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case be subject to the Uniform Rules for Collections published by the International Chamber of

Commerce.

5. 5 To the extent that the parties have agreed that payment is to be backed by a bank

guarantee, the Buyer is to provide, at least 30 days before the agreed date of delivery or at least

30 days before the earliest date within the agreed delivery period, a first demand bank guarantee

subject to the Uniform Rules for Demand Guarantees published by the International Chamber of

Commerce, or a standby letter of credit subject either to such Rules or to the Uniform Customs

and Practice for Documentary Credits published by the International Chamber of Commerce, in

either case issued by a reputable bank.

Art. 6 Interest in Case of Delayed Payment

6. 1 If a party does not pay a sum of money when it falls due the other party is entitled to

interest upon that sum from the time when payment is due to the time of payment.

6. 2 Unless otherwise agreed, the rate of interest shall be 2% above the average bank

short-term lending rate to prime borrowers prevailing for the currency of payment at the place of

payment, or where no such rate exists at that place, then the same rate in the State of the

currency of payment. In the absence of such a rate at either place,the rate of interest shall be

the appropriate rate fixed by the law of the State of the currency of payment.

Art. 7 Retention of Title

If the parties have validly agreed on retention of title, the goods shall remain the property

of the Seller until the complete payment of the price, or as otherwise agreed.

Art. 8 Contractual Term of Delivery

Unless otherwise agreed, delivery shall be “Ex Works”(EXW).

Art. 9 Documents

Unless otherwise agreed, the Seller must provide the documents (if any) indicated in the

applicable Incoterm or, if no Incoterm is applicable, according to any previous course of

dealing.

Art. 10 Late-delivery, Non-delivery and Remedies Therefor

10. 1 When there is delay in delivery of any goods, the Buyer is entitled to claim liquidated damages equal to 0. 5% or such other percentage as may be agreed of the price of those

goods for each complete week of delay, provided the Buyer notifies the Seller of the delay.

Where the Buyer so notifies the Seller within 15 days from the agreed date of delivery, damages

will run from the agreed date of delivery or from the last day within the agreed period of delivery. Where the Buyer so notifies the Seller after 15 days of the agreed date of delivery, damages

will run from the date of the notice. Liquidated damages for delay shall not exceed 5% of the

price of the delayed goods or such other maximum amount as may be agreed.

10. 2 If the parties have agreed upon a cancellation date in Box A9, the Buyer may ter46

Chapter 2 International Contract of Sale

minate the Contract by notification to the Seller as regards goods which have not been delivered

by such cancellation date for any reason whatsoever (including a force majeure event).

10. 3 When article 10. 2 does not apply and the Seller has not delivered the goods by the

date on which the Buyer has become entitled to the maximum amount of liquidated damages

under article 10. 1, the Buyer may give notice in writing to terminate the Contract as regards

such goods, if they have not been delivered to the Buyer within 5 days of receipt of such notice

by the Seller.

10. 4 In case of termination of the Contract under article 10. 2 or 10. 3 then in addition to

any amount paid or payable under article 10. 1, the Buyer is entitled to claim damages for any

additional loss not exceeding 10% of the price of the non-delivered goods.

10. 5 The remedies under this article are exclusive of any other remedy for delay in delivery or non-delivery.

Art. 11 Non-Conformity of the Goods

11. 1 The Buyer shall examine the goods as soon as possible after their arrival at destination and shall notify the Seller in writing of any lack of conformity of the goods within 15

days from the date when the Buyer discovers or ought to have discovered the lack of

conformity. In any case the Buyer shall have no remedy for lack of conformity if he fails to

notify the Seller thereof within 12 months from the date of arrival of the goods at the agreed

destination.

11. 2 Goods will be deemed to conform to the Contract despite minor discrepancies which

are usual in the particular trade or through course of dealing between the parties but the Buyer

will be entitled to any abatement of the price usual in the trade or through course of dealing for

such discrepancies.

11. 3 Where goods are non-conforming (and provided the Buyer, having given notice of

the lack of conformity in compliance with Art. 11. 1, does not elect in the notice to retain

them), the Seller shall at his option:

(a) Replace the goods with conforming goods, without any additional expense to the

Buyer, or

(b) Repair the goods, without any additional expense to the Buyer, or

(c) Reimburse to the Buyer the price paid for the non-conforming goods and thereby

terminates the Contract as regards those goods.

The Buyer will be entitled to liquidate damages as quantified under Art. 10. 1 for each

complete week of delay between the date of notification of the non-conformity according to Art.

