Claims often occur on delivery dates, product quality, and product quantity. Generally speaking, buyers often file claims against sellers. Of course, it is not uncommon for buyers to fail to receive the goods on time or unreasonably refuse to pay for the goods, so there are also cases where sellers file claims against buyers. In order to facilitate the handling of such issues, buyers and sellers generally establish claim clauses when negotiating a contract, and make clear and specific provisions on the claim conditions.
(I) Objection and claim clauses
The objection clauses in international sales contracts mainly include the basis for claims, the period for claims, the method for claims, and the amount of claims.
1. Basis for claims
When a party files a claim, it must have sufficient basis for claims. The basis for claims includes two aspects: legal basis and factual basis. The former is the sales contract and the applicable law; the latter is the facts, circumstances, and written proof of the breach of contract.
2. Period for claims
According to international practice, the injured party can only file a claim within a certain period for claims, otherwise it will lose the right to claim.
3. Claim handling method and claim amount
Regarding the claim handling method and claim amount, because the consequences of breach of contract cannot be predicted in advance, usually only general and vague provisions are made in the contract. In business practice, claims may occur in different business links, and the remedies for breach of contract are varied, so it is difficult to accurately stipulate them when concluding a contract.
(II) Penalty clause
Penalty clauses are mainly applicable to delayed performance, such as delayed delivery by the seller, delayed receipt of goods by the buyer, or delayed opening of L/C. Penalty clauses generally include two contents: the amount of the penalty and the date of penalty calculation.
According to general practice, the amount of the penalty usually does not exceed 5% of the total amount of the goods. The amount of the penalty is negotiated by the buyer and seller according to the length of the breach of contract, and a maximum limit is set. For example, the contract stipulates: “If the seller fails to deliver the goods on time, and the delay is less than one week, the buyer shall charge a penalty of 0.5% of the total value of the delayed goods; if the delay is less than one week, it shall be calculated as one week; if the delay is ten weeks, in addition to requiring the seller to pay the penalty for delayed delivery, the buyer has the right to cancel the contract.”
(III) Issues that should be paid attention to when signing claims and claims settlement clauses in import contracts
Disputes and claims often occur in the process of international trade, which directly affects the economic interests of both parties to the trade. Whether the claims clauses in the contract are signed perfectly is the key to whether the injured party can successfully claim. When signing an international trade contract, the claims clauses must include:
(1) Specifying specific inspection items;
(2) Specifying the inspection standards for imported goods;
(3) Specifying the inspection location, inspection time, and inspector;
(4) Specifying the claim period, including the claim validity period and the quality assurance period.
In addition to considering the above situations, full consideration should also be given to incorporating arbitration clauses, and specifying the institution to apply for arbitration when disputes arise between the two parties to the contract.