General Conditions of Sale

CONTRACT: OTHER CONDITIONS. LEGAL ADDRESSES

ASSIGNMENT AND THIRD-PARTY RIGHTS

DISCUSSING GENERAL CONDITIONS OF SALE.

LIST OF WORDS

1. to assign the rights and obligations

2. to become null/void

3. to reimburse

reimbursement

4. amendments to the Contract

5. to become effective/to come into effect as on

6. non/fulfillment/improper fulfillment

7. to disclaim

disclaimer

8. transfer of title

9. tangible chattel

10. passage of title

11. retention of title

12. warranties of title

13. implied/express warranties

14. good title/faith

15. holder of title

16. privity of contract

17. novation

18. to assign

assignment

19. to confer rights

20. to encrypt

21. to enact

22. to rebut

23. to construe

24. the third-party beneficiary

25. merchantability

26. to waive the right

Read the text and answer the questions that follow.

General Conditions of Sale correspond to “Standard Conditions of Sale” in contracts of some British companies.

The amount of information in General Conditions varies from contract to contract depending on the traditions of the contracting firms and the volume of delivery.

General Conditions may include, for example, in small orders, such items as Shipping Specification, Inspection, Guarantee and Claims, Conditions of Transportation, Force Majeure Circumstances, Arbitration and Sanctions, and are printed on the reverse side of the order form.

In many standard contracts, however, these items are given as separate clauses (articles) and General Conditions (Provisions) only comprise the following information: they may begin with the definition of the date of delivery:

“The date of the Bill of Lading or the date of the stamp on the railway bill, road or airway bills is to be considered as the date of delivery”. Sometimes the definition is contained in other clauses, such as “Shipping” or “Delivery Dates”.

Also, they may contain indication about the proper law of the contract applied. For instance, “The Swedish Civil and Commercial Law shall be applied to this Contract” or “The Contract shall be governed by English Law”.

But as a rule it is given in detail in the clause “Arbitration”.

Other items under General Conditions may be:

“All taxes, dues and customs duties on the territory of the Sellers’ country are borne by the Sellers. On the territory of the Buyers’ country they are borne by the Buyers if they are connected with the fulfilment of this Contract.

Neither party shall have the right to assign the rights and obligations under this Contract to any third party without the written consent of the other party.

In case of non-fulfilment or improper fulfilment by the Sellers of their obligations under this Contract, the Sellers are to reimburse to the Buyers the losses suffered by them.

Appendices, addenda and amendments to the Contract are only valid (or shall be effective) and shall make an integral part of the Contract if made (issued) in writing and signed by the contracting parties.

All enclosures to the General Conditions as well as to the Contract are regarded as an integral part thereof.

All negotiations and correspondence preceding the conclusion of this Contract and pertaining to it become null and void on the date of its signing.

This Contract is signed in (the name of the place) on the (the date) in duplicate (in 2 copies), each in the Russian and English languages, one copy for each party, both texts being authentic (or having equal force), and will become effective from (or comes into effect as on) the date of its signing”.

1. What is called “General Conditions of Sale”?

2. What does the amount of information contained in them depend on?

3. What clauses of the contract may comprise such items as shipping instructions, inspection, guarantees, force majeure circumstances, claims, sanctions and arbitration?

4. Where may the definition of the date of delivery be given?

5. What is to be considered the date of delivery if the goods are carried by sea?

6. What is to be considered the date of delivery if the goods are carried by rail?

7. Where may the proper law of the contract be given? Why is it important?

8. What kind of expenses may be mentioned in the General Conditions?

9. What information always belongs under the General Conditions (what information is the General Conditions proper)?

Read through the text quickly and complete the sentences below using the words in the box.

contracts, disclaimers, exclusions, title, transfer, warranties

1. A sale can be defined as the ¹⁾ ______ of ²⁾ ______in a good.

2. Implied ³⁾ ______do not need to be expressed as they are implied by law.

3. Two means of limiting warranty liability are ⁴⁾ ______ and ⁵⁾ ______.

4. The CISC sets forth rules that govern ⁶⁾ ______ for the international sale of goods.

The sale of goods entails a broad area of the law which is largely governed by legislation. Where an aspect of the law is not regulated by legislation, it is governed by the common law or often by general principles of law in non-common law jurisdictions.

The applicable legislation sets forth the nature of what is involved in the sale of goods. Naturally, this includes definitions of what constitutes a sale and goods. A sale entails the transfer of title in a good from the seller to the buyer. Goods can be defined broadly as some type of tangible chattel. Application of the legislation depends upon: the type of sale; whether the seller is a merchant or not; and, if the seller is a merchant, whether he is trading in the course of his usual business.

