1. PURCHASE CONTRACT
The Contract, made out, in Chinese and English, both version being
equally authentic, by and between the Seller and the Buyer whereby the
Seller aGREes to sell and the Buyer aGREes to buy the undermentioned goods
subject to terms and conditions set forth hereinafter as follows:
1 Name of Commodity and specification
2 Country of Origin & Manufacturer
3 Unit Price (packing charges included)
5 Total Value
6 Packing (seaworthy)
7 Insurance (to be covered by the Buyer unless otherwise)
8 Time of Shipment
9 Port of Loading
10 Port of Destination
mark shown as below in addition to the port of destination, package
number, gross and net weights, measurements and other marks as the Buyer
may require stencilled or marked conspicuously with fast and unfailing
pigments on each package. In the case of dangerous and/or poisonous cargo
(es), the Seller is obliged to take care to ensure that the nature and the
generally adopted symbol shall be marked conspicuously on each package.
12 Terms of Payment:
One month prior to the time of shipment the Buyer shall open with the
Bank of _______an irrevocable Letter of Credit in favour of the Seller
payable at the issuing bank against presentation of documents as
stipulated under Clause 18. A. of SECTION II, the Terms of Delivery of
this Contract after departure of the carrying vessel. The said Letter of
Credit shall remain in force till the 15th day after shipment.
13 Other Terms:
Unless otherwise aGREed and accepted by the Buyer, all other matters
related to this contract shall be governed by Section II, the Terms of
Delivery which shall form an integral part of this Contract. Any
supplementary terms and conditions that may be attached to this Contract
shall automatically prevail over the terms and conditions of this Contract
if such supplementary terms and conditions come in conflict with terms and
conditions herein and shall be binding upon both parties.
FOR THE SELLER FOR THE BUYER
14 FOB/FAS TERMS
14.1 The shipping space for the contracted goods shall be booked by
the Buyer or the Buyer’s shipping agent __________.
14.2 Under FOB terms, the Seller shall undertake to load the
contracted goods on board the vessel nominated by the Buyer on any date
notified by the Buyer, within the time of shipment as stipulated in Clause
8 of this Contract.
14.3 Under FAS terms, the Seller shall undertake to deliver the
contracted goods under the tackle of the vessel nominated by the Buyer on
any date notified by the Buyer, within the time of shipment as stipulated
in Clause 8 of this Contract.
14.4 10-15 days prior to the date of shipment, the Buyer shall inform
the Seller by cable or telex of the contract number, name of vessel, ETA
of vessel, quantity to be loaded and the name of shipping agent, so as to
enable the Seller to contact the shipping agent direct and arrange the
shipment of the goods. The Seller shall advise by cable or telex in time
the Buyer of the result thereof. Should, for certain reasons, it become
necessary for the Buyer to replace the named vessel with another one, or
should the named vessel arrive at the port of shipment earlier or later
than the date of arrival as previously notified to the Seller, the Buyer
or its shipping agent shall advise the Seller to this effect in due time.
The Seller shall also keep in close contact with the agent or the Buyer.
14.5 Should the Seller fail to load the goods on board or to deliver
the goods under the tackle of the vessel booked by the Buyer. Within the
time as notified by the Buyer, after its arrival at the port of shipment
the Seller shall be fully liable to the Buyer and responsible for all
losses and expenses such as dead freight, demurrage. Consequential losses
incurred upon and/or suffered by the Buyer.
14.6 Should the vessel be withdrawn or replaced or delayed eventually
or the cargo be shut out etc., and the Seller be not informed in good time
to stop delivery of the cargo, the calculation of the loss in storage
expenses and insurance premium thus sustained at the loading port shall be
based on the loading date notified by the agent to the Seller (or based on
the date of the arrival of the cargo at the loading port in case the cargo
should arrive there later than the notified loading date). The
abovementioned loss to be calculated from the 16th day after expiry of the
free storage time at the port should be borne by the Buyer with the
exception of Force Majeure. However, the Seller shall still undertake to
load the cargo immediately upon the carrying vessel’s arrival at the
loading port at its own risk and expenses. The payment of the afore-said
expenses shall be effected against presentation of the original vouchers
after the Buyer’s verification.
15 C&F Terms
15.1 The Seller shall ship the goods within the time as stipulated in
clause 8 of this Contract by a direct vessel sailing from the port of
loading to China port. Transhipment on route is not allowed without the
Buyer’s prior consent. The goods shall not be carried by vessels flying
flags of countries not acceptable to the Port Authorities of China.
15.2 The carrying vessel chartered by the Seller shall be seaworthy
and cargoworthy. The Seller shall be obliged to act prudently and
conscientiously when selecting the vessel and the carrier when chartering
such vessel. The Buyer is justified in not accepting vessels chartered by
the Seller that are not members of the PICLUB.
15.3 The carrying vessel chartered by the Seller shall sail and arrive
at the port of destination within the normal and reasonable period of
time. Any unreasonable aviation or delay is not allowed.
15.4 The age of the carrying vessel chartered by the Seller shall not
exceed 15 years. In case her age exceeds 15 years, the extra average
insurance premium thus incurred shall be borne by the Seller. Vessel over
20 years of age shall in no event be acceptable to the Buyer.
15.5 For cargo lots over 1,000 M/T each, or any other lots less than
1,000 metric tons but identified by the Buyer, the Seller shall, at least
10 days prior to the date of shipment, inform the Buyer by telex or cable
of the following information: the contract number, the name of commodity,
quantity, the name of the carrying vessel, the age, nationality, and
particulars of the carrying vessel, the expected date of loading, the
expected time of arrival at the port of destination, the name, telex and
cable address of the carrier.
15.6 For cargo lots over 1,000 M/T each, or any other lots less than
1,000 metric tons but identified by the Buyer, the Master of the carrying
vessel shall notify the Buyer respectively 7 (seven) days and 24
(twenty-four) hours prior to the arrival of the vessel at the port of
destination, by telex or cable about its ETA (expected time of arrival),
contract number, the name of commodity, and quantity.
15.7 If goods are to be shipped per liner vessel under liner Bill of
Lading, the carrying vessel must be classified as the highest ____________
or equivalent class as per the Institute Classification Clause and shall
be so maintained throughout the duration of the relevant Bill of Lading.
Nevertheless, the maximum age of the vessel shall not exceed 20 years at
the date of loading. The seller shall bear the average insurance premium
for liner vessel older than 20 years. Under no circum -stances shall the
Buyer accept vessel over 25 years of age.
15.8 For break bulk cargoes, if goods are shipped in containers by the
Seller without prior consent of the Buyer, a compensation of a certain
amount to be aGREed upon by both parties shall be payable to the Buyer by
15.9 The Seller shall maintain close contact with the carrying vessel
and shall notify the Buyer by fastest means of communication about any and
all accidents that may occur while the carrying vessel is on route. The
Seller shall assume full responsibility and shall compensate the Buyer for
all losses incurred for its failure to give timely advice or notification
to the Buyer.
16 CIF Terms:
Under CIF terms, besides Clause 15 C&F Terms of this contract which
shall be applied the Seller shall be responsible for covering the cargo
with relevant insurance with irrespective percentage.
17 Advice of Shipment:
Within 48 hours immediately after completion of loading of goods on
board the vessel the Seller shall advise the Buyer by cable or telex of
the contract number, the name of goods, weight (net/gross) or quantity
loaded, invoice value, name of vessel, port of loading, sailing date and
expected time of arrival (ETA) at the port of destination. Should the
Buyer be unable to arrange insurance in time owing to the Seller’s failure
to give the above mentioned advice of shipment by cable or telex, the
Seller shall be held responsible for any and all damages and/or losses
attributable to such failure.
18 Shipping Documents
18.A The Seller shall present the following documents to the paying
bank for negotiation of payment:
18.A.1 Full set of clean on board, "freight prepaid" for C&F/CIF Terms
or "Freight to collect" for FOB/FAS Terms, Ocean Bills of Lading, made out
to order and blank endorsed, notifying ___________at the port of
18.A.2 Five copies of signed invoice, indicating contract number, L/C
number, name of commodity, full specifications, and shipping mark, signed
and issued by the Beneficiary of Letter of Credit.
18.A.3 Two copies of packing list and/or weight memo with indication
of gross and net weight of each package and/or measurements issued by
beneficiary of Letter of Credit.
18.A.4 Two copies each of the certificates of quality and quantity or
weight issued by the manufacturer and/or a qualified independent surveyor
at the loading port and must indicate full specifications of goods
conforming to stipulations in Letter of Credit.
18.A.5 One duplicate copy of the cable or telex advice of shipment as
stipulated in Clause 17 of the Terms of Delivery.
18.A.6 A letter attesting that extra copies of abovementioned
documents have been dispatched according to the Contract.
18.A.7 A letter attesting that the nationality of the carrying vessel
has been approved by the Buyer.
18.A.8 The relevant insurance policy covering, but not limited to at
least 110% of the invoice value against all and war risks if the insurance
is covered by the Buyer.
18.B Any original document(s) made by rephotographic system, automated
or computerized system or carbon copies shall not be acceptable unless
they are clearly marked as "ORIGINAL." and certified with signatures in
hand writing by authorised officers of the issuing company or corporation.
