ICC Model Contract FOR THE SALE OF Goods PDF

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ICC MODEL CONTRACT FOR THE SALE OF GOODS

CONTRACT FOR THE SALE OF GOODS

BETWEEN ………………………………… hereinafter called “the SELLER” AND ……………………………........ hereinafter called “the BUYER” PREAMBLE (NOTE: The Preamble is optional) The agreement between the parties to this Contract is based on the following understandings: (NOTE: The following clauses are examples only. Delete as appropriate) 1.The BUYER is acting partly on its own behalf and partly as a purchasing agent for other companies 2.The BUYER is acting as purchasing agent for…....................1 3.Both parties understand that Goods made to meet the BUYER’s special specifications may have no value or very limited value on the open market. 4.The SELLER understands that the BUYER in specifying the Goods has relied to a large extent on the expertise of the SELLER 5.The SELLER understands that the BUYER is under contract to resell the Goods are defective or non-conforming in quality

or quantity, the BUYER

may be liable for damages in an amount exceeding ……………2 6.The SELLER understands that the BUYER intends to install the Goods as a component part in equipment to be resold, and that if the Goods are defective or non-conforming in quality or quantity, the BUYER may be liable for substantial damages 7.………………………………………………3 1.

Applicable Law

1

Name of Principal

2

Currency and amount

3

List of additional background understandings between the parties

1

This Contract and all questions relating to its formation, validity, interpretation of performance shall be governed by the law of………4 (NOTE: The subclause below is optional) This Contract shall not include, incorporate or be subject to the provisions of the “United Nations Convention on Contracts fot the International Sale of Goods” 2.

Definition

In this Contract the words below have the meanings ascribed to them unless the context otherwise clearly dedicates: 2.1.

Unless expressly modifies by the parties, “FOB”, “CIF” and other trade

terms have the meanings and obligations ascribed to them in Incoterms 2000, Publication 460 of the International Chamber of Commerce, Paris 2.2.

“Contract” means this Contract, its Preamble and Appendices, as well as all

documents expressly mentioned in this Contract 2.3.

“Goods” means the Goods specified in Clause 4 below

2.4.

“Price” means the Price as specified in Clause 9 below payable to the

SELLER for the Goods 2.5.

“Delivery” means Delivery as specified in Incoterms 1990 under the

Incoterms or Incoterms agreed in this Contract 2.6.

“Day” means a calendar Day. For the purposes of this Contract, Saturdays,

Sundays and all holidays are considered as Days 2.7.

“Direct” costs and losses are costs and losses arising in immediate

connection with any failure to deliver, any delay in Delivery or any defect in Goods delivered under this Contract. Such costs and losses must have an immediate, foreseeable and provably causal connection with the delay or defect. All other costs and losses are deemed by this Contract to be “indirect”; In particular, loss of profit, loss of use, and loss of contract are considered indirect losses 2.8.

“Government” means national Government, local Government, local

authorities, and their agencies. In particular customs and/or excise departments are considered as Government agencies 2.9.

Termination” means the discharge of the Contract by one of the parties under

any right expressly granted by this Contract. The discharge of the Contract by ant 4

Name of country

2

other right arising from the applicable law or any other source is deemed to be “cancellation” of the Contract 2.10. ………………………………………………..5 3.

Entire Agreement and Contract Documents

This Contract constitutes the entire agreement and understanding between the parties. There are no understandings, agreements, conditions, reservations, or representation, oral or written, that are not embodied in this Contract or that have not been supersede by this Contract (NOTE: The sub-clause and list below are optional) In addition to the text of this Contract itself, the documents listed below shall form part of the Contract. All listed documents and the clauses of this Contract shall be read, if possible, so as to be consistent. In the event of conflict, the order of precedence for the provisions and documents which constitute this agreement shall be as follows: (NOTE: The list below contains examples only. Delete as appropriate) a. Any alterations made on the face of the printed Contract b. The Contract itself c. Specifications d. Manufacturing drawings e. The BUYER’s Special/General Conditions of Purchase f. The SELLER’s Special/General Conditions of Sale g. ………………………………………………………6 4.

