Lesson 2 Trade Contract

A trade contract is a mutual agreement between a trade operator and an entity for the sale/purchase of goods, which is formed when one party makes an offer, which is accepted by the party to whom the offer is made, both in compliance with law. It generally contains clauses identifying the commodity, quality, quantity, packaging, unit price, total price, time of delivery, port of shipment and port of destination, method of payment and terms relating to the inspection of the goods.

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Exercise I. Read and translate the example of Trade Contract using the words and expressions given below:

Contract № 84

For the Sale of Oil Products

London 4^th March, 2006

This contract is made between Frontier Oil Corporation (London), hereinafter called Sellers and Ales Groupe (Paris) hereinafter called Buyers, whereby it is agreed as follows:

1. Subject of the Contract

Sellers have sold and Buyers have bought c.i.f.* (premium diesel fuel)

2. Quality

The goods sold under the present contract shall be of the following specifications: ……………………………………………………………………………………….

3. Price

4.000.000£

4. Time of Delivery

The date of the Bill of Lading to be considered as the date of delivery.

5. Payment

Payment for the goods sold under the present contract is to be effected out of an

irrevocable confirmed Letter of Credit to be opened by Buyers with the Bank for Foreign Trade of England, London.

The Letter of Credit is to be opened not later than 15 days before the agreed time of shipment of each lot of the goods. Expenses in connection with the opening, amendment and utilization of the Letter of Credit are to be paid by Buyers.

Should Buyers fail to open the Letter of Credit in time, they are to pay Sellers a fine for each day of delay, but not more than for 20 days, at the rate of 0.1 per cent. of the

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amount of the Letter of Credit and in that case Sellers shall have the right not to load the tanker until the Letter of Credit has been opened. Should the delay in the opening of the Letter of Credit exceed 20 days, Sellers shall have the right to refuse to deliver the goods which were to be paid for out of this Letter of Credit.

6. Delivery and Acceptance

The goods are considered to be delivered by Sellers and accepted by Buyers in respect to quantity: as per weight indicated in the Bill of Lading in conformity with the measurements of the shore tanks at the port of loading, and in respect to quality issued by a laboratory at the port of loading. The weight stated in the Bill of Lading is to be considered final and binding upon both parties.

Prior to the loading of the goods, 4 arbitration samples are to be taken from each of the shore tanks from which the goods are to be loaded in the carrying tanker. These samples are to be sealed by Sellers as well as by Captain of the tanker; 2 samples to be handed over through the Captain of the tanker at the port of unloading to Buyers or to another person according to Buyer’s instructions and the other 2 samples to be retained by Sellers.