NGUYEN TRONG DAN
11(11 3 HONG TIMING MAI
QUtit TE
Xueit bcin lein this 6
International
Trade Contracts
6t h Edition
NHA XUAT BAN LAO DONG
HA NOL 2007
Thu' tit g6p y xin
GS.TS. Nguygn Trong Dan
DTDD: 0904 055 077
Email: dhannte,fpt.vn
Tac gi6 gilt bgn quye'n
© Copyright by the author
2
Preface
This book is intended to provide commerce students of international
trade and other readers with guidelines to the language of international
trade contracts as the name of the book suggests.
Despite the difficulty and complexity of the subject matter, the language
used in the book is straightforward and readily understood.
The book contains 11 parts. The first eights parts deal with legal aspects
and give examples of authentic language used to illustrate them. At the
end of each part, there are comprehension questions so that the students
can check their understanding. In the footnote from Part 1 to Part 8, four
or five words and/or expressions are listed with their context meanings
in Vietnamese.
Part 10 gives examples of authentic contracts from various Vietnamese
and foreign trading corporations. All of these contracts are bilingual:
English and Vietnamese. Part 11 includes the ICC Model Sale contract
and the remarks made on each individual provision in the light of the
civil code of the SRVN regarding civil contracts.
Although every effort has been made to ensure the reliability of the
information in the book, for readers of the book, the author is not
responsible for any losses resulting from using this book or specimen
contract clauses taken from therein. Before signing a contract, business
persons should take appropriate legal advice.
As mentioned the subject matter is very difficult and complicated, errors
and mistakes might have been made here and there in the book.
Constructive suggestions and corrections are, therefore, highly
appreciated.
Prof. Dr. Nguyin Trong Dan
Hanoi, 2007
3
Acknowledgements
I would like to express my many thanks for Directing Board of the
Foreign Trade University for their help and assistance during the
preparation and production of this book.
I also would like to express my sincere thanks for my colleagues at the
English Department of the Foreign Trade University for their long and
kind co-operation in the making of this book.
I am deeply indebted to my Australian Collegue, Mr. Timothy Maxwell
Clemons for his valuable suggestions, comments, criticism and
correction during the development of this book.
I am also deeply indebted to all Vietnamese and foreign import and
export organizations and commercial services to their assistance and
permission for reproduction of their contracts and documents.
As always I wish to express my special thanks to my wife and my
children for their understanding and encouragement throughout the
preparation of this book.
I would like to thank Mr. Nguyen Van Chau, BMA, Researcher, at the
Foreign Trade University for his deligence shown in proofreading of the
book and for all other things that he has done on my behalf so that the
book would have been made possible for the first edition.
Finally, I also would like to thank all of my friends and former students
for their assistance in providing the contracts and their translation.
Prof. Dr. Nguyin Trong Dan
4
Contents
Page
PREFACE
3
ACKNOWLEDGEMENTS
4
CONTENTS
5
BIBLIOGRAPHY
7
HOW TO WORK WITH THE BOOK
9
THE RELATIONSHIP BETWEEN THE LAW AND THE CONTRACT
11
1.
BRIEF INTRODUCTION TO THE LAW AND THE CONTRACT
11
2.
THE RELATIONSHIP BETWEEN THE LAW AND THE CONTRACT
11
3.
EUROPEAN (CONTINENTAL) LAW AND ANGLO - AMERICAN
LAW
13
4. THE APPLICABLE LAW
17
5. SOME SPECIMEN CLAUSES
21
6. COMPREHENSION QUESTION
22
THE LANGUAGE OF CONTRACT IN ENGLISH
25
1. THE CONTRACT SENTENCE
25
2.
THE LANGUAGE OF ANGLO-AMERICAN CONTRACTS
31
3.
THE CLAUSES PATTERN IN CONTRACT ENGLISH
33
4. THE PASSIVE FORM
37
5. COMPREHENSION QUESTIONS
38
INTERPRETATION OF THE CONTRACT
43
1.