Scope of Supply

The Goods to be delivered under this Contract are specified……………….. ……………………………………………………………………………….7 5.

Delivery

5.1.

Date, Place and Terms of Delivery

5

List of additional definitions argeed between the parties

6

Further contract documents

7

Use “below” or the name of the annex where the goods are specified

3

Delivery of the Goods shall be made…..8; the schedule date of Delivery shall be …….9; Risk and title the Goods shall pass from the SELLER to the BUYER on Delivery. The place of Delivery under this Contract is …………………10 5.2.

Naming the Arrival of Vessel

(NOTE: This clause is intended primarily for use in FOB and FAS contracts). The BUYER shall advise the SELLER of the name of the vessel not later than ………11. Days before the agreed Delivery date If the vessel named by the BUYER fails to arrive on or before………12 then the SELLER mat at his discretion deliver the Goods to a bonded warehouse in the port of ………13 and shall be deemed to have fulfilled his Delivery obligations under this Contract. In this event, the SELLER must notify the BUYER of the full circumstances of the Delivery to the warehouse. With Delivery to the warehouse, all costs, including but not limited to cost of storage and insurance are to the BUYER’s account 5.3.

Shipping Marks and Packaging

(NOTE: The following two sub-clauses are examples. Reword as appropriate). On the surface of each package delivered under this Contract shall be marked: the package number, the measurements of the package, gross weight, net weight, the lifting positions the letter the credit number, the words RIGHT SIDE UP, HANDLE WITH CARE, KEEP DRY, and the mark …………14 Goods are to be packed in ……………15 and are to be well protected against dampness, shock, rust or rough handling. The SELLER shall be liable for any damage to or loss of the Goods attributable to improper or defective packaging. (NOTE: The following sub-clause is relevant only to deliveries in Germany). 8

Agreed Incoterm

9

Agreed date of delivery

10

Agreed place of delivery. Note: In FOB, FCR, CIF and CIP (etc.) contract, this is part of shipment.

11

Number (of days)

12

Date of arrival of ship

13

Port of shipment

14

Shipping mark

15

Description of required packing

4

5.4.

Disposal of Packaging

Responsibility for the disposal of any packaging shall be the BUYER’s 6.

Notifications of Delivery

(NOTE: This clause applies largely to contracts under which delivery takes place in the country of the seller). Immediately on Delivery, the SELLER shall notify the BUYER of Delivery by ………16 This notification shall include …………17 7.

Inspection before Shipment

7.1.

Inspection by the Buyer

The BUYER may, at the BUYER’s option, inspect the Goods prior to shipment. At least …………18 Days before the actual Delivery date, the SELLER shall give notice to the BUYER, or to any agent nominated by the BUYER, that the Goods are available for inspection. The SELLER shall permit access to the Goods for purposes of inspection at a reasonable time agreed by the parties (NOTE: Customs requirements for importation of goods into Indonesia and the Philippines require inspection by SGS prior to shipment from the Seller’s country. The following clause is recommended for sales to these countries). 7.2.

Inspection by Inspection service

The parties understand that importation into ……….19 requires inspection of Goods by SGS before shipment from the SELLER’s country. The SELLER agrees to cooperate fully with the SGR in providing access to and necessary information about the Goods for the purpose of such inspection

8.

Early Delivery, Partial Shipment, Delay in Deliver

8.1.

Early Delivery

(NOTE: The three sub-clauses below are alternatives. Delete as necessary).

16

Means of notification, e.g., FAX

17

List of documents and information required

18

Number (of days)

19

Name of country

5

Under this Contract Delivery up to ……20 Days early is permitted. However, payment shall not become due until the date agreed for payment in this Contract; Delivery up to …….21 Days early is permitted. In this case payment shall false due as though the actual Delivery date were the Delivery date agreed in the Contract. 8.2.

Partial Shipment

(NOTE: The two sub-clauses below are alternatives. Delete as necessary). Partial shipment is not permitted under this Contract, subject to the agreement of both parties. However, any costs arising from partial shipment shall be to the account of the ………22 8.3.

