2. Master the skills of making up some simple English contracts.
Chapter 15 Contract
Learning Objectives:
Learn and study the strict style and language characteristics of the English contracts.
Master the skills of making up some simple English contracts.

3. Ⅰ. The Contents of the Contract
The contract contents are as follows:
(1)Title
(2)Preamble
The date and place of contract signing; the names and positions of the persons concerned; the reason of signing the contract; the principles of reaching the agreement or of signing the contract and the scope of the authorized rights, etc.
(3)Essential Clause
The name of the commodity;the terms of quality, price, payment, shipment, insurance, delivery, inspection, import and export license and taxation, etc.
(4)Special clause
The terms of installation and adjustment, loading and unloading, training and etc.
(5)General Clause
The terms of force Majeure, claims, arbitration, breaching , releasing, applicable laws, etc.
(6)The Other Clauses
The terms of contract amendments, the bribes declining and the other items which have not been defined in the Contract.
(7)Witness Clause
The validity of the contract, the language of the Contract, the signature of the legal representatives of two parties of the Contract, their positions and etc.

4. Ⅱ. The Requirements of Working out the Contracts and the Style and Characteristics of Contract Language:
The literary form of the contract language is the most formal and strictest one in English, so in drafting or translating the contract the following requirements should be fulfilled:
1. All the parts and articles should be arranged clearly, definitely and orderly.
2. The items and the articles must be numbered correctly and clearly.
3. The items and the articles should be drafted and edited concisely and smoothly, and be kept in accordance with the international practices.
4. The sentences and phrases, the technical terms and punctuations should be written clearly and correctly. Special attention should be paid to the English Grammar. The English sentences and phrases should be written out grammatically in order to make them understandable.
5. The typing of the contract should be checked once and again. The spelling, the capital letters, the numbers, the amounts, the types of the commodities and so on should be paid great attention to in order to avoid the evitable mistakes in your contract.
6. The contract is the kind of official documents and some of the sentences may be too long and too difficult for the first learners of Business English to understand， to imitate or to write. Therefore learning good business English is rather important in your future work of trading with the foreign businessmen.

5. Ⅲ．The Main Kinds of Contracts.
主要合同的种类：
1) 买卖合同或销售合同 Sales Contracts
2) 供用电，水，气，热力合同 Contracts for Supply of Power, Water, Gas, Heat.
3) 赠予合同 Gift Contracts
4) 借款合同 Contracts for Loan of Money
5) 租赁合同 Leasing Contracts
6) 融资租赁合同 Financial Leasing Contracts
7) 承揽合同 Work-for-Hire Contracts
8) 建设工程合同 Contracts for Construction Projects
9) 运输合同 Carriage Contracts
10) 技术合同 Technology Contracts
11) 保管合同 Safe- keeping Contracts
12) 信用合同 Ware- housing Contracts

6. Ⅲ．The Main Kinds of Contracts.
13) 委托代理合同 Agency Appointment Contracts
14) 商业合同 Commercial Contract
15) 购货合同 Purchase Contract
16) 商业代理合同 Commercial Agency Contract
17) 合资经营合同 Joint Venture Contract （Between xx & xx）
18) 合作经营企业合同 Contract for Joint-Operating Enterprises
19) 劳动合同 Labour Contract
20) 保险合同 Insurance Contract
21) 租船合同 Chartering Contract
22) 购销合同 Purchase and Sales Contract
23) 技术诀窍转让合同 Contract for Transfer of Technical Know-how
24) 回购合同 Counterpurchase Contract

7. Ⅲ．The Main Kinds of Contracts.
25) 来料加工和来件装配合同 Contract for Processing with Supplied Materials and Assembling with Supplied Parts
26) 非政府贸易合同 Non-Governmental Trade Contract
27) 销售代理协议 Sales Agency Agreement
28) 总代理协议 General Agency
29) 委派协议 Assignment Agency
30) 成立维修服务中心协议 Agreement for Setting-up a Repair and Maintenance Service Center
31) 独家代理协议 Sole-Agency Agreement
32) 售货确认书 Sales Confirmation
33) 补偿贸易合同 Compensation Trade