THE ENTIRE AGREEMENT AND THE CONTRACT DOCUMENTS
43
2. THE WHEREAS - RECITAL
45
3. DEFINITIONS
47
4. SOME SPECIMEN DEFINITIONS
49
5. COMPREHENSION QUESTIONS
50
Part 4 THE PARTIES TO A CONTRACT
54
I.
THE NAMES OF THE PARTIES TO A CONTRACT
54
2. THE SIGNATURE
55
3.
THE ASSIGNMENT OF RIGHTS AND DUTIES
57
4. COMPREHENSION QUESTIONS
58
Part 5 GOODS AND DELIVERY, PRICE AND PAYMENT
61
I. SCOPE AND DELIVERY
61
2. PRICE AND PAYMENT
69
3. COMPREHENSION QUESTIONS
72
Part 6 THE DEFECT AND THE LIABILITY
75
I. WARRANTY AND GUARANTEE
75
2. THE DEFECTS LIABILITY PERIOD
76
3. REMEDY
77
4.
THE TIMING OF THE DEFECTS LIABILITY PERIOD
79
5.
WHO PAYS FOR CLAIMS UNDER WARRANTY?
80
6.
DEFECTS LIABILITY AND MAINTENANCE
81
Part 1
Part 2
Part 3
5
7 - COMPREHENSION QUESTIONS 82
Part 7 BREACH OF CONTRACT 87
I. LIQUIDATED DAMAGES AND PENALTIES 87
2. LIQUIDATED DAMAGE: PROBLEMS 88
3. TERMINATION 91
4. THE LIMITATION OF LIABILITY 93
5. COMPREHENSION QUESTIONS 99
Part 8 FORMATION OF CONTRACTS 104
I. SOME LEGAL ASPECTS 104
2. THE OFFER 108
3. THE PURCHASE ORDER 109
4. ACCEPTANCE OF ORDERS 109
5. GENERAL CONDITIONS 109
6. ECE GENERAL CONDITIONS 110
7. APPLICABILITY 110
8. GENERAL NOTE ON NEGOTIATION 111
9. COMPREHENSION QUESTIONS 111
Part 9 THE INDUSTRIAL PLANT CONSTRUCTION CONTRACT 114
1. UNPACKAGING, TENDERING AND NEGOTIATION 114
2. THE PARTIES 117
4. THE EMPLOYER'S DUTIES: PRICE AND PAYMENT 122
5. VARIATION 123
6. TEST AND INSPECTIONS 126
7. AN EXAMPLE OF A SUPPLY CONTRACT TO DELIVER AND
INSTALL MACHINERY (BILINGUAL) 129
Part 10 EXAMPLES OF CONTRACT 231
I. CONTRACT FOR RICE
231
2. CONTRACT FOR LUBRICANTS
241
3. ABC CORPORATION'S CONTRACT
249
4. CONTRACT FOR GARMENT PROCESSING
260
5. CONTRACT FOR DISTRIBUTORSHIP AGENCY
273
6. JOINT VENTURE CONTRACT 306
7. SALES AND PURCHASE CONTRACT 1 322
8. SALES AND PURCHASE CONTRACT 2 334
Part 11 ICC MODEL CONTRACT FOR THE SALE OF GOODS 340
I. THE ENGLISH VERSION OF THE CONTRACT 340
2. THE VIETNAMESE VERSION OF THE CONTRACT 354
3. MODEL CONTRACT FOR THE SALE OF GOODS AND THE CIVIL
CODE OF VIETNAM 369
APPENDIX 385
- CONG 1.fric VIEN 1980 385
2 HOP DOING MUA BAN TAI SAN THEO LUAT DAN SVCOA NUOC
CONG HOA XA HOI CHU NGHIA VIET NAM 428
6
BIBLIOGRAPHY
Anderson, Ronald A. Business Law. Cincinati: South Western 1980.
Black, H. C. Black's Law Dictionary. 5 th ed. St Pault: West. 1979.
Dy, Nguyen Duc, et al. Tt? di en ngoai Throng Dai hoc Ngoui
thtrong, Ha NOi. 1985.