Delay in Delivery

In the event of late Delivery for reasons other than force majeure as defined in Clause 17 below, the SELLER shall pay as liquidated damages and not as a penalty the sum of ……23 of the value of the undelivered part per Day of late Delivery up to a maximum of ……24 of the Contract Price. Payment of liquidated damages shall be due without the BUYER having to furnish proof of any loss, damage or injure (NOTE: The two sub-clauses below are alternatives. Delete as necessary). Payment of liquidated damages shall constitute full and complete satisfaction of any claim of the BUYER against the SELLER arising from the or in connection with late Delivery of any Goods. In particular the SELLER shall not Be liable for any indirect loss or damage, as defined in Clause 2.7 above, arising from or in connection with late Delivery of any Goods. Payment of liquidated damages by the SELLER shall not preclude the BUYER from seeking compensatory damages from the SELLER for any loss, injure or damage arising from or in connection with late Delivery of any of Goods. In particular the BUYER shall be entitled to compensation the SELLER for any indirect or consequential loss or damage, including but not limited to loss of profit, loss of use or loss of contract, arising from or in connection with late Delivery of any Goods. However, payments 20

Number (of days)

21

Number (of days)

22

BUYER or SELLER

23

Figure

24

Figure

6

made as liquidated damages shall be offset against any compensatory damages recovered from the SELLER for the late Delivery of any Goods 8.4.

Termination for delay

In the event that the SELLER becomes liable to pay the maximum sum payable as liquidated damages under Clause 8.3 above, then the BUYER shall, upon due notice, have the right to terminate the Contract. 9. Price The price for the Goods to be delivered under this Contract is…………………25 (…………. 26) 10. Terms of payment Payment shall be made by means of an irrevocable, confirmed letter of credit. The BUYER shall open the letter of credit on or before …….. 27. On the terms agreed by the parties and annexed to this Contract as Appendix…….28 This Contract shall not come into force under Clause 16 below until the SELLER has received advice that the letter of credit has been opened in his favour and has ascertained that the terms are in accordance with those agreed between the parties. Any discrepancies between the terms agreed by the parties and the letter of credit as issued shall be notified by the SELLER to the BUYER immediately. 11. Inspection of the Goods 11.1. Duty to Inspect and Notify Discrepancies The Buyer shall inspect the Goods on their arrival at the place of destination. If the Goods fail to conform with the Contract in either quality or quantity, then the BUYER shall notify the SELLER of any discrepancy without delay. 11.2. Failure to notify Discrepancies If the BUYER does not notify the SELLER of any such discrepancy within …..29 Days of the arrival of the Goods, then the Goods shall be deemed to have been in conformity with the Contract on arrival. 25

Currency symbol and figure

26

Currency and figure in words

27

Date of opening of letter of credit

28

Appendix number

29

Number (of days)

7

11.3. Buyer’s Rights in the Event of Discrepancy in Quantity If an material discrepancy in quantity exists and is duly notified to the SELLER, the BUYER at his discretion and subject to Clause 8.2 above may either: a. Accept the delivered portion of the Goods and require the SELLER to deliver the remaining portion forthwith; or b. Accept the delivered portion of the Goods and terminate the remaining portion of the Contract upon due notice given to the SELLER. If any material discrepancy in quantity exists such that …… 30 and if such discrepancy is duly notified the SELLER, the BUYER may at his discretion: a. Adopt either of the remedies prescribed above in this clause; or b. Reject the delivered portion of the Goods and recover from the SELLER all payments made to the SELLER as well as all costs, expenses and customs duties incurred by the BUYER in association with shipment, movement through customs, insurance or storage of the Goods. (NOTE: Clause 11.4 below may be necessary if SGS’s inspection takes place before shipment). 11.4. Buyer’s Rights in the Event of Discrepancy in Quality Discrepancies in quality shall be considered as defects and shall give rise to claims under the defects liability provision of this Contract in Clause 12 below. However, a fundamental discrepancy in quality shall give the BUYER the right to refuse Delivery of Goods in whole or in part and to recover from the SELLER all payments made for the unaccepted portion of the Goods as well as all costs, expenses and customs duties incurred by the BUYER in association with the shipment, movement through customs, insurance or storage of the unaccepted portion of the Goods. 12. Defects Liability 12.1. Seller’s Liability for Defects The SELLER warrants that the Goods supplied under this Contract shall at the date of their Delivery: a. Be free from defects in material b. Be free from defects in workmanship 30