18.C Through Bill of Lading, Stale Bill of Lading, Short Form Bill of
Lading, shall not be acceptable.
18.D Third Party appointed by the Beneficiary as shipper shall not be
acceptable unless such Third Party Bill of Lading is made out to the order
of shipper and endorsed to the Beneficiary and blank endorsed by the
18.E Documents issued earlier than the opening date of Letter of
Credit shall not be acceptable.
18.F In the case of C&F/CIF shipments, Charter Party Bill of Lading
shall not be acceptable unless Beneficiary provides one copy each of the
Charter Party, Master’s of Mate’s receipt, shipping order and cargo or
stowage plan and/or other documents called for in the Letter of Credit by
18.G The seller shall dispatch, in care of the carrying vessel, two
copies each of the duplicates of Bill of Lading. Invoice and Packing List
to the Buyer’s receiving agent, _______________at the port of destination.
18.H Immediately after the departure of the carrying vessel, the
Seller shall airmail one set of the duplicate documents to the Buyer and
three sets of the same to ______________________________ Transportation
Corporation at the port of destination.
18.I The Seller shall assume full responsibility and be liable to the
Buyer and shall compensate the Buyer for all losses arising from going
astray of and/or the delay in the dispatch of the above mentioned
18.J Banking charges outside the People’s Republic of China shall be
for the Seller’s account.
19 If the goods under this Contract are to be dispatched by air
, all the terms and conditions of this Contract in connection
with ocean transportation shall be governed by relevant air terms.
20 Instruction leaflets on dangerous cargo:
For dangerous and/or poisonous cargo, the Seller must provide
instruction leaflets stating the hazardous or poisonous properties,
transportation, storage and handling remarks, as well as precautionary and
first-air measures and measures against fire. The Seller shall airmail,
together with other shipping documents, three copies each of the same to
the Buyer and___________________ Transportation Corporation at the port of
21 Inspection & claims:
In case the quality, quantity or weight of the goods be found not in
conformity with those as stipulated in this Contract upon re-inspection by
the China Commodity Import and Export inspection Bureau within 60 days
after completion of the discharge of the goods at the port of destination
or, if goods are shipped in containers, 60 days after the opening of such
containers, the Buyer shall have the right to request the Seller to take
back the goods or lodge claims against the Seller for compensation for
losses upon the strength of the Inspection Certificate issued by the said
Bureau, with the exception of those claims for which the insurers or
owners of the carrying vessel are liable, all expenses including but not
limited to inspection fees, interest, losses arising from the return of
the goods or claims shall be borne by the Seller. In such a case, the
Buyer may, if so requested, send a sample of the goods in question to the
Seller, provided that sampling and sending of such sample is feasible.
With the exception of late delivery or non-delivery due to "Force
Majeure" causes, if the Seller fails to make delivery of the goods in
accordance with the terms and conditions, jointly or severally, of this
Contract, the Seller shall be liable to the Buyer and indemnify the Buyer
for all losses, damages, including but not limited to, purchase price
and/or purchase price differentials, deadfreight, demurrage, and all
consequential direct or indirect losses. The Buyer shall nevertheless have
the right to cancel in part or in whole of the contract without prejudice
to the Buyer’s right to claim compensations.
23 Force Majeure:
Neither the Seller or the Buyer shall be held responsible for late
delivery or non-delivery owing to generally recognized "Force Majeure"
causes. However in such a case, the Seller shall immediately advise by
cable or telex the Buyer of the accident and airmail to the Buyer within
15 days after the accident, a certificate of the accident issued by the
competent government authority or the chamber of commerce which is located
at the place where the accident occurs as evidence thereof. If the said
"Force Majeure" cause lasts over 60 days, the Buyer shall have the right
to cancel the whole or the undelivered part of the order for the goods as
stipulated in Contract.
Both parties aGREe to attempt to resolve all disputes between the
parties with respect to the application or interpretation of any term
hereof of transaction hereunder, through amicable negotiation. If a
dispute cannot be resolved in this manner to the satisfaction of the
Seller and the Buyer within a reasonable period of time, maximum not
exceeding 90 days after the date of the notification of such dispute, the
case under dispute shall be submitted to arbitration if the Buyer should
decide not to take the case to court at a place of jurisdiction that the
Buyer may deem appropriate. Unless otherwise aGREed upon by both parties,
such arbitration shall be held in ________, and shall be governed by the
rules and procedures of arbitration stipulated by the Foreign Trade
Arbitration Commission of the China Council for the Promotion of
International Trade. The decision by such arbitration shall be accepted as
final and binding upon both parties. The arbitration fees shall be borne
by the losing party unless otherwise awarded.