8. Ⅳ. Kinds of Standard Contracts
Contract No. XXX
Date: April 1, 2005
The Seller: XXX Industrial Co., Ltd.
The Buyer: XXX Development Corp.
The Seller and the Buyer have agreed to the following transactions according to the terms and conditions stipulated below:
(1) Name of Commodity: XXX Brand Electronic Computer
(2) Specifications: Type XXX
(3) Quantity: 200
(4) Unit Price: US $ XXX
(5) Total Price: US $ XXX
(6) Packing: In wooden case
(7) Time of Shipment: Seven days after receipt of letter of credit
(8) Loading Port: XXX
(9) Destination: XXX

9. Ⅳ. Kinds of Standard Contracts
(10) Insurance: To be effected by the Buyer
(11) Terms of Payment:
① The Buyer shall send a confirmed, irrevocable, transferable and divisible letter of credit to be drawn by sight draft to the Seller before May 2, The Letter of Credit remains Valid until 15 days after the delivery of the goods and will expire on June, 7, 2005.
② A deposit of 10% of the total price should be paid by the Buyer immediately after the signing of the Contract.
(12) Shipping mark and clearance: Shipping mark to be at the Seller’s option
(13) Remarks:
The Seller: XXX Industrial Co., Ltd. The Buyer: XXX Development Co.
(Signature) (Signature)

10. 2. Sales Contract Contract No. XXX Date: 7 November, 2005
Signed at: Beijing
Sellers: China National Textiles Imp./Exp. Corp.
Buyers: London Textiles Co., Ltd.
This Sales Contract is made by and between the Sellers and Buyers where the sellers agree to sell and the buyers agree to buy the under-mentioned goods according to the terms and conditions stipulated below:

11. 2. Sales Contract Name of Commodity Pattern No. Quantity(Yard)
Unit Price per Yard, CIF London
Amount
Printed Linen Cloth 50
5000
XXX 60
6000 70
7000
Total Amount: Say Pounds Sterling XXX Only ￡ XXX

12. 2. Sales Contract Shipping Mark: CT Packing: In wooden cases
Insurance: To be covered by the Sellers for 110% of the invoice value against All Risks and War Risks. Should the Buyers desire to cover for any other extra risks besides the aforementioned, the Sellers’ approval must be obtained beforehand. All the additional premiums thus incurred shall be for the Buyers’ account.
Time of Shipment: To be effected not later than 31 December, 2004, allowing transshipment with partial shipments prohibited.
Port of Shipment: Tianjin
Port of Destination: London
Terms of Payment: By irrevocable L/C available by draft at sight to reach the Sellers a month prior to the time of shipment and remain valid for negotiation in China until the 15th day after the final date of shipment.

13. 3. Sales Confirmation 销售确认书
No. XXX
字第 XXX 号
SALES CONFIRMATION
卖方：中国XXX进出口公司 日期
Sellers: China National XXX Date:
Import & Export Corporation 签约地点：
Signed At: 传真:
Address: Fax:
　　　 电邮：　
　　　
买方：
Buyers: Smith & Co. , Ltd.
地址： 电邮：
Address:

14. 3. Sales Confirmation 销售确认书
兹经买卖双方同意成交下列商品订立条款如下：
The Undersigned Sellers and Buyers have agreed to close the following transaction according to the terms and conditions stipulated below:
(1) 商品
Name of Commodity:
(2) 规格
Specifications:
(3) 数量
Quantity:
数量及总值均得有5%的增减，由卖方决定。
With 5% more or less both in amount and quantity allowed at the Sellers’ option.
(4) 单价
Unit Price; US $ XXX per metric ton CIF
(5) 总值
Total Value: US $ XXX ( In words )
(6) 包装
Packing: All in bulk
(7) 装运期
Time of Shipment: During XXX
(8) 装运口岸和目的地
Loading Port & Destination: From XXX to XXX, transshipment & partial shipments allowed.
(9) 保险
Insurance: To be covered by the Sellers for 110% of the invoice value against ALL RISKS and WAR RISKS.

