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Financial Forecasts of a Business Plan

This section of your business plan essentially turns your plans into numbers. As part of any business plan, you will need to provide financial projections for your business. Your forecasts should run for the next three to five years. However, the first 12 months' forecasts should have the most details, including assumptions both in terms of costs and revenues, so investors can clearly see your thinking behind the numbers.

Your financial forecasts should include:

  • cash flow statements this is a cash balance and monthly cash flow pattern for the first 12-18 months. It includes working capital, salaries and sales
  • profit and loss forecast this is the level of profit you expect to make, given your projected sales, the costs of providing goods and services, and your overhead costs
  • sales forecast this is the amount of money you expect from sales of your product and/or service

Things to consider:

  • How much capital do you need, if you are seeking external funding?
  • What security can you offer to lenders?
  • How do you plan to repay any borrowings?
  • What are your sources of revenue and income?
  • Forecasts should cover a range of scenarios.
  • Review risks and develop contingency plans to offset the risks.
  • Review industry benchmarks/averages for your type of business.
  • Managing your finances

Resources to help you understand financial concepts and learn about tasks like budgeting, financial analysis and bookkeeping.

  • Performance Plus

Find out how your firm measures up to comparable small businesses within your industry.

Other Useful Information

The following sections are not always required, but will certainly enhance any business plan:

  • Implementation Plan this section lists estimated dates of completion for different aspects of your business plan, targets for your business and milestones.
  • Appendices these should include different supporting materials, such as any licences and permits, agreements, contracts and other documentation that support your business plan.

 

Business plan template you can find using the following address:

http://www.canadabusiness.ca/eng/

 

Summary

Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan should contain whatever information is needed to decide whether or not to pursue a goal.

For example, a business plan for a non-profit might discuss the fit between the business plan and the organizations mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organizations ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project requiring equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.

Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others. It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.

A good business plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good business plan cant guarantee success, but it can go a long way toward reducing the odds of failure.

 

Typical structure for a business plan

  • cover page and table of contents
  • executive summary
  • business description
  • business environment analysis
  • industry background
  • competitive analysis
  • market analysis
  • marketing plan
  • operations plan
  • management summary
  • financial plan
  • attachments and milestone

 

 


Module 4 Contract

 

Unit 1. Contract and its Features

 

Essential Clauses of Contract

By law contracts are made by Ukrainian foreign trade organisations in writing. When striking a deal standard contracts and widely used. Standard contracts are not a must. Some articles may be altered and supplemented.

Here are some of the items which are part and parcel of any contract: legal title of the contracting parties, subject of the contract, quality, price, delivery and payment terms.

 

Subject

This section names the product for sale or purchase. It also indicates the unit of measure generally employed in foreign trade for specific commodities. Contracts for bulk cargo contain a stipulation 'about' or 'plus or minus... per cent', denoting the permitted quantity tolerance.

 

Quality

The quality of machines and equipment is to be in conformity with the technical specification of the contract.

The quality of raw materials and foodstuffs is determined, as a rule,

by standards

by sample

by description.

 

Price

The price stated in a contract may be firm, fixed or sliding.

Firm price. Firm prices are not subject to change in the course of the fulfillment of the contract.

Fixed price. It is the price governing in the market on the day of delivery or for a given period.

Sliding prices. These prices are quoted for machinery and equipment which require a long period of delivery.

 

Vocabulary

essentialclauses

strike a deal

standard contract

part and parcel '

legal title

contracting parties ,

unit of measure

commodity

tolerance

stipulation

bulk cargo

in conformity with

by sample

quote a price

subject to

firm prices

fixed prices

sliding prices

 

Questions

1. Why are standard contracts widely used?

2. What are the essential items of a contract?

3. What information is contained in different contract?

4. How is quality determined in a contract?

5. What sort of prices may be indicated in a contract?

 

 

Payment

A cheque is a written order to a Bank given and signed by someone who has money deposited there to pay a certain amount mentioned in the cheque to a person named on it.

 
 

 


In the place of the cheque system Banks provide an international system of Bank Transfers. The Seller gives TT or mail remittance terms to a Buyer when he is a trusted customer or agent. It involves risk as the Seller ships goods without any assurance of getting payment.

 

Draft.

Moscow,_______19__ _______

ON___ PAY AGAINST THIS BILL OF EXCHANGE TO THE ORDER OF THE BANK FOR FOREIGN ECONOMIC AFFAIRS OF THE RUSSIA, MOSCOW, THE SUM OF _____________________________ONLY FOR VALUE RECEIVED.

To___________

_____________ Vsesojuznoje Objedinenije

_____________

 

Like a cheque, a draft is an order to pay. It is made out by an exporter and presented to the importer. It is also called a bill of exchange. A sight draft is a bill which is paid immediately on presentation. A bill to be paid at a later date is called a term draft. There are 30-day, 60-, 90- and 120-day drafts.

A very usefull method is to attach the shipping documents (the Bill of Lading, the Insurance Policy and the Invoice) to the Draft and hand them to the Bank for collection. The documents can be handed over to the Buyer either against payment (D.P. Documents against Payment) or against acceptance of the Draft (D.A. Documents against Acceptance). D.P. refers to sight drafts. D.A. refers to term drafts.

A sight draft does not require acceptance. A term draft must be necessarily accepted. The drawee writes "Accepted" across it and signs his name.

The draft is then returned to the Seller, who can hold it until maturity.

This method of payment involves risk to the exporter or his bank as it may happen that a draft is not honoured when it is due.

The shipper has full protection when drafts are presented against L/C. With a letter of credit, at least when it is confirmed and irrevocable, the payment is guaranteed.

The Bank at the Sellers' end guarantees payment in case the opener of the credit defaults. Besides, the credit cannot be cancelled before the expiry date.

A revolving letter of credit is a special type, the value of which is constantly made up to a given limit after each shipment, thus saving charges on multiple letters of credit.

 

Vocabulary

cheque (Br.E), check (Am.E.)

to deposit

telegraphic transfer (TT)

mail remittance

customer , 볺,

billof exchange/draft ,

make out a document

sight draft '

term draft

bill of lading ( , )

insurance policy (, )

invoice

acceptance ,

accepted , -

honour a draft

drawee (, )

maturity '

default

cancel , ,

letter of credit ( , )

confirmed

irrevocable

revolving ,

expiry,

value

multiple

 

 

Questions

1. What is a cheque?

2. Whom do you give TT terms to?

3. What are the two types of drafts?

4. What is an irrevocable L/C?

5. Who guarantees payment against a confirmed letter of credit?

6. Does a term draft involve risk for an exporter?

7. Name a major advantage of a revolving L/C as compare with multiple L/Cs.

 

 

Transport and Delivery Terms

Multimodal (Door to Door) transport is "wide-spread in ship ping now. It involves a transfer of the goods from one mode f transport to another.

Traditionally, the ship's rail was considered the critical point of responsibility, that is when all risks of loss or damage are transferred from one party to the other. Now it is no longer the ship's rail but the port terminal which may be such a point. In sea port areas the goods are put into containers, on pallets or aboard the ship.

The main carrier often prefers to assume through responsibility for the cargo he carries. In a through movement of the goods a combined transport document is issued instead of a traditional Bill of Lading.

Like a traditional Bill of Lading it is a receipt for the consignment.

 
 

But instead of ports of shipment and discharge it shows the place of delivery and receipt. The new system of multimodal shipment in international trade is reflected in the International Commercial Terms (Incoterms 1980).

 

The Fourteen Incoterms

EX Works

"Ex Works" means that the seller's only responsibility is to mk the goods available at his premises (i. e. works or factory). In particular he is not responsible for loading the goods in the vehicle provided by the buyer, unless otherwise agreed. The buyer bears the full cost and risk involved in bringing the goods from there to the desired destination. This term thus represents the minimum obligation for the seller.

 

Free Carrier

...(named point)

This term has been designed to meet the requirements of modern transport, particularly such "multimodal" transport as container or "roll on-roll off" traffic by trailers and ferries. It is based on the same main principle as FOB except that the seller fulfils his obligations when he delivers the goods into the custody of the carrier at the named point.

 

For/Fot

FOR and FOT mean "Free on Rail" and "Free on Truck". These terms are synonymous since the word "Truck" relates to the railway wagons. They should only be used when the goods pre to be carried by rail.

