1、Chapter 7International Business Contract 1USTB刘志伟-UIBEP 版权所有 Know how to make business contract in English languageMaster the tips of business contract making213Get familiar with the form,terms,and characteristics of business contractUSTB刘志伟-UIBEP 版权所有 3123USTB刘志伟-UIBEP 版权所有 Definition of Business C
2、ontractq A business contract is a legally binding agreement between two parties for an exchange of goods or services or intellectual property rights that are of value.For a contract to be valid,an offer must be made and accepted.Using a contract in business dealings helps ensure an agreement is acte
3、d on,insofar as a broken contract could result in a lawsuit or out-of-court settlement and the payment of damages caused by the breach of the contract.The best way to avoid a dispute or potential litigation,however,is to draft a solid agreement in which you are confident you have negotiated the best
4、 terms for your business.q For a legally valid business contract,all you need is a clear agreement and mutual promises to exchange things of value.q Most contracts only need to contain two elements to be legally valid:All parties must be in agreement(after an offer has been made by one party and acc
5、epted by the other).Something of value must be exchanged-such as cash,services,or goods,or intellectual property rights(or a promise to exchange such an item)-for something else of value.USTB刘志伟-UIBEP 版权所有 When to Use Business ContractsqA business contract is often used for,but not limited to,the fo
6、llowing:Hiring or being employed as an independent contractor Buying or selling services or goods License agreementsLeases agreements Selling your business Partnerships and joint ventures Franchising Confidentiality agreements Non-compete agreements USTB刘志伟-UIBEP 版权所有 Oral Business Contractsq An ora
7、l contract is a spoken agreement that is as valid as a written contract in most countries,including China.For example,if you have a promise that a job shall be complete for monetary or other compensation,you have created an oral contract.q Oral contracts are legally enforceable,although they are fre
8、quently subject to misinterpretation and they can be difficult to prove in court because they often come down to one persons word against the other.Moreover,some types of contracts must be in writing,for example,contracts for the purchase or sale of goods or services in international business.USTB刘志
9、伟-UIBEP 版权所有 Written Business Contractsq In a few situations,contracts must be in writing to be valid.United State laws often require written contracts for real estate transactions or agreements.You need to check to determine exactly which contracts must be in writing.But even if its not legally req
10、uired,its always a good idea to put business agreements in writing,because oral contracts can be difficult or impossible to prove.q Written contracts are produced on paper or electronically.Legally,a written business contract is easier to uphold than an oral contract because there is a reference for
11、 the agreement.q With a written contract,its easier to prove the terms between the parties and eliminate arguments over who said what.Its often easier for businesses to recognize potential points of contention in the language because the agreement is detailed in writing.q Whether your business is pr
12、oviding or offering services,you had better use a written business contract and include specific details about the agreement.USTB刘志伟-UIBEP 版权所有Offer and Acceptanceq The most basic rule of contract law is that a legal contract exists when one party makes an offer and the other party accepts it.For mo
13、st types of contracts,this can be done either orally or in writing.q Lets say,for instance,youre shopping around for a print shop to produce brochures for your business.One printer says(or faxes,or emails)that hell print 3,000 of your two-color flyers for$300.This constitutes his offer.q If you tell
14、 the printer to go ahead with the job,youve accepted his offer.In the eyes of the law,when you tell the printer to go ahead you create a contract,which means youre liable for your side of the bargain(in this case,the payment of$300).But if you tell the printer youre not sure and want to continue sho
15、pping around(or dont even respond,for that matter),you havent accepted the offer,and no agreement has been reached.q But if you tell the printer the offer sounds great except that you want the printer to use three colors instead of two,no contract has been made.This is because you have not accepted
16、all of the important terms of the offer.You have actually changed one term of the offer.(Depending on your wording,you have probably made a counteroffer,which is discussed below.)USTB刘志伟-UIBEP 版权所有 When Acceptance Occursq In day-to-day business,the seemingly simple steps of offer and acceptance can
17、become quite convoluted.For instance,sometimes an offer isnt quickly and unequivocally accepted;the other party may want to think about it for a while,or try to get a better deal.And before the other party accepts your offer,you might change your mind and want to withdraw or amend it.Delaying accept