15. 3. Sales Confirmation 销售确认书
(10) 付款条件
买方须于XX前将保兑的、不可撤销的、可转让、可分割的即期信用证开到卖方。信用证议付有效期至上列装运期后15天在中国到期。
Terms of Payment: By Confirmed, Irrevocable, Transferable, and Divisible Letter of Credit to be available by sight draft to reach the Sellers before XXX and to remain valid for negotiation in China until the 15th day after the aforesaid Time of Shipment.
(11) 装船标记：由卖方决定
Shipping Mark: At the Sellers’ option
(12) 开立信用证时请注明我方成交确认书号码
When opening L/C, please mention our Sales Confirmation number.
(13) 其他条款
Other terms:
卖方 买方
THE SELLERS THE BUYERS

16. Ⅴ. The Ways of Preparing the English Sales Contracts for the transactions
1. Use the information you have got from the following Chinese letter, work out an unfilled-in Sales Contract in English and then fill in various terms and conditions as necessary.

17. Ⅵ. Contract for Processing with Supplied Materials and Assembling with Supplied Parts
XX Co., Ltd (hereinafter referred to as Party A) and China XX Co., Ltd (hereinafter referred to as Party B) have succeeded in reaching an agreement on the contract for processing with supplied materials and assembling Colour TV sets with supplied components and parts in China under the following terms and conditions:
1.Party B shall process with the materials supplied by Party A and assemble Colour TV sets with components and parts supplied by Party A in total of XX sets within a period of XX years.
2.All necessary materials and parts listed in the Contract shall either be supplied by Party A, or purchased in international market by Party B in accordance with the technical requirements stipulated by Party A.
3.The processing charge for each set is US $ XX, not including insurance premium.
4.The materials, parts and components requiring for processing and assembling shall be sent from XX to XX by Party A. If there is any shortage or damage, Party A shall take the responsibility for supplying replacements.
5.Payment for the processing charges and costs of parts, consumables and materials purchased in the international market by Party B and shipping expenses shall be made by sight L/C to be opened by Party A one month before shipment of the finished products.
6.Party B shall complete the processing and assembling of all types of Colour TV sets, and effect shipment within the agreed date without delay except in the occurrence of uncontrollable and unforeseeable events.

18. Ⅵ. Contract for Processing with Supplied Materials and Assembling with Supplied Parts
7. Insurance for the parts and components and auxiliary materials, etc. during their storage in Party B’s storehouse and the finished products during transit from the shipment port to the destination is to be taken care of by Party A on behalf of Party B.
8. The allowance for damage to parts, components and auxiliary materials during processing and assembling is 2.5% . Party A shall take the responsibility of supplying the damaged parts, components and materials free of charge within the damage rate of 2.5%. Should the damage rate exceed 2.5% , Party B shall supply additional necessary parts, components and materials.
9. All parts and materials supplied by Party A for all types of XX shall be processed by Party B strictly in accordance with the designing drawings without any modification.
10. Should Party A fail to supply the components, parts and materials or Party B fail to deliver the finished products in time as contracted, as a result of which loss is incurred, the responsible party shall compensate the Party affected for the entire loss thus sustained.
11. Shipment of the finished products shall be effected according to the shipping instructions given by Party A one month in advance. Should shipment of parts, components and materials sent by Party A be wrong or in excess, Party B shall return the excessive portion at the expense of Party A , in case of short shipment, Party A shall make up the shortage.

19. Ⅵ. Contract for Processing with Supplied Materials and Assembling with Supplied Parts
12. Packing:
_____ sets to a wooden case suitable for export. Packing charges are for Party A’s account, on cost basis.
13. After signing the contract, Party A shall send at its own expenses technicians and 5 administrative staff members to Party B’s factory to render technical assistance during assembly and inspection and to inspect the finished products before delivery. Party A shall allow its technicians to remain with Party B for inspection of the finished products. In such case, Party B agrees to pay a monthly salary of US $ XX for each person and all other expenses including round trip tickets shall be borne by Party A.
14. Other terms and conditions:
(1) The trademark of the finished products shall be supplied by Party A.
(2) Party B shall prepare samples of all types of the processed products at any time and send them to foreign buyers appointed by Party A.
15. This contract is signed by both Parties in two original copies in English. Each Party holds one copy.
Party A Party B
XXX Co., Ltd China XXX Co., Ltd.
Signed ___________ Signed__________________
XXX, XXX, 2005

