PREFACE China and Japan are neighboring countries separated only by a narrow
PREFACE China and Japan are neighboring countries separated only by a narrow
stretch of ocean and have shared a long history of economic relations and
trade. In the 1950's and 1960's, Sino-Japanese trade relations were mainly
promoted by the trading firms and corporations of the two countries on the
basis of friendship and mutual benefit. Since that time, trade relations
have further developed in a desired direction and the volume of trade has
increased rapidly since the normalization of diplomatic relations between
China and Japan in 1972.
In order to promote the development of bilateral trade and to
facilitate the sale of goods between the two countries, the Sino-Japanese
Commercial Contract Terms Committee and the Japan-China Trade Contract
Terms Study Committee were respectively established with the task of
preparing Model Terms of Contracts for Sale of Goods (hereinafter referred
to as the "Model Terms"). The Model Terms are intended to be used by
Chinese and Japanese trading firms and corporations in formulating their
own standard contracts. After two years' efforts devoted by the two
committees, the Model Terms were completed before the end of February,
1992.
The Model Terms are based on the current effective laws of, and the
international treaties acceded by, the two countries, as well as the
international trade practices.
In order to have the proper use of the Model Terms, the instructions
are given as follows:
1. The Model Terms are intended to be used for drafting of contracts
for the sale of goods between the two countries.
2. Some of the Model Terms are provided for one or more alternatives
to accommodate different kinds of transactions or different categories of
goods.
3. The Model Terms, as such, are not intended to constitute a
particular contract. The trading firms and corporations should select the
most suitable terms from the Model Terms and formulate their own standard
contracts.
4. When preparing contracts, each trading firm and corporation may
modify the provisions of the Model Terms and incorporate new provisions
into their contracts according to the nature of the transaction or goods.
5. The Model Terms provides for maritime transportation, however, if
other means of transportation are to be employed, the relevant provisions
in the Model Terms should be modified and new provisions should be
incorporated into the contracts.
We hope that Chinese and Japanese trading firms and corporations are
willing to use the Model Terms, and we look forward to receiving opinions
and proposals so as to make further improvement to the Model Terms in the
future.
MODEL TERMS OF CONTRACTS FOR SALE OF GOODS
Sino-Japanese Commercial Japan-China Trade Contract
Contract Terms Committee Terms Study Committee
By: By:
MODEL TERMS OF CONTRACTS
FOR SALE OF GOODS
For Sales Through Maritime Transportation Between Japanese and Chinese
Firms and Corporations
Contract Number:
Date of Execution of Contract:
Place of Execution of Contract:
Seller:
Address:
Country of Incorporation:
Telex:
Fax:
Cable:
Buyer:
Address:
Country of Incorporation:
Telex:
Fax:
Cable:
The Buyer and the Seller, through friendly negotiation, have executed
this Contract on a basis of [ ] FOB, or [ ]CFR, or [ ] CIF and agreed
to the terms and conditions stipulated below.
1. Name of Commodity:
2. Specifications/Quality:
3. Units:
4. Quantity:
[with ( ) % more or less both in amount and quantity allowed at
[ ] the Seller's, or [ ] the Buyer's option]
5. Unit Price FOB/CFR/CIF:
6. Total Amount:
7. Country of Origin and Country of Manufacture:
8. Shipping Mark:
9. Shipment
9.1 Time of Shipment:
9.2 Port of Shipment:
9.3 Port of Unloading:
9.4 "On-deck" shipment [ ] is, or [ ] is not allowed.
9.5 Transshipment [ ] is, or [ ] is not allowed.
9.6 Partial shipment [ ] is, or [ ] is not allowed.
10. Terms of Payment
10.1 Method of Payment {*Select one of the following from
section 10.1.1 (Sight Letter of Credit), 10.1.2 (Letter
of Credit with Usance), 10.1.3 (D/P), 10.1.4
(D/A), or 10.1.5 (Remittance)}
[ ] 10.1.1 Sight Letter of Credit
The Buyer shall,
[ ] ( )days prior to the first day of the time of
shipment specified in this Contract,
[ ] within ( ) days after the execution of this Contract,
establish in favor of the Seller an irrevocable letter of
credit (L/C) payable at sight issued by
[ ] (bank name) ,
[ ] an international first class bank
by [ ] telex, or [ ] cable, or [ ]SWIFT, or [ ]
mail,
the contents of which shall be in conformity with the
terms of this Contract.
