Unit 4. Contracts, agreements, leasing, official documents on civil aviation. Text 1. Contract and its Structure.

According to the law all the contracts should be concluded in writing. When striking a deal the standard contracts are widely used. A contract usually consists of the following items:

• The contract number (Contact 0/1);

• Place and date of signing (Kyiv, January 5, 2001);

• Legal title of the contracting parties (Name of the parties);

• Subject of the Contract;

• Price and Total Cost of the Contract;

• Quality of the Merchandise (goods, equipment, etc.);

• Dates and Terms of Delivery;

• Packing and Marking;

• Form of Payment;

• Insurance of Goods;

• Force Majeure;

• Claims and Sanctions;

• Settlement of Disputes and Arbitration;

• Legal Addresses and Signatures of the Parties.

Subject of the Contract

Subject indicates the unit of measure generally employed in foreign trade for specific commodities. Subject of the Contract describes the goods which quantity, assortment and quality are indicated in the Contract.

Quality of goods should be in full conformity with international standards and should be confirmed with manufacturer's certificate of quality. The quality of machines and equipment is to be in conformity with the technical specification of the contract. The quality of raw materials and foodstuffs is determined, as a rule, by standards, by sample, by description.

Price and Payment

The price stated in a contract may be firm, fixed or sliding. Firm prices are not subject to change in course of the fulfillment of the contract. Fixed price is the price governing in the market on the delivery or for a given period. Sliding prices are quoted for machinery and equipment which require a long period of delivery.

The payment is to be effected by cash, cheque , bill of exchange (draft), invoice and so on. A cheque is a written order to a bank given and signed by someone who has money deposited there to pay a certain amount mentioned in the cheque to a person named on it. Like a cheque, a draft is an order to pay. It is made out by an exporter and presented to the importer.

Packing and Marking

Packing goods for export is a specialized job. If the goods are improperly packed and marked, the carrier will refuse to accept them, or will make qualifications about the unsatisfactory condition. Packing can be external (crate, bag) and internal (box, packet, flask etc.), in which the goods are sold.

Goods packing has a double function. On the one hand, it is for protection. On the other - it serves to advertise a product and attract a customer.

Marking should be in indelible paint in English and Ukrainian, inscribed on three sides of the cases: on two opposite sides and on the top of the case.

Insurance of goods

The export trade is subject to many risks. Ships may sink or collide. Consignments may be lost or damaged. All sensible businessmen now insure goods for their value. Insurance is against risk. While the goods are in a warehouse, the insurance covers the risk of fire, burglary, etc. As soon as the goods are in transit they are insured against pilferage, damage by water, breakage and leakage.

The goods may be also covered against general and particular average. Particular average refers to risks affecting only one shipper's consignment. General average refers to a loss incurred by one consignor, but shared by all the other consignors, who use the same vessel on the same voyage.

Force majeure

Force majeure is a force against which you cannot act or fight. Every contract has a force majeure clause. It usually includes natural disasters such as an earthquake, flood, fire, etc. It can also list such contingencies as war, embargo, sanctions. In case of a contingency the seller must notify the buyer of a force majeure. The duration of a force majeure is, as a rule, 4 or 6 months. After that the buyer has a right to cancel the contract. The seller in this case has no right to claim any compensation for his losses.

A force majeure must be a proven fact. The seller is to submit to the buyer a written confirmation issued by the Chamber of Commerce to this effect. The certificate testifies that a contingency really took place. It describes its nature and confirms its duration.

Claims and sanctions

A contract defines the rights and obligations of the parties involved. In case of breach of contract the suffer makes a claim on the party which fails to meet its contract obligations. It is the buyer who more often raises a claim to the seller. Most often the buyer raises quality and quantity claims to the seller. The cause for complaint may be poor quality, breakage, damage, short weight, leakage etc. If the seller failed to deliver the goods in the time stipulated by the contract, he must pay the buyer a penalty at the rate of per cent of the value of the goods. If a friendly settlement of disputes is considered to be impossible, the dispute is submitted for the consideration to the Arbitration Court.

Task 1. Read text 1 and translate it into Ukrainian.

Task 2. Translate the Parts of the Contract into Ukrainian in writing. Use Vocabulary Notes given below.

Parts of the Contract

CONTRACT № ______

“____” ____________200____

Company_______________, hereinafter referred to as the Sellers on the one hand and Company _________________, hereinafter referred to as the Buyers on the other hand, have concluded the present Contract for the following: