Risk Aversion In Foreign Trade Contracts

In 1994, a grain chemical plant in Sichuan Province imported the chemical equipment of 2 million 800 thousand US dollars from the country's trump card company through the Canadian government loan through the blue sky company. In order to coordinate the capital and construction status of the matching equipment, the smart chemical plant added a "seller to the buyer before the shipment, and agreed with the buyer before making the shipment".

After completing the stocking, the trump company sent the shipping notice to the Lantian company. However, the shrewd Chemical Factory refused to sell the goods on the grounds that the matching funds were not in place and the subsidiary facilities could not start.

After many consultations, the smart factory agreed to accept the first shipment on the premise that the ace company agreed to pay $20 thousand a year for warehousing charges.

In view of the local chemical market situation, in order to avoid losses, the smart chemical plant no longer agreed to accept several batches of goods.

Finally, the contract was found in the shrewd chemical plant to find new buyers.

In 1990, a certain import and export company exported a batch of non edible corn to Brazil.

The contract stipulates: the quality is marketable quality, the purity is 98%, the impurity is less than 2%, the mode of pportation is sea freight, and the payment method adopts the time draft bill of acceptance to give the opponent a certain amount of money.

。

After verification, the quality of the original goods does not hamper their sales, and the other party's breach is mainly due to the fall in market prices at that time.

After many discussions, we completed the contract at a price reduction of 30%.

It is easy to see from the two cases mentioned above.

Some use the risk clause reasonably and effectively to protect their own interests. Some know the existence of risk clauses, but in order to facilitate paction success and risk assessment, they are lucky to jump into the trap.

So, we can only grasp "

Only in this way can business opportunities be grasped and invincible in commercial wars.

However, as a buyer, at the beginning of the term, it was entirely objective cause.

It is also accepted by the seller to coordinate all funds and construction projects.

Over time.

Under the adverse circumstances of the market, the clause also enables the buyer to reduce the warehousing fee successfully, postpone the execution time of the contract, and smoothly resell it to other customers, thereby avoiding and pferring the risk and receiving the unexpected results.

Thus, it is feasible and effective to protect the interests of one party rationally and skillfully.

When the contract is implemented, it is not timely to grasp this clause. It treats it only as a general shipping notice clause in the trade contract. It will start stocking the goods without obtaining the buyer's consent in advance, until the buyer is notified before shipment, causing the buyer to refuse the goods. Finally, he has to bear the evil fruit and bear the cost of storage and the loss of funds for a long time.

In case 2, payment methods and quality terms are very risky for exporters.

In terms of quality, although the quality of agricultural products is difficult to grasp accurately when stocking, it is supplemented by "marketable quality", but the quality reduction clause is not used to specify the way of dealing with discrepancies in quality.

In addition, corn itself has the characteristics of easily producing Aspergillus flavus, and the long time pportation will speed up its growth.

All these provide an opportunity for the other party to reject the goods.

In terms of payment, the time draft for bill of exchange is on the basis of cash delivery, although it is widely adopted in South American trade, but this way is too focused on promoting the establishment of the contract, and it is extremely risky, and it is particularly vulnerable to malicious use by the other side.

In the case of favorable market conditions, they often resort to other terms, or refuse to accept goods, or substantially reduce prices.

The case is a typical example of the use of "risk clause" by evil kings.

In the negotiation of international trade contracts, the conclusion of the articles will directly affect the interests of buyers and sellers. In specific trade, we should try to avoid the "risk clause" that easily leads to disputes.

It is the key to success or failure of signing a contract to reasonably grasp the terms and avoid risks.

Specific attention should be paid to the following points:

1. choose a good trading partner.

Honesty and credibility are the foundation of successful trading. Strengthening credit investigation is an important way to determine trading partners.

In the survey, we should focus on the nature of the other party's business, the morality of the trade object and the trade experience, especially the capital and liabilities of the trading partners, the economic style and the performance credit.

2. strictly review and grasp the terms of the contract.

If we make a contract in a realistic way, we can not make sure that the terms we cannot do.

3. strictly enforce the contract to prevent any risks that are inconsistent with the terms and do not give the other party an opportunity.

4. timely pfer of risks.

Use the contract to pfer potential risks to articles that are not good for them.

For example, pport related issues can be handled by pport companies, so that risks can be effectively avoided.

5. make full use of the perfect international trade insurance system and shift the predictable risks at a lower cost.

The soft clause in a letter of credit refers to the clause that the initiative is held in the hands of the applicant. The clause that the beneficiary can not control or ambiguous and ambiguous terms.

Because it is difficult to meet this provision, it will cause considerable difficulties and risks to the beneficiary.

A soft clause in the following case has cost our export company forty thousand US dollars.

A bank in Singapore has issued a letter of credit amounting to USD382500.00 for the Bank of China.

Regarding the bill of lading, the NOTLFY PARTY has the following terms: NOTIFY PARTY WILL BE ADVISEDLATER BY MEANS 0F L, 0F, and it is also called "the"

However, the issuing bank delayed the issuance of a letter of credit to amend the named person of the bill of lading. In order to avoid the expiry of the L / C, our company had no choice but to make a presentation before the amendment of the letter of credit and APPL1CANT the name on the NOTIY PARTY column of the bill of lading.

After issuing, the issuing bank refuses to pay.

Despite repeated rebuttal and several telegrams and calls, the issuing bank has always insisted on discrepancies.

It is considered that no negotiation can be made without modification.

Finally, the issuing bank calls that the applicant will ask for a reduction of forty thousand dollars to make a redemption, otherwise, he will have to return the goods.

Our company is under pressure from all sides to accept the request from the other side and settle it at the cost of forty thousand US dollars.

Before leaving the bank, Bank of China consulted the company on the issue of modifying the letter of credit, and hinted at the risks involved, but the company insisted on the presentation of the documents due to rush to deliver the goods.

Our company said that this problem had been settled with the applicant before the order was issued, and the other side agreed to the order.

It can be seen that oral commercial credit is unreliable. It is the best guarantee for collecting money that the documents are punctually delivered in strict accordance with the requirements of the letter of credit.

We have consulted experts from Singapore International Chamber of Commerce on this soft clause.

The expert thinks that the issuing bank's refusal to pay is somewhat unreasonable, but it also has its arguments. If we fight a lawsuit, our company will probably lose more.