Dy, Nguyen Dile. Tit dien gidi nghia kinh to kinh doanh, NXB Khoa
hoc va Ky thuat. 1996.
Dam, Nguyen H6ng. Van tdi ngoai thumg. Throng Dai hoc Ngoul
thtrang. 1987.
Dan, Nguyen Trong. Ngorr ngi? hop dong thu'ung mai Anh My. Sinh
hoat khoa hoc trubng Dal. hoc Ngoai thtrong. 1993.
Dan, Nguyen Trong. Cau, menh de va ngi? trong hop eking thuzing
mai quae re'. Ky
y6u HOi nghi Khoa hoc 1c'T ni4rn 30 nam Vien ngOn ngir
hoc V* Nam. 1993.
Dan, Nguyen Trong.
The language of business correspondence in
English. NXB Gido duc. Ha NO. 1992.
Groner, Sammel B. Modern Business Law. Reston. 1983
Mc (Draw Hill - 1992. Gifis, Steven H. Law Dictionary, Third Ed.
New York, 1992.
Nguyen Th6 et al. Ter dien Phap luat Anh Viet. NXB KHXH.
1992.
Federation Internationale des Ingenieurs (FIDIC):
Conditions of
Contract - 1987
International Chamber of Commerce:
+ Force Majeure and Hardship. Paris. ICC. 1984.
7
+
Guide to Penalty and Liquidated Damages Clauses.
Paris
ICC. 1990.
+ Incoterms -
Paris ICC. 2000.
+
Model forms for Issuing Contract guarantees Paris. ICC - 1992.
+ Rules of Concilliation and Arbitration.
Paris. ICC. 1988.
Ma, Nguyen Thi va Thiet, Hoang Van. Phap ly dai cumig. TriOng
Dai hoc Ngoai thuong. NOi. 1991
Ma, Nguyen Thi va Hoang Van: Nhil'ng van de phap li trong
ngoai thumg.
TrtOng Dai hoc Ngoai diming. 1996.
Pinnels, James.
International Procurement Contracts.
Prodec.
Helsinki. 1991.
Sanderson, Steve. Ed.
Standard Legal Forms and Agreements for
Canadian business. Canada 1989.
Staple, James G. et al.
"Know - how in the united States" in the know
- how contract in Germany, Japan and the United States
Ed. Herbert Stumpf Deventer: Kluwer. 1984.
Tixu, Vu Hiru. Tdchdc ky thugt Ngoai thurnig. Trtthng Dai hoc Ngoai
thuang. Ha NOi, 1991.
White, James, et al - Uniform Commercial Code. St Paul West. 1980.
Trinh, Dinh Xuan. tay thank loan Quo . c Trubng Dai hoc Ngoai
thtrong Ha NO. 1991
Bo lugt Dan su' dia nu& Cong hoa xar 110i chi nghig Viet Nam.
Vietnam Law & Legal Forum. 1996.
Ludt thumig mai cua niffrc COng hoa xd hgi chi nghra Viet Nam.
1996.
Legal writings on Foreign Investment in Vietnam.
SCCI. 1992.
COng uOc Vien 1980 ye Hop (long mua ban QuCic to Paris. 1980.
8
HOW TO WORK WITH THE BOOK
This book is, as mentioned, meant to be used, firstly by commerce
students at the Hanoi Foreign Trade University and otber business
persons. The focus of the book is on both the language and other legal
aspects of contracts.
Anyone who wishes to use the book effeciently should, first of all, attain
a fairly advanced level of English and then have a good understanding of
such key subjects as:
- Laws applied to international business operations
- Foreign Trade Organizations and Techniques
- International Payment
- Shipping, Transport and Insurance.
In order to understand, at the beginning, and be able to apply the contract
terms and conditions, the students, readers and users are required to work
through the book starting from Part I.
The working phases are recommended as follows:
Phase 1:
- Understanding technical terms
- Being able to analyze clause structure
- Understanding every single grammatical unit.
Phase 2:
- Understanding legal and technical aspects as explained in each
part
- Reading sample provisions
- Reading and understanding short contracts, and then
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