英文篇

Chapter 1 Name of Commodity and Quality Clause

1.1 Name of Commodity

1.1.1 Description and Significance

Name of commodity is what a commodity is called, which is a distinction mark from other goods. In international trade, name of commodity reflects the natural attributes, purpose and the main features of the commodity itself.

When conducting business negotiations, both the sellers and buyers should reach an agreement about description of goods in the contract firstly. It is significant to stipulate the name of commodity. As to international trade, it is the base and precondition for other terms in the transaction. From a legal perspective, as a basis for the delivery of goods, name of commodity has bearing on the rights and obligations of both trading parties. If the seller fails to deliver the same goods as named in the contract, the buyer is entitled to claim against the seller for compensation, refuse to take delivery, or even cancel the contact. Therefore, the name of commodity should be clearly and properly specified in the contract and the name of the goods delivered should exactly conform to the contract.

1.1.2 The Name of Commodity Clause

The name of commodity clause, as a main component of the description of goods in international trade contract, is relatively simple. There is no uniform contract format. Usually, both parties in the contract just specify the name of the products under the article of name of commodity. Sometimes, both parties only write several sentences at the beginning of a contract without headline, indicating they have reached an agreement on the business of some commodity.

1.1.3 Points for Attention in Stipulating Name of Commodity Clause

Owing to the significance of name of commodity clause, there are four principles that should be considered when setting the name of commodity clause to avoid subsequent disputes:

（1）The expression of the commodity name should be clear and specific to indicate specific characteristics. In addition, it should avoid vagueness and ambiguity.

（2）Be practical and realistic.

The name of commodity stipulated in the contract must be in conformity with the goods that meet the requirements of both trading parties. Exaggerated or unnecessary descriptions should not be used so as to avoid the difficulty in fulfilling the contract.

（3）Adopt international common terms as practical as possible.

Sometimes, a product has different name in different countries and regions. Hence, different names may refer to the same commodity or the same name may mean different goods. Possible disputes could be further avoided by adopting internationally standardized and widely accepted names.

（4）Select appropriate name of commodity for tariff reduction and cutting out the shipping.

In international trade, choosing appropriate commodity name is a way to facilitate import and reduce the cost of transaction in terms of customs tariff and freight charges. It happens that when the same product is imported or exported under different names or categories of commodities, differential tariff rates or freight rates and trade policies may apply. Therefore, choosing an appropriate name as the name of commodity is beneficial to both the exporter and the importer.

1.2 Quality of Commodity

1.2.1 Description and Significance

The quality of commodity is integration of the internal attributes and the external appearance of goods. The internal attributes include the physical, mechanical, biological and natural properties and chemical compositions of goods. The external appearance includes shape, taste, color transparency and style of the goods.

It is significant to improve the quality of the commodity. As the core component in international transaction, quality of goods not only concerns with the value of use and the value of the commodity, but also directly affects the market price and marketability of the commodity, and even the reputation of a country. Hence, to improve quality of goods could not only enhance export competitiveness, increase price and expand market, but also improve reputation of export goods in international market.

1.2.2 Requirements of Commodity Quality

It is significant of commodity quality. If goods could not meet the quality requirement, it would be not allowed to import. There are several international standards of commodity quality, which include ISO 9000 and ISO 14000, CE Mark and UL Mark and so on.

（1）ISO 9000

ISO 9000 standard is the quality standard of manufacturing enterprise established by international organization for standardization in 1987. With the certificate of ISO 9000, export products will obtain permits to enter into international market. Since ISO 9000 serious of standards were issued, they have been adopted by 60 countries include China.

（2）ISO 14000

ISO 14000 environmental standards were enacted by“ISO Technical Committee 207 on Environmental Management”, which was established in June 1993. Some developed courtiers have taken them as one kind of“green barrier”. The developed courtiers will refuse the import of such goods without the certificate, with the aim of establishing implementing and effective environmental management system within the organization to regulate the environmental behavior of the organization, control and reduce damage to the environment caused by the production and management activities, encourage and promote enterprises to produce green environmental protection product so as to meet the ISO 14000 series of standard belong to green enterprises, and products are recognized as environmental friendly.

