Business negotiation

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Business negotiation and conclusion of contract
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Main contents of this chapter
Section 1 Forms and Contents of Trade
Negotiation Section 2General Procedures of
business Negotiation Section 3Time and
conditions of contract formation Section 4Forms
and Contents of contract
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Section 1 Forms and Contents of business
Negotiation

• 1.1 Forms of business Negotiation
• in verbal forms by Face to Face(at international
  fairs etc) or by Telephone.
• in writingby Letters, Fax, E-mail or MSN.

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• 1.2 Contents of business negotiation
• 1.2.1 Major Terms and Conditions
• description of the goods, quality, quantity,
  packing, price, delivery, payment, etc.
• 1.2.2 General Terms and Conditions

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Section 2 General Procedures of Business
Negotiation
Business Negotiation usually includes four stages
Inquiry, Offer, Counteroffer and Acceptance,
among which offer and acceptance are the two
required factors.

• 2.1 Inquiry / Enquiry
• Invitation to make offers
• The inquiry is not binding on the seller or the
  buyer. (without engagement.)

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• 2.2 Offer
• 2.2.1 Concept of Offer

Article 14 (CISG) (1) A proposal for
concluding a contract addressed to one or more
specific persons constitutes an offer if it is
sufficiently definite and indicates the intention
of the offeror to be bound in case of acceptance.
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2.2.2 Constitutions of an effective
offer 1.Offeree must be (a) specific person(s)
Relevant laws about the nature of advertisements

• Article 14 (CISG) (2)
• A proposal other than one addressed to one or
  more specific persons is to be considered merely
  as an invitation to make offers, unless the
  contrary is clearly indicated by the person
  making the proposal.

• ??????15?????????????????,?????

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• 2. The content of an offer must be sufficiently
  definite.
• Article 14 (CISG) A proposal is sufficiently
  definite if it indicates the goods and expressly
  or implicitly fixes or makes provision for
  determining the quantity and the price.

• In trade practice, the main trade terms should be
  completely denoted Name of Commodity
  Quality Quantity Packing Price
  Delivery Payment.

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• 3. The offeror intends, without reservation, to
  enter into a contract with the offeree if all the
  terms offered are accepted by the offeree.(to be
  final).
• 4.An offer becomes valid when it reaches the
  offeree. Before the offer reaches the
  offeree, the offeree cant accept the offer even
  though he has known the content of the
  offer.(CISG Article 15)

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• 2.2.3 Time of Validity of an Offer
• 1. To stipulate clearly the time of validity
• 1)Offer subject to reply here by June 15th.
• 2)Offer valid for a period of time .
• About the commencement when stipulating a period
  of time

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• ????H?????????,4?2????????????????????????,
  ?????????????????????,???????????????????????????1
  5????????????????,?????????????,????????????
• 4?4??????????,4?17????????????????????,?
  ???????????????????4?19???H?????H????4?18?????????
  ???,???????????????????????,??????????,??H????????
  ????????????????

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• 2. Not to stipulate the time of validity
• Such offers hold valid within a reasonable time.
• 2.2.4 The moment when an Offer becomes effective
• Different interpretations concerning this problem
  in different countries
• Dispatch Theory (USA)
• Arrival Theory(Germany, UN, China)

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•  Significance of stipulating time that an offer
  begins to function (1) It concerns if an
  offeree can accept it (2) It concerns when an
  offeror can withdraw or modify an offer

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• 2.2.5 Withdrawal and Revocation of an offer(1)
  Withdrawal of an offer
• An offer, even if it is irrevocable, may be
  withdrawn if the withdrawal reaches the offeree
  before or at the same time as the offer. (CISG15)

• An offer can be withdrawn only when the offer is
  made by cable or letter. An offer made by FAX,
  e-mail or MSN cant be withdrawn.

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• (2) Revocation of an offer
• different interpretations concerning revocation
  of an offer ? An offer can be revoked or
  modified at any time (even if it has the validity
  time ) before the offeree accepts it. (USA) ?An
  offer cant be revoked or modified within its
  validity. (Germany)

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ltCISGgt Article 16(1) Until a contract is
concluded an offer may be revoked if the
revocation reaches the offeree before he has
dispatched an acceptance. (2) However, an offer
cannot be revoked (a) if it indicates,
whether by stating a fixed time for acceptance or
otherwise, that it is irrevocable or (b) if
it was reasonable for the offeree to rely on the
offer as being irrevocable and the offeree has
acted in reliance on the offer.
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• ?????????????5?3????????????????????????????????
  ?????????????????????????????,?????5?15??????????,
  ?????5?31???????5?5???????????????????????,??5?15?
  ??????????5?20????????????,?????????5?5???????????
  ?????????????????5?31??,?????????????????5?5????,?
  ?????????5?20???,??????????????????

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• 2.2.6 Termination of an offer (1) An offer is
  revoked before it is accepted (2) An offer
  exceeds the time limit (3) An offer is
  rejected or counter-offered (4) An
  offer terminates owing to force majeure (5)
  Special events occur such as legal persons
  bankruptcy.

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• 2.3 Counter Offer
• Your offer price too high, counter offer
  USD350/MT shipment August reply 10th.
• The alterations proposed by the offeree must be
  material.

ltCISGgt Article 19 (3) Additional or different
terms relating to the price, payment, quality and
quantity of the goods, place and time of
delivery, extent of one party's liability to the
other or the settlement of disputes are
considered to alter the terms of the offer
materially.
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• ???????????A????????????,???????????????,??????
  ???,???????????????????,????????????????????????
  ?,????A????????????????????????????????,??????????
  ?,?A?????????,???????????,????????????????????,??
  ?????

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• 2.4 Acceptance
• 2.4.1 Definition of an acceptance
• 2.4.2 The constitution of an Acceptance
• ( 1) An acceptance must be made by an
  offeree.
• ??????????A,???????????????,??6?8??A?????6?15????
  ??12???????B???????????????,???????A?????8??????
  ?B????????????????,?????????????,?????????B??,???
  B???????????????,????????????????,???????????
  ???????????????

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• (2) An acceptance should be made in the form of a
  statement or any other conduct.
• (3) An acceptance must conform to the conditions
  in the offer.

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• (4) Acceptance must be made within the validity
  of the offer.

•  ltCISGgtarticle 20(2)
• Official holidays or non-business days occurring
  during the period for acceptance are included in
  calculating the period. However, if a notice of
  acceptance cannot be delivered at the address of
  the offeror on the last day of the period because
  that day falls on an official holiday or a
  non-business day at the place of business of the
  offeror, the period is extended until the first
  business day which follows.

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• 2.4.3 The moment an acceptance begins to function
• Despatch theory
• Arrival theory
• acceptance is effective at the moment the act is
  performed.
• 2.4.4 Late Acceptance
• Late acceptance usually does not have legal force
  and therefore is not binding upon the offeror.
• Two exceptions (from ltCISGgt article 21)

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Whether a late acceptance is effective legally
depends upon the offerors opinion.

• Late acceptance has legal force if the offeror
  informs the offeree to this effect verbally or in
  writing without any delay.

• Late acceptance has legal force if the letter or
  any other written document with acceptance shows
  that it can reach the offeror under normal
  situation, unless the offeror informs the offeree
  without delay that the offer has lapsed.

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2.4.5 Withdrawal of an acceptance ? An
acceptance can be withdrawn if the notice of
withdrawal reaches the offeror on or before the
moment that the acceptance should take effect.
(ltCISGgt article 22)
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Procedures of Business Negotiation
?? Inquiry
?? Offer
????
??????
?? Counter Offer
?? Acceptance
???
No
Yes
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Section 3Time and conditions of contract
formation

• 3.1 Time of contract formation
• ltCISGgt Article 23 A contract is concluded at
  the moment when an acceptance of an offer becomes
  effective.
• ??????????
• 3.2 conditions of contract formation

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Section 4Forms and Contents of the contract4.1
Forms of the contract

• ltCISGgtArticle 11
• A contract of sale need not be concluded in or
  evidenced by writing and is not subject to any
  other requirement as to form. It may be proved by
  any means, including witnesses.

• ????10??????????,??????????????????????????????
  ??,????????????????????,????????

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• ???????????????????????????,???????????,???????,?
  ??????????????????????,????2001?12??????????,???20
  02?1?,??????????????????????????,?????????????????
  ??????????????????????
• Inwriting(Contractconfimationagreement)
• In oral form
• Other forms

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• ????????????????????,???????,????????????,???????
  ???????????????????????????????,?????????????,????
  ????????????????????,???????????,?????????????????
  ??????????????
• 4.2 Contents of the contract
• 1?Preamble
• 2?Body
• 3?Witness Clause

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Assignment

• 1.Do the exercises of this chapter .
• 2. Read the relative Clauses of CISG.
• 3. ??????????