Chapter2Chapter2

Subject Matter of an Subject Matter of an International Sales International Sales

ContractContract

1. Name of Goods1. Name of Goods Be specificBe specific Be true to factBe true to fact Try to use a name accepted internationallyTry to use a name accepted internationally - Sometimes a commodity has different names - Sometimes a commodity has different names

in different areas and easily misunderstanding. in different areas and easily misunderstanding.

- Select a name to reduce tariff charges or - Select a name to reduce tariff charges or fees.fees.

Ways to name commodityWays to name commodity1) according to the use1) according to the use tennis shoestennis shoes ，， electronic pianoelectronic piano ，， sunglasses.sunglasses.

2) 2) according to the material usedaccording to the material used cashmere sweatercashmere sweater ，， plastic flower, golden coin.plastic flower, golden coin.

3) 3) according to the main compositionaccording to the main composition soy milksoy milk ，， pure golden coinpure golden coin ，， peanut chocolate.peanut chocolate.

4) 4) according to outward lookingaccording to outward looking T- shirtT- shirt ，， claw hammerclaw hammer ，， computer mousecomputer mouse

5)5) according to good meaningaccording to good meaning Coca Cola Coca Cola ，， Pepsi Pepsi ，， Piaget / Piaget / 伯爵表伯爵表

6)6) according to well-known name according to well-known name Louis XIII whiskyLouis XIII whisky ，， Swarovsky CrystalSwarovsky Crystal ，， Toyota wagonToyota wagon

7)7) according to technology or craftaccording to technology or craft Fried chipsFried chips ，， Hand-made LaceHand-made Lace ，， Pressed Peanut OilPressed Peanut Oil

HS CodeHS Code

SITC CodeSITC Code

2. 2. Quality of GoodsQuality of Goods 1) Methods of Describing Quality of Goods1) Methods of Describing Quality of Goods Sales by sample(Sales by sample( 凭样品买卖 )) The sample refers to the article which can be used to repr

esent the quality of the whole lot. Sale by sample includes two cases

Sales by seller’s sampleSales by seller’s sample Representative sample (original sample/ type sample) is

usually sent by the seller to the buyer, and at the same time, duplicate samples are always kept by the seller for later reference.

“ “Quality as per seller’s sample”Quality as per seller’s sample”

Sales by buyer’s sampleSales by buyer’s sample

WWhen possible, the seller will do according to the bhen possible, the seller will do according to the buyer’s sample. uyer’s sample.

“ “Quality as per buyer’s sample”Quality as per buyer’s sample”

If impossible, he may send to the buyer a samplIf impossible, he may send to the buyer a sample of goods in similar quality, called e of goods in similar quality, called return samplreturn samplee (( 回样回样 )) or or counter samplecounter sample （对等样品）（对等样品） , as , as a proposal for the buyer’s consideration.a proposal for the buyer’s consideration.

Sales by specificationsSales by specifications The specification of the goods refers to certain main

indicators which indicate the quality of the goods, such as composition, content, purity, size, length, etc.

Sale by Description and illustration The quality of some commodities, such as technological

instruments, electric machines, etc. can not be simply indicated by quality indexes, instead it is quite necessary to explain in detail the structure, material, performance as well as method of operation. If necessary, pictures, photos, etc. must also be provided.

Sales by Grade ( 商品的等级 ) 　 The grade of the goods refers to the classifications of the

commodity of the goods which is indicated by words, numbers or symbols. The classifications are usually decided by different qualities, weights, compositions, appearances, properties, etc.

Sales by Standard （ 商品的标准）　 The standard refers to the specifications or grades which

are stipulated and announced by the government or the chambers of commerce, etc.

FAQ (Fair Average Quality)FAQ (Fair Average Quality) F.A.Q indicates the quality of a product that is offered F.A.Q indicates the quality of a product that is offered

not on a particular quality specification but on the basis not on a particular quality specification but on the basis equal to the average quality of the current crop, recent equal to the average quality of the current crop, recent shipment.shipment.