The letter of credit shall not expire until ( ) days after
the last day of the time of shipment specified in this
Contract.
The statement "this credit is subject to Uniform Customs
and Practice for Documentary Credits, 1983 Revision,
International Chamber of Commerce Publication
No. 400" shall be contained in the letter of credit.
[ ] 10.1.2 Letter of Credit with Usance
The Buyer shall,
[ ] ( ) days prior to the first day of the time of
shipment specified in this Contract,
[ ] within ( ) days after the execution of this Contract,
establish in favor of the Seller an irrevocable letter of
credit (L/C) payable ( ) days
after , issued by
[ ] (bank name) ,
[ ] an international first class bank
by [ ] telex, or [ ] cable, or [ ] SWIFT, or [ ]
mail, the contents of which shall be in conformity with
the terms of this Contract.
The letter of credit shall not expire until ( ) days after
the last day of the time of shipment specified in this
Contract.
The statement "this credit is subject to Uniform Customs
and Practice for Documentary Credits, 1983 Revision,
International Chamber of Commerce Publication
No. 400" shall be contained in the letter of credit.
[ ] 10.1.3 Document Against Payment (D/P)
After shipment, the Seller shall deliver a sight bill (s)
of exchange drawn on the Buyer together with the required
documents to the Buyer through a bank. The
Buyer shall effect the payment immediately upon the
first presentation of the bill (s) of exchange and the required
documents, i.e. D/P.
[ ] 10.1.4 Document Against Acceptance (D/A)
After shipment, the Seller shall deliver bill (s) of exchange
drawn on the Buyer, payable ( ) days after
, together with the required documents to the
Buyer through a bank for acceptance. The Buyer shall
accept the bill (s) of exchange immediately upon the
first presentation of the bill (s) of exchange and the required
documents and shall effect the payment on the
maturity date of the bill (s) of exchange, i.e. D/A.
[ ] 10.1.5 Remittance
The Buyer shall,
[ ] within ( ) days after the receipt of the required
documents specified in section 10.2 below,
[ ] within ( )days after the date of the Bills of
Lading,
pay the invoice value of the goods to the Seller's account
with a bank, designated by the Seller by means of [ ]
T/T (Telegraph Transfer), or [ ] M/T (Mail Transfer),
or [ ] D/D (Demand Draft).
10.2 Documents Required
The following documents shall be prepared by the Seller
and submitted to the Buyer:
(1) Commercial Invoice in copy (ies).
(2) Full set of clean on board ocean Bills of Lading
made out to [ ] , or [ ] to order
and blank endorsed marked freight [ ] prepaid,
or [ ] to collect, notifying consignee or
.
(3) Insurance Policy/Insurance Certificate
(4) Quality Inspection Certificate/Inspection Report/
Analysis Certificate
(5) Certificate of Origin/FORM A
(6) Packing List/Weight List/Quantity List
(7) Notice of Shipment/Shipping Advice
(8) The following other Documents:
10.3 Banking Charges
Depending upon the method of payment selected pursuant
to Clause 10.1 above, the Buyer shall bear all
banking charges incurred in the country of
[ ] L/C issuing bank (in case of payment by L/C),
[ ] Collecting Bank (in case of payment by D/P or
D/A),
[ ] Remitting bank (in case of payment by remittance),
and the seller shall bear all banking charges incurred
outside such country.
10.4 Overdue Interest
If the Buyer fails to pay any amount when due, the Buyer
shall be liable to pay to the Seller overdue interest on
such unpaid amount from the due date until the actual
date of payment at the rate of ( )percent per annum.
Such overdue interest shall be paid upon demand of the
Seller.
11. Terms of Delivery
11.1 Packaging
All goods shall be packaged to prevent damage from
dampness, rust, moisture, erosion and shock, and shall
be suitable for
[ ] ocean transportation,
[ ] multiple carrier transportation.
The Seller shall be liable for any damage and loss of the
goods attributable to inadequate or improper packaging.
The measurement, gross weight, net weight of each
package and any necessary cautions such as "Do not
Stack Upside Down", "Keep Away From Moisture",
"Handle With Care" shall be stenciled on the surface of
each package with fadeless pigment, whenever necessary.