 

Fob Airport

FOB Airport is based on the same main principle as the ordinary FOB term. The seller fulfils his obligations by delivering the goods to the air carrier at the airport of departure. The risk if loss of or damage to the goods is transferred from the seller to the buyer when the goods have been so delivered.

FAS

FAS means "Free Alongside Ship". Under this term the seller's obligations are fulfilled when the goods have been placed alongside the ship on the quay or in lighters. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

 

FOB

FOB means "Free on Board". The goods are placed on board a ship by the seller at a port of shipment named in the sales contract. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods pass the ship's rail.

& F

& F means "Cost and Freight". The seller must pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment.

 

CIF

CIF means "Cost, Insurance and Freight". This term is basically the same as & F but with the addition that the seller ha to procure marine insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.

 

Freight Carriage Paid To

Like C&F "Freight or Carriage paid to..." means that the seller pays the freight for the carriage of the goods to the named, destination. However, the risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship's rail. It can be used for all modes of transport including multimodal operations and container or roll on-roll off traffic by trailers and ferries. When the Seller has to furnish a bill of lading, waybill or carrier's receipt, he duly fulfills this obligation by presenting such a document issued by the person with whom he has contracted for carriage to the named destination.

 

Freight Carriage and Insurance Paid To

This term is the same as "Freight or Carriage Paid to..." but with the addition that the seller has to procure transport insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.

 

EX Ship

"EX Ship" means that the seller shall make the goods available to the buyer on board the ship at the destination named in the sales contract.

 

 

EX Quay

"EX Quay" means that the seller makes the goods available to the buyer on the quay (wharf) at the destination named in the sales contract.

 

Delivered at Frontier

"Delivered at Frontier" means that the seller's obligations are fulfilled when the goods have arrived at the frontier - but before "the customs border" of the country named in the sales contract.

 

Delivered Duty Paid

While the term "Ex Works" signifies the seller's minimum obligation, the term "Delivered Duty Paid", when followed by words naming the buyer's premises, denotes the other extreme - the seller's maximum obligation. The term "Delivered Duty Paid" may be used irrespective of the mode of transport.

Notes:

"Incoterms" - "̳ ". ̳ . "Incoterms 1980" 14 .

 

EXW-EX works -

PRC - Free carrier... named point ( )

POR/FOT - Free on Rail/Truck -,

FO - FOB Airport

FAS - Free alongside ship

FO - Free on Board

CFR-C and F- Cast and Feight -

CIF-Cost, Insurance,Freight ѳ- ,

Freight/Carriage paid to / ...

Freight/Carriage and Insurance paid to / ...

E Ship

E Quay

DAF-Delivered at Frontier

DDP - Delivered Duty Paid

 

 

Vocabulary

multimodal

mode of transport

ship's rail

critical point of responsibility

risk of loss or damage

terminal ,

pallet

through

assume responsibility

port of shipment

port of discharge

receipt ,

vehicle

fulfil obligations '

meet the requirements ,

RO/RO Roll on/Roll off

ferry

custody

wagon

carrier

carry ,

carriage ,

by rail

quay (wharf)

lighter

on board a ship

marine insurance

insured 1) (, )

insurer 2) (, )

insurance premium , (, )

Questions

1. What does the term 'multimodal transport' mean?

2. What is regarded as the critical point now?

3. What document is issued in combined transport?

4. What mode of transport do you use for carriage of goods?

5. Where are critical points of responsibility under Incoterms?

 

 

Packing and Marking

Packing goods for export is a highly specialized job. If the goods are improperly packed and marked, the carrier will refuse t accept them, or will make qualifications about the unsatisfactory condition of packing in the bill of lading.

Packing can be external (crate, bag) and internal (box, packet, flask etc.), in which the goods are sold.

In case of consumer goods packing has a double function. On the one hand, it is for protection. On the other it serves to advertise a product and attract a customer.

Marking should be in indelible paint with recognized kind of marks.

 

Extract from a contract

 

 
 

Contract No_____

Packing

1. The equipment and spare parts are to be shipped in export sea packing meeting the requirements of each particular type of equipment.