18、ance of an offer and revoking an offer,as well as making a counteroffer,are common situations that may lead to confusion and conflict.To minimize the potential for a dispute,here are some general rules you should understand and follow.USTB刘志伟-UIBEP 版权所有 The valid period of an Offerq Unless an offer
19、includes a stated expiration date,it remains open for a reasonable time.Whats reasonable,of course,is open to interpretation and will vary depending on the type of business and the particular fact situation.q To leave no room for doubt as to when the other party must make a decision,the best way to
20、make an offer is to include an expiration date.q If you want to accept someone elses offer,the best approach is to do it as soon as possible,while theres no doubt that the offer is still open.Keep in mind that until you accept,the person or company who made the offer-called the offeror-may revoke or
21、 amend the offer.USTB刘志伟-UIBEP 版权所有 Revoking an Offerq Whoever makes an offer can revoke it as long as it hasnt yet been accepted.This means that if you make an offer and the other party wants some time to think it through,or makes a counteroffer with changed terms,you can revoke your original offer
22、.Once the other party accepts,however,youll have a binding agreement.Revocation must happen before acceptance.q An exception to this rule occurs if the parties agree that the offer will remain open for a stated period of time.USTB刘志伟-UIBEP 版权所有 Offers with Expiration Datesq An offer with an expirati
23、on date is called an option,and it usually doesnt come for free.Say someone offers to sell you a forklift for$10,000,and you want to think the offer over without worrying that the seller will withdraw the offer or sell to someone else.You and the seller could agree that the offer will stay open for
24、a certain period of time-say,30 days only for you but not anyone else.In this case,however,the seller will normally ask you to pay for this 30-day option-which is understandable,because during the 30-day option period,the seller cant sell to anyone else.q Payment or no payment,when an option agreeme
25、nt exists,the offeror cannot revoke the offer until the time period ends.USTB刘志伟-UIBEP 版权所有 CounteroffersqOften,when an offer is made,the response will be to start bargaining.Of course,haggling over price is the most common type of negotiating that occurs in business situations.When one party respon
26、ds to an offer by proposing something different,this proposal is called a counteroffer.When a counteroffer is made,the legal responsibility to accept,decline or make another counteroffer shifts to the original offeror.qEven though a contract is formed only if the accepting party agrees to all substa
27、ntial terms of an offer,this doesnt mean you can rely on inconsequential differences to void a contract later.USTB刘志伟-UIBEP 版权所有 Consideration DefinedqThe thing of value being exchanged is most often a promise to do something in the future,such as a promise to perform a certain job,or a promise to p
28、ay a fee for a job.For instance,lets return to the example of the print job.Once you and the printer agree on terms,there is an exchange of things of value(consideration):The printer has promised to print the 3,000 brochures,and you have promised to pay$260 for them.USTB刘志伟-UIBEP 版权所有 Gifts vs.Contr
29、actsq The main importance of requiring things of value to be exchanged is to differentiate a contract from a generous statement or a one-sided promise,neither of which are enforceable by law.q If a friend offers you a gift without asking anything in return-for instance,offering to stop by to help yo
30、u move a pile of rocks-the arrangement wouldnt count as a contract because you didnt give or promise your friend anything of value.If your friend never followed through with her gift,you would not be able to enforce her promise.q However,if you promise your friend youll help her weed her vegetable g
31、arden on Sunday in exchange for her helping you move rocks on Saturday,a contract exists.USTB刘志伟-UIBEP 版权所有 Promises vs.Actionq Although the exchange-of-value requirement is met in most business transactions by an exchange of promises(Ill promise to pay money if you promise to paint my building next
32、 month),actually doing the work can also satisfy the rule.q If,for instance,you leave your printer a voicemail message that youll pay an extra$100 if your brochures are cut and stapled when you pick them up,the printer can create a binding contract by actually doing the cutting and stapling.And once
33、 he does so,you cant weasel out of the deal by claiming you changed your mind.USTB刘志伟-UIBEP 版权所有 Promises vs.Actionq Although the exchange-of-value requirement is met in most business transactions by an exchange of promises(Ill promise to pay money if you promise to paint my building next month),act