（3）CE Mark

According to EU regulations, from January 1, 1996, if to enter the European market, electrical products must comply with the common safety standards（with CE Mark）identified by the EU.

（4）UL Mark

It is a mark of security certificate stipulated by the inspection agency subordinated to the Underwriters' Laboratories. Electrical products exported to Canada and America should not be sold without UL mark.

1.2.3 Methods of Stipulating Quality

In international trade, commodities have various types and characteristics so as to have several methods to stipulate quality of goods. Generally, there are three categories to indicate quality of goods: sale by actual commodity, sale by sample, and sale by description.

（1）Sale by Actual Commodity

Sale by actual quality or sale by actual commodity, it means that goods already available at the time of contracting and then quality of actual goods will form the condition of transaction. Under terms of sale by actual commodity, buyers inspect the quality of the actual goods at the seller's premises. If buyer satisfied with the quality of the actual goods, both sides make a deal. It usually takes place in some special forms, such as consignment sales, auction, trade fairs and exhibition sale, etc.

（2）Sale by Sample

A sample is a small quantity of product, which is taken out from a whole lot to represent the average quality of goods. Sale by sample, which means both trading parties agree take sample as the representative of quality and condition of the goods to be delivered. This method is applied when it is difficult to indicate quality of commodity by scope of any scientific or technical description. For example, light industrial products, agricultural native products, handicraft articles, and textile products.

According to the supplier of the sample, there are three cases under sale by sample: sale by seller's sample, sale by buyer's sample and sale by counter sample.

1）Sale by seller's sample

Seller's sample is the sample provided by the seller. In international trade, when buyers and sellers use the seller's sample to determine the quality of goods, it is called sale by seller's sample.

2）Sale by buyer's sample

Buyer's sample refers to the sample prepared by the buyer. In international trade, when buyers and sellers use the buyer's sample to determine the quality of goods, it is called sale by buyer's sample.

In case of sale by buyer's sample, the seller should study the samples thoroughly, which not only include external features but also the intrinsic characteristic of the sample. In addition, the seller should pay attention to raw materials supply, processing techniques and so on. Considering limitation of local conditions, sellers encourage to adopt sale by seller's sample rather than sale by buyer's sample so as to avoid risk.

3）Sale by counter sample

Counter sample, is also called a return sample, which is a replica made by the seller based on the sample provided by the buyer. After the confirmation of the buyer, the confirmed sample called counter sample. In international trade, when buyers and sellers use the counter sample to determine the quality of goods, it is called sale by counter sample.

Points for attention in sale by sample: ①As standard sample, it had better pick the representative sample, which could represent the average quality level of the whole lot, rather than pick best quality of goods as a sample. ② Reference sample should carry the mark clearing showing“For Reference Only”. ③ It had better keep one additional duplicated sample and sealed sample before sending samples.

（3）Sale by Description

Generally speaking, sale by description is applicable to commodities of which quality can be expressed by some scientific indicator. There are six forms based on the different attributes, nature and characteristics of a commodity as follows.

1）Sale by specification

The specification of the goods refers to main indicators to reflect commodity quality, such as composition, content, purity, length and size, etc. In international trade, when buyers and sellers use the specification to determine the quality of goods, it is called sale by specification.

2）Sale by grade

The grade of goods refers to the classifications of commodities of the same kind, which is indicated by word, numbers or symbols. In international transaction, when buyers and sellers use grade to determine the quality of goods, the sale is called sale by grade. Since different grades of goods embody different specifications, when stipulating the grades of goods, the specific speciation of each grade should also be stipulated.

3）Sale by standard

Standard is the standardization of the specifications and grades. In international transaction, when buyers and sellers use standard to determine the quality of goods, it is called sale by standard. Standards are formulated either by the government or commercial organizations. Some standards are not legally binding, and just serve as reference only. Some standards have been accepted internationally, and we could conduct the transaction according to the standard, such as ISO 9000 and ISO 14000.

4）Sale by description and illustrations

In international trade, owing to complicated structure of machine, it is difficult describe commodity only by few indexes, which are described by the description and illustrations accompanied by pictures, design drawings, analytic tables and various data to indicate specific properties and structural features. When buyers and sellers use description and illustrations to determine the quality of goods, it is called sale by description and illustrations. This method is usually applied in machinery, precision instruments and equipment.

