NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATIONAL PROGRAM

GROUP ASSIGNMENT
INTERNATIONAL PAYMENT
TOPIC: INTERNATIONAL SALES CONTRACT
Group 1 – BANKING AEP 59

Members: Pham Thanh An - 11170020

Dao Phuong Anh - 11170061
Nguyen Minh Anh - 11170231
Nguyen Nhat Anh - 11170243
Nguyen Trang Anh - 11170309
Doan Ngoc Anh - 11170465
Lecturer: Nguyen Thi Dieu Chi, Ph.D

Hanoi, 2020
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 Planning Table
Numbe Members Duties Rate
r
1 Pham Thanh An Do research, part B, present 100%
2 Dao Phuong Anh Do research, arrange duties, collect and edit 100%
(LEADER) word, present
3 Nguyen Minh Anh Do researh, part C, present 100%
4 Nguyen Nhat Anh Do reasearch, powerpoint, present 100%
5 Nguyen Trang Anh Do research, part B, present 100%
6 Doan Ngoc Anh Do research, part A , present 100%

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 INTRODUCTION

In the context of the increasingly internationalized economy, Vietnam is developing a

market economy, opening-market, cooperation and integration, international trade and
investment activities emerge as a bridge between the domestic economy and the outside
world. In order to perform this bridge function, international banking operations such as
international payment, foreign trade finance, foreign exchange trading, bank guarantee in
foreign trade ... play a role as an essential and increasingly important tool.

Thesedays, international payment and foreign trade financing are increasingly important
service for commercial banks, besides supporting and promoting import-export and
foreign investment. .

International trade and payment is inherently more complex and risky than domestic trade
and payment, because it is governed by not only local but also international laws and
practices, using foreign languages and payment currencies are usually foreign currencies.
Therefore, the parties involved in international trade and payment need to be proficient
not only in the language, professional technical processes, but also in the international,
local laws and practices.

Our research paper below is designed to help you understand the basics of Foreign Trade
Contracts as well.

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 OUTLINE
Introduction.........................................................................................................................2

A. Basic Information.....................................................................................................4
I. Definition.......................................................................................................4
II. Purposes.........................................................................................................4
III. Features..........................................................................................................4
IV. Forms.............................................................................................................4
V. Principal in signing the international sales contract......................................5
VI. Classify International sales contract..............................................................5

B. Provisions of an international sales contract.............................................................6

I. Introduction of an international sales contract...............................................6
II. Clauses of the contract...................................................................................8
III. Conclusion of the contract............................................................................13

C. Sample of an international sales contract................................................................14

Conclusion..........................................................................................................................17

References..........................................................................................................................18

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 CONTRACT FOR THE INTERNATIONAL SALE OF GOODS

A. Basic Information
I. Definition
- This model of international sale contract is used by companies positioned in
different countries for the sale and purchase of goods.
- The exporter (seller) is responsible for delivering the stated products, and the
importer (buyer) shall accquire them under the agreed conditions of payment,
delivery and transaction schedule

II. Purposes
- To serve as a basis for the parties to fulfill their obligations
- It will reference the governing body of law, the forum where any disputes are to be
resolved and the method of dispute resolution, such as arbitration as opposed to
litigation.
- To perform procedural tasks

III. Features
1. Parties
- CISG 1980: This Convention applies to contracts of sale of goods between parties
whose places of business are in different States:
(a) when the States are Contracting States; or (b) when the rules of private
international law lead to the application of the law of a Contracting State.
- Art. 27.1, Law on Commerce 2005:
International purchase and sale of goods shall be conducted in form of export,
import, temporary import for re-export, temporary
export for re-import and transfer through border-gates.

2. Object
- Under CISG 1980: the object may be moved across the border.
- Under Law on Commerce 2005: the object must be moved across the border.

3. Payment currency
- Payment currency may be foreign currencyfor at least one party.
Example: the contract between a Vietnam’s trader and a Japan’s trader.

4. Governing law
- Feature: being diversified and complicated.

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- Law sources:
+ International trade treaties.
+ National laws.
+ International trade practices.

5. Dispute settlement body

- Feature: being diversified and complicated.
- Specific bodies:
+ Economic Courts.
+ Commercial Arbitration.

IV. Forms
- Direct contract: The two buying and selling parties meet directly to agree on the
terms and conditions of the contract.
- Indirect contract: The two parties do not directly meet, but only send letters,
telegrams, emails ... expressing the content of the contract.

