Detailed Analysis of a Sales Contract: Law 404 Assignment, Spring 2019

This document presents an analysis of a sales contract between ABC Chicken Grower & Exporter Co. Ltd and XYZ Chicken Importer Co. Ltd. The contract outlines the sale of chicken, specifying details such as the origin, packaging, and age of the chickens. It defines the quantity as 100,000 kg, with a delivery timeframe between March 26, 2017, and April 2, 2017. The contract details quality requirements, including health certificates, and sets the price based on international market rates, carriage costs, insurance, and seller's commission. Payment terms are established through an irrevocable letter of credit. The contract also specifies delivery procedures, inspection protocols, insurance coverage, applicable law (International Court of Arbitration), and confidentiality clauses. Banking details for both the buyer and seller are provided, along with signatures and initials of representatives from both parties, confirming their agreement to the terms and conditions.

ABC Chicken Growers & Exporter Co. Ltd
TRNC.
CONTRACT OF SALES
Between: ABC Chicken Grower & Exporter Co. ltd
(The Seller / Sellers) TRNC.
Representatives: Henry Atkinson
Mathew Falkner
Tina Anderson
And: XYZ Chicken importer Co. ltd
(The Buyer / Buyers) Beirut, Lebanon.
Representatives: Barrack Lewis
George Parker
Uma Shanknar
(From here onwards the buyer and sellers in combination may be referred to as “parties” and in
case any mentioning anyone of them then “party” may be used as reference). The parties are
expected to adhere to the following clause to avoid penalties and fine along with cancellation of
contract.
CLAUSE 1: Sale of Goods Act
1.1. The seller has the full ownership to the goods and the title of ownership is without any
restriction hence, giving the party the right to sale the goods to the buyer.
1.2. The buyer will have clear title of ownership to the goods even if the seller has faulty title to
ownership and fails to disclose the same before entering into the contract.
CLAUSE 2: Goods
2.1 It is strictly mentioned that the chicken shall be grown in TRNC and shall be grown without
chemical and pesticide.

2.2 Chicken shall be packed in foam boxes with 12 per chicken and must be snap frozen.
2.3 The chicken shall be aged between 42 to 60 days.
CLAUSE 3: Quantity
3.1 With average weight of each chicken between 1.5 kg to 2 kg the total quantity of chicken
shall be 100,000 kg.
3.2 The entire shipment of 100,000 kg of Chicken shall be delivered and accepted in one
shipment by the seller and the buyer respectively.
CLAUSE 4: Time Period
4.1 The goods shall not be delivered later than 02/04/2017 and not before 26/03/2017 and the
chicken must be delivered within 7 days from slaughtering.
CLAUSE 5: Quality
5.1 Appropriate authority must provide health certificate for the chicken to justify the guarantee
given by the seller about the quality of chicken.
CLAUSE 6: Price
6.1 The Chicken price in international market is between US$ 4,000 and 4,500 per ton (the total
amount of contract fixed at 540,000 USD), cost of carrying is $300 per ton (the total carriage
price at 36,000 USD) with insurance cost @ 2% and seller commission @ 10%.
6.2 The parties have agreed to set the price by using the above unit price after the buyer decides
to nominate a discharge port (CIF).
Seller’s Signature Buyer’s Signature & initial
CLAUSE 7: Payment and Banking

7.1.1 By an irrevocable, non-transferable, documentary letter of credit payable 100% at sight at
buyer’s destination port against shipping document.
7.2 The banking procedures are as follows:
7.2.1 Buyer and seller discuss and negotiate final terms and conditions on sales and purchase
agreement.
7.2.2 Buyer confirms draft contract for the seller’s review
7.2.3 Every page shall have seller’s signature and if signature is not possible then at least there
shall be initial of seller in every page.
7.2.4 The buyer shall sign and return the document after the same is sent by the seller.
7.2.5 Six hard copies shall be made and signed by buyer and shall send mail to the seller. The
seller after signing all six of the hard copies must sent back 3 hard copies to the buyer.
7.2.6 The proof of product (POP) shall be issued by the bank of seller to bank of buyer.
The chicken shall be delivered to the address of the buyer as per the terms and conditions and
necessary document shall be furnished.
CLAUSE 8: Delivery
8.1 Shipping company of seller’s choice shall be accepted for delivery of chicken.
8.2 Fixed price as per clause 6 is inclusive shipping costs.
8.3 Port of Beirut is the selected port.
8.4 The delivery time as given in clause 4 must be followed.
CLAUSE 9: Inspection of quality and health
9.1 Independent surveyor shall be appointed in both sides of the port to check the quantity and
quality of cargo.
9.2 The health and quality of the chicken shall be inspected by an independent health inspector
once the shipment reached the port.
9.3 The amount to be paid to the seller shall be determined on the basis of quantity determined in
the above.
Seller’s Signature & initials Buyer’s signature & initials

CLAUSE 10: Insurance
10.1 Best applicable protection to the goods of the buyer shall be provide by taking best
possible insurance for the goods to be delivered to the buyer.
10.2 The following losses shall be covered for damages (2%) as per clause B.
 Fire explosion
 Grounding.
 Loss due to sinking of the vessel.
 Washing overboard
 Loss while loading or unloading.
 Loss and destruction of goods due to natural disaster.
 Loss due to Earthquake.
CLAUSE 11: Applicable law
11.1 Laws of the international court of Arbitration shall be followed to comply with the
contract law.
CLAUSE 12: Confidentiality
12.1 The agreement is strictly confidential and the confidentiality shall be maintained by the
parties for at least five years from the date of the contract.
Seller’s Signature & initials Buyer’s Signature & initials
The parties hereby agree to respect the mentioned contract of sales, accepted signed sealed
as below on 20/03/2017
Seller’s Representative Buyer’s Representative
Full Name & Signature Full Name & Signature
___________________ ___________________

CLAUSE 16 – Buyer’s Banking Details
Bank Name: Beirut Bank
Account Name: XYZ Chicken importer Co. Ltd
Account Number: 000001444000
Swift Code: 0002558800
CLAUSE 17 – Seller’s Nominated Bank
Bank Name: Extreme Bank
Account Name: ABC Chicken Grower & Exporter Co. Ltd
Swift Code: 0022577888
Account Number: 11122255588888