Essential Features of Contract

According to Ukrainian law contracts must always be made in the form of duly signed documents containing the terms of an agreement between two firms or associations called counterparts (or parties).

In international trade contracts of sale, contracts for construction work (very often for the delivery, erection and commissioning of the equipment for industrial enterprises) and lease are most frequent among a variety of basic deals. Contracts of sale include turnkey contracts and large-scale contracts on a compensation basis. There may also be barter deals and сompensatory deals.

A written contract of sale is made out in the form of a document signed both by the Buуегs and the Sellers.

When there is no necessity of introducing special terms and conditions into the contract of sale, our associations use standard forms of contracts containing the following clauses (articles):

1. Naming (definition) of the Parties

2. Subject of the contract and volume of delivery

3. Prices and the total value (amount) of the contract (including terms of delivery)

4. Time (dates) of delivery

5. Terms of payment

6. Transportation (= carriage) of goods (packing and marking, ship­ment)

7. The Sellers' guarantees (the quality of the goods)

8. Sanctions and compensation for damage.

9.Insurance

I0. Force majeure circumstances

11. Arbitration

12. General provisions

In the case of a contract for sophisticated machinery and equipment there may be other clauses: (technical conditions, test and inspection conditions, requirements to technical documentation, supervision of erection and putting the machinery into operation (commissioning), and sending specialists for the purpose, training of the Buyers' specialists, the Sellers' obligations for technical servicing and the like. These clauses may be included in the contract itself or in the Appendices to the contract which are an integral part of it. Here are some of the items which are part and parcel of any contract:

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.

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 prices, are not subject to change in the cour­se of the fulfillment of the contract. Fixed price — is the price governing in the market on the day of delivery or for a given period. Sliding prices are quoted for machinery and equipment which require a long period of delivery.