Practice of International Trade – Negotiation for Sales Contract Chapter 4-1

Preparation Before Negotiation Preparation for Export Select proper sales market and Buyers Make export plan Proper advertisement for exporting goods Preparation for Import Select purchasing market and supplier Select proper goods Make import plan

Inquiry Can be made by the person who is willing to sell or to buy Most made by buyers Purpose To conclude a contract To get information Content may include Quality, quantity, price, packing, time of delivery etc. Usually be the start of a transaction, but it’s not an indispensable step for the transaction

Offer Offer means a party of a transaction puts forward trade conditions to the other party, indicating that he is willingness to conclude a contract on certain commodities with the latter according to these conditions Selling offer, Bid Offers have binding force on both parties The offeror cannot withdraw the offer or change the trade conditions included within the period of validity If the offeree wants to conclude a contract with the offeror according to the content of the offer, he must send the acceptance back within the stipulated time

Rules required for an offer An offer must appoint one or more specific persons who can express their acceptance to the offer An offer must indicate that the offeror to be bound in case of acceptance by the offeree An offer must be sufficiently definite The trade conditions should be complete The trade conditions should be clear The trade conditions should be final An offer must be sent to the offeree

Withdraw and revocation of an offer Withdraw – prevent the offer from being effective Revocation – cancels an offer after it has been effective – Can offeror do so? “ ⑴ Until a contract is concluded an offer may be revoked if the revocation reaches offeree before he has dispatched an acceptance. ⑵ However, an offer cannot be revoked, (a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or (b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.”

Counter-offer A counter-offer is a proposal made by the offeree who does not fully agrees the offer and makes modification or alteration to the offer Effect of a counter-offer Makes the prior offer invalid It’s a new offer indeed It’s not an indispensable step for the transaction The changes on “unimportant” contents in an offer cannot be regarded as a counter-offer

Acceptance Acceptance means the offeree expresses his acceptance within the stipulated period of validity of the offer Rules required for an acceptance Should be made by the offeree Should be in accordance with the offer Most acceptance have differences in content with offers Counter-offer or Acceptance? Should be made in the validity period Late Acceptance Should be transferred by means of communication stipulated in the offer

Effect and withdrawal of an acceptance The time when an acceptance goes into effective – according to different kinds of laws Ever since it has been sent out – Anglo-American Laws Only after it has reached the offeror – Statute Laws Withdrawal or alteration of an acceptance Cannot be withdrawn if it has been effective at the time of being sent If it is effective after being got by the offeror, “it may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective”