The arbitration clause
The Arbitration Clause is an obligatory clause of every contract in international business transactions. It includes the terms of settling commercial disputes, which may arise out of making the Contract.
If the arbitrators within 30 days after their appointment fail to come to an agreement in respect of the umpire, the President of the Chamber of Commerce shall appoint the latter at the request of either party.
If the arbitrator or the umpire appointed are not able or refuse to fulfil their duties, a new arbitrator or an umpire should be appointed instead within 30 days in the same way as the other replaced.
Force majeure
Force majeure is a force against which you cannot act.
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, and sanctions. Along with this there are some other circumstances beyond the Seller's control.
When negotiating a Contract a list of contingencies must be agreed on and put into the Contract.
When a manager makes up a contract he must not think only of his one-sided interest. He must think in terms of common interest with his counterpart. Only then will he prove loyal to his partner.
In case of a contingency the Seller must notify the Buyers of a force majeure.
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.
The duration of a force majeure is, as a rule, 4 or 6 months. After that the Buyer has the right to cancel the Contract. The Seller in this case has no right to claim any compensation for his losses.
-Amendments to the contract
It is common for Buyer's representatives to visit Seller's premises for technical or commercial discussions, either before or after a Contract has been made. Pretty often the engineering department of the Seller finds it necessary to improve the model, which the Buyer ordered under the Contract, by making a few modifications (usually shown in the attached drawings). The modifications can be very slight or considerable, but, as a rule, they are very effective and improve performance.
Therefore in order to finalize the matter the Seller invites the Buyer to visit his premises. And if the Customer approves of the modifications, the Seller makes an appropriate amendment to the Contract.
Enquiries and offers
A lot of business transactions are opened with an enquiry. A general item of information, a price-list, a catalogue may be asked for. Detailed enquiries may express requests for the prices of specified goods, terms of delivery, etc. They are mostly short and to the point. The size of the future order may be pointed out because large-scale sales tend to reduce prices. In such cases the seller usually grants the buyer a discount or quantity discount on the list-prices. If made by telex, telephone or in a personal interview, enquiries should be confirmed by a letter.
If the seller can meet the Buyer's requirements, he sends an offer. The price, the terms and conditions under which a company is willing to sell goods is called an offer. It usually includes the description, the quantity, quality, and the prices of the goods, as well as the delivery or shipment period, and the delivery and payment terms (who pays the cost of delivery, of shipment and insurance and how payment will be made), marking and packing.
An offer may be firm (for a specified period) or may be free (in this case it is usually called a quotation).
A tender is a special kind of offer. It is sent in response to an invitation to submit such an offer in competition with other companies. It is usually public bodies or governments that invite tenders (in form of advertisements) for large-scale business deals, for example, construction work. Tenders are to be submitted by a fixed date, and the advertiser will select the best offer.