11.2 Terms of Shipment
11.2.1 If shipment is made under the terms of CFR or CIF,
the Seller shall, not later than ( ) days before the time
of shipment, inform the Buyer by Telex, Fax or Cable
of the name, nationality, age and other details of the
carrying vessel as well as the contract number for each
shipment. The shipment shall not be effected without
the confirmation from the Buyer with respect to the acceptability
of the vessel; provided that, the Buyer shall
not unreasonably withhold such confirmation. The Buyer
shall confirm the vessel within [ ] 3, [ ] 5 working
days, otherwise the vessel shall be regarded as confirmed.
11.2.2 (This Paragraph shall be [ ] maintained or [ ]
deleted.)
Upon written request of the Buyer and if and to the extent
that such information is available, the Seller shall
also inform the Buyer by Telex, Fax or Cable, not later
than ( ) days before the time of shipment, of the name
of the commodity, the estimated quantity, the estimated
total amount, the package numbers, the estimated total
weight and volume, and the estimated date of arrival of
the vessel at the port of shipment.
11.2.3 If shipment is made under the term of FOB, the
Buyer shall book shipping space in accordance with the
time of shipment stipulated in this Contract. The Seller
shall, at least ( ) days before the date of shipment
stipulated in this Contract, advise the Buyer by Telex,
Fax or Cable of the contract number, the name of the
commodity, the quantity, the total amount, the package
numbers, the total weight and volume and the date
when the goods should be ready for shipment at the port
of shipment. The Buyer shall, at least ( ) days before
the estimated date of arrival of the vessel at the port of
shipment, notify the Seller of the name of the vessel,
the estimated date of loading and the contract number
for the Seller to effect shipment. In case the carrying
vessel or the date of arrival has to be changed, the Buyer
or its shipping agent shall advise the Seller in time to
make necessary arrangement. Should the vessel fail to
arrive at the port of shipment within ( ) days after the
arrival date advised by the Buyer, the Buyer shall bear
all actual expenses, including, the storage expenses and
interest charges, calculated from the ( ) day thereafter.
The Seller shall be liable for any dead freight or demurrage,
should they fail to have the quantity of the goods
ready for loading in time as stipulated, if the carrying
vessel has arrived at the port of shipment as advised.
11.2.4 If shipment is made under the terms of FOB, CFR or
CIF, the Seller shall, immediately upon the completion
of the loading of the goods, provide the Buyer and the
consignee appointed by the Buyer, with notice of shipment
by Telex, Fax or Cable. The notice shall include
the contract number, name of the commodity, quantity,
net and gross weight, measurements, invoiced value,
bills of lading number, sailing date and the estimated
date of arrival at the port of unloading.
If the goods to be shipped include any flammable, hazardous
or dangerous materials, the Seller shall indicate
on the surface of each package appropriate cautions with
respect to the special care for the transportation and
handling thereof, as well as the identification numbers
or other indications required under customary international
practice and/or regulations applicable to such materials,
if any.
If shipment is made under the term of FOB or CFR,
should the Seller fail immediately to provide the shipping
notice to the Buyer and/or the consignee appointed by
the Buyer, and the Buyer can not procure the insurance
in time, the Seller shall be responsible for any damage
to and/or loss of the goods incurred in the course of
transportation.
11.2.5 Upon completion of loading, the Seller shall send
one duplicate copy of each of the following documents
with the captain's care:
(1) ocean bill of lading
(2) commercial invoice (shipping lot No. to be
indicated in case of partial shipment)
(3) packing list
(4) weight list/quantity list
(5) certificate of origin
(6) quality inspection certificate/inspection report/
analysis certificate.
11.2.6 Within ( ) working days after the date of actual
shipment, the Seller shall airmail one copy of each of the
documents mentioned in the preceding clause to the
Buyer or the consignee appointed by the Buyer.
12.1 Insurance
If shipment is made under the term of FOB or CFR, insurance
shall be procured by the Buyer.
If shipment is made under the term of CIF, insurance
shall be procured by the Seller for 110% of the invoice
value against [ ] F.P.A, or [ ] W.P.A., or [ ]
All Risks. Additional insurance shall include:
13. Warranty (*Select one or more of the following)
[ ] 13.1 The Seller must deliver goods which are of the
quality and description required by this Contract and
which are contained or packed in the manner required
by this Contract.