V. Principal in signing the international sale contract

- Voluntary agreement: based on the principle of free will of the two trading parties.
No agency, organization or individual has the right to impose their will on the
parties involved.

- Equality of benefit: relationship between the parties must be established on the

basis of commensurate rights and obligations, ensuring economic benefits for the
parties.

- Physical responsibility: The parties to the contract shall be solely responsible for
the properties related to the contractual fine and compensation for breach of
contract.

- Comply with law: The agreements in the contract must be in accordance with the
law, not taking advantage of the contract to operate illegally.

VI. Classify international sales contracts

- Duration of contract:
+ Short-term contracts: usually signed in a relatively short time and after one
performance, the two parties have fulfilled their obligations.
+ Long-term contracts: usually made for a long time and during which deliveries
are conducted several times.

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 - The business content of the contract:
+ Export contract: A contract of sale of goods to a foreign country to perform the
transfer of such goods to foreign countries and at the same time move the
ownership of such goods to the buyer.
+ Import contract: means a contract for purchase of foreign goods and then
bringing such goods into their country in order to serve domestic consumption or
serve domestic manufacturing and processing industries.
+ Re-export contract: A contract to export goods that were previously imported
from abroad without being reprocessed or produced domestically.
+ Re-import contract: a contract for the purchase of goods manufactured by the
country they have sold to foreign countries and unprocessed in foreign countries.
+ Export processing contract: a contract indicating that a domestic party imports
raw materials from a foreign party to assemble or process products and then export
them to that country rather than consume them domestically.

- Contract’s form:
There are 3 types of contracts: written contracts, oral contracts and casual
contracts. However, the preferred form of the document has many advantages:
safety, comprehensiveness, and clarity

B. Provisions of an international sales contract:

I. Introduction of the contract

1. Number of contract (Contract No.): usually under the name of the document,
or in the left corner of the contract. This is the necessary basis for storing,
searching and recording related documents for reference

2. Name of contract: usually named after commodity categories (Example:

Frozen shrimp export contract).

3. Basis of contract: This content highlights the voluntary contract signing of

both parties (Example: Both sides have discussed and agreed to conclude a
contract for shipment on ... with terms and conditions as follow).
If the contract is established on the basis of a government agreement or
protocol, a letter agreement must be established as the basis for establishing the
contract.
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 4. Place and time of contract: This is considered a milestone marking the
establishment of a contractual relationship in a specific time and space to prove
the transaction of the two buying and selling parties, as well as a timeline for
the parties to exercise their rights and obligations. his contract. If no court is
appointed to adjudicate disputes, then the court of the place where the contract
is made will handle and adjudicate the disputes occurring. There are also many
cases, locations, and dates of signing the contract shown at the end of the
contract.

5. Name, address, telephone, email of seller and buyer: name of the parties
involved in the contract. In order to avoid fraud, the partners must be
organizations with legal status, while the person signing the contract must
specify the nationality, title and authority; At the same time, through the bank
that serves you to collect economic information about the partner, consider
whether the partner falls into bankruptcy, default ... or not.
Must specify and address the headquarters of the buyer and seller. This is the
address for stakeholders to contact correspondence and resolve related issues....

6. Account number of parties: It is not required, but if you have to write the full
bank account, the reliability in the purchase will be higher

7. Legal presentative: the name of the head of the legal entity or the person
named in the business registration permit. In the case of a contract signed under
an authorization, the power of attorney must be attached to the contract.

SALES CONTRACT
No: Date:
Hereinafter we signed as follows:
BETWEEN
The buyer:
Add :
Tel : Fax:
Bank name:
Bank address:
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Account No:
Swift code:
Represented by :
AND
The seller:
Add :
Tel : Fax:
Bank name:
Bank address:
Account No:
Swift code:
Represented by :
It is mutually agreed between both sides to sign this contract with terms and specifications
specified hereunder:
II. Clauses of the contract

1. ARTICLE 1: COMMODITY/ GOODS

There are 8 main ways to show the commodity

- Insert the commercial name / common name with the scientific name.

Ex: coffee Rubosta,…

- Name of goods together with the name of the locality of manufacture.

Ex: Ginseng Ngoc Linh,….

- Name of goods together with main specifications of the goods

Ex: 4-seat car, TV 32 inch,….

