Drafting an international contract Examples

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Drafting an international contractExamples

• International Business Law

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CASE

• Vetati, a French distribution company, sells low
  price clothes. They concluded a contract with
  Polovet Company, a Spanish company. The parties
  planned that Polovet would sell 50.000 pullovers
  for 2 euros per pullover.

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PREAMBULE

• Vetati is the leader on the children low prices
  clothes market. In order to expand their market,
  Vetati contacted Polovet, a Spanish producer of
  wool pullovers. Polovet accepted to become
  Vetati s provider.

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SECTION 1 SPECIFIC TERMS
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I- Parties

• Art 1 Parties
• The contract is concluded between the following
  parties
• Vetati Company, settled 10 rue Carnot in Lille,
  represented by its director M. Tita, hereunder
  called  THE BUYER 
• Polovet Company, Settled calle de la libertad,
  Madrid, represented by M. Figuo, Sales manager,
  allowed by the board of directors to sign this
  contract, according to a signed authorization,
  hereunder stated as  THE SELLER .

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• Art 2 Definitions
• Pullover  is a children pullover which respects
  the EN-327 quality norm.
• Réceptionnaire is the person chosen by THE
  BUYER who has the power to take delivery of the
  goods. His name will be given to THE SELLER by
  fax at the beginning of each month.

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• Art 3 Object of the contract
• THE BUYER promises to buy 50.000 pullovers.
• Those pullovers are of a superior quality as
  stated on THE SELLER s website.
• The pullovers are delivered with 20 in 1 year
  old size, 20 in 2 years old size, 30 in 3 years
  old size, 40 in 4 years old size and 20 in 5
  years old size.

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• Art 4 Delivery
• Delivery is performed by THE SELLER at THE
  SELLER s cost. THE SELLER promises to ask the
  carriage company TRANSDEX France to perform the
  carriage.
• The place of delivery is at THE BUYER s storage
  place, 01 rue Carnot, in Lille. The
  Réceptionnaire will sign the delivery document.
• The transfer of risks on the sold goods will
  happen when THE BUYER acceps the delivery of the
  goods.

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• Art 5 Packaging
• The pullovers will be packed by size, with 1 pack
  per size.
• Each pullover will be packed separately in a
  plastic bag and eack pack of pullovers will be
  protected by a plastic protection according to
  the TRIFILM technique.

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• Art 6 Way of delivery
• 5.000 pullovers will be delivered every month
  during 10 month, with 1 delivery per month.
• Delivery will happen on the first Monday of every
  month between 10 and 11 AM.

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• Art 7 Price
• THE BUYER promises to pay 2 euros per pullover
  that is a total of 10.000 euros per delivery.

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• Art 8 Way of payment
• Payment will happen 90 days after the date of
  delivery.
• Payment will happen through a Swift bank transfer
  on the account number 317-224-429 at the Banque
  du Commerce in Lille.

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• Art 9 Conformity
• THE SELLER promises to deliver goods that
  perfectly conform the order.
• Any defect in packing can be considered as bad
  delivery by THE BUYER.
• Proof of conformity lies on THE SELLER. In case
  of claim, THE SELLER should be able to show a
  receipt signed by THE BUYER s réceptionnaire.

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• Art 10 Defective goods
• THE SELLER promises to accept to take back any
  goods that are declared as defective by THE BUYER
  when THE BUYER opens the packs.
• THE BUYER should send the defective goods back to
  THE SELLER and should be paid back within 8 days.

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SECTION 2- GENERAL TERMS
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I- Best efforts

• Art 20 Sub-contracting
• THE SELLER promises to chack that his
  sub-contractors do not hire employees under the
  age of 16. THE SELLER promises to give to THE
  BUYER the results of an audit conducted in his
  sub-contractors and dated from the year of
  delivery.
• If there is no audit or THE SELLER does not
  fulfil this duty, THE BUYER can cancel the
  contract and ask for damages.

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II- Penal term

• Art 21 Late delivery
• In cas of late delivery, if delivery happens
  within 7 days after the planned delivery date,
  THE BUYER promises not to refuse delivery but THE
  SELLER promises to pay an indemnity of the amount
  of 10 of the amount of the order.

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III- Liability

• Art 22 Late payment
• If the BUYER pays late, no indemnity is due if
  payment is less than 7 days late.
• In case of payment between 8 and 15 days late,
  THE BUYER will have to pay an indemnity of 2 of
  the late payment.

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IV- Force majeure

• Art 23 Force majeure
• THE SELLER will not be liable for late delivery
  if it is due to a force majeure event.
• Force majeur events are the destruction of the
  factory by fire or due to a natural event.
• If a force majeure event happens, THE SELLER
  promises to have the goods delivered by a
  sub-contractor within 2 month from the date of
  happening of the force majeure event.

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• Strike by the carrier WILL NOT be considered as a
  force majeure event.

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V- Hardship term

• Art 24 Hardship
• In case of strike by the carrier s employees, if
  the strike lasts less than 5 days, the date of
  delivery will be moved accordingly by the same
  number of days.
• If the strike lasts more than 5 days, THE SELLER
  promises to have the goods delivered by plane or
  train on the next Monday following the initial
  delivery date. THE SELLER will pay delivery
  costs.

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VI- Change in market conditions

• A- Competing offer
• Art 25 Competing offer
• If THE BUYER receives an offer by one of THE
  SELLERs competitors and this offer is 10 less
  expensive for similar goods produced in the EU,
  THE SELLER promises to give a discount to THE
  BUYER by 80 of the difference of price.

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VI- Change in market conditions

• B- Client in a better position
• Art 26 Client in a better position
• If THE SELLER sells the same goods to one of THE
  BUYERs French competitors, THE SELLER promises
  to advise THE BUYER before any delivery and to
  inform THE BUYER of the price. If the price is
  less than the one agreed on in this contract, THE
  BUYER can cancel the contract or get a discount
  of the amount of the difference of price.

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VIII- Option term

• Art 27 Option
• At the end of this contract, THE BUYER can renew
  the contract with the same conditions. THE BUYER
  should advise THE SELLER at least 1 month in
  advance by a recommanded letter with a proof of
  receipt.
• If THE BUYER does not renew, tthe contract will
  automatically end after the last delivery and
  payment.

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SECTION 4 DUTIES SURVIVING THE CONTRACT

• I- Duties concerning the Past

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• A- Stock
• Art 30 stock
• THE SELLER promises to take any unsold stock at
  50 of its price during a period of 1 year after
  the end of this contract.

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• B- Documents
• Art 31 Advertising documents
• THE BUYER can continue using advertising
  documents given by THE SELLER until the whole
  stock is sold.

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II- Terms regarding the future

• A- non-competition term
• Art 32 non-competition
• During the wole length of the contract and for a
  period of 1 year after the end of the contract,
  THE SELLER promises not to sell any same goods to
  VETABLE company, which is THE BUYER s main
  competitor.

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• B- Confidentiality term
• Art 33 Confidentiality
• THE SELLER promises not to display any
  information about amount of the sales performed
  with THE BUYER. In case of breach of this duty,
  THE SELLER will pay a 30.000 euros indemnity to
  THE BUYER.

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• C- Warranty term
• Art 34 Warranty
• THE SELLER promises to guarantee the solidity of
  the pullovers during 1 year. THE SELLER will
  directly answer the clients  claims. THE SELLER
  will put a stamp on each pullover mentioning the
  existence of this guarantee and THE SELLER s
  after sale phone number.

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Section 5 Other terms

• Art 40 Language
• The contract is drafted in English and Spanish.
  In case of difficulty to interpret the contract,
  the English version will prevail.

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• Art 41 Jurisdiction
• In case of liligation, the parties plan that the
  judge will be the Commercial Tribunal in Lille.

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• Art 42 Applicable law
• The applicable law to this contract is French
  law.

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• Art 43 Vienna Convention
• The Vienna convention applies to this contract