20. Ⅶ. Compensation Trade Contract
This Contract is made on August 1, 2003, in Xi'an, China, between Xi'an XX Power Cable Co., Ltd. with its principal office at Xi'an, China (hereinafter called Party A), and Nokia XX Investment Co., Ltd. with its principal office at Helsinki, Finland (hereinafter called Party B). The two Parties agree to conclude the following compensation trade under the terms and conditions set forth below:
Whereas Party B has machines and equipment, which are now used in Party B’s manufacturing of power cables, and is willing to sell to Party A the machines and equipment;
Whereas Party B agrees to buy the products— the cables, made by Party A using the machines and equipment Party B supplies, in compensation of the price of the machines and equipment;
Whereas Party A agrees to purchase from Party B the machines and equipment;
Whereas Party A agrees to sell to Party B the products— the cables, in compensation of the price of Party B’s machines and equipment.
Now therefore, in consideration of the premises and convenances described hereinafter, Party A and Party B agree as follows:
1. Purchase Arrangement
Party A agrees to purchase from Party B the following commodity under the terms and conditions set out below:
1.1 Commodity, Specifications and Its Capability:
Commodity:
Specifications:
Capability:

21. Ⅶ. Compensation Trade Contract
1.2 Quantity:
1.3 Price:
On FOB basic:
Unit Price: US $ XX
Total Price: US $ XX
1.4 Payment:
The price of the machines and equipment shall be compensated with the products, the cables, manufactured by Party A using the machines and equipment. Supplied by Party B.The payment of the total price shall be effected three times equally in 3 successive years, beginning in_____.
1.5 Shipment:
Time of shipment:
Port of loading:
Port of destination:
Shipping marks:
1.6 Insurance:
To be effected by Party A.
1.7 Inspection:
1.8 Guarantee:
Party B guarantees that the machines and equipment are unused, sophisticated and of best quality, and that the machines and equipment are capable of manufacturing the cables of _____ specifications with a production of ______ meters per hour.

22. Ⅶ. Compensation Trade Contract
2. Sales Arrangement
Party A sells to Party B the cables in compensation of the price of the machines and equipment Party B sells to Party A.
2.1 Commodity and Specifications:
Commodity: Cables
Specifications:
2.2 Quantity:
______ meters of cables per year, of which the price shall be US $ _______ per annum.
2.3 Price:
The Price of the cables shall be set on the basis of the prevailing price in the world market at the time when shipment is made. The price shall be based on CIF basis.
2.4 Shipment:
Shipment shall be made twice a year, in March and in September, each for the value of US $ XX.
Port of loading:
Port of destination:
Shipping marks:

23. Ⅶ. Compensation Trade Contract
2.5 Packing:
2.6 Payment:
Payment shall be effected by confirmed and irrevocable letter of credit in favor of Party A, payable at sight, allowing transshipment. The letter of credit shall reach Party A 30 days before the month of shipment and shall be valid for not less than 60 days.
The letter of credit shall be in strict accordance with terms and conditions of the Contract, otherwise Party B shall hold the responsibility for the delay in shipment and Party A may lodge claims against Party B for the losses arising therefrom. All the expenses arising from the amendments shall be for Party B’s account.
2.7 Insurance:
To be covered by Party A for 110% of the invoice value, covering W. P. A. and War Risks.
2.8 Inspection:
The quality certificate issued by Party A shall be regarded as final. If, on arrival of the goods at the port of destination, Party B finds the quality not up to the specifications mentioned above, Party B shall notify Party A within 45 days after arrival of the goods at the port of destination. Both Parties shall have consultations for a settlement of the matter in dispute.

24. Ⅶ. Compensation Trade Contract
3. Force Majeure
Party A or Party B shall not be responsible for any failure or delay in delivery of the entire lot or a portion of the goods under the contract as a result of any force majeure accident(s).
4. Arbitration
All disputes arising in connection with this contract or in the execution thereof, should be settled amicably through negotiations. In case no settlement can be reached, the case in dispute shall then be submitted for arbitration in _____. The decision of the arbitration shall be accepted as final and binding upon both Parties.
5. Governing Law
The formation, interpretation and performance of the contract shall be governed by the laws of the People’s Republic of China.
6. Original Text
The contract is made, in English, in two originals, one for each party.
7. Duration
Party A: Party B:
________________ ______________
(signature) (signature)