34、ually doing the work can also satisfy the rule.q If,for instance,you leave your printer a voicemail message that youll pay an extra$100 if your brochures are cut and stapled when you pick them up,the printer can create a binding contract by actually doing the cutting and stapling.And once he does so
35、,you cant weasel out of the deal by claiming you changed your mind.USTB刘志伟-UIBEP 版权所有v Summarize the basic terms of your agreement in writing.Before making a business contract,youll need final agreement on all the terms.If possible,confirm these terms with the other party by email or fax.For complic
36、ated business contract such as license agreement,equipment sales contract,engineering project contract,related parties should meet together to negotiate the commercial contract and all technical appendices.Step 1USTB刘志伟-UIBEP 版权所有v Find samples of the relevant business contract online.Depending on t
37、he type of business contract,there may be existing templates you can use that are on the web.You can find over 1000 different types of professional business agreements or business contract in Chinese,English and some other languages at this web site http:/ should modify these business contract templ
38、ates to suit your needs and specific terms.Step 1Step 2USTB刘志伟-UIBEP 版权所有v Draft a business contract using a sample agreement from Step 2 or create your own new contract using clear language.If you have a simple business contract,you may not need a sample agreementit may be easier to make your own a
39、s a letter agreement that is signed by all parties.Step 1Step 2Step 3USTB刘志伟-UIBEP 版权所有v Include all terms and specific agreements within your business contract.Read the contract.Confirm that you have written about the Who,What,When,Where,Why and How regarding the terms of the deal.Step 1Step 2Step
40、3Step 4USTB刘志伟-UIBEP 版权所有22v Consider“what if”scenarios.Check that you have accounted for non-performance,lateness,and default.Discuss any changes or new terms with the other party if applicable.Step 1Step 2Step 3Step 4Step 5USTB刘志伟-UIBEP 版权所有23v Send the contract to your attorney for review for a l
41、arge business deal.For big investments such as a house or investment purchase,equipment purchase,license agreement its best to work with an attorney to ensure that your contract is compliant with the law.Step 1Step 2Step 3Step 4Step 5Step 6USTB刘志伟-UIBEP 版权所有v If you are not able to sit together to s
42、ign the agreement,send two(2)originals to the other party with a short cover letter.All parties should initial each page of the agreement,and sign and date the last page.Follow up to get the signed contract back quickly.After the other party has initialed and signed the contracts,sign them and send
43、one original back to them for their records.Complete your side of the deal and enforce the agreement.Step 1Step 2Step 3Step 4Step 5Step 6Step 7USTB刘志伟-UIBEP 版权所有Recitals of a biz contractRecitals are the whereas clauses normally precede the body of a contract.They provide a simple way to bring the c
44、ontracts reader(party,judge or jury)up to speed on what the contract is about,who the parties are,why they are signing the contract,etc.The first paragraph in the body of the contract can incorporate the recitals by reference and state that they are true and correct.This will avoid a later argument
45、as to whether or not the recitals are a legally binding part of the contract.USTB刘志伟-UIBEP 版权所有DefinitionsvIn order to avoid misunderstanding of different interpretation of certain terms and words used in a contract,normally such terms and words shall be defined clearly in the contract.For example.合
46、同文本USTB刘志伟-UIBEP 版权所有Terms of Main ContractvArticle 1-DefinitionsvArticle 2-Scope of the Contract vArticle 3-Performance SecurityvArticle 4-PricesvArticle 5-PaymentvArticle 6-Delivery vArticle 7-Packing and MarkingvArticle 8-Technical DocumentationvArticle 9-InspectionvArticle 10-Erection,Mechanical
47、 Test,Commissioning,Performance Test and Acceptance TestvArticle 11-Guarantee and Mechanical WarrantyvArticle 12-ClaimvArticle 13-Change Orders vArticle 14-SubcontractvArticle 15-Delays in the Sellers PerformancevArticle 16-Liquidated Damage vArticle 17-TerminationvArticle 18-Force MajeurevArticle 1
48、9-Taxes and DutiesvArticle 20-ArbitrationvArticle 21-Contract LanguagevArticle 22-Applicable LawvArticle 23-NoticesvArticle 24-Effectiveness of the Contract and Miscellaneous(see note)USTB刘志伟-UIBEP 版权所有Some features of Biz ContractStrictness合同中,每一个词的意义都非常明确,决不含歧义。合同撰写者往往选择词义范围较小,语义较为明确的词。在其他文体中常见到的表
49、示程度或频率的词如“often”,“always”,“very”在合同英语中几乎不用,因为这些词表示的程度或频率不确切。甚至连定冠词“the”也常常被限定范围较小的“such”所代替。USTB刘志伟-UIBEP 版权所有Some features of Biz ContractShall but not willv根据Longman Dictionary of Contemporary English 的解释,shall应解释为(formal or old-fashioned)used in official documents to show a law,command,obligation
50、,compulsion。可见shall 的这一用法是较古老或者较正式的,体现了合同条款内含的法律的威严性和约束性。v凡是表示强制(compulsion)、权利（rights）、责任（liability）或义务(obligation)时,均不能用will 或should 取代shall。这一用法的shall 的主语一般以第三人称居多,且此时shall必须重读。shall 这一用法的否定形式shall not 表示“禁止”或“不得”。例如:(see note)USTB刘志伟-UIBEP 版权所有Some features of Biz ContractWhereas 等古体词 为体现合同文本行为正
