1. A contract comes into force when there is a meeting of minds.

Minimally, this is an agreement about scope (what will be sold) and price (what will be paid). 2. Export price calculations normally take into account all the additional costs of doing business abroad. 3. The high costs of exporting often make otherwise attractive business unprofitable. Careful calculation is essential. 1. Exporting creates risks for all parties: exporter, buyer, and government alike 2. Governments protect the interests of the country by passing laws over which the exporter has, in effect, no influence. 3. The relationship between the exporter and the buyer is, on the other hand, largely at the discretion of the parties concerned. 4. Exporters protect themselves against the risk of non-payment by insurance, by a guarantee, or, most favorably, by a letter of credit. 5. For the buyer, some protection against poor quality is offered by performance guarantees and retentions. 6. For both exporter and buyer, their contract and law which supplements it are their main protection. 1. Law has two branches, public and private. 2. A contract operates within the sphere of private law 3. Most rights and duties under the private law are disposive, the parties can agree to set them aside 4. The parties to a contract create new, legally enforceable rights and duties that exist only between the two of them. 5. The parties cannot set aside rights or duties under the public law 6. In principle, the parties are free to choose which national private law applies to their contract. 7. If a particular trade has strong, well understood conventions, the parties often agree only the minimum contract: scope and price. 8. Trade is often conducted on the basis of general conditions of sale or purchase, this often leads to conflict between sets of conditions. 9. The safest and most satisfactory basis for concluding an export agreement is the negotiated written contract. A model contract can offer useful guidance. Chapter 1: Negotiating delivery 1. A systematic approach to negotiating delivery avoids the danger of the parties overlooking important issues. 2. Negotiating delivery is a five step process based on five questions: when? Where? By what means? How will risk and title pass? What incoterm is the most appropriate? Timimg This agreement shall come into force after the execution by both parties on the date of last necessary approval by the competent authorities in the country of the seller and the buyer. If the contract has not come into force within ninety days of execution, it shall become null and void. The date of delivery shall be twenty-eight days after the date of coming into force of the contract.

Time is and shall be of the essence of this contract. For each week of late delivery the seller shall pay the buyer 0.1% of the contract price. If delivery is not effected within one month of the agreed delivery date, then the seller shall pay the buyer 0.1% of the contract price. If either party is prevented from, or delayed in, performing any duty under this contract by an event beyond his reasonable control, then this event shall be deemed force majeure, and this party shall not be considered in default and no remedy, be it under this contract or otherwise, shall be available to the other party. Force majeure events include, but are not limited to war (whether war is declared or not), riots (cuc no lon), insurrections (cuc khi ngha), acts of sabotage (s ph hoi), or similar occurrences, strikes, or other labor interest, newly introduced laws or government regulations, delay due to government action or inaction, fire, explosion, or other unavoidable accident; flood, storm, earthquake, or other abnormal natural event. Force majeure events do not include monsoon rains. If either party is prevented from, or delayed in, performing any duty under this contract, then this party shall immediately notify the other party of the event, of the duty affected, and of the expected duration of the event. If any force majeure event prevents or delays performance of any duty under this contract for more than sixty days, then either party may on due notification to the other party terminate this contract. Liquidated damages If the seller fails to supply any of the goods within the time period specified in the contract, the buyer shall notify the seller that a breach of contract has occurred and shall deduct from the contract price per week of delay, as liquidated damages, a sum equivalent to one half percent of the delivered price of the delayed goods until actual delivery up to a maximum deduction of 10% of the delivered price of the delayed goods. This contract shall come into force after approval by the governments of the seller and the buyer, however at the latest by 31st December, 1995.

If the vessel named by the buyer fails to arrive on or before the agreed delivery date, then the seller may at his discretion/at liberty deliver the goods to a bonded warehouse in the port of Mombasa, and shall be deemed to have fulfilled his delivery obligations under this contract. Goods are to be packed in new, strong, wooden cases suitable for long distance ocean transport and are to be well protected against dampness, shock, rust or rough handling. The seller shall be liable for any damage to or loss of the goods attributable to improper or defective packaging. On the surface of each package delivered under this contract shall be marked: the package number, the measurements of the package, gross weight, net weight, the lifting position, the letter of credit number, the words right side up, handle with care, keep dry, and the mark: DNP/.

Contract should specify the type of packaging and the shipping marks agreed by the parties. On delivery, the exporter receives from the carriers the most important of all shipping documents, the bill of lading (consignment note) Each mode of transport has a characteristic shipping document: the marine bill of lading, the air waybill, the rail consignment note, and the road consignment note are the most common. Combined transport (container transport) uses a combined transport bill of lading. Under certain circumstances, a marine bill of lading can be made into a negotiable document. The marine bill of lading, to be acceptable as a shipping document under a letter of credit, must bear the notation ( li ghi ch) that the goods have been shipped on board a named vessel. Payment under a letter of credit depends largely on the correctness of the shipping documents. Payment under a letter of credit may be delayed if the letter of credit repeats exactly the contractual packaging requirements but the exporter has failed to meet them The carrier will note any defects in the packaging, weight or general appearance of the goods on accepting them from the exporter. The carrier does not inspect the goods themselves, only the packaging. To be acceptable under a letter of credit, all shipping documents must be clean, free of notes about defects.