- Name of goods together with production time.

Ex: Vietnam winter-spring rice,….

- Name of goods together with brand

Ex: Nike shoes, ….

- Name of goods together with the uses of the goods.

Ex: hair dye,…..

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- Name of goods together with HS code of the goods.

Ex: Iphone 6s, Samsung Galaxy S10,….

- Combining many ways.

Ex: Iphone XS , Apple, made in the US in 2018

2. ARTICLE 2: QUALITY/ SPECIFICATION

- As per sample agreed by both parties (Depend on negotiations between “seller”
and buyer” or depend on quality requirements of “buyer”)
- Identify qualities based on:

+ The sample

+ The standard

+ Technical document

+ The status of goods

+ The density of goods

+ Brand

+ Describe the content of major substances

+ The description of the items

3. ARTICLE 3: QUANTITY
- Quantity calculation unit:
Calculation unit: pcs, pcs, ark, bale ...
Unit of measurement system (metric system): KG, MT ...
UK, US units: Gallon, inch, foot
Unit of length measurement: inches, feet, yards ...
Unit of area measurement: square inch, square yard ...
Capacity measurement unit: gallon ...
Unit of mass measurement: long ton, short ton, pound ...
Unit of number of sets: dozen, gross, set ...

- Method of quantity regulation:

Definitive regulations.
Provisional regulations.
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 (About, Approximately, More or less, From ... to ...)

- Method of weight regulation:

Gross weight (gross weight).
Net weight : Net weight = gross weight (trọng lượng cả bì) - gross weight (trọng
lượng bì).
Theoretical weight. Commercial weight 100 + WTC GTM = GTT x 100 + WTT
Location determining quantity and weight: Determining at place of departure.
Determine at destination.
4. ARTICLE 4: PRICE
- The counter currency is the currency used as the reference or second currency in
a currency pair. When viewing an ISO currency code the counter currency is listed
after the base currency, and is separated with a slash. Major currencies, such as the
euro and U.S. dollar, are more likely to be the base currency in a currency pair.

- The Incoterms or International Commercial Terms are a series of pre-defined

commercial terms published by the International Chamber of Commerce (ICC)
relating to international commercial law.

- Method of price determination:

There are 4 methods to determine price:
+ Fixed price: The price is set at the time of signing the contract and cannot be
modified unless otherwise agreed. This method is usually applied to
contracts with a short validity period, low price fluctuations, or sales in
some special markets. In the contract the parties can record: 300 USD / MT
+ Flexible price: Is Revisable price which was determined during the contract,
but can be reviewed later, at the time of delivery, ... This method is applied
when the field value of the commodity has volatility to a certain extent. In
the contract, the parties must specify the original price, the rate of change,
the time of revaluation, and reference sources
+ Usance price: The price is not determined immediately upon the signing of
a sales contract, but is determined during the contract performance. The
following specified prices may be fixed or flexible.

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 + Sliding scale price: The price is determined explicitly at the time of contract
performance based on the initial price, referring to changes in production
costs during the contract performance period.

- Discount
If we look at the types of discounts we see, there are types of discounts:
+ Single price discount, usually expressed by a certain percentage compared
to the item price
+ Double discount (also called continuous discount), is a chain of single
discounts that buyers are entitled to many different reasons.
+ Progressive discount is a type of discount that increases gradually according
to the quantity of goods sold in a certain trading session.
+ Bonus discounts are types of discounts that sellers reward regular buyers, if
in a certain time (such as 6 months, a year), the total purchase amount
reaches a certain level.

5. ARTICLE 5: SHIPMENT - DELIVERY

- Delivery time:
- Place of delivery: 10th floor, Lotte building,….
- Delivery notification: signature when receive goods,….
- Some other provisions
6. ARTICLE 6: PAY MENT
- Currency of payment: USD, Euro,….
- Time of payment: in advance, within 2 weeks,….
- Place of payment
- Methods of payment: by cash, bank accounts,…
- Payment documents (Hối phiếu (Bill of Exchange), Hoá đơn thương mại
(Commercial Invoice), Vận đơn đường biển (Bill of Lading), Chứng thư bảo hiểm
(Insurance Policy/Insurance Certificate), Giấy chứng nhận chất lượng (Certificate
of quality), Giấy chứng nhận số lượng, trọng lượng, Phiếu đóng gói hàng hoá
(Packing List)…)

7. ARTICLE 7: PACKING
- Method of providing packaging
- Price of packaging

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 - Packaging quality requirements (Wooden case, cartons and metal frame pallet
packaging suitable for container shipment (Depend on requirement of “buyer”
such as: Goods packed in ................, net weight is ……………..))

