Contract as a document

A contract is the most accepted form of formal document con­firming the decision of the contracting parties to carry out mutual business obligations.

The major contract clauses in­clude articles on legal titles of the parties, subject of the con­tract, quality and quantity of the goods, terms of inspection, delivery and payment, require­ments for packing and mark­ing, claims and arbitration and other articles.

As a rule concluding a contract is preceded by discussing the enquiry of the Buyer and the offer of the Seller.

Here is a part of a specimen contract:

Contract No 32-1

Moscow September 4th, 1994

Foreign trade company Chemico, Moscow, hereinafter referred to as the Sellers, on the one part, and Messrs. Petro Co., Liverpool, England, hereinafter referred to as the Buyers, on the other part, have concluded the present Contract to the following effect.

The Sellers have sold and the Buyers have bought on с i f terms 10 000 kgs. of Chemicals ST to be delivered in the fourth quarter of 1994. Partial shipments are allowed. The quality of the Chemicals is to be confirmed by certificate issued by a competent independent and recognized laboratory. The Chemicals are to be packed in plastic bags.

The price is 175 English pounds sterling per kilo с i f Liverpool. The total value of the Contract is GBP 1750,000 (one million seven hundred and fifty thousand English pounds sterling).

The date of the bill of lading issued in the name of the Buyers is to be considered the date of delivery. Payment for the Chemicals delivered under the present Contract is to be made by a letter of credit on the presentation of the following documents:

1. Sellers' Commercial Invoice.

2. Full set of clean on board Bills of Lading.

3. Quality Certificate issued by the laboratory.

4. Weight Certificate issued by the recognized company.

5. Certificate of Origin issued by the Chamber of Commerce and Industry.

6. Insurance Policy issued by the State Insurance company. Payment is to be made through the National Bank, Liverpool.

III. Answer the following questions:

1. What kind of document is a contract?

2. What do the contract clauses include?

3. Who has concluded the Contract No 32-1?

4. What is the subject of the contract?

5. What can you say about the quality of the goods?

6. What are the terms of payment?

	Speaking Practice

I. Translate the following speech patterns and memorize them:

We are interested in establishing contacts with you.

What's your final decision?

We are quite able to meet the dates.

We would like to give us a discount of …%.

As a special concession to a new customer…

These terms are acceptable to us.

II. Read the conversation and practice it in pairs.

Discussing a Contract.

Mr. Petrov (P) has come to London to continue talks with Mr. Black (B). He contacts Mr. Black and at 10 o'clock he is in Mr. Black's office.

B: Good morning, Mr. Petrov.

P: Good morning, Mr. Black.

B: How are you?

P: Just fine, thank you. And how are you?

B: Very well, thank you. Are you enjoying your stay in London?

P: Yes, my stay here is very pleasant. The weather is fine.

B: We have a few problems to discuss. First comes the problem of deli­very terms. As far as I remember you prefer f.o.b. terms.

P: You're quite right.

B: These terms are acceptable to us.

P: What's your idea of an f.o.b. price?

B: It's 1 200 Pounds per unit. If you buy on f.o.b. loaded and stowed terms, then the price will be 1300 Pounds.

P: Pardon?

B: 1300 Pounds.

P: Well, I suppose f.o.b. loaded and stowed terms suit us. But will you give us a discount if we buy, say, 50 machines?

B: In this case we can give you a 10% discount.

P: So, the problem has been settled. When can you deliver the machines?

B: Well, we can dispatch the machines in two equal lots of 25 machines each. We can promise to deliver the first lot in April.

P: And can the second lot be delivered in July?

B: Yes, I think we can meet these delivery dates.

P: Fine. It seems to me we have settled all the problems and we can sign the contract now.

B: We'll do so as soon as the secretary has typed it... You'll have to wait a little.

(Mr. Black buzzes on the intercom and gives the necessary instructions to his secretary).

Mr. Petrov would you like to go to the theatre tonight? We can go and see a very good modern ballet at the Royal Opera House.

P: That's a wonderful idea. Thank you very much.

B: The performance starts at 7 p.m. I'll be in the lobby of your hotel at 6.30.

P: Well, I'll be there on time.

III. Act out a similar dialogue.

	Writing Practice

I. Read the document. Try to make up a similar one.

Contract No 58/3-1

Moscow 23 December, 19..

Messrs Brown and Co., London, England hereinafter referred to as "Sellers" on the one part, and Russian Italian Joint Venture Loco, hereinafter referred to as "Buyers" on the other part, have concluded the present Contract whereby it is agreed as follows:

1. Subject of the Contract

According to the present Contract the Sellers have sold and the Buyers have bought the goods which description, quantity and prices are indicated in Specification No 1.

The Specification is considered an integral part of the Contract.

2. Prices and Total Value of the Contract

Prices for the goods to be delivered under the present Contract arc understood franco- warehouse, Moscow, in US Dollars, including packing, marking, freight and insurance.

The total value of the Contract is USD 141,000.00 (one hundred and forty one thousand American Dollars).

3. Time of Delivery

Time of Delivery of the goods is determined and indicated in Specification No I of the present Contract. The date of the Air waybill issued in the name of the Buyers is considered to be the date of delivery. The goods shall be shipped by lots indicated in Specification No 1. Partial shipments are not allowed.

4. Quality of the goods

The quality of the goods delivered under the present Contract shall conform to the quality of the samples selected by the Buyers for the purchase.

5. Packing and Marking

Packing and marking of the goods to be delivered under the present Contract are made in accordance with the Rules for Air Transportation. Packing shall provide the full safety of the goods during transportation as well as their storage.

6. Notification of Shipment

The Sellers arc obliged to notify the Buyers of the shipment by telex or by fax not later than 2 hours after shipment indicating the following:

number of the Contract

description of goods

date and time of shipment

number of the Air waybill

quantity of goods

weight in Kgs

total value of goods

The address of the Buyers is indicated in Specification No 1.