11. 1 and the supply of substitute goods under Art. 11. 3( a) or repair under Art. 11. 3( b)

above. Such damages may be accumulated with damages ( if any) payable under Art. 10. 1,

but can in no case exceed the aggregate 5% of the price of those goods.

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11. 4 If the Seller has failed to perform his duties under Art. 11. 3 by the date on which

the Buyer becomes entitled to the maximum amount of liquidated damages according to that

article, the Buyer may give notice in writing to terminate the Contract as regards the nonconforming goods unless the supply of replacement goods or the repair is effected within 5 days

of receipt of such notice by the Seller.

11. 5 Where the Contract is terminated under Art. 11. 3(c) or Art. 11. 4, then in addition to any amount paid or payable under Art. 11. 3 as reimbursement of the price and damages

for any delay, the Buyer is entitled to damages for any additional loss not exceeding 10% of the

price of the non-conforming goods.

11. 6 Where the Buyer elects to retain non-conforming goods, he shall be entitled to a

sum equal to the difference between the value of the goods at the agreed place of destination if

they had conformed to the Contract and their value at the same place as delivered, such sum not

to exceed 15% of the price of those goods.

11. 7 Unless otherwise agreed in writing, the remedies under this article 11 are exclusive

of any other remedy for non-conformity.

11. 8 Unless otherwise agreed in writing, no action for lack of conformity can be taken by

the Buyer, whether before judicial or arbitral tribunals, after 2 years from the date of arrival of

the goods. It is expressly agreed that after the expiry of such term, the Buyer will not plead

non-conformity of the goods, or make a counter-claim thereon, in defence to any action taken

by the Seller against the Buyer for non-performance of this Contract.

Art. 12 Cooperation Between The Parties

12. 1 The Buyer shall promptly inform the Seller of any claim made against the Buyer by

his customers or third parties concerning the goods delivered or intellectual property rights

related thereto.

12. 2 The Seller will promptly inform the Buyer of any claim which may involve the

product liability of the Buyer.

Art. 13 Force Majeure

13. 1 A party is not liable for a failure to perform any of his obligations in so far as he

proves:

(a) That the failure was due to an impediment beyond his control, and

(b) That he could not reasonably be expected to have taken into account the impediment

and its effects upon his ability to perform at the time of the conclusion of the Contract, and

(c) That he could not reasonably have avoided or overcome it or its effects.

13. 2 A party seeking relief shall, as soon as practicable after the impediment and its

effects upon his ability to perform become known to him, give notice to the other party of such

impediment and its effects on his ability to perform. Notice shall also be given when the ground

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of relief ceases.

Failure to give either notice makes the party thus failing liable in damages for loss which

otherwise could have been avoided.

13. 3 Without prejudice to Art. 10. 2, a ground of relief under this clause relieves the

party failing to perform from liability in damages, from penalties and other contractual

sanctions, except from the duty to pay interest on money owing as long as and to the extent that

the ground subsists.

13. 4 If the grounds of relief subsist for more than six months, either party shall be

entitled to terminate the Contract with notice.

Art. 14 Resolution of Disputes

14. 1 Unless otherwise agreed in writing, all disputes arising in connection with the

present Contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

14. 2 An arbitration clause does not prevent any party from requesting interim or conservatory measures from the courts.

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Sales Contract Specimen 2

Sales Contract

No:

Date:

For Account of:

Indent No:

This contract is made by and between the Sellers and the Buyers; Whereby the Sellers

agree to sell and the Buyers agree to buy the under-mentioned goods.

According to the terms and conditions stipulated below and overleaf:

(1) Names of commodity(ies) and specification(s):

(2) Quantity:

(3) Unit price:

(4) Amount TOTAL: % more or less allowed.

(5) Packing:

(6) Port of loading:

(7) Port of destination:

(8) Shipping marks:

(9) Time of shipment: within days after receipt of L / C,

allowing transshipment and partial shipment.

(10) Terms of payment: by 100% Confirmed, Irrevocable and Sight Letter of Credit to

remain valid for negotiation in China until the 15th day after shipment.

(11) Insurance:

□ Covers all risks and war risks only as per the Clauses of the People?s Insurance Company of China for 110% of the invoice value.

□ To be effected by the Buyer.

(12 ) The buyer shall establish the covering Letter of Credit before

; failing which, the Seller reserves the right to rescind this Sales Contract without

further notice, or to accept whole or any part of this Sales Contract, non-fulfilled by the Buyer,

or to lodge claim for direct losses sustained, if any.

(13) Documents: the sellers shall present to the negotiating bank, Clean On Board Bill of

Lading, Invoice, Quality Certificate issued by the China Commodity Inspection Bureau or the

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