Parties to the contract are never able to foresee all possible actions of the partner or, at least, some circumstances which may arise in the future. Consequently they cannot stipulate all of them in the contract. The unforeseen problems can be settled amicably or by an umpire. But if the counterparties are unable to settle the conflict in this manner, they are to apply to arbitration. There are two main types of arbitration in the world: national arbitration which acts under the laws of a particular country and an international arbitration which settles disputes under the international laws. Parties to the contract usually stipulate the legislation in the contract. If they fail, they usually apply to the international arbitration. The problem is that decisions of any international arbitration do not have a legal power in some countries (including Russia)..On the one hand, a national legislation is more detailed.
Nowadays the international law is set well. It is based on numerous conventions (e.g. Geneva Conventions for Bills of Exchange, or Vienna Convention for the Contract of Sale). It is also regulated by INCOTERMS-2000.
Ways to settle disputes: letters of complaint, claims (Sellers’ and Buyers’ reasons for claims)
A sales contract defines rights and liabilities of the parties involved. The seller’s liabilities are to deliver the goods on time and in perfect condition. and passing a special document, to the buyer. The buyers’ liabilities are to accept delivery of the goods and to pay for the goods within the time agreed.If one party doesn’t fulfil its liabilities, the contract is broken (this is called a breach of contract). In this case the other party can claim compensation. It is more often the case that it is the buyer who makes a claim on the seller.The buyer can make some complaints about:
• The goods are of inferior quality.,The goods are damaged. The goods were lost in transit.The price is incorrect.There was a delay in delivery.The wrong goods were delivered.
If the complaint is justified, the sellers have to to offer the buyer some form of compensation. There are four possibilities: The sellers invite the buyers to RETURN the goods at the sellers’ expense.The sellers REPLACE the faulty goods at their own expense. In some cases, the goods can be REPAIRED by the sellers or at the sellers’ expense. The buyers keep the goods, but the sellers offer them a price REDUCTION.
If the buyers suffer a loss because of the goods are delivered late — they may lose business, for example. In this case, they can start legal proceedings for compensation. The buyer must write a statement of claim and mail it to the seller together with the supporting documents. Bill of Lading, Airway and Railway Bill, Survey Report, Quality Certificate. If necessary, drawings, photos, samples are enclosed as proofs of claims. The sellers decline liabilities if the B/L is clean, that is the shipping company hasn't made any remarks about the quantity or condition of the cargo shipped. If the delay is longer than two months, the buyer has the option of cancelling the contract altogether but the seller is to compensate for the loss incurred.
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