2. The packing is to secure full safety of the goods from any kind of damage and corrosion during transportation by sea, railway and combined transport. The packing shall be suitable for loading by crane, by autocars, by trucks and manually in so far as the weight and volume of individual packages allow.

Before packing, the equipment is to be protected with anti-corrosive coating to protect it from any damage and corrosion in transit and to ensure storage during hot summer and cold winter (to minus 40 C).

3. The Sellers shall be responsible for any damage to or breakage of the goods that may be caused by poor packing or for corrosion which may appear due to improper or insufficient coating.

 

Extract from a contract

Contract No._____

Marking

1. The cases in which the equipment is packed are to be marked on three sides: on the top of the case and two non-opposite sides.

 
 

 

 


2. The marking shall be clearly made with indelible paint in English and Russian as follows:

 

VVO BBO

Contract No.

Nariad No.

Trans No.

Package No. ̳

Net/Gross weight in kg /

Case dimensions in cm (, ,

(length, width, heigth) )

 

3. All cases which need special handling must have an additional marking:

 

"Handle with care" ""

"" ""

"Do not turn over" "He "

 

as well as other indications if specific handling of a particular case is required.

 

 

Voabulary

packing

external packing

internal packing

sea packing

marking

marks

make qualifications

indelible

safety

in transit ( )

storage

breakage

 

Questions

1. What are the packing requirements in this concrete case?

2. What preventive measures are necessary to protect the goods from damage?

3. Why is it necessary for a packer to know the freight routes?

4. What kinds of export packing do you know?

5. What is the function of packing in the sale of consumer goods?

6. What are the requirements for marking the goods in this concrete case?

7. What is usually written if the goods need special handling?

8. What happens in case of wrong marking?

9. Are there any international standards of packing and marking?

 

Insurance of Goods

The export trade is subject to many risks. Ships may sink or collide; consignments may be lost or damaged. All sensible businessmen now insure goods for the full value. The idea of insurance is to obtain indemnity in case of damage or loss. Insurance is against risk.

While the goods are in a warehouse, the insurance covers the risk of fire, burglary, etc.

As soon as the goods are in transit they are insured against pilferage, damage by water, breakage or leakage. Other risks may also be covered.

The insured is better protected if his goods are insured against all risks. The goods may be also covered against general and particular average.

In the insurance business the word average means loss. Particular average refers to risks affecting only one shipper's consignment.

General average refers to a loss incurred by one consignor but shared by all the other consignors who use the same vessel on the same voyage.

Ukrainian foreign trade organizations in most cases take out insurance with Ingosstrakh. Goods may be insured as well with some other insurance companies which have recently appeared in the Ukraine.

 

 

Vocabulary

consignment ,

insurance indemnity

warehouse ()

burglary

pilferage ,

leakage ,

general average .

particular average .

incur losses

consignor

insure goods with smb ...

 

 

Questions

1. Name some risks to which the export trade is subject.

2. What does the word 'average' mean in the insurance business?

3. What is the name of the state insurance company in the Ukraine?

4. Has Ingosstrakh any competitors?

5. Why is it very important to encourage competition in the insurance business?

6. Describe the conditions of insurance for your goods.

 

 

Force Majeure

Forcemajeure is a force against which you cannot act or fight.

Every contract has a force majeure clause. It usually includes natural disasters such as an earthquake, flood, fire, etc. It can also list such contingencies as war, embargo, sanctions. Along with this there are some other circumstances beyond the Sellers' control. The Seller may find himself in a situation when he can't fulfil his obligation under the Contract. It may happen if there is general strike in the country, a strike of coal-miners, transport workers etc. Production may be suspended if there is a shortage of the energy supply. When negotiating a contract a list of contingencies must be agreed on and put into the Contract.

 

 
 

 

 


When a manager makes up a contract he must not think only of his one-sided interest. He must think in terms of common interest with his counterpart. Only then will he prove loyal to his partner.

In case of a contingency the Seller must notify the Buyers of a force majeure. The Article of the Contract to this effect may run:

"Should the Seller fail to notify the Buyer of a contingency the Seller is denied a right to refer to these circumstances". The Seller is to notify the Buyer of a contingency right away. If it's done in due time the Buyer may take immediate action to protect his interest. He may sign a contract with another supplier on similar terms or if it's impossible he will secure the best possible terms he can have at the moment. If prices are rising he will be quick to act and will do everything possible to negotiate the best price obtainable at the moment.

A force majeure must be a proven fact. The Seller is to submit to the Buyer a written confirmation issued by the Chamber of Commerce to this effect. The certificate testifies that a contingency really took place. It describes its nature and confirms its duration.

In a dispute between the Buyer and the Seller not only the fact of a contingency is to be ascertained. The Seller must have evidence that non-execution of a contract or its partial fulfillment is a direct result of a contingency. If it is proved the Seller is not liable and the execution of a contract is postponed until all the after-effects causing damage are eliminated. A natural disaster may last only a few minutes but it'll take a lot of time to recover the loss.

The duration of a force majeure is, as a rule, 4 or 6 months. After that the Buyer has a right to cancel the contract. The Seller in this case has no right to claim any compensation for his loss

 

 

Vocabulary

force-majeure , , ;

contingency ,

suspend ,

shortage ,

negotiate contract

make up contract

notify smb of smth

duration

submit

ascertain ,

execution

non-execution

liable , '

eliminate ,

claim compensation

Questions

1. What is the definition of force majeure?

2. What contingencies are listed in a force majeure clause?

3. Why is it very important to notify the Buyer of a contingency?

4. What document certifies the fact of a contingency?

5. What duration is usually stated in a contract for contingeny?

6. Do you agree or disagree with the statement?

The wording of a force majeure clause must be very precise. When negotiating this point you must foresee the contingenies which may be detrimental to you.

 

 

Claims and Sanctions

A contract defines rights and obligations of the parties involved.

In case of breach of Contract the sufferer makes a claim on he party which fails to meet its contract obligations. It is more often the case that it is the Buyer who makes a claim on the Seller.

Most often the Buyer makes quality and quantity claims on the Seller. The cause for complaint may be poor quality, breakage, damage, short weight, leakage etc.

 

What is the claim procedure?

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 nay serve as documentary evidence. If necessary, drawings, photos, samples are enclosed as proofs of claims. The date of a complaint is the date on which it is mailed.

Claims can be lodged during a certain period of time, which is usually fixed in a Contract.

During the claim period the Seller is to enquire into the case and communicate his reply. He either meets the claim or declines it.

The Seller declines liability 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.

The Seller has also a full right to decline a claim if the goods are disorderly stored, mishandled or misused by the Buyer. If a claim has a legitimate ground behind it the parties try to settle it amicably.

 

What are the ways of settling a claim?

In case of short-weight it is recompensed by a load sent separately or at the time of follow-up shipments. In case of damage or faults, the goods at the Buyer's option can be repaired or replaced, all at the Seller's expense.

Sometimes if deviation in quality is within certain limits the goods can be retained but with an allowance proportionate to the discrepancy in quality. This is usually the case with raw materials, foodstuffs or any other goods sent in bulk.

If the goods are missing the Seller must necessarily locate them. Sometimes it is quite a problem as consignments may be lost when transshipped at some intermediate port or if sent at a wrong address. If the goods are not recovered compensation must be paid by the party directly responsible for it.

 

What is the sanction against the Seller if he fails to deliver the goods by the date due?

The Seller is penalized. The rate of penalty is fixed in the Penalty Clause or in the Clause of Agreed and Liquidated Damages.

If the delay is longer than 2 months the Buyer has the option of cancelling the Contract altogether but the Seller is to compensate for the loss incurred.

 

What may be the grounds for complaint coming from the Seller and what are the ways of settlement?

The Seller in his turn is entitled to make a claim on his counterpart if the Buyer fails to meet his contractual obligations.

The Seller may inflict penalties on the Buyer if there is a default in payment.

In an f.o.b. transaction the Seller is entitled to compensation for extra storage expenses if the Buyer's vessel bound to pick up the goods fails to call at the port in time.

In a c.i.f. transaction the Seller may claim the demurrage if his own vessel stays idle at the port awaiting unloading.

The demurrage claims may emerge from the Buyer as well as Contract is signed on f.o.b. terms of delivery. If it is a c.i.f. nract, the Buyer is liable to extra storage expenses when through the Seller's fault he cannot clear the goods from the customs within the allowable period.

Financially, legitimate claims are in large part settled by debit or credit notes.

 

Vocabulary

breach of Contract

the sufferer

claim

make claim on smb '

statement of claim

survey report

meet the claim

decline the claim

settle the claim ,

amicably

clean bill of lading

at Buyers'/Sellers'/option /

deviation

dicrepancy , ,

retain the goods

allowance for damage ();

in bulk , ,

tranship, transship ( )

transshipment, transhipment ,

penalty

penalize

agreed and liquidated damages

compensate smb for smth ,

title , ( -to)

entitled ,

expenses ,

at someone's expense

demurrage ,

through smb's fault 躿-

clear the goods

debit note -

credit note -

 

 

Questions

1. What kind of claims are made by the Buyer?

2. What sort of claims are lodged by the Seller?

3. What is the procedure for making claims?

4. When does the Seller decline a claim?

5. How are claims settled?

6. What are the sanctions against the defaulter?

 

 


Unit 2. Contract Samples

 

Contract for Sending Specialists Abroad

 

 

CONTRACT

Moscow December 1, 199...

Moscow, hereinafter referred to as the Supplier and the State Enterpise for. hereinafter referred to s the Customer have signed the Present Contract. The terms and conditions of the Contract are as follows:

The Supplier shall construct and commission the Cement Plant in .. .For this purpose the Supplier shall send to . specialists.

The number of specialists, their specialities and periods of stay in............. shall be stipulated in the Appendix to the present Contract. The Appendix shall form an integral part of the Contract.

The Supplier's specialists shall be sent to at the Customer's request in accordance with the agreed schedule of commissioning of various units and shops of the Cement Plant.

4.1. The Customer shall reimburse the Supplier for:

a) monthly salaries of specialists in Local currency from the date of arrival in up to the date of firture from ..at the following rates:

General Consultant

Deputy Ceneral Consultant

Specialist on

Senior Engineer

Engineer

Foreman

b) transfer allowance to every specialist sent tofor a period of one year or more at the following rates:

General Consultant

Deputy General Consultant

(and all others)

c) ... air travel expenses of the specialists and their family members from Moscow to..and back: for General Consultant and Deputy General Consultant first class; and for other specialists tourist class (economy class); including the cost of excess luggage transportation over and above the free allowance indicated in each ticket at the rate of 80 kg per person and the maximum of 240 kgs for a family.

The family members (wife and dependent children) shall travel to..only if the period of the specialist's stay in.is to exceed six months.

d) round travel expenses (excluding excess luggage) for specialists and their family members going on home leave;

e) the period of specialists' holiday.

The duration of holiday shall be 48 working days for year of work in.. .

The time of holiday shall be agreed about in each particular case.

f) expenses incurred on the insurance of the Supplier's with Ingosstrakh against professional risks and/or accidents during their stay in.at the rate of per year per each specialist.

4.2. The Supplier shall bear expenses of sending interpreters and their family members.

The Customer at his own expense shall ensure:

a) meeting and seeing off specialists, interpreters and their family members;

b) the travel of specialists, interpreters and their family members to the duty station by railway (airconditioned coaches) and/or by car and also transportation of their luggage;

c) first class hotel accommodation for specialists, interpreters and their family members on their way to the duty station in. and back including expenses for service and meals;

d) transport facilities for business trips;

e) first class hotel accommodation (or adequately furnished flats) and offices;

f) adequate medical service including hospitalization if necessary;

g) transport facilities for sightseeing and social purposes;

h) primary school facilities for children of specialists and interpreters.

 

If any of the Supplier's specialists fall ill while staying in the Customer shall continue payment of his monthly salary for a period of up to two months.

a) In the event of prolonged illness of specialist the Supplier shall replace him and the Customer shall reimburse the Supplier for all expenses incurred.

b) The Supplier reserves the right to recall any of his specialists and replace him with another specialist of similar qualification and experience.

c) The Supplier's personnel shall observe all the laws, rules and regulations of the Customer's country and also respect the local customs and traditions.

d) The holidays of the Supplier's country shall be days off for the Supplier's specialists and shall be paid by the Customer.