The aspects of sale of goods governed by legislation include such things as contract formation, price, passage of title, warranties of title, implied warranties, express warranties, disclaimers of warranties, remedies for breach of warranty, delivery and acceptance of goods, and the passing of risk. The principal relevant legislation in the UK is the Sale of Goods Act 1979 (including its amendments).

Contract formation in this context includes the requirements applied to contracts in general with some added details such as agreements implied by conduct of the parties. The price to be paid for the goods is usually set forth in the agreement, but in some instances relevant legislation will determine the price if this term is left out. At the very least, the buyer is generally required to pay a reasonable price. Contractual provisions concerning the transfer of title dictate when good title is transferred, for example between a person who has possession but not title to a third-party buyer. Generally, good title cannot be transferred to a third party from a person not authorised to do so by the holder of title. Naturally, aspects of good faith and apparent authority come into play in this context.

Different warranties play a major role in the sale of goods. Implied warranties are such warranties which do not need to be expressed but which the law implies. Some of these types of warranties would include warranties of title, fitness for a particular purpose, and quality or merchantability. Many times the application of the latter two types of warranty depends upon the type of sale (for example sales by sample) and whether the seller is a merchant acting in the course of business. Express warranties are warranties which are specifically stated either in writing or orally, as the case may be. Under many statutory provisions, an express warranty cannot negate an implied warranty of the relevant legislation. A common feature of legislation governing the sale of goods is to restrict the ability to limit warranty liability through exclusions or disclaimers in the contract.

Another general aspect of this type of legislation is to regulate performance between the parties. Aspects covered in this area would include delivery and acceptance, inspection by the buyer, the buyer's right to refuse acceptance and return of goods.

An international convention which should be particularly mentioned in this context is the United Nations Convention on Contracts for the International Sale of Goods Act (CISG). The Convention sets forth rules that govern contracts for the international sale of goods and takes into consideration different social, economic and legal systems to remove legal barriers and foster the development of international trade.

Ex. 1. Look through the first text about general conditions again and find the English equivalents for the following Russian ones.

1. печатаются на обратной стороне заказа, 2. определение даты поставки, 3. кроме того, они могут включать, 4. ни одна сторона не имеет права передавать, 5. в случае невыполнения или ненадлежащего исполнения, 6. приложения, добавления и изменения к контракту, 7. считаются их составной частью, 8. предшествующие заключению контракта, 9. в двух экземплярах, 10. при этом оба текста имеют одинаковую силу, 11. варьируется из контракта в контракт в зависимости от традиций и объема поставки, 12. однако во многих типовых контрактах, 13. датой поставки считается дата коносамента или дата штампа на железнодорожной накладной, 14. к этому контракту должно применяться шведское гражданское и коммерческое право, 15. без письменного согласия другой стороны, 16. продавец должен возместить понесенные покупателем потери, 17. действительны, если сделаны в письменной форме, 18. все вставки в Общие Условия, 19. теряют силу в день его подписания, 20. и вступит в силу с даты подписания.

Ex. 2. Match these types of warranties and concepts related to warranties (1-7) with their definitions (a-g). Consult a dictionary if necessary.

1. express warranty   2. implied warranty	a) a warranty that the goods being sold are suitable for the purpose for which the buyer is purchasing them
3. warranty of fitness	b) a warranty that the seller of the goods owns them (e.g. the goods have not been stolen or already sold to someone else)
4. warranty of merchantability   5. warranty of title	с) a violation of a warranty when the goods do not comply in some regard with an express or implied promise at the time of sale
6. breach of warranty   7. disclaimer of warranty	d) a spoken or written promise made by the seller about the quality, performance or other considerations concerning the goods covered by the contract which would affect the buyer's decision to purchase
	e) a negation or restriction of the rights under a warranty given by a seller to a buyer
	f) a warranty that the goods being sold are of a quality that generally conforms to ordinary standards of similar goods sold under similar circumstances
	g) a warranty which is not explicitly stated but that is imposed by the law due to the nature of the transaction

Ex. 3. Give noun forms for the verbs below. Consult a dictionary if necessary.

renew, draft, include, omit, terminate, encrypt, adopt, negotiate, propose, transact, assign, imply, intend, enact, rebut, construe, induce, convince, persuade, disclaim, indemnify, retain, bind, ascertain, exclude, postpone, tolerate, entitle, specify, conform.

Ex. 4. Read the following news item from a legal journal. Use the words in brackets to form a suitable word in the gap.

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