Delivery terms in sales of goods contracts

Delivery terms are an indispensable part of a sales of goods contract. This clause plays a decisive role in determining the responsibilities of the parties involved and ensuring the smooth implementation of the contract. Developing clear and detailed delivery terms helps minimize disputes and misunderstandings, while protecting the interests of both the seller and the buyer. This article will analyze in detail the elements that make up delivery terms for your reference.

The importance of delivery terms

In a sales contract, delivery terms are the basis for determining the time of transfer of ownership and risk of the goods. This directly affects the payment and related obligations of the parties. This is the basis for resolving disputes if they arise during contract implementation.

For foreign trade transactions, delivery terms become even more complicated and important. Relating to regulations on import and export, international transportation and cargo insurance. Understanding and properly applying international delivery conditions such as Incoterms helps parties avoid unnecessary risks.

In a simple contract form for individuals, the delivery terms may include only basic information. However, for large or complex transactions, the content of this clause needs to be expanded and detailed. This helps avoid misunderstandings and disputes that may occur during contract implementation.

Detailed content of delivery terms

Delivery time

A clear agreement on delivery time helps the parties be proactive in production and business plans and avoid unnecessary disputes. The parties can agree to deliver goods on a specific date, within a certain period of time, or in batches with a specified quantity and time.

The parties need to pay attention to the seller’s production and supply capabilities and the buyer’s usage needs. In case of batch delivery, it is necessary to clearly specify the quantity and time for each batch. This clause should also cover force majeure circumstances that may affect delivery times and how delays will be handled.

Violation of delivery times can lead to serious legal consequences. The violating party may be subject to sanctions such as fines, compensation for damages or termination of the contract. Therefore, the parties need to be careful when committing to delivery time and have a backup plan to ensure the correct implementation of the commitment.

Legal basis: Article 37 of the Commercial Law 2005.

Delivery location

A clear agreement on the delivery location helps the parties determine the responsibilities and costs related to the transportation and delivery of goods. The parties may agree to deliver the goods at the seller’s location, the buyer’s location, or an intermediate location.

Accurate determination of the delivery location is important in determining the time of transfer of risk and ownership of the goods. Normally, risk will be transferred from the seller to the buyer at the agreed delivery location. Therefore, the parties need to consider carefully when choosing a delivery location to ensure their benefits.

Legal basis: Article 35 of the  Commercial Law 2005.

Delivery method

A clear agreement on the delivery method helps the parties determine responsibilities, costs and risks related to the process of transporting and delivering goods.

In a contract for the sale of goods, the method of delivery can be specified in many different ways. Each delivery method will have its own advantages and limitations, affecting costs, time and risks during the delivery process.

When drafting terms on delivery methods, the parties need to pay attention to factors such as type of goods, transportation distance, requirements for goods preservation, and ability to control the transportation process. This clause should also clearly stipulate the packaging and preservation of goods during transportation and the responsibilities of each party in loading, unloading, and delivering goods.

Choosing the appropriate delivery method can help optimize costs and minimize risks during contract implementation. For example, for high-value or perishable goods, the parties may choose a faster and safer method of transportation, although the cost may be higher.

Responsibilities of the parties during the delivery process

This regulation clearly defines the obligations and rights of the seller and buyer during the goods transfer process, thereby limiting risks and disputes that may arise. For the seller, responsibilities may include preparing goods of the right type, quantity, and quality as agreed, packaging the goods appropriately, providing relevant documents, and notifying the buyer about delivery.

The buyer is responsible for preparing the delivery location, checking the goods upon receipt, and paying on time. The parties need to pay attention to factors such as type of goods, delivery method, and risks that may arise during transportation. This clause should also clearly stipulate what to do in case an incident occurs, such as goods being damaged or lost during transportation.

Legal issues related to delivery terms

Handling violations of delivery terms

Violation of delivery terms in a goods purchase and sale contract is an act of failure to comply with commitments regarding time, place or method of delivery. This behavior can come from the seller or the buyer, affecting the contract implementation process.

Violations of delivery terms may be subject to sanctions such as forced performance of the contract, fines for violations, compensation for damages, temporary suspension of contract performance, suspension of contract performance or contract cancellation. The level of sanctions applied depends on the nature and extent of the violation and actual damages incurred. The violating party is responsible for remedying the consequences and compensating for damages to the violated party.

In case the seller violates the delivery deadline, the buyer has the right to a reasonable extension for the seller to deliver the goods. If this period expires and the seller still does not deliver the goods, the buyer can unilaterally suspend the performance of the contract or cancel the contract. Similarly, if the buyer violates the delivery deadline, the seller has the right to sell the goods to someone else after giving reasonable notice to the buyer.

For violations of the delivery location, the violating party must bear all risks and costs arising from delivery to the wrong location. The aggrieved party has the right to refuse to receive the goods and request delivery to the agreed location. In this case, the delivery time is calculated from the time the goods arrive at the agreed delivery location.

Resolve disputes related to delivery

Vietnamese law regulates methods of resolving disputes in the commercial field, including negotiation, conciliation, commercial arbitration and court. For delivery-related disputes, negotiation and mediation should be prioritized to maintain business relationships. If an agreement cannot be reached, the parties can choose arbitration or court depending on the dispute resolution provisions in the contract.

During the dispute resolution process, the parties need to prepare sufficient evidence to prove the other party’s performance of obligations or violations. Important documents include contracts, delivery records, transport documents, invoices, and correspondence between the parties.

For disputes in international goods sales contracts, the parties often choose international commercial arbitration. The parties must have an arbitration agreement in order for the dispute to be resolved by arbitration.

In case a dispute is brought to court, determining which court has jurisdiction is very important. For domestic disputes, the competent court is usually the court where the defendant resides or is headquartered. For international disputes, the parties need to carefully consider the court selection clause in the contract to avoid non-recognition and enforcement of judgments in foreign countries.

Consulting services for drafting sales of goods contracts

Careful drafting helps minimize risks and disputes during contract implementation. To ensure maximum rights and benefits, customers can ask for expert support during the purchase and sale of goods. At Long Phan provides the following services:

• Consulting on drafting delivery terms, helping to avoid future legal risks.
• Support negotiating delivery terms with partners.
• Evaluate potential risks in commodity trading transactions and propose measures to manage risks
• Review the draft contract, amend the terms if necessary to ensure the contract fully meets the requirements of the parties
• Assist customers in resolving disputes related to delivery.
• Provide support in resolving issues that arise after the contract has been signed.

Delivery terms play a decisive role in sales of goods contracts. Careful drafting helps minimize risks and disputes during contract implementation. To ensure your rights, customers should carefully study the relevant legal regulations. Long Phan provides consulting services for drafting professional delivery terms, suitable for each type of contract, from simple to foreign trade.  Please contact Long Phan immediately via hotline: 0906.735.386 for support.