 

To effect payments under this Contract the officials of the Russia's side in..shall, once every month, draw invoices in 3 copies to the Customer through the National Bank of for collection. A statement, containing the names of the Supplier's specialists, the duration of their stay in the Customer's country, monthly reimbursement rates and other expenses incurred under the present Contract shall be enclosed with each invoice.

The Customer shall pay against the above invoices within 15 (fifteen) days from the date of receiving the invoices.

The above sums shall be remitted to the account of the Bank for Foreign Economic Affairs in favour of the Supplier.

 

 

N

1 199...

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Contract for the Export of Goods

 

CONTRACT No

of __________ 199

Place of signing

Trade Partners Enteprise, Moscow, Russia, hereinafter referred to TPE, on the one part, and Bulgaria Cardon Tubes Limited, Nigeria, hereinafter referred to BCTL, on the other part, have signed the present contractasiollows:

1.1. To the total sum indicated in point 1.1 TPE shall deliver within ______months of the date of signing this Contract the goods as under Annex I to the Contract being its integral part.

Quantity__________ metric tones.

Price per ton__________

Total sum_____________

The delivery shall be effected on C.I.F. terms, Bulgarian port.

1.2. The date of Bill of Lading made out for this lot of goods shall be considered the date of delivery of goods. The goods delivered under this Contract shall be considered accepted:

in respect of quality in accordance with the quality provided . for in the Quality Certificate of the manufacturer;

in respect of quantity in accordance with the quantity of the pieces and the weight stated in the Bill of Lading.

2.1. Payments for the goods delivered in accordance with the present Contract shall be effected by BCTL in_______________________

2.2. To effect the payment, BCTL shall open within 30 (thirty) days from the date of receipt from TPE of the cable notification of readir ness of the goods for delivery an irrevocable confirmed letter of credit with a Bank for Foreign Economic Affairs, Moscow, through the State Bank of Bulgaria in favour of TPE to the amounts stated in 1.1 and shall be valid for a period of months from the date of opening of Letter of Credit.

2.3. Should BCTL do not open the Letter of Credit in the period stipulated by 2.1 and in accordance with the terms and conditions of 2.6 of the present Contract, TPE shall be entitled to correspondingly prolong the period of delivery of the goods either for a period of delay in opening the Letter of Credit or for a period to be required to make the Letter of Credit correspondent to the terms and conditions of 2.5 of the Contract.

Should the validity of the Letter of Credit be prolonged, the validity of the present Contract shall be automatically prolonged.

2.4. The Letter of Credit should not contain any other terms and conditions except those stipulated by the present Contract.

2.5. The payment under the Letter of Credit shall be effected by the Bank for Foreign Economic Affairs of the RF for the delivery of goods against the invoices of TPE to be forwarded in 3 copies for every lot of goods attaching the following documents:

1. Two originals of a clean on board Bill of Lading, issued in the Black Sea port in the address of BCTL.

2. Shipping specification 3 copies.

3. Quality certificate 1 copy.

4. Insurance policy issued by the RF Ingosstrakh 1 copy.

2.6. The Letter of Credit shall contain the following terms and conditions:

a) partial shipment is allowed;

b) the number of the Letter of Credit shall be written only on the invoices;

c) the sum of each invoice shall be calculated on the basis of the actual weight of the shipped goods and average weight price per each Net metric ton of the goods equal to________, C.I.F., the port of Bulgaria;

d) the total value inclusive of the sum of the last invoice shall not . overestimate the total Contract value;

e) the Letter of Credit shall contain the terms and conditions of i.2.4 of the present Contract;

f) the Contract will be deemed to have been fulfilled when supply of goods is effected within 5% of the Contracted quantities.

However payment will be on the basis of actual quantities as per the Bill of Lading.

2.7. All the expenses connected with the opening Letter of Credit, notification of its opening and, in case of necessity, increase and prolongation of the Letter of Credit shall be borne by BCTL.