8. ARTICLE 8: WARRANTY

Warranty: is the period of time for the seller to guarantee the quality of goods,
which is considered to be the time limit for the buyer to discover goods defects.

- Warranty period
- Content warranty
- Rights and obligations of the parties

Ex: Rice is guaranteed for 3 months from handover. Warranty only applies to the
product packaging intact.

9. ARTICLE 9: INSURANCE
- Regulations on insurance buyers: Insurance to be effected by the seller
- Insurance conditions: “ All risks” for 110% of the invoice value
- Insurance money: 110% of CIF invoice value against Free Particular Average

10. ARTICLE 10: FORCE MAJEURE

- Events that made force majeure:  act of God, war, hostilities, civil war,  acts or
threats of terrorism, strikes,...
- Procedures for recording events:
- Consequences of force majeure: The Contract Period shall be extended by a period
of time equal to the period of interruption caused by an Event of Force Majeure.

11. ARTICLE 11 : CLAIM

- Claim period
- Set of claim documents
- Legal documents:

Ex: All buyer claim will be made by telex or tax within 7 days after the goods arrive at
the port of destination and must be confirmed in writing in the form sent to the seller
within 21 days after receiving the investigation report of Vinacontrol, Hanoi.

12. ARTICLE 12 : PENALTY

- Penalty case: In case LC( Letter of Credit) is not opened ontime as stipulated
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 - Fines: 5%contract value to the Seller’s account
- Deadline for paying fines: within 10 working days after the latest date ofissuing LC
( Letter of Credit)

13. ARTICLE 13: ARBITRATION

- Arbitration venue: the VietNam International Arbitration Centre (VIAC) at the
VietNam Chamber of Commerce and Industry (VCCI) in HaNoi
- The procedure for conducting arbitration:
- Rules used for adjudication:
- Execution: VIAC award shall be final and binding by both parties. Arbitration fee
and all of fees and charges relating to arbitration shall be born by the losing party

14. ARTICLE 14 : OTHER TERMS AND CONDITIONS 

There are terms agreed upon both parties such as:

- Penalty for party cancels the contact without agreement of other party
- Arise appendix or modification
- Final judgment if there are arising conflicts.

Ex: All amendments and additional annexes (if any) to the contract shall be only legal
and valid in writing form with the signatures of both parties.

III. Conclusion of the contract

The final part of an international sales contract usually has:

- The number of copies of the contract

- Contract agreement and language
- Validity period, amendments to terms
- Signature and representation on each side

Ex: All amendments and additional annexes (if any) to the contract shall be only legal
and valid in writing form with the signatures of both parties.

This contract is made at Hanoi in English in 4 copies, 2 of which for each party.

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C. Sample of an international sale contract
CONTRACT

No: 01DD-01MM/2020
Date: 01-JAN-2020

BETWEEN: HANOI FOOD EXPORT IMPORT COMPANY

Address: 99 Tran Dai Nghia Street, Hai Ba Trung District, Ha Noi, Viet Nam
Tel: 0975.739.657 Telex: 024-123-4567 Fax: 024-123-4567
Represented by Mrs. Dao Phuong Anh
Hereinafter called THE BUYER

AND: ELLEN LIMITED

Address: lat A. 3/F Causeway, Tower16 – 22 Causeway Road, Causeway Bay
HONGKONG
Tel: 1234.5678.90 Telex: 0012-768-89 Fax: 0123-4576-98
Represented by Mr. Jackson Wang
Hereinafter called THE SELLER