GMQ (Good Merchantable Quality)GMQ (Good Merchantable Quality) While G.M.Q. refers to the sound quality that is free While G.M.Q. refers to the sound quality that is free

from defects and is sufficiently good to satisfy the from defects and is sufficiently good to satisfy the purpose for which the buyer intends to use the goods or purpose for which the buyer intends to use the goods or for which the seller intends that they should be used. for which the seller intends that they should be used. Both terms are rather too general and sweeping. When Both terms are rather too general and sweeping. When in use, therefore, they are usually supplemented by in use, therefore, they are usually supplemented by some concrete specifications.some concrete specifications.

Sales by Brand Name or Trade Mark As to the goods whose quality is stable,

reputation is sound and with which the customers are quite familiar, we may sell it by brand name or trade mark.

Sales by Name of Origin It is suitable for some agricultural products and

by-products whose origins are well- known all over the world.

Sales as seen

2)Quality clause2)Quality clause Tolerance clauseTolerance clause Flexible rangesFlexible ranges A given rangeA given range A limitA limit A more or less clauseA more or less clause

CaseCase

An export company in China concluded a An export company in China concluded a deal on edible citric acid. While delivering deal on edible citric acid. While delivering the goods, they mistook inedible citric acid the goods, they mistook inedible citric acid for the edible kind. Not until several days for the edible kind. Not until several days after the vessel’s departure did they after the vessel’s departure did they discovered the mistake. By then, the discovered the mistake. By then, the relevant documents had already been sent relevant documents had already been sent by the negotiating bank. by the negotiating bank.

To avoid severe consequences, the export To avoid severe consequences, the export company tried to withhold the documents company tried to withhold the documents at the post office, while, on the other hand, at the post office, while, on the other hand, it urgently informed the ocean shipping agit urgently informed the ocean shipping agency to ask the agent in HongKong to hold ency to ask the agent in HongKong to hold back the goods when the ship called at the back the goods when the ship called at the port. Though an accident has been avoideport. Though an accident has been avoided, the company had suffered a great loss. d, the company had suffered a great loss.

3. Quantity of Goods3. Quantity of Goods 1) calculation of quantity1) calculation of quantity MetrologyMetrology Metric System(Metric System( 公制公制 ); British System (); British System ( 英制英制 ); U.S. System (); U.S. System ( 美制）美制） ; Int; Int

ernational System of Units(ernational System of Units( 国际单位制国际单位制 ))

Unit of MeasurementUnit of Measurementweight weight ：： 千克、公斤（千克、公斤（ kilogram , kg.kilogram , kg. ）， 克（）， 克（ gram , g.gram , g. ），）， 公吨（公吨（ metric ton , m/tmetric ton , m/t ）， 盎司（）， 盎司（ ounce , oz.ounce , oz. ），）， 磅（磅（ pound , lb.pound , lb. ）， 长吨（）， 长吨（ long ton , l/tlong ton , l/t ），）， 短吨（短吨（ short ton , s/tshort ton , s/t ）， 公担（）， 公担（ quintal , q.quintal , q. ））

capacity capacity ：： 升（升（ liter , l.liter , l. ），加仑（），加仑（ gallon , gal.gallon , gal. ） ， 蒲式耳（） ， 蒲式耳（ bushel , bu.bushel , bu. ））

numbersnumbers ：： 只（只（ piece , pc.piece , pc. ）， 双（）， 双（ pairpair ），）， 件（件（ package , pkg.package , pkg. ）， 头 （）， 头 （ headhead ）） 台、架、套（台、架、套（ setset ）， 打（）， 打（ dozen , doz.dozen , doz. ），）， 罗（罗（ gross , gr.gross , gr. ）， 令（）， 令（ ream , rm.ream , rm. ），）， 包、 捆（包、 捆（ bundle , balebundle , bale ） ， 袋 （） ， 袋 （ bagbag ），）， 箱（箱（ case, c/scase, c/s ） ， 盒（） ， 盒（ box ,bx.box ,bx. ），）， 卷（卷（ roll/coilroll/coil ）， 辆（）， 辆（ unitunit ））

length length ：： 码（码（ yard , yd.yard , yd. ） 米（） 米（ meter , m.meter , m. ）） 英寸（英寸（ inch , in.inch , in. ） 英尺（） 英尺（ foot , ft.foot , ft. ）） 厘米（厘米（ centimeter , cm.centimeter , cm. ））area area ：： 平方码（平方码（ square yard, sq.yd.square yard, sq.yd. ）） 平方米（平方米（ square meter , sq.m. square meter , sq.m. ） ） 平方英尺（ 平方英尺（ square foot , sq.ft. square foot , sq.ft. ）） 平方英寸（ 平方英寸（ square inch , sq.in.)square inch , sq.in.)