3.1. When delivering the goods, the following documentation shall be forwarded to BCTL:

a) Bill of Lading three originals and four copies including one original to be airlifted to BCTL's agent at the port; two originals with the invoice, one copy to BCTL by airmail; one copy by airmail to the BCTL's agent; two copies with the captain's mail;

b) shipping specification in six copies including one copy to be airlifted to BCTL at the port; three copies with the invoice; one copy with the captain's mail and one copy by airmail to BCTL's agent at the port;

c) Quality Certificate in two copies including one copy with the captain's mail and the other with the invoice;

d) packing List in four copies including two copies along with the cargo inside Case No. 1; two copies with each package (one copy inside the package and the second one inside the special pocket on the outer side of the case);

e) Insurance Policy with the invoice 1 copy. '

3.2. The packing of the goods to be delivered under the present Contract shall ensure its safety during both railway and marine transportation as well as during transshipment when the usual handling of the cargoes is observed.

3.3. The goods to be delivered shall have the following marking:

- Made in Russia

- The port of loading

- Order Number

- Case Number

- Net and Gross Weight

- Consignee

- Contract No.

- Port of destination.

3.4. The package number is shown with the fraction; the numerator being the serial number of the package and the denominator being the total number of the packages containing a complete unit of the goods.

3.5. The package that cannot have the above mode of marking shall have a metal tag fastened and bearing the required marking.

3.6. BTCL shall ensure the unloading of the goods from the Vessels at the port of unloading at his own expense.

4.1. TPE guarantee the quality of the delivered goods within 6 months from the date of delivery at the port of destination.

4.2. Should any quantity of delivered goods prove to be defective during the guarantee period TPE at his own expense shall replace the corresponding defective quantity of goods for the goods of proper quality.

The guarantees shall not cover the goods damaged en route or due to nonobservance of instructions on storage, due to carelessness or improper handling while transshipment or usage.

4.3. Any claims in respect of quality of the goods shall be submitted to TPE within the guarantee period but not later than 30 (thirty) days after guarantee period expires.

4.4. Any defects detected in the delivered goods during the guarantee period shall be covered by an Act of Claim to be issued within

a reasonable period of time, but not later than 30 (thirty) days after the defect is found, moreover the participation of the TPE's representative or a person authorized by the Supplier for issuing an Act of Claim being binding.

Should the TPE's representative do not arrive for participation in drawing up the Act of Claim within a 30 days from the date of receiving the written notification of BCTL, BCTL shall issue the Act of Claim in unilateral order and this Act of Claim shall be the ground to present a Claim. A list with the detailed description of the detected defects is to be enclosed with the BCTL's notification.

4.5. The Act of Claim shall be considered the document substantiating the Claim.

4.6. The Act of Claim shall contain the description and quantity of the goods under claims, order number, description and origin of the defect,, the date of the goods delivery at the port of unloading, the condition of packing and storage as well as the concrete claim of BCTL

A photo of the defective goods is to be attached thereto if possible.

The claim shall be sent by the registered mail by BCTL with the enclosure of all the required documents.

The date of the postal stamp of the country of despatch shall be deemed the date of presenting the claim.

4.7. Claims in respect of quantiny of the goods (entire shortage) shall be presented wiithin 9 months from the date of delivery of the corresponding lot of goods in accordance with the procedure of the specified in sub-items 4.4, 4.5, 4.6 of para 4 on condition that the goods were delivered to the place of destination with packing intact and was not damaged through the transport agencies fault.

4.8. TPE shall undertake to settle such a claim within 3 (three) months from the date of receit of the claim.

5.1. TRE shall insure the goods to be delivered on C.I.E. terms, the port of Bulgaria against usual marine risks with Ingosstrakh in accordance with the Transport Insurance Rules.

The insurance shall be made to the full amount for the goods on terms and conditions against all risks.

5.2. All the claims that may arise in connection with the loss and damage of the goods during transportation shall be made by BCTL directly to Ingosstakh.

5.3. Any risk of an accidental loss, breakage or damage to the goods passes from TPE to BCTL from the moment of loading the goods on board the ship at the port of loading.

In case of any disagreement between the Nigerian and Russia's organizations on any matter arising from or connected with the implementation of the present Contract, TRE and BCTL shall immediately consult each other and endeavour to reach a mutual settlement of such disagreement.

Any dispute or difference which may arise out of or in connection with the Contract to be referred, with exclusion of the ordinary courts of law, for the decision of an arbitration to be held as follow.

If the defendant in such dispute or difference is TPE t

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