NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Chapter Three: Terms of Commodity Clauses: Terms of Commodity International Cargo Transport International

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY

Chapter Three: Terms of Commodity Clauses: Terms of Commodity International Cargo Transport International Cargo Transportation Insura

nce Terms of Price International Payments Claims, Force Majeure and Arbitration


Definition of contract

A contract is an agreement which set forth binding obligations between the relative parties.


Types of contract

1 Agreement 2 Contract 3 Confirmation 4 Memorandum 5 Order


Contract clauses Name of

commodity Quality Quantity Packing Shipment Insurance

Price Payment Commodity

inspection Claim Arbitration Force majeure


Conditions of contract Name of commodity Quality Quantity Packing Shipment Price Payment


General Terms of Contract Insurance Commodity inspection Arbitration Claim Force Majeure


Name of commodity

Name of commodity is a main component of “Description of goods”

It concerns the rights and obligations of the seller and the buyer.

If the goods delivered by the seller are not in accordance with the contract, the buyer reserves the right to lodge a claim, reject the goods or even cancel the contract.


Name commodity Valid terms of name commodity: ｛ 1 ｝ Commodity should be

owned by the Exporter; ｛ 2 ｝ Commodity should be

agreeable by the relative parties; ｛ 3 ｝ Commodity should be legal.


Notes of Name commodity Clear Concrete Common Reasonable Sometimes it is descripted with the

term of quality.


HS （ Harmonized System ） The HS is a core system of obligating

contracting parties to use the international six-digit nomenclature as the basis of their national import and export tariff and statistical compilations.

The Hs consists of 20 sections divided into 96 chapters listing 5019 articles descriptions. China began to adopt HS in 1992.


Quality of Goods ）商品质量（ Quality of Goods ）：商品内在素质（物理性能、机械性能、

化学成分、生物特征等）和外观形态（外形、色泽、款式等）的综合反映。


Role of quality clause A condition of contract clause. Basis of avoiding disputes. Obligations of the seller to

provide the quality of the goods.

Descriptions of the goods .


Methods of describing the quality

Phisical g

oods

Description


Methods of describing the quality Sale by actual quality 1 Actual goods （ 1 ） The buyer has no rights to put

forward any discrepancy of quality after he inspected the goods.

（ 2 ） The buyer and the seller are far apart in different countries.


Sample A sample is a small quantity

of a product, often taken out from a whole lot or specially designed and processed that is given to encourage prospective customers to buy the product.


Sales by Sample

Reference sample When sale is made by description,

either the seller or the buyer may send a physical sample to the other party to let him know more clearly about the products. This sample is often marked “for reference only”.

It is not the basis of delivery.


Standard sample Standard samples include seller's

sample, buyer's sample and counter sample.

Sample are either offered by the seller or the buyer. They are described as

sale by the seller's sample, and the sale by the buyer's sample.


Counter sample

When sale is made by the buyer's sample ,the goods delivered by the seller, may sometimes not be in conformity with the buyer's sample and thus the buyer may refuse to accept the goods. In order to avoid disputes over the quality of goods in the days to come, a wise seller should first send a copied product for confirmation before putting in production.


Sealed sample Before sending samples or delivering

the goods to the buyer, the seller may select some samples and seal them in the presence of the buyer or notary（公证人） .

This sealed sample is for checking the quality of the shipments in the future.


Sale by description Sales by Specification, Grade or

Standard Sales by Brand or Trade Mark Sales by Description, Drawing o

r Diagram （ illustration ） Sale by name of origin


FAQ—Fair Average Quality ( 良好平均品质 )

是指一定时期内某地出口货物的平均品质水平，一般是指大路货（即中等货）。

具体指：农产品的每个生产年度的中等货某一季度或某一装船月份在装运地发运的同

一种商品的“平均品质” 在我国是指大路货，与精选货相对


GMQ——Good Merchantable Quality （上好可销品质）


Quality clause in contract Flexible quality range: “The quality of the goods shipped

to be about equal to the sample”. Quality tolerance


Quantity of commodity Unit of Measurement Calculation of Weight More or less clause