volumevolume ：： 立方米（ 立方米（ cubic meter , cu.m.cubic meter , cu.m. ），）， 立方码（ 立方码（ cubic yard , cu.yd. cubic yard , cu.yd. ），）， 立方英尺（ 立方英尺（ cubic foot , cu.ft.cubic foot , cu.ft. ），）， 立方英寸（立方英寸（ cubic inch , cu.in. cubic inch , cu.in. ））Measurement of weightMeasurement of weight

gross weight:gross weight: net weight plus tare (the weight of packing), “gross for net weight plus tare (the weight of packing), “gross for net” indicates the goods of little values, eg. rice, some kinds of beannet” indicates the goods of little values, eg. rice, some kinds of beans. s.

net weight: net weight: gross weight minus tare, there are ways to subtract targross weight minus tare, there are ways to subtract tare, namely, to subtract the real tare, actual tare, average tare, custoe, namely, to subtract the real tare, actual tare, average tare, custo

mary tare, or the computed tare.mary tare, or the computed tare.

conditioned weight: conditioned weight: dry weight plus standarddry weight plus standard moisture contentmoisture content

theoretical weight: theoretical weight: total number times the weight of each unittotal number times the weight of each unit

legal weight: legal weight: net weight + inner packingnet weight + inner packing net net weight: net net weight: net weight – (moisture + dust)net weight – (moisture + dust)

2) quantity clause2) quantity clause ContentContent More or less clauseMore or less clause ““5000m/t, 5000m/t, with 5% more or lesswith 5% more or less at seller’s optionat seller’s option”, ”,

usually “at the seller’s option” is often used. But when usually “at the seller’s option” is often used. But when shipment is organized by buyer, “shipment is organized by buyer, “buyer’s optionbuyer’s option” is ” is preferred. “preferred. “At carrier’s optionAt carrier’s option” is sometimes used when ” is sometimes used when charter transport is adopted, by this means, the capacity charter transport is adopted, by this means, the capacity of the ship is fully utilized.of the ship is fully utilized.

Approximately or AboutApproximately or About

某公司定购钢板某公司定购钢板 400M400M ／／ TT ，计，计 66 英尺、英尺、 88英尺、英尺、 1010 英尺、英尺、 1212 英尺四种规格各英尺四种规格各 100M100M／／ TT ，并附每种数量可增减，并附每种数量可增减 55 ％的溢短装％的溢短装条款，由卖方决定。今卖方交货为：条款，由卖方决定。今卖方交货为： 66 英英尺，尺， 70M70M ／／ TT ，， 88 英尺，英尺， 80M80M ／／ TT ；； 1010英尺，英尺， 60M60M ／／ TT ；； 1212 英尺，英尺， 210M210M ／／ TT ，，总量未超过总量未超过 420M420M ／／ TT 的溢短装上限的规的溢短装上限的规定。对于出口商按实际装运数量出具的跟定。对于出口商按实际装运数量出具的跟单汇票，进口商是否有权拒收拒付？单汇票，进口商是否有权拒收拒付？

4. Packing and Marking4. Packing and Marking1) factors influencing types of cargo packing :1) factors influencing types of cargo packing :Value of goodsValue of goods

TransportTransport

Dimension and the weight limitDimension and the weight limit

customs or statutory requirementscustoms or statutory requirements

EconomicalEconomical

InsuranceInsurance

Handling easilyHandling easily

2) Types of packing2) Types of packing Without packingWithout packing

• 散装货 散装货 (bulk cargo / cargo in bulk )(bulk cargo / cargo in bulk )• 裸装货 裸装货 (nude cargo )(nude cargo )

packingpacking• 运输包装 运输包装 ( transportation packing( transportation packing

/ outer packing)/ outer packing)• 销售包装 销售包装 ( selling packing ( selling packing

/ small packing/ small packing / inner packing / inner packing / immediate packing )/ immediate packing )

3) Outer packing3) Outer packing

单件包装单件包装（（ single-piece packingsingle-piece packing ）：）：

箱箱（（ wooden case; crate; carton; corrugated carton ) wooden case; crate; carton; corrugated carton )

