The main characteristics of the contract of sale
Contract is an agreement, enforceable by law, between two or more competent parties (legal entities) to perform or not to perform specific act or acts for a consideration. A contract is the most accepted formal document confirming the decision of the contracting parties to carry out mutual business obligations.
A contract may be verbal or written. An offer released by a party becomes a contract, when accepted by the other party. Acceptance may be either in writing or by performance, unless the purchase order requires acceptance thereof to be in writing, in which case it must be thus accepted. Contracts financed with public funds are generally made in writing. In foreign trade transactions a contract is drawn up to give legal expression to the intentions of the partners and to guarantee that the obligations contained in the contract will be fulfilled.
According to the purpose and contents, contracts can cover: goods, services, licenses, patents, technology and know-how.
A written contract of sale is made out in the form of a document signed both by the Buyers and the Sellers.
When there is no necessity of introducing special terms and conditions into the contract of sale, Russian associations use standard forms of contracts containing the following clauses (articles):
1. Naming (definition) of the Parties
2. Subject of the contract and volume of delivery
3. Prices and the total value (amount) of the contract (including terms of delivery)
4. Time (dates) of delivery
5. Terms of payment
6. Transportation (=carriage) of goods (packing and marking, shipment)
7. The Sellers' guarantees (the quality of the goods)
8. Sanctions and compensation for damage
9. Insurance
10. Force - majeure circumstances
11. Arbitration
12. General provisions
Also, there may be standard General Conditions which form an integral part of the contract and are either printed on the reverse side of me contract or at the foot of the face of the contract or attached to it.
In the case of a contract for sophisticated machinery and equipment there may be other clauses: technical conditions, test and inspection conditions, requirements to technical documentation, supervision of erection and putting the machinery into operation (commissioning), and sending specialists for the purpose, training of the Buyers' specialist, the Sellers' obligations for technical servicing and the like. These clauses may be included in the contract itself or in the Appendices to the contract which are an integral part of it.
When detailed special terms and conditions are introduced into the contract or the agreement, it is customary to draw up an individual contract or agreement in each particular case (e.g. a turnkey contract, a licence agreement).
Sometimes Russian organizations use standard forms of contracts worked out by the biggest federations and associations of merchants and importers abroad, by exchanges, Chambers of Commerce and the like for use in particular trade. These standard forms of contracts, for example, are used in grain trade, seed, sugar, cotton and other trades.
As a rule, concluding a contract is preceded by considering the enquiry of the Buyers and the offer of the Sellers.
Answer the questions:
1. When may a Standard Contract be used?
2. What Standard Contracts are given in the text?
3. What other Standard Contracts can you name? Describe them.
4. What are the clauses of a Standard Contract?
5. When is it necessary to work out an individual contract? Give examples.
6. What additional clauses may they comprise?
7. How does concluding of a contract usually begin?