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 long ones Phase 3: - Translating some simple short contracts into Vietnamese, and comparing them with the ones provided in the book - Drafting short provisions, and then long ones - Drafting a contract - Discussing it with someone who is an authority on the subject matter. In the course of using this book, it should be kept in mind that laws are constantly changing and it is the drafter, not the author of this book, who is responsible for the effectiveness of the drafted contract clauses or the contract itself. It is, therefore, essential and vital that the students, users and readers should have a good command of English and a comprehensive knowledege and experience in international business. Prof. Dr. NGUYEN TRONG DAN 2007 10