桶桶（（ iron drum ; wooden caskiron drum ; wooden cask ） ）

袋袋（（ gunny bag ;cloth bag ; plastic bag ; paper baggunny bag ;cloth bag ; plastic bag ; paper bag ））

捆包捆包 (bundle ; bale(bundle ; bale ） ） 罐罐（（ cancan ） ） 篓篓（（ basketbasket ） ）

瓶瓶（（ bottle ; cylinderbottle ; cylinder ） ） 坛坛 (demijohn ; carboy(demijohn ; carboy ） ）

集合包装集合包装（（ muster packingmuster packing ）：）： 集装箱集装箱（（ containercontainer ） ） 托盘托盘（（ palletpallet ））

集装袋集装袋（（ Flexible container Flexible container ））

4) marking4) markingAlso called Also called shipping markshipping mark. . It is a symbol or a sign on outer packing It is a symbol or a sign on outer packing

usually withusually withThe order number or contract number, The order number or contract number, name of exporter,name of exporter, Name of buyer,Name of buyer, Destination,Destination, number of cases,number of cases, special warning.special warning.

identification markidentification mark 识别标志又称附属标志（识别标志又称附属标志（ subsidiary mark)subsidiary mark) 94CL — H08 94CL — H08 合同号合同号 ART.NO. : 904A ART.NO. : 904A 货号货号 COLOUR : NAVY/GREY COLOUR : NAVY/GREY 色泽色泽 SIZE : SIZE : 尺寸搭尺寸搭

配配 N.W. : 11.3KG N.W. : 11.3KG 净重净重 G.W. : 16.4KG G.W. : 16.4KG 毛重毛重 MEAS. :45.5×52×55.5cm MEAS. :45.5×52×55.5cm 尺码尺码 MADE IN CHINA MADE IN CHINA 生产国别生产国别

Of course , it is not always possible to keep the marking Of course , it is not always possible to keep the marking simple. Sometimes , it is necessary to indicate the weighsimple. Sometimes , it is necessary to indicate the weight or measure of the packages, the name of the vessel or t or measure of the packages, the name of the vessel or the origin of the goods. the origin of the goods.

When fragile goods are being transported, it is sound When fragile goods are being transported, it is sound practice to indicate this by marking the cases “practice to indicate this by marking the cases “FragileFragile” o” or for bags of raw materials to bear the notice “r for bags of raw materials to bear the notice “Use No HoUse No Hooksoks”, or where appropriate for other materials, “”, or where appropriate for other materials, “Keep DrKeep Dryy””..((indicative markindicative mark))

On occasions, the warning signs for any On occasions, the warning signs for any dangerous , dangerous , explosiveexplosive or or corrosive productscorrosive products should be given in the should be given in the shipping marksshipping marks..((warning markwarning mark))

5) Packaging5) Packaging Packaging functionsPackaging functions Kinds of packagingKinds of packaging LabelingLabeling 6) Product code6) Product code

• 美国统一代码委员会（美国统一代码委员会（ UCCUCC ）） : UPC: UPC 码 （码 （ Universal Product CodUniversal Product Codee ））

• 国际物品编码协会（国际物品编码协会（ IANIAN ）） : EAN: EAN 码（码（ European Article NumbeEuropean Article Numberr ） ）

• othersothers ：三九条码（：三九条码（ 3 of 9 Bar Code 3 of 9 Bar Code 或或 Code 39Code 39 ）、九三条码）、九三条码（（ Code 93 Bar Code Code 93 Bar Code ）、库德巴条码（）、库德巴条码（ Codabar Bar CodeCodabar Bar Code ）、）、二五条码（二五条码（ 2 of 5 Bar Code2 of 5 Bar Code ））

• China(IAN): “690” “691” “692” “693” “694” “489” “471”China(IAN): “690” “691” “692” “693” “694” “489” “471”

EAN EAN 消费单元编码标准版消费单元编码标准版

6 9 2 0 7 7 9 6 0 2 0 8 0

前缀码

制造厂商代码

商品项目代码

校验码

7)Neutral packing & manufacturing brand-name goods7)Neutral packing & manufacturing brand-name goods 8) clause of packing8) clause of packing

• In single, new, used and / or repaired gunny bags of 90kIn single, new, used and / or repaired gunny bags of 90kg each g each

• In baskets of 50kg each , covered with hessian cloth and In baskets of 50kg each , covered with hessian cloth and secured with ropes.secured with ropes.