25. Ⅷ. Exclusive Agency Agreement
This agreement is made and entered into by and between the two parties concerned on ____(date) in ____(area), China on the basis of equality and mutual benefit to develop business on terms and conditions mutually agreed upon as follows:
Article 1 The Parties Concerned
(1) Party A:
Registered office address:
Tel: Fax:
(Hereinafter called the Manufacturer)
(2) Party B:
(Hereinafter called the Agent)
Article 2 Appointment
Party A hereby shall appoint Party B as its Exclusive Agent to solicit orders for the Commodity stipulated in Article 3 from customers in the territory stipulated in Article 4, and Party B shall accept and assume such appointment.
Article 3 Commodity
Commodity: XXX
Article 4 Territory
Territory: XXX
In the territory of ____ only.
Article 5 Duties of the Agent

26. Ⅷ. Exclusive Agency Agreement
The Agent shall:
5.1 Solicit customers in the territory.
5.2 Transmit to the manufacturer enquiry and orders received by him.
5.3 Bring to the notice of the customers the terms and conditions of sales prescribed by the Manufacturer.
5.4 Perform informative work and carry out to his utmost sales work to obtain orders.
5.5 Acquire a technical knowledge of the products and cover any expenditure for necessary promotion from his commission.
5.6 Take measures to get informed of the solvency of the customers having ordered the commodity mentioned in Article 3.
5.7 Assist the Manufacturer in recovering debts due.
5.8 Be entitled to receive observations and complaints made by the customers with respect to the products delivered, inform the Manufacturer of such case and act in the Manufacturer’s best interests.
5.9 Keep the Manufacturer informed of the market condition and the state of competition.
5.10 Supply the Manufacturer and send a report on his activities every four month to the Manufacturer with quotations and advertising materials on similar products of other suppliers.
Article 6 Duties of the Manufacturer

27. Ⅷ. Exclusive Agency Agreement
The Manufacturer shall:
6.1 Provide the Agent all information and documents necessary for the exercise of the Agents activities including conditions of sales, price lists, technical documents, advertising materials and as well immediately notice the Agent of any change in his prices, his sales conditions and payment terms.
6.2 Notify the Agent of any orders reaching him directly from the customers in the territory and shall entitle the Agent to the commission provided for in Article 10 on such orders.
6.3 Assist the employees of the Agent to acquire the technical knowledge of the Products and provide them board and lodging during their training.

28. Ⅷ. Exclusive Agency Agreement
Article 7 Minimum Turnover
The Agent shall undertake to solicit orders for the Commodity in Article 3 from the customers in the Territory in Article 4 during the effective period of this Agreement for not less than US $ ***.
Article 8 Price and Payment
8.1 The price for each individual transaction shall be fixed through negotiations between the Agent and the buyer and shall be subject to the Manufacturer’s final confirmation.
8.2 Payment shall be effected by confirmed, irrevocable L/C established by the buyer in favor of the Manufacturer, which shall reach the Manufacturer 30 days before the date of shipment.
Article 9 Exclusive Right
In consideration of the exclusive rights granted herein, the Manufacturer shall not grant to any other person or undertake the right to represent or to sell the commodity in the Territory. The Manufacturer shall notify the Agent of any orders reaching him directly from the customers situated in the Territory. The Agent shall be entitled to the commission provided for in Article 10 on such orders.

29. Ⅷ. Exclusive Agency Agreement
Article 10 Commission
10.1 The Manufacturer shall pay the Agent a commission of 5% on the net invoiced selling price on all orders directly obtained by the Agent and accepted by the Manufacturer. Commission shall be paid only after the Manufacturer’s receiving the full payment for each order.
10.2 Commission shall be calculated on the net invoiced price, any additional charges, such as charges for packing, transport and insurance, dues and taxes levied by the customers or in the country into which the goods are imported shall be excluded if they are invoiced separately.
10.3 The Manufacturer shall pay the Agent the commission not later than 30 days after he has received the payment of the commodity from the customer.
10.4 Commission shall be payable after it has been calculated and transferred in the currency of the transaction.