[ ] 13.2 The Seller shall warrant that all goods delivered
by the Seller shall conform to the contract stipulations.
The warranty period shall remain in effect until the expiration
of
[ ] ( ) months after the date of shipment,
[ ] ( ) months after the date of the completion of
unloading of the goods at the port of unloading,
[ ] ( ) months after the date of the arrival of the
goods at the destination but in no circumstances
exceeding ( ) months after the date of the completion
of unloading of the goods at the port of
unloading.
In the event that the goods are found to be in breach of
the said warranty and so notified during the warranty
period, the Seller on its own account shall,
[ ] repair or replace the defective goods or the defective
parts,
[ ] repair of replace the defective goods or the defective
parts and compensate the Buyer for damages,
if any.
[ ] 13.3 The Seller shall warrant that the quality and specifications
of the goods delivered pursuant to this Contract
shall conform to the contract stipulations. The Seller
shall make no warranty as to the fitness of the goods
thereof for any particular purposes or environments, except
as expressly stipulated in this Contract or as expressly
or impliedly made known to the Seller.
The warranty period shall remain in effect until the expiration
of
[ ] ( ) months after the date of shipment,
[ ] ( ) months after the date of the completion
of unloading of the goods at the port of
unloading,
[ ] ( ) months after the date of the arrival of the
goods at the destination but in no circumstance
exceeding ( ) months after the date
of the completion of unloading of the goods
at the port of unloading.
In the event that the goods are found to be in breach of
the said warranty and so notified during the term of the
warranty and the cause of such breach is attributable to
the Seller, the Seller shall promptly
[ ] repair or replace such goods,
[ ] repair or replace such goods and compensate the
Buyer for damages, if any.
14. Inspection
14.1 Pre-Delivery Inspection (*Select one of the following)
[ ] 14.1.1 The Seller shall, before the time of shipment,
apply to the inspection organization for the inspection of
the quality, specifications, quantity, weight, packaging
and requirements for safety and sanitation/hygiene of
the goods in accordance with
[ ] the stipulations of this Contract, or
[ ] standards.
The inspection certificate issued by the said inspection
organization shall be an integral part of the documents to
be presented for payment.
Inspection organization:
In China; Import & Export Commodity
Inspection Bureau of the People's Republic of China.
In Japan; of Japan.
[ ] 14.1.2 For inspection by manufacturer
The Seller shall, before the time of shipment, provide
the Buyer with the inspection reports signed by the
manufacturers on the quality, specification, quantity,
weight, packaging and requirements for safety and sanitation/
hygiene of the goods in accordance with
[ ] the stipulations of this Contract, or
[ ] standards.
The said inspection reports shall be an integral part of
the documents to be presented for payment.
14.2 Re-Inspection
For the purpose of warranty and other claims, the Buyer
shall have the right to apply to the inspection organization
for the inspection of the goods after the arrival of
the goods
[ ] at the final destination, or
[ ] at the port of unloading.
Inspection organization:
In China; Import & Export Commodity Inspection
Bureau of the People's Republic of China.
In Japan; of Japan.
15. Force Majeure
Neither party shall be held responsible for failure or delay
to perform all or any part of this Contract due to
flood, fire, earthquake, snowstorm, drought, hailstorm,
hurricane, war, government prohibition, or any
other events that are unforeseeable at the time of the execution
of this Contract and could not be controlled,
avoided or overcome by such party. However, the party
who's performance is affected by the event of Force Majeure
shall give a notice to the other party of its occurrence
as soon as possible and a certificate or a document
of the occurrence of the Force Majeure event issued by
the relative authority or a neutral independent third party
shall be sent to the other party not later than ( )
days after its occurrence.
If the event of Force Majeure event continues for more
than ( ) days, both parties shall negotiate the performance
or the termination of this Contract. If within
( ) months after the occurrence of the event of Force
Majeure, both parties can not reach an agreement, either
party has the right to terminate this Contract.
16. Penalty
16.1 Failure to Make Timely Delivery
In the event the Seller for its own sake fails to make delivery
of all or any part of the goods on time as stipulated
in this Contract, the Seller shall pay a penalty to
the Buyer. The penalty shall be charged at the rate of
( )% of the amount of the delayed goods for every
( ) days or delay in delivering the goods, however,
the penalty shall not exceed ( ) % of the total value of
goods involved in the late delivery. Any fractional days
less than ( ) days shall be deemed to be ( ) days for
the calculation of penalty.