Description of fundamental discrepancy

8

c. Be free from defects inherent in design, including but not limited to selection of materials, and be fit for the purpose for which such Goods are normally used. If any defect provably present in any of the Goods on the date of Delivery comes to light during the defects liability period, then the BUYER shall forthwith notify the SELLER. The SELLER, without undue delay, shall at his own risk and costs and at his discretion repair or replace such item or otherwise make good the defect. The SELLER’s liability for defects is subject to the BUYER having adhered to all procedure and instructions applicable to the …..31 of the item, and expressly excludes damage to the Goods caused by fair wear and tear or by misuse occurring after Delivery. 12.2. Defect Liability Period The SELLER shall be liable for defects which come to light during a period of ……32 days from ……33 After the end of this period, the BUYER shall have no right to raise claims of any kind against the SELLER for any defects in any Goods of the SELLER’s supply The defects liability period shall be prolonged by the length of any period of during which the Goods cannot be used by the BUYER because of a defect. However, if new Goods are delivered to replace defective Goods, the defects liability period shall not begin again on the replacement Goods. 12.3. Limitation of Defects Liability (NOTE: The two clauses below are alternatives. Delete as necessary) The duty to repair and replace or otherwise to make good the defects is the only duty of the SELLER in the event of the Delivery of defective Goods. In particular the BUYER shall not be entitled to compensate the SELLER for any indirect loss or damages as defined in Clause 2.7 above, arising from or in connection with Delivery of defective Goods The SELLER shall indemnify and hold harmless the BUYER against any loss or damage however arising whether direct or indirect

31

Condition of use (e.g., “storage, installation, use or operation”)

32

Number (of days)

33

Date of start of defects liability period

9

which shall be suffered by the SELLER as the result of defective or faulty Goods delivered by the SELLER 13. Liability to Third Parties (NOTE: The two clauses below are alternatives. Delete as necessary) The……..34 shall compensate and hold harmless the……… 35 from any award of damages, reasonable costs, expenses or legal fees, in the event of any action or lawsuit by a third party resulting from any injury, loss or damage to the third party caused by a defect in the Goods delivered under this Contract In the event of such Lawsuit, the…… 36shall immediately notify the……37and shall fully cooperate with the…….38in taking any necessary legal action. In the event of any action or lawsuit by a third part resulting from any injury, loss or damage to the third party caused by a defect in the Goods delivered under this Contract, the party against whom the action or lawsuit is brought shall bear all costs, expenses, awards of damages or legal fees arising therefrom 14. Taxation All income taxes, value added taxes, customs duties, excise charges, stamp duties or other fees levied by any Government, Government agency or similar authority shall be borne exclusively by the party against whom they are levied 15. Assignment of Rights and Delegation of Duties The rights under this Contract may not be assigned nor the duties delegated by either party without the prior written consent of the other party 16. Coming Into Force This Contract shall come into force after signature by both parties and after: a.

The issuance of a letter of credit in accordance with the terms of

Clause 10 above; b.

………………………………………………………………………..39

34

Name of the party giving the indemnity (BUYER or SELLER)

35

Name of the party receiving the indemnity (BUYER or SELLER)

36

Name of the party receiving the indemnity (BUYER or SELLER)

37

Name of the party receiving the indemnity (BUYER or SELLER)

38

Name of the party receiving the indemnity (BUYER or SELLER)

39

List of events which must occur before contract comes into force

10

If the Contract has not come into force within….40Days of its signature by both parties, all its provisions shall become null and void 17. Force majeure (NOTE: The...