Ukraine.

Terms of Payment

Within thirty (30) days from the date of signing of this Contract, the Buyer is to open in favor of the Seller a Letter of Credit with Citibank, London, for hundred per sent (100%) of the total contract value. The Letter of Credit is to be valid for three (3) months.

Technical Documentation

Within five (5) days from the delivery date the Seller shall send two (2) sets of the technical documents as listed in Appendix 2 to the address of the Buyer.

All instructions on the drawings are to be in English, with all the instructions contained in items 1, 2, 3 and 4 of Appendix 2 translated into Russian.