30. Ⅷ. Exclusive Agency Agreement
Article 11 Term of the Agreement
This agreement when duly signed by the both Parties concerned, shall remain in force for 12 months from ___ to ___, and it shall be extended for another 12 months upon expiration unless notice in writing is given to the contrary.
Article 12 Termination
During the validity of this agreement, if either of the two Parties is found to have violated the stipulations herein, the other party has the right to terminate this agreement.
Article 13 Force Majeure
Either Party will not be held responsible for failure or delay to perform all or any part of this agreement due to flood, fire, earthquake, draught, war or any other events which could not be predicted, controlled, avoided or overcome by the relative Party. The affected Party shall inform the other Party of its occurrence in writing as soon as possible and send a certificate issued by the relevant authorities to the other Party within 15 days after its occurrence.

31. Ⅷ. Exclusive Agency Agreement
Article 14 Arbitration
All disputes arising from the performance of this agreement shall be settled through friendly negotiations. Should no settlement be reached through negotiation, the case shall be submitted for arbitration to the China International Economic and Trade Arbitration Commission (Beijing) and the rules of this Commission shall be applied. The award of the arbitration shall be final and binding upon both Parties.
Party A Party B
Name:________________ Name:________________
Legal Representative:_______________ Legal Representative:________________
(Signature) (Signature)

32. Ⅸ. Joint Venture Contract
Article 1 General Provisions
In accordance with “The Law of the People’s Republic of China on Sino-Foreign Equity Joint Ventures” and other relevant laws and legislations of the People’s Republic of China, the XX Electric Power Corp. of Xi’an and XX Electric Machinery Corp. of Japan have agreed to establish a joint venture Company “XX Electric Power Products Manufacturing Co., Ltd.”on the basis of equality and mutual benefit. And herein have signed this Contract.

33. Exercises
Ⅰ. Translate the following sentences from English into Chinese.
1. In accordance with this contract, Party B shall provide the Cooperation Venture Company with certain training.
2. In case, the Buyer fails to arrange insurance in time due to the Seller’s not having faxed in time, all losses shall be borne by the Seller.
3. The guarantee period shall be 12 (twelve) months starting from the date on which the commodity arrives at the port of destination.
4. The Seller shall be liable for any dead freight or demurrage, should it happen that they have failed to have the commodity ready for loading after the carrying vessel has arrived at the port of shipment on time.
5. Both Parties have the responsibility to retain confidentiality regarding this Contract and no one is allowed to release any part of it to a thirty country without the consent of other Party.

34. Exercises
Ⅱ. Translate the following sentences from Chinese into English.
1. 开具的信用证必须满足合同所规定的条款内容。
2. 信用证所列条件应准确、公正，卖方能予以承兑。
3. 广告费用应由乙方承担。
4. 买方须在签约后立即支付合同金额的10%作为定金。
5. 管理公司须按规定收取物业管理费(含租金)。

35. Exercises Ⅲ. Choose the correct answer.
1. Please advise us what___ are involved and the time ____ for delivery.
A. procedures, need B. process, needed
C. formalities, taken D. business, taken
2. Special instructions have been given to our dispatch department to send your orders on August 15 and September 15 separately, as ___ in your letter of July 15.
A. was written B. ordered
C. wishes D. specified
3. Sometimes, transshipment and partial shipments are____.
A. permission B. permitted
C. permitting D. permit
4. We wish to stress that shipment must be made within the prescribed time limit, as a further____ will not be considered by our endusers.
A. expansion B. protract
C. prolong D. extension

36. Exercises
5. It is not necessary to indicate the name and address of the consignee on each package, since shipping marks comprise the ___ of the buyer’s name.
A. short time below B. nickname for
C. initials of D. capital betters above
6. We will sign the contract on condition that the buyer’s packing instructions are____.
A. obliged B. observed
C. obeying D. objected
7. We have not yet had precise shipping instructions and ____ your order until they arrive.
A. are holding B. have hold
C. hold D. held
8. We have the goods you asked for in stock and will deliver as soon as we____ your order.
A. receiving B. received
C. will receive D. receive
9. Packing charges____ in the price, and we can make delivery whenever you wish.
A. included B. include
C. is included D. are included
10. We are sorry for the short delivery by 23 tons. This ____ you some difficulty in meeting orders of your clients.
A. must have caused B. must cause
C. has caused D. will be caused