Legal Issues Relating to International Sales Contracts, Dealings and Transactions

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Incoterms refer to a series of commercial terms that help personnel to communicate tasks, costs and ideas between different people involved in the transportation and delivery of various types of products. It is important to know the meaning of the different terms and the party, place, date and time to deal with. Example, which party will handles insurance and permits when the transport of goods from one country to another country, which party will get bared the costs and risks from place to place. There are numbers of mode of transport such as Carriage and insurance paid to (CIP), Delivery at terminal (DAT), Cost, Insurance and Freight (CIF), Free on Board (FOB). For China, most of the organizations will use the incoterm that specify the location and delivery information for specific goods. DDP is the most common term used by China organization which defined as deliver duty paid. DDP term used by China organization because the obligations always place on the seller who is the exporter from Malaysia rather than buyer who receive the product in China. This was benefit to China organization, because exporter is responsibility on the cost of transport and insurance, the risk is higher and anything happen that damage the goods and services, China have the right to sue the seller/exporter. This is an advantage for Malaysia as an exporter because Malaysia exporters bare the risk and high cost to export the goods to China. If anything happen or delay, China applicable to sue Malaysia exporter.

For the International Sale of Good Contracts, there are many acts that enforce the parties to follow. This convention applies to contracts of sale of goods between parties whose places of business when they are in different states. The fact that the parties have their places of business in different states is to be disregarded whenever this fact does not appear either from the contract or from any dealings. When the parties receive payment and another party receives the receipt, the offer becomes effective according to the law Article 15. The seller must deliver the goods that fixed from the contract, except where the parties have agreed. According to Article 45, if the seller fails to perform any of his obligations under the contract, the buyer can exercise the right to claim damages as provided in articles 74 to 77.

China has administrated the import of goods which broadly divided into three categories: goods banned for import, goods restricted for import and goods free for import. Malaysia exporters have to aware that the Goods banned from China because if Malaysia exporters export unnecessary goods to China might be confiscated and get sue. According to the research, the list of goods banned for import is published by the competent authority under the State Council. There are numbers of situations when import goods in China. First, banned for import where the national security or public interest are jeopardized. For example, goods such like Poison, drugs, weapon, and food that harm to human and animals are not allow. Other that those security, goods such like films, photo and other things that could do harm to China politics, economy, culture and morality is strictly prohibited. For some of the goods are restricted imports to China. There are two factors relevant: one is the state implements a quota with quantitative restrictions, and the other is the license administration system. Both factors are mainly involved in situation where it is necessary to import to China. If the goods are fall into those categories, exporter must apply for license or quota allocation in order to continue the transactions.

In short, Malaysia exporters are necessary to conduct the legal research and due diligence on trade-related matters before enter into the International Sales Contract. The comprehensive of legal issue and legal system of another country are able to minimize the legal issue that will arise during the trade transaction. Besides that, Malaysia exporters are able to save cost and minimize the confiscated risk in other country. It also would speed up the process of transactions between the parties of the contract.

References

Cao Jianmin, eds., WTO Yu Zhong Guo De Si Fa Shen Pan: WTO and Court Trial in China, at 101–102, (China, Law Press, 2001).

Li Mei Qin 2003. Singapore Journal of International & Comparative Law, China Legal system. 7pp 102-126.

Legal Vision, 2015. “What are the legal issues when exporting overseas?”, retrieved by 6 December 2015 from

Canada 2015. “Justice Laws Website”, retrieved by 6 December 2015 from http://laws-lois.justice.gc.ca/eng/acts/I-20.4/FullText.html

China Solutions, 2012. “Importing food into china: steps and strategic considerations.”, retrieved by 6 December 2015 from http://www.chinasolutionsllc.com/2012/12/importing-food-into-china/

Australia Unlimited, 2015. “Legal Issues compliance with government sanctions and regulations.”, retrieved by 6December 2015 from https://www.austrade.gov.au/Australian/Export/Guide-to-exporting/Legal-issues

The Law Donut, 2015. “Understand legal issues for exporters”, retrieved by 6December 2015 from http://www.lawdonut.co.uk/law/sales-and-marketing/importing-and-exporting/understand-legal-issues-for-exporters\

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