The systems of weights and measures

1 Metric system （ kilogram, meter, square meter and lite

r ） 2 International system （ kilogram, meter and second ） 3 British system （ pound and yard ） 4 U.S. system （ pound and yard ）


Relations of S/T and L/T 1L/T=2240 pounds =1016kg 1S/T=2000pounds =907kg 1MT= 2204pounds=1000kg


Some methods for calculating weight

Gross weight The over-all weight of the

commodity including the package weight.

Net weight The weight of the commodity itself. Gross for net


Ways to calculate tare Real tare Average tare Customs tare Computed tare.


Calculation of weight Gross weight Net weight Conditioned weight Theoretical weight 法定重量 (Legal Weight) 和实

物净重 (Net Net Weight)


Conditioned weight

公量 (Conditioned Weight) 指用科学方法除去其所含水分，然后再加上

国际公认的标准含水量，按此方法求出的重量，称为公量。

公量＝商品干净重 × （ 1+ 公定回潮率）公量＝商品净重 × （ 1+ 公定回潮率） /

（ 1+ 实际回潮率）


More or less clause More or less clause is a clause

which stipulates that the quantity delivered can be more or less within certain extent.

Settlement for the more or less clause part is usually based on the contract price.


Packing of Commodity Any kind of fast-selling goods is not

only be superior in quality but also attractive in appearance.

Preference of people, their custom and tradition play important role in the packing of goods.

Commodities can be categorized into bulk, nude packed and packed commodities.


Types of Packing

Outer Packing Inner Packing Marking of Goods Shipping Mark Indicative/ Warning Mark Neutral Packing


Bulk commodity Bulk commodity means the

commodity directly shipped and even sold without packages.

Bulk shipment has the advantage of space saving, quick handling and lower freight.


Nude packed Nude packed commodity means

the commodities to be shipped without any packages or in simple bundles. Some commodities such as steel, rubber and automobiles etc., can be packed in nude.


Packed commodities Packed commodities can be classified

in to shipping package and sales packing.

Shipping package also called outer package, is used for protecting the commodities against damages to or shortages during the storing and transportation.


Shipping marks Shipping mark Indicative mark Warning mark


Content of Standard Shipping Mark ：

①The abbreviation name of the importer or consignees ；

②Reference number ； ③Port of destination ； ④Serial number.


运输标志

主要标志……………………

件号标志……………………

目的地标志…………………

体积标志……………………

重量标志……………………

原产地标志…………………

ABC NOS.26/60

NEW YORK 45×60×65

G.125 kgs N.100 kgs T.25 kgs

MADE IN CHINA


Indicative mark



警告性标志

Warning mark



Sales packing Also called inner packing or small

packing. It can protect the commodity, also

helps to improve the image of commodities, it enables the consumers to easily identity, select, carry and use the commodities.


Neutral packing Neutral packing is the packing without the name an

d address of the manufacturer, the origin of country, the trade mark and brand. It is adopted to break the tariff and non-tariff barriers of some importing countries or regions, to meet the special demand of the transaction, and help the manufacturers in exporting countries to increase the competitiveness of their products and expand the exports.


Types of Neutral Packing

（ 1 ） Neutral Packing （ 2） Brand Designated b

y the Buyer


Packing clause 1 Contents Packing: in wooden cases of

50kilos net each. 2 Packing marks 3 Packing charges


Examples of packing clauses in Contract

1) In international standard tea boxes, 24 boxes on pallet, 10 pallets in FCL container.

2) To be packed in new gunny containing about 100kgs and each bag shall weigh 1.15kgs with allowance of 0.1 kgs.

Documents

NORTH CHINA INSTITUTE OF SCIENCE AND TECHNOLOGY Chapter Three: Terms of Commodity Clauses: Terms of Commodity International Cargo Transport International