CHAPTER 3 CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 1 CHAPTER 3 MATERIALS • Textbook “Foreign Trade Techniques”; • Incoterms 2010 (ICC); • UN Convention on Contracts for the International Sale of Goods; • UNIDROIT Principles of International Commercial Contracts; • Civil Code (2005); • Commercial Law (2005); • Sample Contracts; 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 2 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1. Concept 1.1. Contracts for purchase and sale of goods 1.1.1. Contracts for purchase and sale of property Civil Code 2005, Article 428: A contract for purchase and sale of property is an agreement between the parties whereby the seller has the obligation to hand over the property to the purchaser and receive payment, while the purchaser has the obligation to accept the property and make payment to the seller. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 3 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.1.2. Contracts for purchase and sale of goods Commercial Law 2005, Article 3: Purchase and sale of goods mean commercial activities whereby the seller is obliged to deliver goods, transfer ownership of goods to the purchaser and receive payment; the purchaser is obliged to pay the seller, receive the goods and the ownership thereof as agreed. Goods include: • All types of movables, including those to be formed in the future; • Things attached to land. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 4 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Contracts for purchase and sale of goods: Contracts for purchase and sale of goods is an agreement between the parties, according to which the seller has the obligation to deliver goods, transfer the ownership of the goods to the buyer and receive payment, the buyer has the obligation to arrange payment, receive the goods and the ownership thereof. Note: Commercial Law 2005 does not provide any concept for contracts for either domestic or international purchase and sale of goods. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 5 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.2. Contracts for the international sale of goods Contracts for the international sale of goods = Contracts for purchase & sale of goods + international elements. 1.2.1. International Law 1.2.1.1. Convention relating to a Uniform Law on the International Sale of Goods (Hague Convention 1964) Article 1, Chapter I, Annex (Uniform Law on the International Sale of Goods): The present Law shall apply to contracts of sale of goods entered into by parties whose places of business are in the territories of different States, in each of the following cases: 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 6 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (a) where the contract involves the sale of goods which are at the time of the conclusion of the contract in the course of carriage or will be carried from the territory of one State to the territory of another; (b) where the acts constituting the offer and the acceptance have been effected in the territories of different States; (c) where delivery of the goods is to be made in the territory of a State other than that within whose territory the acts constituting the offer and the acceptance are effected.  The application of the present Law shall not depend on the nationality of the parties. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 7 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.2.1.2. United Nation Convention on Contracts for the International Sales of Goods (CISG 1980) CISG, Article 1, Chapter I, Part I : This Convention applies to contracts of sale of goods between parties whose places of business are in different States; Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention. CISG does not define exactly the concept of contracts for the international sale of goods. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 8 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.2.2. Vietnam Law 1.2.2.1. Temporary Regulation on concluding foreign trade contracts (Regulation 4794/TN-XNK, issued by the Ministry of Trade on 31/7/1991) - Foreign trade contracts are those with international elements; - International elements: Traders are of different nationalities; Goods are transported across borders; Payment currency is foreign to at least one party. Nationality is one of the most important elements. 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 9 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.2.2.2. Commercial Law 1997 Contracts for purchase and sale of goods with foreign traders are contracts entered into between a Vietnamese trader and a foreign trader What is the crucial element? A contract entered into between a Chinese trader and a Vietnamese one, both based in Vietnam? A contract entered between two Vietnamese traders based in different countries? 07/10/2013 Lecturer: Nguyễn Thị Minh Hà 10 [...]... according to which the Seller (the Exporter) is obliged to deliver goods, and transfer the ownership thereof to the Buyer (the Importer); the Buyer is obliged to receive of the goods and the ownership thereof, and arrange payment 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 13 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 2 Major features of contracts for the international sale of goods 2.1 General... relations involving foreign elements) or other Laws; Real estate sold to foreigners? What is on-spot import/export? Your opinion on the listing of forms of international purchase and sale of goods? 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 12 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Contracts for the international sale of goods is the agreement between parties whose places of business are...OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 1.2.2 .3 Commercial Law 2005 Chapter II, Article 27.1.: International purchase and sale of goods shall be conducted in form of export, import, temporary import for re-export, temporary export for re-import and transfer through border-gates Legal definitions of forms of international sale of goods: Article 28 -30 , Commercial Law 2005;... DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS b Name of goods + place of origin c Name of goods + manufacture’s name d Name of goods + brand name e Name of goods + major specifications E.g.: 14-inch TV; 29-seat bus f Name of goods + main use E.g.: Cotton for medical use g Name of goods + HS code E.g: Automobile air conditioner 8415.20 To specify the goods, a-g are often combined 07/10/20 13 Lecturer:... DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 3. 3 .3 Theoretical weight M (mass) = D (density) x V (volume) 3. 3.4 Commercial weight 100 + W0 G0 = G1 x 100 + W1 - Goods whose mass is sensitive to moisture change - G0 : Commercial weight W0: Standard moisture - G1 : Actual weight W1: Actual moisture 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 30 DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 3. 4... 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 17 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 4 Content of Contracts for the international sale of goods: 4.1 Preamble: - Contract date and number; - Date and place of signing contract; - Parties’ information; - Legal basis of the contract (if necessary); - Definition of terms (if necessary) 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 18 OVERVIEW ON CONTRACTS. .. OF GOODS e As per technical documents f As per specifications of goods g As per volumetric weight of goods h As per general customary criteria E.g.: FAQ, GAQ, GMQ i As per content of essential components j As per ratio of products form k As per brand of goods l As per description of goods 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 24 DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 2.2 Content of. .. 2005; Commercial Law 2005 and nationality? 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 11 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS - The movement of goods across national and/or customs borders - Contracts without the movement of goods across national and/or customs borders will not be considered contracts for the international sale of goods ; - Commercial Law 2005 may not govern all cases... State/customs border; Payment: foreign currency to at least 1 Party; Various sources of governing law: National law International will Commercial practice Legal precedent 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 15 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 3 Legal validity of contracts for the international sale of goods - Subjects: legal; - Objects: legal; - Form: legal + CISG: oral, in... DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 2 Quality - One of the most important terms; - Clearly define main characteristics of the goods; - Require wide knowledge on machandizing 2.1 Methods to denote quality: a As per sample b As it is (tale quale) c As inspected and approved d As per standard or category 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 23 DRAFTING CONTRACTS FOR THE INTERNATIONAL SALE . Contracts for the international sale of goods Contracts for the international sale of goods = Contracts for purchase & sale of goods + international elements. 1.2.1. International Law. forms of international purchase and sale of goods? 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 12 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Contracts for the international sale. land. 07/10/20 13 Lecturer: Nguyễn Thị Minh Hà 4 OVERVIEW ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS Contracts for purchase and sale of goods: Contracts for purchase and sale of goods