Week five - international contracts

Question 1

what is a contract

Answer 1

an agreement between two or more parties undertaken over a matter or thing and to which compliance can be forced

Question 2

what are some existing international regulations and commerical customs (for contracts)

Answer 2

• international chamber of commerce (solution of litigations)
• united nations (Vienna convention (1980) on contracts for international sales)

Question 3

what are some solutions of litigation (disputes)

Answer 3

• negotiation
• mediation
• conciliation

Question 4

what is the process of international arbitration

Answer 4

• parties appoint an independent third party by mutual agreement, they will be responsible for resolving the conflict
• the arbitrator is limited by the agreement to issue its arbitral award
• it is highly recommended to include an arbitration clause from a prestigious institution in the contract

Question 5

advantages of choosing arbitration over judicial proceedings

Answer 5

• more flexible
• cheaper
• faster
• confidential

Question 6

what does an international sales contract look like

Answer 6

exporter –> consumer

Question 7

what does an agency contract look like

Answer 7

exporter –> agent –> consumer

Question 8

what does a distribution contract look like

Answer 8

exporter –> distributor –> consumer

Question 9

what was the objective of the vienna convention of 1980

Answer 9

to provide uniform law for international sales contracts

Question 10

in which contracts is the vienna convention of 1980 applicable

Answer 10

intetrnational goods sales contract and for firms established in different countries

Question 11

what are the obligations for the parties in the vienna convention of 1980

Answer 11

• the seller must deliver the goods, the documents accompanying them and transfer the property of the goods to the buyer
• the buyer must pay the agreed price, examine and accept the merchandise

Question 12

what are the consequences of non-compliance in the vienna convention of 1980

Answer 12

• claim for compensation for damages

Question 13

when does the contract start and is binding

Answer 13

with the exchange of two declarations of will
- an offer is the starting point
- the second part is a positive, clear and unconditional response by the firm/s that receives the offer

Question 14

what are the main clauses in the international sales contract

Answer 14

• price and payment
• product
• guarantees/quality
• mode of delivery
• non-compliance: defective product, delayed delivery, payment delayed
• resolution of disputes and applicable law

Question 15

what are the common characteristics of a representative employee contract and agency contract

Answer 15

• act on behalf of the manufacturer
• the manufacturer sets the price
• do not acquire the property of the goods
• do not assume the risk of default

Question 16

charcateristics of an employee representative contract

Answer 16

• is a person, not a firm
• has a labour contract with the company
• the nationality of the individual is irrelevant, if the company hiring is Spanish then Spanish legislation applies

Question 17

what is agency contract

Answer 17

a person or a firm (the agent) commits to another firm to promote transactions in a stable and continuous way, in exchange for payment on behalf of the firm that has contracted the agent. I.e. the agent acts as the independent intermediary

Question 18

the agency contract clauses

Answer 18

• payment (remuneration)
• duration and termination of contract
• compensation for customers
• compensation for damages
• minimum sales target
• territory, exclusivity and non-competition

Question 19

characteristics of a distributor

Answer 19

• acts on its own responsibility
• acquires the property of the goods
• sets its prices
• assumes the risk of default

Question 20

clauses of distribution contract

Answer 20

• products
• exclusivity and territory
• causes and consequences of stopping a distribution contract
• delivery date
• technical support