5）Sale by origin

Owing to natural conditions and traditional production techniques in certain areas, the native produces are renowned for their unique specialty in quality. In international transaction, when buyers and sellers use origin of the goods as characteristic to determine the quality of goods, it is called sale by origin. This method is suitable for indicating the quality of agricultural products and native product, such as Fulin Pickle, Guizhou Mao-tai Wine.

6）Sale by brand name and trademark

Trademark is a mark used by the producers or merchants to identify the commodity, which is composed one or few of words, letters, numbers, graphic or pictures. Brand name is the particular name of business enterprise to produce and sell, which distinguish own products from other same kind of commodity. In international transaction, when buyers and sellers use brand name and trademark to determine the quality of goods, it is called sale by brand name and trademark. Brand and trademark are symbol of quality for itself, which represent the quality of the commodities. This method is usually applied in highly reputed products with well-known brands and trademarks.

1.3 Quality Clause

1.3.1 Basic Contents

The quality clause is one of the main conditions in the contract, which means that both buyers and sellers agree upon the goods covering the specification, grade, standard and so on. Generally, the name of the commodity and specific quality basis should be indicated explicitly in the quality clause.

When the contract is under sale by sample, it should indicate the number of the sample and the date of delivery. Sometimes it also includes clearly quality to be about the sample or to be similar to the sample. When the contract is under sale by description, it should indicate clearly the name of the goods, specification, grade, standard, brand, trademark, origin and illustration.

1.3.2 Quality Tolerance

Quality tolerance is the quality deviation that is recognized internationally. It is usually used in terms of manufactured goods, such as watch. It is allowed a quality tolerance within 60 seconds per day.

1.3.3 Points for Attention of Quality Tolerance

（1）The buyer should not refuse goods delivery and claim compensation if the quality deviation is within the range of quality tolerance.

（2）The buyer should not adjust price of goods if the quality deviation is within the range of quality tolerance.

1.3.4 Quality Latitude

Quality latitude means it allows some flexibility on delivery of goods in quality indicator within a certain range. In international transaction, the buyer should not refuse goods delivery within range of quality latitude, and usually price keeps the same as required in the contract. However, sometimes commodity price can be adjusted within the range of quality latitude according to term of“price adjustment clause relating to quality”in the contract.

There are three ways to stating the quality latitude.

（1）Flexible quality range or scope:

Beef weight:1-2 kilograms.

（2）Maximum & minimum requirements: Moisture（max.）12%; Oil content （min.）42%.

（3）Allowed deviation: Duck's feather 16%±1%.

1.3.5 Points for Attention in Stipulating Quality Clause

（1）Adopt the Correct Method to Express Quality of Commodity

In international transaction, there are various methods of specifying quality and each applicable to commodities with certain characteristics. We should adopt a proper way to express quality of commodity based on the character of goods. For example, sale by brand is usually applied in highly reputed products with well-known brands and trademarks. In addition, sometimes method comprehensive applied to express quality of goods. For example, it uses both sample and specification to express quality of goods. In this case, seller should pay attention for what is the final quality basis. Because in some countries, if trading parties use sample and specification to determine the quality of goods at the same time, the seller is responsible for the delivery of the goods of the same quality as both the sample and specification.

（2）Pay Attention to the Latest Laws and Regulations Concerning the Quality of Exports Among Different Countries

There are different laws and regulations in different countries and areas. In order to succeed in delivery of goods, sellers should ensure that the product complies with laws and regulations in exporter courtiers. In addition, it also helps importers access to international market successfully.

（3）Be Flexible About Quality of Goods

In some agricultural product, light industrial products and mineral products, it usually stipulates quality latitude clause in the contract.

1.3.6 CISG

CISG, short for the United Nations Convention on Contracts for the International Sale of Goods, was enacted by“United Nations Commission on International Trade Law”, which was established in January 1988. According to CISG, the seller must deliver the goods, which conform to quality and description requirement in the contract. Otherwise, the buyer may claim damages, require delivery of substitute goods, or require the seller to remedy or even reject the goods and cancel the contract.

In conclusion, in terms of commodity, the quality clause is the essential part in international sales contracts. The sellers have responsible delivery of the goods of the same quality as required in the contract.