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Spot contracts & regular trading
Spot contracts:
One-time purchases based on who offers the
best deal at the time of the purchase
...


Regular trading:
Repeated spot purchases from one or more
suppliers
ITC

M8:U3:3
...


§ Identifying the parties

§

Objective: To determine the parties
to the contract
...


Contents: Exact name, type, location,
registration
...
2-1

2
...

Why: To determine if the goods
conform to what you require & and how
to verify this
...

ITC

M8:U3:3
...


§

Contract price

§

Objective: Determine the amount the
buyer is to pay, or the way in which
this amount is to be determined
Why: Price represents the buyer’s
main responsibility
Contents: Price per unit or for total
number of units
...
Currency, taxes, VAT,
price adjustments
...
2-3

4
...


Why: Many different costs are involved
...


ITC

M8:U3:3
...
§

Inspection by the buyer §

Objective: For the buyer to be able to

examine whether the goods, the result of the
services, or the capital investment meet the
requirements of the contract
...


Why: To ensure that goods conform to

specs
...

ITC

M8:U3:3
...
§

Retention of title

§

Objective: Determine who retains the
title of ownership to the goods, works
or capital investment, and until when
...
2-6

7
...

Why: To specify this additional
key obligation of the buyer
Contents: When, how, where to pay
...

ITC

M8:U3:3
...


§

Documents

§

Objective: To specify which
documents the seller is to provide in
order to complete obligations
...

Contents: List of transportation documents,
invoice, pocking list, insurance documents,
certificates of origin and of inspection
...
2-8

9
...

Why: To ensure compensation for delays
and clarify how to deal with problems
Contents: State how problems will be

addressed, notice of delays, when the buyer will
have the right to terminate the contract
...
2-9

10
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Why: To avoid having to
negotiate or litigate the dispute
Contents: Specifies duties to inspect & to give
notice; whether to refuse, replace, repair or
reimburse non-conforming goods and the time
frame for the seller’s liability
...
2-10

11
...

Why: To ensure a duty to
cooperate

ITC

Contents: Each party’s duty to inform
the other about claims and to assist
each other
...
2-11

Product liability

ITC

Action Point

3
...
2-12

12
...

Why: To relieve a party from the
duty to perform in case of
impediments beyond its control
Contents: Specify what is to be considered
force majeure and how to notify it
ITC

M8:U3:3
...


§

Applicable law

Objective: To help the parties know
how to interpret their obligations
under the contract
...


§

LAW

Why: To minimise misinterpretation
and problems in case of a dispute
Contents: Specify the law to apply
ITC

M8:U3:3
...


§

Resolution of disputes

§

Objective: To determine the
procedure for resolving disputes
...
ordinary
courts, etc
...
2-15

15
...


Why: To simplify communications

ITC

Contents: Specify the language or the
controlling language (in case of more
than one)

M8:U3:3
...


Conditions to the entering into
§
force of the contract §

Objective: To address the difficulty that the
contract may only be able to come into force if
certain approvals are received, financing
procured, etc
...
may be
needed and their timing may be
beyond your control
...

ITC

M8:U3:3
...


§

Definitions

§

Objective : To identify certain terms that
have a specific meaning for the parties in the
context of the agreement
...
2-18

18
...

Why: To protect the parties from
arguments that a communication was
not received
Contents: Specify to whom
communications are to be made, in
what way, any copies required…
...
2-19

19
...

Why: Some headings may sometimes seem
misleading
§

Contents: State that headings are
used for convenience only
ITC

§

§

§

M8:U3:3
...
§

Merger

§

Objective : To specify that the contract is
the complete contract between the parties
...
2-21

21
...

Why: It may otherwise be difficult to
determine when and whether a
communication amounts to a modification in
the contract or not
...

ITC

§
§
M8:U3:3
...
§

Changes in the parties

§

Objective : To ensure the buyers rights in
the event of substantial changes in the
ownership, management, etc
...

Why: Important changes may mean that the
buyer would want to terminate the contract
...

M8:U3:3
...


§

Assignment

§

Objective : To protect the buyers interest in
the event of the seller wishing to assign the
contract to a third party
...
2-24

24
...

Why: It is important to know under
what conditions this can be done

t
c
a
r
t
n
o
C

Contents: Specify the types of events that
may lead to termination and the procedure
for communication
ITC

M8:U3:3
...


§

Insurance

§

Objective : The determination of who is to
bear the costs of the insurance and the way it
is to be procured is necessary
...
2-26

26
...

Why: To make it clear who bears the
costs of repair and refunds and how
this is to be done
Contents: Specify procedures &
responsibilities
ITC

M8:U3:3
...
2-2

M8:U3:3
...


Voidability of the contract or
part or it
§
§

Objective : To help thee contract survive
even if part of it is not valid under local law
...
2-29

28
...

Why: The seller (or the buyer) may
not want the other party to acquire
any rights in this regard
Contents: State which rights are to be
acquired, if any
ITC

M8:U3:3
...
2-3

Intellectual property

ITC

M8:U3:3
...


§

Taxes

§

Objective : To make clear the manner in
which taxes will be covered by the parties
Why: To avoid tax surprises
Contents: Statement that each party
bears the responsibility for its own
taxes
ITC

M8:U3:3
...
§ Performance bonds, advance §

payment, and/or completion bonds

Objective : To protect any advances made
and ensure performance
...
2-33

Action Point

3
...


Are there any differences? Note any trends that
appear
...
2-34



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