16.2 Failure to Timely Open the Letter of Credit
In the event the Buyer for its own sake fails to open the
Letter of Credit on time as stipulated in this Contract,
the Buyer shall pay a penalty to the Seller. The penalty
shall be charged at the rate of ( )% of the amount of
the Letter of Credit for every ( ) days of delay in
opening the Letter of Credit, however, the penalty
shall not exceed ( )% of the total value of the Letter
of Credit which the Buyer should have opened. Any
fractional days less than ( ) days shall be deemed to
be ( ) days for the calculation of penalty.
16.3 The penalty provided for in Clause 16.1 and/or 16.2
shall be the sole compensation for the damages caused
by such delay.
17. Claims
17.1 Except those claims for which a third party is liable,
should the quality, specifications, quantity, weight,
packing and requirements for safety or sanitation/hygiene
of the goods be found not in conformity with the
stipulations of this Contract, the Buyer shall give a notice
of claims to the Seller and shall have the right to
lodge claims against the Seller based on the inspection
Certificate issued by the inspection organization provided
in Clause 14.2 of this Contract within
[ ] ( ) days from the date of the arrival of the
goods at the final destination, provided that
such date shall not exceed ( ) days from the
date of the completion of unloading of the goods
at the port of unloading,
[ ] ( ) days from the date of the completion of unloading
of the goods at the port of unloading.
In the event of non conformity, the Seller shall promptly
[ ] repair or replace such goods or supply the quantity
that is deficient,
[ ] repair or replace such goods or supply the quantity
that is deficient and compensate the Buyer for
damages, if any.
In the event that the Buyer does not make such claim
within the above-mentioned time-limit, the Buyer shall
forfeit its right to make a claim with respect to the
quantity deficiency or the apparent quality defect.
17.2 The Seller shall reply to the Buyer's claim not later than
( ) days after receipt of the inspection certificate issued
by the inspection organization provided in Clause
14.2 of this Contract and the claims shall be regarded
as having been accepted, if the Seller fails to reply within
the above-mentioned time-limit.
18. Termination
18.1 Except as provided elsewhere, this Contract may be terminated
in either of the following cases:
(1) Through mutual written agreement by both parties;
or
(2) If the other party fails to perform its obligations
within the time limit agreed upon in this Contract,
and fails to eliminate or remedy such breach within
( ) days following the receipt of the notice thereof
from the non-breaching party. In such case the
non-breaching party shall give a written notice to
the other party to terminate this Contract.
19. INCOTERMS
Unless otherwise stipulated in this Contract, the terms
and conditions of this Contract shall be interpreted in
accordance with the "International Rules for the Interpretation
of Trade Terms" (INCOTERMS 1990) provided
by International Chamber of Commerce, International
Chamber of Commerce Publication No. 460.
20. Arbitration
All disputes arising form the performance of this Contract,
should be settled through friendly negotiation.
Should no settlement be reached through negotiation,
the case shall then be submitted for arbitration in the
country where the defendant resides. If the arbitration
takes place in China, the case shall be submitted to China
International Economic and Trade Arbitration Commission
[ ] Beijing, or [ ] Shanghai, or [ ] Shenzhen
and the arbitration rules of this Commission shall
be applied. If the arbitration takes place in Japan, the
case shall be submitted to the Japan Commercial Arbitration
Association [ ] Tokyo, or [ ] Osaka and the
arbitration rules of this arbitration organization shall be
applied. The award of the arbitration shall be final and
binding upon both parties. The arbitration fee shall be
borne by the losing party unless otherwise awarded by
the arbitration organization.
21. Notice
Any notice to be given here under shall be in writing and
shall be hand-delivered, transmitted by facsimile or
telexed or sent by express airmail, and shall be deemed
given when so hand-delivered, or if transmitted by facsimile
or telexed, one day after the date of such facsimile
or telex so transmitted, or if sent by mail when received,
to the parties at the addresses specified at the
head of this Contract.
The foregoing terms are agreed by both the Buyer and
the Seller signing below.
Buyer: Date: , 19
By:
Seller: Date: , 19
By:
|