• In tin-lined cartons of 11 kilos net each. In tin-lined cartons of 11 kilos net each.

• In cartons of 48 tins ×312oz. Net each.In cartons of 48 tins ×312oz. Net each.

• In cartons,each containing 4 boxes about 9 lbs.,each fruIn cartons,each containing 4 boxes about 9 lbs.,each fruit waxed and wrapped with paperit waxed and wrapped with paper

• Marking: Marking:

• Each package shall be stenciled with Each package shall be stenciled with gross and net weights, package number, gross and net weights, package number, measurement, port of destination, country measurement, port of destination, country of origin and the following Shipping of origin and the following Shipping Mark:Mark:

89ZHPC-07589ZHPC-075

GUANG ZHOUGUANG ZHOU

Packing clause in the contract: Packing clause in the contract: To be packed in new strong wooden cases / To be packed in new strong wooden cases /

cartons suitable for long voyage and well cartons suitable for long voyage and well protected against dampness, moisture, protected against dampness, moisture, shock, rust and rough handling. The Seller shock, rust and rough handling. The Seller shall be liable for any damage to the goods shall be liable for any damage to the goods due to improper packing and for any damage due to improper packing and for any damage attributable to inadequate or improper attributable to inadequate or improper protective measures taken by the Seller. In protective measures taken by the Seller. In such case all losses and/or expenses such case all losses and/or expenses incurred shall be borne by the Seller.incurred shall be borne by the Seller.

Questions:Questions:

1. What is 1. What is F.A.Q.F.A.Q. ? ?

2. What is 2. What is Gross for NetGross for Net ? ?

3. What is 3. What is Return SampleReturn Sample or or Counter SamplCounter Samplee??

4. What is 4. What is Net Net WeightNet Net Weight ? ?

5. What is 5. What is Plus or Minus ClausePlus or Minus Clause ? ?

Case1Case1

A Chinese company imported some flammable A Chinese company imported some flammable liquid chemical raw material from a French liquid chemical raw material from a French company. When the goods arrived at the company. When the goods arrived at the destination, it was found that there was a slight destination, it was found that there was a slight leakage caused by the defect in a few packages. leakage caused by the defect in a few packages. However, the Chinese company failed to take any However, the Chinese company failed to take any measures to save the loss and prevent the measures to save the loss and prevent the damage from expanding. As a result, the leakage damage from expanding. As a result, the leakage worsened after the warehousing of the goods and worsened after the warehousing of the goods and led to a self-ignited fire. Afterwards, the Chinese led to a self-ignited fire. Afterwards, the Chinese company claimed against the French company for company claimed against the French company for full compensation of the total loss.full compensation of the total loss.

Case 2Case 2

An export company in China made an An export company in China made an offer on an agricultural product to an offer on an agricultural product to an American importer. Aside from all the American importer. Aside from all the essential conditions, it was also indicated essential conditions, it was also indicated in the offer that ”packing in sound bags”. in the offer that ”packing in sound bags”. Within the validity period, the American Within the validity period, the American importer gave a reply: “refer to your telex importer gave a reply: “refer to your telex first accepted, packing in new bags”. After first accepted, packing in new bags”. After receiving this, the export company started receiving this, the export company started to prepare the goods. to prepare the goods.

A few days later, when the price of the agriA few days later, when the price of the agricultural product plummeted in the internaticultural product plummeted in the international market, the American importer claimeonal market, the American importer claimed in its telex ” the contract is invalid becaud in its telex ” the contract is invalid because you have not confirmed our alteration to se you have not confirmed our alteration to the offer.” But the export company insisted the offer.” But the export company insisted that the contract was valid. A dispute was tthat the contract was valid. A dispute was thus aroused. hus aroused.

Price, payment, quality and quantity of the Price, payment, quality and quantity of the goods, place and time of delivery, extent goods, place and time of delivery, extent of one party’s liability to the other or the of one party’s liability to the other or the settlement of disputes (material alteration)settlement of disputes (material alteration)