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1、chapter8,Inspection,Force Majeure&Private Dispute Resolution 班级：08080343X 学号：08080343X07 姓名：韩敬媛,Commodity InspectionForce MajeurePrivate DisputeResolution,Commodity Inspection,From a business point of view,it is not difficult at all to understand why a buyer wants to inspect the goods he is purchasi
2、ng.A buyer wants to make certain that the goods delivered to him are exactly the goods described by the contract he has signed with the seller.,In simple words,he wants to get his moneys worth according to the contract,which has stipulations with regard to quality,quantity,measurement,weight,packing
3、,etc.Although he can choose to waive his right of inspection,the buyers right of inspection has been widely recognized by either national laws or international conventions,such as United Nations Convention on Contract for the International Sale of a Goods(the Convention).On the other hand,a seller a
4、lso wants to inspect the goods he is selling for two reasons.First,a seller wants to control the quality of the goods so that his credibility will not be damages and the market will be developed.,Second,a seller wants to prove with an inspection document that the goods delivered have met the relevan
5、t contract terms so that he will not be responsible for any problem in the goods after delivery.We should also remember that certain import and export commodities are subject to mandatory inspection under a countrys laws and regulations and cannot be exempted from,inspection,even if the importer or
6、the exported wants to apply for an exemption,because a country has its own compulsory standards covering quality,specifications,quantity,weight,packing,labeling,and requirements for safety and hygiene.,Commodity inspection,therefore,is an indispensable part of international trade and inspection clau
7、se is an indispensable clause of a contract to protect the interests of both of a contract to protect the interests of both the buyer and the seller while cargo standards may vary enormously from country to country.,1)Place and Time of Inspection The place and time of inspection is an important item
8、 in an inspection clause.It stipulates where and when the inspection should be conducted and it is associated with the terms of delivery,the nature of the commodity and packing,and the laws or regulations of different countries.,In general,inspection authorties of different countries can entrust com
9、petent inspection organizations both at home and abroad to carry out the inspection.When the departure term(EXM)is used,it is clear that the commodity should be inspected at the factory or warehouse where the delivery is made,If arrival terms such as DDU or DDP are used,the inspection should be cond
10、ucted at the named place in the country of importation where the goods are made available to the buyer.However,for some terms such as FOB,CFR or it can be difficult or impossible to carry out the inspection right at the place of delivery of the commodity,especially for some commodities and types of
11、packing when the facilities or personnel of inspection are not available.Generally speaking,there are two places(exporting country and importing country)where inspection can be carried out and quality and quantity are the two key items to be inspection.,Any provision for inspection is normally a cer
12、tain combination of these four components.（Of course,the location for inspection within either the exporting country or the importing country can still be different,e.g,at the sellers factory or at the port of shipment.）And,the provision is linked to where the risk passes over from the seller to the
13、 buyer.,In general,there are four ways to stipulate the place and time of inspection of quality and quantity.(1)Shipping quality and quantity(2)Landed quality and quantity(3)Inspection at the port shipment and re-inspection at the port of destination,(4)Shipping quantity and landed quality2)Inspecti
14、on Agency and Certificate 1)Agency There are mainly two types of inspection agencies:state inspection agencies and private inspection companies.,Sometimes also acceptable are the inspection certificates issued by the manufactures who are the industry leaders and are actually setting the industry sta
15、ndards in their respective industries.The type of agency chosen to carry out inspection should be permitted by relevant laws that may require certain type of commodity to be inspection by a particular type of agency.,If there is no specific requirement of law,the agency should be acceptable to both
16、the buyer and the seller.2)Certificate Certificate is a general name it can be issued to include different items of inspection such as weight,quality,packing,ect.,Certificates are used to verify whether the goods are in conformity with the terms of contract.If the verification is positive,the certif
17、icates are the documents for payment.If commodities are found to be not up to the quality standard,damaged or short on weight or quantity,the consignee shall apply to the commodity inspection authorities for inspection and the issuance of an inspection certificate,and such a certificate may be neces
18、sary for refusal of goods and claim for compensation.,Most frequently used certificates are:Inspection Certificate of Quality,Weight,Quantity,OriginValue,Damaged Cargo,and Health.For commodities such as frozen meat or leather,Veterinary Inspection Certificate may be required to prove that the commod
19、ity is free from diseases of animals.,When feather or human hair is traded,Sanitary or Disinfection Inspection Certificate is required to prove that the commodity is free from harmful bacteria.It should be clearly stated in the contract what certificates are needed according to the nature of the goo
20、ds and the laws of the importing country.,3)Methods and standards of inspection Inspection methods such as sampling and standards prescribe how inspection should be carried out and how quality and quantity should be assessed.Different methods and standards will certainly produce different conclusion
21、s and results,which can have a significant implication to both the seller and the buyer.,Therefore,it is important for the two parities to agree upon the methods and standards when they conclude a deal within the limit of law they must observe.One,they can agree to describe the standards in the cont
22、ract.Two,they can choose to use the standards,which may be compulsory,of the importing country,the exporting country or even a third country.And three,international standards can be used.In fact there are quite a number a number of international or regional standards to choose from.ISO is typical or
23、ganization setting such standards.Of course,before choosing a standard,the contract parties must make sure they have sufficient understanding of the method.For one contract,only one method and one standard should be used to ensure consistency in inspection.,4)Re-inspectionIf re-inspection is permitt
24、ed by the contract,the time and place of re-inspection should be set out clearly,The choice of the time and place is largely related to the nature of commodity.,With regard to time,re-inspection can be conducted a specified number of days after the ships arrival at the port of destination.This metho
25、d starts to count the number of days allowed for re-inspection once the ship arrives at the port of destination regardless of whether the goods have been discharged.Apparently,it is unfavorable to the buyer in case the port is congested and unloading cannot start soon after the ships arrival.,Or re-
26、inspection can be conducted a specified number of days after the discharge of goods.This methods is favorable to the buyer since it starts to count the number of days allowed for re-inspection only when the goods have been discharged from the carrying vessel.,When it is allowed in the contract,re-in
27、spection must be carried out within a time limit,usually 30-180 days after discharge or ships arrival,which should be set according to the nature of commodity and the unloading facilities at the port of destination.,If agricultural produces and perishables are to be re-inspected,the time limit shoul
28、d be short for obvious reasons.For commodities such as chemicals and minerals,the time limit can be longer.For electric appliances and complete plant,the time limit should be even longer because installation and testing need more time.In such a case,a time limit for a preliminary inspection should b
29、e set.,When the port is normally congested and unloading may be delayed.The re-inspection time limit should be long enough,particularly when the time limit starts as soon as the carrying vessel arrives at the port of destination.With regard to the place of re-inspection,there are several alternative
30、s:on the dock,in bond(before paying Customs duty),final destination,and buyers business premises.,The choice of the place of re-inspection depends mainly on the nature of the commodity.Some commodities can be re-inspected right on the dock while some other commodities can only be re-inspected at the
31、 buyers business premises.,5)Receipt and acceptance In business communication,it is essential to say what you really want to say.In commodity inspection and the expression of your intention to take or to reject the goods,it is very important to use correctly the words receipt and acceptance.,Receipt
32、 means that the goods have come into the control of the buyer without regard to ownership or to agreement to any aspect of the goods.Acceptance,however,means that the buyer has the control of the goods with consent regarding the goods delivered.Receipt does not mean acceptance and acceptance means m
33、ore than receipt.,The buyer in particular should use these two words with care regarding his obligations to the goods.Acceptance generally can be made by:express statement of acceptance,buyers disposal of goods against sellers ownership,or giving no rejection after a reasonable time.If a buyer does
34、not intend to accept the goods he has received,he should give a clear rejection within a reasonable time and should not dispose the goods against the sellers ownership.,6)Claim When one party to a contract fails to fulfill his obligations and causes the other party financial losses,the latter would
35、demand the former to compensate him for the losses.This demand is called a claim.For a moderate contract of general merchandise,a discrepancy and claim clause is often included.In case the goods delivered are inconsistent with the contract stipulations for quantity,quality.,Packaging,etc,the buyer s
36、hould make a claim against the seller within the time limit of re-inspection and claim with the support of a survey report issued by a surveyor accepted by the seller.For a contract covering a huge shipment of goods or high value equipment such as a complete plant,a penalty clause may also be includ
37、ed and quoted when one party fails to implement the contract such as non-delivery,delayed delivery,etc.,A penalty is often a certain percentage of the total contract value,but paying the penalty does not mean that the contract can be avoided.In other words,the party that has failed to implement the
38、contract must carry out his contract obligations in spite of his payment of the penalty.,Force Majeure,Force majeure is a common clause in contracts which essentially frees one or both parties from libability or obligation when an extraordinary event or circumstance beyond the control of the parties
39、 prevents one or both parties from fulfilling their obligations under the contract.,1,1)A force majeure event should have the following features:Externality Unforeseeability Unavoidability,2,3,2)consequences of force majeuretermination of contractPostponement of contract3)points to remember when dra
40、fting the clause(1)determine the scopeThere are basically three ways to set the scope:,General stipulation:Specific listing:Specific listing plus general stipulation:,1,2,3,(2)specify the consequences(3)Designate the agency to issue certificate(4)Set the time limit of notice to the other contractor,
41、4)points to remember when quoting the clause(1)Decide if an accident is within the scope according to the contract terms(2)Notify the other contractor as soon as possible(3)Supply the certificate issued by the correct agency,Private Dispute Resolution,Private dispute resolution refers to the settlem
42、ent of dispute privately instead of by litigation.Very often litigation is unsatisfactory to one or both parties and it is frequently better to resolve disputes privately.Ian fact 98%of all civil lawsuits never make it to trial.Dispute resolution resolves issues 85%of the time.Private dispute resolu
43、tion can save significant expense and time.,1）Arbitration(1)Arbitration defined Arbitration is the most traditional form of private dispute resolution.It is a method of having a dispute between two or more parties resolved by impartial persons called arbitrators who are knowledgeable in the subject
44、matters of dispute.It is often administered by a private organization that maintains lists of available arbitrtors and provides rules under which the arbitration will be conducted.,(2)Advantages of arbitration Arbitration is also noted for its neutrality.In arbitral proceedings,parties can place the
45、mselves on an equal footing in first key respects:1)place of arbitration；2）language used;3)procedures or rules of law applied；4）nationality；5）legal representation.,(3)arbitration case flowSubmit dispute to arbitration:Appoint arbitrators:Hear a case:Issue an award:,(4)effects of arbitration An arbit
46、ration award is subject to review by a court only on a very limited bosis.If one party refuses to obey the award,the other can ask a court to enforce the implementation of the award.According to the laws of some countries,a law suit against the award is allowed.Then,there must be a time limit to fil
47、e the suit.,（5)fees Fees can be borne by the losing party of the dispute,can be divided between the two parties or can be paid according to the award.（6)arbitration clauseAgreement has the following functions:,It embodies the agreement of both parties that,if any dispute arises with regard to the ob
48、ligations which one party undertaken to the other,such a dispute shall be settled by a tribunal of their own constitution.It may exclude the court from having jurisdiction over the dispute.It gives jurisdiction to the arbitrator or an arbitration organization,which should have set of rules with rega
49、rd to the arbitration by that organization.,2)mediation In the business world today,commercial mediation has become more popular.Mediation is an informal,voluntary process in which an impartial person,trained in facilitation and negotiation techniques,helps the parties reach a mutually acceptable re
50、solution.What distinguishes mediation from other forms of dispute resolution-principally,arbitration and litigation-is that the mediator does not have the authority to make a binding decision or award but rather works with the parties to create their own solution.,The emphasis is on fashioning a sol