The above parties hereby agreed that Seller shall sell and Buyer shall buy the
following commodity with the following terms and conditions:
1/ COMMODITY: Vietnamese Rice Type Pearl
2/ SPECIFICATION:
* Moisture: 14.0% max.
* Foreign master: 0.5% max.
* Broken: 25.00% max.
* Whole grain: 40.00% min.
* Damaged kernel: 2.00% max.
* Chalky kernel: 8.00% max.
* Red kernel: 4.00% max.
* Immature kernel: 1.00% max.
* Milling degree: ordinary milled.
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 3/ QUANTITY: 20.000 MT (10% more or less at Buyer option)
4/ PACKING: in new single jute bags of 50 kgs net each
5/ SHIPMENT: 10.000 MT in October and 10.000 MT in November
6/ PRICE: USD195.000 MT FOB Saigon Port
7/ PAYMENT: By Irrevocable Letter of Credit at sight L/C
Buyer shall open an irrevocable Letter of Credit at sight L/C in favor of
Vietcombank requiring the following documents for negotiation:
- Full set of commercial invoice
- Full set Clean on Board Bill of Lading
- Certificate of weight and quality issued by independent surveyor
- Certificate of origin
- Phytosanitary certificate
- Fummigation certificate
- Certificate of vessel's Hatch cleanliness
8/ PRE-SHIPMENT SURVEY: Buyer shall have right to pre-shipment
survey of cargo.
9/ INSURANCE: To be converred by the Buyer.
10/ ARBITRATION: Any disputes, controversy or claim arising out of or
relating to this contract or breach therefore, which can not amicably be settled by the
parties hereto, shall be finally settled by Legal Solution in Singapore.
11/ LOADING TERMS
a- At the load port, the cargo is to be loaded at the rate of 1,000 metric
tons (PWWDSHEXUU) per weather working days of 24 consecutive hours,
Sunday and holiday excepted unless used. If the Notice of Readiness is
presented before 12 hrs noon laytime to commence at 13 hrs the same day. If
the Notice of Readiness is given after 12 hrs noon but before the close of
office (17:00 hours) the laytime to commence from 8:00 AM on the next
working day. Dunnage to be for Buyer/Shipowner's account.
b- Shore tally at the Seller's account and on board vessel tally at
Buyer/Shipowner's account.
c- At load port, tax for cargo is to Seller’s account
d- Dammurage?Despatch as per Charter party

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 e- All other terms as per Gencon Charter party
12/ APPLICABLE: This contract shall be governed by and construed
according to the laws of The Republic of Singapore.
13/ FORCE MAJEURE: The Force Majeure (Exemption) Clause of
The International Chamber of Commerce (ICC Publication No.412) is
hereby incorporated in this contract.
14/ SURVEY: The supervision and survey of the Vietnamese White
Rice at mills/stores quality, weight, quantity, number of bags, conditions of
boxes and packing will be done by Vinacontrol in Vietnam, the cost thereof
being to 's account.
15/ OTHERS: The Trade Terms used herein shall be inpreted in
accordance 1980 including its amendments.
This sales contract is done in Jakarta 1 Jan. 2020 in 04 (four) English
originals, 02 (two) for each side.
SIGNED (The Seller) SIGNED (The Buyer)

Dao Phuong Anh Jackson Wang

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 CONCLUSION

An “international sale of goods” is the prescribed term for such international business
transactions dealing with goods, but trade in technology, services, finance, capital, and
overseas construction also requires international transactions or license contracts. The
international business contracts for such items other than physical goods are essentially
similar to contracts for international sale of goods, and are sometimes accompanied by
contracts of carriage, insurance, and foreign exchange (or settlement), which are
supplemental to international sale of goods contracts.

The sales contract for goods is a specific or general contract for sellers to transfer the
ownership of goods to the specified buyer in return for a specified sum of money. The
contract ensures the buyer his rights in securing the goods, and ensures the seller his
rights in collecting payment for those goods. Stipulations should be made to clearly define
the goods to be traded by quantity, quality and other aspects. If the details are not clearly
defined, the importer could receive a shipment of goods very different from the
expectations.

In the project, our group clarified clearly the contents of foreign trade contracts such as
the concept, the principles of contract signing, the characteristics as well as the sentences
of the contract. Despite trying to concentrate, the project certainly does not avoid
shortcomings. We would like to thank and sincerely welcome comments and suggestions
for possible amendments.

Again, we would like to thank our lecturer - Ph.D Nguyen Thi Dieu Chi for her
wholehearted guidance to help us complete this assignment.

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 REFERENCES

1. International Trade Finance – A Pragmatic Approach by Tarsem Singh Bhogal

Arun Kumar Trivedi.

2. Materials from International Settlement by Ph.D Nguyen Thi Dieu Chi, School of
Banking and Finance, NEU.

3. https://thuvienphapluat.vn/hopdong/108/HOP-DONG-XUAT-KHAU-GAO

4. https://xuatnhapkhauthucte.com

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