Contract No 2

Moscow ................ (date)

Objedinenije "Russoimport", Moscow, hereinafter referred to as the "Seller" on the one part, and Messrs—, hereinafter referred to as the "Buyer" on the other part, have concluded the present contract whereby it is agreed as follows: -

1. SUBJECT OF THE CONTRACT

The Seller has .sold and the Buyer has bought C.I.F.

(F.O.B., F.O.R.).............................................the goods

specified in the enclosed appendix, showing specifications, quantities, prices and delivery times of the goods and constituting an integral part of the present contract.

2. PRICES

The prices are fixed in.....................and understood

C.I.F. (F.O.B., F.O.R.)..............................................

export packing and marking included.

All expenses incurred¹ on the territory of..................

in connection with the present contract'(duties, taxes, customs², etc.) are to be paid by the Buyer.

3. QUALITY

The quality of the goods under the present contract shall be in full conformity either with the State standards existing in Russia or with the technical conditions ruling at the manufacturing works³.

4. TIME OF DELIVERY

The goods sold under the contract shall be delivered within .........................months after the signing of the contract.

The date of the Bill of Lading (or: Railway Bill) shall be considered as the date of delivery.

5. DELIVERY AND ACCEPTANCE OF GOODS

The goods are considered to be delivered by the Seller and accepted by the Buyer:

a) in respect of quantity — according to the number of cases and the weight as shown on the BiE of Lading (or on the Railway Bill);

b) in respect of quality — according to the Manufacturer's certificate issued by the manufacturing works or by the Seller.

6. TERMS OF PAYMENT

Payment for the goods to be delivered under the present

contract is to be effected in........................................

in accordance with the Trade Agreement between the

Governments of the Russia and......................................

dated the _t........................................by an irrevocable

confirmed Letter of Credit to be opened by the Buyer with the Bank for Foreign Trade of Russia Moscow, in favour of the Seller within 10 days of receipt of the Seller's notification of the readiness of the goods for shipment. The Letter of Credit to be valid...........................days.

The payment of. the credit is to be made against the following documents:

Invoice.

Bill of Lading (or Railway Bill).

All expenses connected with the opening of the Letter of Credit are to be borne by the Buyer.

Part shipment and transhipment are permitted.

Insurance to be made to the amount of 110 per cent, of the value of the goods.

7. PACKING AND MARKING

The goods shall be secured and properly packed to withstand both overseas and overland transport as well as transhipment.

Each package shall be provided with marking showing the place of destination, name of Consignee, description of goods, contract number, case number, gross and net weight.

8. GUARANTEE

Any part or parts which may prove defective through faulty material or workmanship⁴ will be repaired or

replaced by the Seller C.I.F., F.O.B., F.O.R......................

free of charge within the period of.................................

calendar months of the date of shipment provided⁵ the defective part or parts have been returned to the Seller's works for examination, carriage paid.

This guarantee will be invalidated⁶ by the Buyer making, causing or allowing any alterations or repair to the goods without the Seller's consent⁷ and also if the damage is due to negligence or improper handling on the part of the Buyer or to any other causes outside the Seller's control including damage in transit from Russia to the place of destination.

Rapidly wearing⁸ parts as well as parts which have suffered from natural wear are excluded from the guarantee.

9. CLAIMS

Claims which may arise with regard to the quality of the goods owing to their non-conformity with the standards and technical conditions provided for under clause 3 of this contract as well as claims concerning the quantity of the goods will be considered by the Seller only if submitted within 45 days from the date of arrival of the goods at the place of destination shown in the Bill of Lading and in any case not later than within 90 days of the date of delivery of the goods C.I.F., F.O.B. or F.O.R.....................................

Claims which arise through faulty material or workmanship as stipulated in clause 8 will be considered by the Seller only if submitted within the guarantee period.

The claims should be corroborated⁹ by the Buyers' reports drawn up with the assistance of competent organizations.

No claims put forward in respect of any consignment of the goods can be used by the Buyer as a reason for his refusal to accept the goods and to pay for them. This applies to both the consignment in respect of which a claim has been raised and to all further consignments to be delivered under the present contract.

The date of the postmark on the Buyer's letter containing the claim and addressed to the Seller to be considered as the date of the claim.

10. CONTINGENCIES

Should any circumstances arise which prevent the complete or partial fulfillment by any of the parties of their respective obligations under this contract, namely: fire, acts of elements, war, military operations of any character, blockades, prohibition of exports or imports or any other circumstances beyond the control of the parties, the time stipulated for the fulfillment of the obligations shall be extended for a period equal to that during which such circumstances will last.

If the above circumstances last for more than six months, each party shall have the right to refuse any further fulfillment of the obligations under the contract and in such case neither of the parties shall have the right to make a demand upon the other party for compensation for any possible losses.

The party for whom it becomes impossible to meet their obligations under the contract, shall immediately advise the other party as regards the beginning and the cessation of the circumstances preventing the fulfillment of their obligations.

Certificates issued by a respective Chamber of Commerce of the Seller's or Buyer's country shall be a sufficient proof of such circumstances and their duration.

11. ARBITRATION

All disputes and differences which may arise out of the present contract and/or in connection with it are to be referred for settlement to¹⁰ the Foreign Trade Arbitration Commission at the Russian Chamber of Commerce in Moscow in accordance with the Rules of Procedure of the said Commission the awards of which are final and binding upon both parties¹¹. Application to State Courts is excluded¹².

12. OTHER CONDITIONS

(1) Neither party- is entitled to transfer¹³ their rights and obligations under the present contract to third person without a written consent thereto of the other party.

