Foreign Trade University

Faculty of Law

(LLM) DO Viet Anh Thai

dovietanhthai@ftu.edu.vn

I. Definitions
Sale: "the passing of title from the seller to the buyer

for a price" [UCC 2-106(1)]. The price may be payable in

money, goods, services, or land.
Goods: tangible personal property

If a transaction involves both goods and services, a

court determines which aspect is dominant.

II. Terms in a sales contract

Upon parties' agreements
Rules: clear and sound terms can avoid dispute later

Essential terms in a sale contract

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Parties of the contract

Good
Quality
Quantity
Price
Payment
Transportation and delivery
Inspection
Limitation of damages/Force majeure
Governing law
Dispute resolution
.
4

1. Parties of the contract

Full legal name and address of Buyer and Seller

Ex: Microsoft Corporation, Unilever Bestfoods LLC

Full name and title of the representative
=> Attention: Verify the capacity to enter the contract
of both parties

=> Question:
Is a sales contract signed by the Vice President in
charge of Sale valid?
5

2. Goods
Methods for drafting goods provision:

- Goods with Commercial name : Basa Catfish

- Goods with Scientific name : Pangasius bocourti
- Goods with local of production: Buon Me Thuat coffee,

Bordeaux wines
- Goods with utility: lotion anti-wrinkled
- Goods with serial number/model : Air conditionner
model number 111.222.333

3. Quality
By description
By sample

The goods delivered shall be exactly as sample

=> Be careful if, for marketing aim, you provide sample
with the best quality!!!
By standard
=> Keep the standard up to date

4. Quantity
Exact quantity

Example: 200 computers

with tolerance
Example: 2000 pounds of rice +/- 5%
=> mostly to cover natural loss during transportation

5. Price
Fixed price : the price is determined at the formation

of the contract
Floating price : the price will be determined later
Ex: market price on the day of delivery

6. Payment

Time of payment:
A fixed date (Goods shall be delivered at September 1st 2012)
A deadline (Goods shall be delivered before September 1st 2012)
A period (Goods shall be delivered in September 2012)
Payments currency:
Attention: if payments currency is different from prices
currency, you must insert an exchange rate between 2 currencies
Method of payment
- Bank transfer
- Letter of credit
- Etc
10

7. Transportation and delivery

Method of transportation: boat, air, truck
Who pay the transportation fee?

=> International sale: INCOTERMS ( FOB, CIF )

Time of delivery
Announcement of delivery

11

8. Inspection
Seller

Certificate of
Quality

Buyer

Survey Report

12

9. Force majeure
Force majeure: an impediment beyond a partys

control and that a party could not reasonably be

expected to take the impediment into account at the
time of the conclusion of the contract or have avoided
or overcome its consequences.
Breaching party is not liable for the breach of contract
due to a force majeure

13

10. Governing law

Domestic contract : not necessary => Governing law is

the law of the country of the parties

International contract : compulsory => choice
between:
- Law of Buyers country
- Law of Sellers country
- Law of other country
- International Treaty
- Etc
14

11. Dispute resolution

- Negotiation
- Conciliation/Mediation
- Court Litigation

- Arbitration
Criteria

Court

Arbitration

Fee ( cost)

Not expensive

Very expensive

Time

Longer

Faster

Secrecy

No

Yes

Finality of the decision Appeal possible

No appeal

Choice of
judge/arbitrator

Impossible

Right of the parties

Enforcement of the
decision

Decision is enforced by the

executive branch of the
court

Parties must ask the executive

branch of the court to enforce
arbitral decision
15

Review a contract
CONTRACT No 1/2015

The Buyer:
Unimex Thai Binh
Adress: 01 Hai Ba Trung, Le Hong Phong district, Thai Binh
Tel: 84 36 3730 190
Fax: 84 36 3730 191

The Seller:
Asian Network Samoa (ANS)
Adress: C/O : Space, 4, Leng Kee Road, Singapore 159088
Tel: +65 6269 2269
Fax: +65 6269 2268
16

CONTRACT No 2/2015
[]
Article 1. Goods:
Illicium verum
Article 2. Quality:
- Percentage of breakage: <5%

17

 CONTRACT No 3/2015

Article 15: Force majeure

Any delay or failure in the performance by the Seller
shall be excused if and to the extent caused by the
occurrence of a Force Majeure, for example flood,
storm, hurricane, tsunami.

18

II. Implied terms

Watch out with implied terms by statutes
Correspondence with description
Sale by sample
Merchantable quality
Fitness for purpose

Title, quite possession

19

Case study 1

Kim purchases $200 of fruit and vegetables from an On-line

Supplier called Food on the Go ltd. The products are

described on the web page with photos and prices per
kilogram.

When the fruit and vegetables are delivered, Kim notices that
half the fruit she ordered is unfit to eat and the potatoes are
not the variety she ordered.

=> What should Kim do?

20

Case study 2

Gus purchased a pair of jeans that were on sale (20% off ) at

Northshore Jeanery Pty.Ltd.

The first time Gus wore the jeans, the zip broke and the
stitching around the waistband became loose.

Gus returns the jeans and requests a refund, but the sales
assistant points to a sign displayed above the cash register,
which states No refunds or exchange on Sale items.

=> What should Gus do?

21

Case study 3
David goes to an electrical shop, which specializes in

selling TVs, DVD players and other sound systems

and asks for an all region DVD player.
When he inserts a new DVD imported from US, he

discovers that it will not play because DVD player

does not carter for that region.
=> Which implied terms have been breached?
22

III. Exclusion Clauses: the Position at

Common Law

An exclusion clause is a term of the contract that limits or

excludes a liability from one party that they would otherwise be
subject to.

The function of an exclusion clause is to limit or exclude liability

for breach of an express/implied term, or even negligence in a
contract.

The courts approach to interpreting such a clause is to interpret

them narrowly.
23

 Once you sign the contract, it is assumed that you are

bound regardless of the fact that you read it or not

With an unsigned document, an exclusion clause will

be binding only if the clause was brought to the notice

of the customer. This notice must be reasonable
notice and is determined objectively by the courts.

24

Previous Course of Dealing

If the customer has had previous dealings with the

defendant, the court will more readily infer knowledge of

the exclusion clause.
If the customer knows about the clause through his

previous dealings then he/she will be bound by it

25

Contra Proferentum Rule

The contra proferentum rule is a rule of interpretation

used by the courts. The rule provides that the courts will
interpret the exclusion clause against the party relying on
the clause

26

Exclusion Clauses: The Position under Statute

Law
Given the view that exclusion clauses are generally

considered to be unfair to consumers, legislation has

been enacted to modify the operation of exclusion
clauses in relation to the sale of goods/services.
They are void for consumer contract

27