(2) Any alterations an^a^fJj^kms to the present contract will be valid only if made in writing and duly signed by both parties.

(3) After the signing of the present contract all preceding negotiations and correspondence pertaining" to it become null and void¹⁵.

LEGAL ADDRESSES OF THE PARTIES

Sellers..................................................................

Buyers................................................................

SELLER BUYER

(Signature) (Signature)

If one compares these two contracts, one will note that the majority of clauses in them is'the same. However, there are also some apparent differences. These are explained by the different subject matter of the two contracts. For instance, the second contract has a special clause covering Guarantee (8). This is understandable, since in Contract No. 2 the selling of machinery is dealt with¹⁶, and the agreement upon guarantee is essential¹⁷.

Also, Contract No. 2 has special clauses covering the Time of Delivery (4) and Claims (9). Insurance procedures, which in the first contract are specified by a special clause (VI), in Contract No. 2 are included in Clause 6 ("Terms of Payment").

Upon more careful comparison¹®, other differences will become apparent. Such a comparison, in fact, is strongly recommended to the users of this book, because it allows to understand better what contracts are about, what is essential for them, and what is not so essential.

NOTES

1. expenses incurred	— убытки, понесенные
2. duties, taxes, customs	— пошлины, налоги, таможенные сборы
3. manufacturing works	— завод-изготовитель
4. through faulty material	— из-за дефекта материала или работы
or workmanship
5. provided con/	— если; втом случае, если
6. to invalidate v	— лишать силы, действия
7. consentn	— согласие
to consent	— давать согласие
8. rapidly wearing (parts)	— быстро изнашивающиеся (части)
9. to corroborate v	— подтверждать
10. to refer for settlement	— передавать для решения
to...	в...
11. final and binding upon	— окончательный и обязательный для обеих сторон
both parties
12. application to state	— без передачи дел в общегражданские суды
courts is excluded
13. to transfers	— зд. передавать
14. to pertain to v	— относиться к
15. to become null and void	— терять силу
16. to deal with v	— иметь дело с
17. essential adj	— существенный
18. upon... comparison	— при... сравнении

CHAPTER X

CONTRACTS AND THEIR PERFORMANCE

(CONTINUED)

КОНТРАКТЫ И ИХ ИСПОЛНЕНИЕ

(ПРОДОЛЖЕНИЕ)

It quite often occurs that¹ the performance of the contracts is not altogether smooth¹, and that one of the parties to the contract believes that the other party is not fulfilling its terms. In this case a letter of complaint³ will probably be sent, containing a claim for damages⁴, etc. This claim can either be settled amicably⁵, or else the dispute may be taken to the court of law, or, which is more common, decided by arbitration.

A special clause in contracts is usually devoted to the matters of arbitration. It is often stipulated that in case of arbitration ea'ch party should appoint its arbitrator, and, if the two arbitrators cannot agree, they have to appoint an umpire⁶, whose decision (award) is final and binding upon both parties. Some contracts stipulate that all disputes and differences should be settled by arbitration in a third country, while some other contracts provide for an arbitration in the country of the respondent party⁷.

Disputes between Russian and foreign companies are usually settled by the Foreign Trade Arbitration Commission at the Russian Chamber of Commerce and Industry⁸. This Commission consists of fifteen members appointed by the Presidium of the Russian Chamber of Commerce and Industry. The arbitration by this Commission was stipulated in the two contracts of the previous chapter; it is also stipulated in the contract given as an example below.

This contract is at the same time shorter and longer than each of the two previous ones. Contract No. 3 consists of two parts: of the contract proper⁹ (in which all the usual requisites¹⁰ of the contracts can be found, such as the legal addresses of the parties, the denomination of goods, the total amount of money involved, the terms of delivery, etc.), and of the General Conditions of Dilivery (Appendix No. 1). These are quite )ong. They are standard and may be applied not only to¹¹ this particular contract (which deals with the sale of equipment) but to many other djjfera tcontracts as well. The General C^djtfqns form an integral part of Contract No. 3 and should be signed as well as the contract proper.

Often, due to their very length, standard general conditions to contracts are not read hy those signing the contracts, which may lead to problems. However, if the terms causing such misunderstanding are harsh or uncustomary¹² (especially if they are in small type¹³), many courts will refuse to enforce the agreement. If a term is ambiguous¹⁴, the doubt will be resolved against the party, who drafted¹⁵ the text.

Nevertheless, it is better that which is signed, should be read, and therefore it is recommended that the users of this book read and translate the rather lengthy "General

Conditions of the Contract No. 3. For the sake of brevity, some clauses of the General Conditions have been omitted.

NOTES

1. it quite often occurs that	— часто бывает, что
2. not altogether smooth	— не полностью бесконфликтный, не идеальный
3. letter of cpmp(aint	— письменная жалоба, рекламационное письмо
4. claim for damages	— требование о возмещении убытков
5. amicably adv	— дружественно, по взаимному согласию
6. umpire n ;,	— супер-арбитр,третейский судья
7. respondentn	— ответчик
respondent party	— ответчик (отвечающая сторона)
8. Foreign Trade Arbitration	Внешне-торговая арбитражная комиссия при Всероссийской торговой палате
Commission at the Russian
Chamber of Commerce
9. contract proper	— собственно контракт
10. requisite n	— составная часть
11. to be applied to	— применяться к
12. harsh or uncustomary	— жестокие или необычные (условия)
(terms)
13. in small type	— мелким шрифтом
14. ambiguous adj	— двусмысленный
15. to draft v	— готовить проект, составлять текст для подписания