Compensation Trade Contract(补偿贸易合同)
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Compensation Trade Contract(补偿贸易合同)
This contract is hereby made and entered into between ________Co.(hereinafter referred to as Patty A)and________Co.(hereinafter referred to as Praty B)this________day of________,________,in________,China, adhering on the principle of equality and mutual benefit and through amicable consultation.
Party A: ________Company, China.
Address: ________
Tel: ________
Telex: ________
Party B: ________ Company, ________
Address: ________
Tel: ________
Telex: ________
Article 1 Introduction
a) Party B shall provide Party A with ________machines of model ________to be used in production.Along with them shall also be provided various kinds of supporting machinery,accessories and spare parts it needs,and the various kinds of measuring and testing instruments required in the course of production,The specific models, names,specifications, quantity,unit prices,packing requirements and the deadline for delivery shall be specified in an additional contract to be made between the both parties,which will serve as a integral part of the contract.
b) The total cost of the entire machinery and its supporting equipment shall be paid to Party B of the part of the products and/or other commodities produced by Party A with the machinery supplied by Party B.It may also be paid to Party B of (a certain product)turned ort by .(This practice is hereinafter referred to as a make-up payment).The specific names,quantity and unit price of the products to be delivered as make-up payment,and the deadline for delinery,are to be specified in an additional contract between the two parties on products-supplying as make - up payment,which shall be the integral part of the contract.The two additional contracts mentioned above may be merged as one called buy - and sell contract on compensation trade.
Article 2 Terma of Payment
The two parties shall open a L/C in favour of each other.I.e.Party A shall open,at regular intervals,long-term L/C in favour of Party B to pay in install ments the entire cost of the machinery and its support sight L/C in favour of {arty A as a payment for the cost of the products to be delivered by Party A.Party A shall pay for the total cost of the machinery and its supporting equipment with the sum of money which Party B shall pay the products to be delivered by Party A as a make - up payment.In case the money to be paid by pairy B is not enough to cover the value of the long - term L/C is determined by the at - siggt L/C opened by Party B and its down payment as stipulated in the contract .Party B grarantees to fulfil what is required of it to do as mentioned herein.
Article 3Deadline for Payment
Party A shall pay the total cost of the machinery and its supporting equipment supplied by Party B by delivering the products it produces to Party B as a make - rp payment on a month - to - month basis , and pay is off within a preriod of ________ years and ________months.The payment shall start approximately ________ months after the first delivery of the machinery is made .In principle,the sum to be paid per month shall be ________ percent of the total amount due to be paid for the machinery Party A can make its payment ahead of schedule with a notice given to Party B ________ months in advance.During the compensation period ,Party B shall open a L/C in favour of Party B,covering the total amount , at sight , irrevocable , divisible and assignable ,in accordance with the relevant provisions in the buy - and - sell contract on compensation trade.
Article 4 Currency for Pricing
Products provided by either party shall be priced in terms of________.All the items supplied by Party B,including machinery ,the required apparatus,accessories and spare parts shall be priced directly in terms of ________ above mentioned ;while the products provided by Party A as a make - up payment for the machinery supplied by Party B shall be first priced in terms of RMB as orher similar exports at the time the contract is made and then the prices in RMB shall be turned into those in ________ above mentioned according to the current exchange rate at the time.
Article 5 Interest Rate
Party A shall pay the interest on its long - term L/C and the down payment of Party B.The annual interest rate is agreed upon at ________%.
Article 6 Technical Service
After arrival at the destination port,the machinery shall be assembled by Party A.When Party A believes it is necessary ,Party B shall send its technicians to provide on-the-spot instructions and other required technical assistance during the course of assembling. Party B shall be liable for the losses incurred in the coures fo assembling as a result of technical default of its prat.
After approval by both parties, Party B shall send a group of technicians to China to faciliate the completion of the project. The cost incurred in China shall be borne by Party B.
Article 7 Additional Equipment
In the course of implementing the contract if it is foun necessary that ,in addition to the machinery and accessories already listed in the provisions, some additional items of the equipment and measuring and testing apparatus are needed, an additional order shall be agreed upon through negotiation .The items thus added shall be incorporated in the contract.
Article 8 Insurance
After being delivered in China, the machinery and its supporting equipment shall be insured by Party B. The unforeseen losses in connection with the equipment shall be indemnified for by the Insurance Company first to the insurer (Party B) in case the equepment has already been paid off for and thus transferred into Party A's possession.Then a proportional part of the sum paid by the Insurance Company shall be allotted to Party A to cover the payment Party A has already made for the items of equipment involved the losses.
Article 9 Liability for Breach
Either party shall be liable for a breach of contract in accordance with the provisions in the contract and shall indemnify for all the losses thus if Party B should fail to make purchase of the products to be delivered by Party A as make - up payment , or Party A should fail to deliver the products for compensation . In such case, the breaching party shall pay to the other a sum as a fine , which shall account for ________ % of the total cost the products in question.
Article 10 Performance Guarantee
To guarantee the implementation of the contract, each party shall submit to the other a performance guarantee issued by a bank agreed by both parties. The guarantee bank of Party A is Bank of China, while that of Party B is ________ Bank.
Article 11 Amendment of the Contract
When the contract needs to be amended in certain particular cases, the amendment can be effected only after it is agreed upon by both parties through consultation.
Article 12 Force Majeure
Either party shall not be held resposible for failure or delay to perform all or any part of the contract due to flood, fire earthquake , drought , war or any other events which coule not be predicted at the time of the conclusion of the contract, and could not be controlled, avoided or overcome by the parties. However,the party effected by the Event of Force Majeure shall inform the other party of its occurrence in written as soon as possible and thereafter send a certificate of the Event issued by the relevant authority to the other party but no later than 15days after its occurrence.
In the Event of Force Majeure last over 120 days, both parties shall negotiate the performance or the termination of the contract.
Article 13 Arbitration
All disputes arising from the performance of this contract should be settled through friendly negotiations. Should no settlement be reached through engotiation, the case shall then be submitted for arbitration to the China International Economic and Trade Arbitration Commission(Beijing) and the rules of this Commission shall be applied. The Arbitration fee shall be borne by the losing party unless otherwise awarded by the arbitration organization.
In the Event of Force Majeure last over 120 days, both parties shall negotiate the performance or the termination of the contract.
Article 13 Arbitration
All disputes arising from the performance of this contract should be settled through friendly negotiations. Should no settlement be reached throuhg engotiation, the case shall then be submitted for arbitration to the China International Economic and Trade Arbitration Commission(Beijing)and the rules of this Commission shall be applied. The Arbitration fee shall be borne by the losing party unless otherwise awarded by the arbitration organization.
During the course of the arbitration, the contract shall be performed except for the part under arbitration.
Article 14 Language and Effective Date
The contract shall be written in Chinese and in English. Both languages are equally authentic. In the events of any discrepancy between the two abovementioned versions,the chinese version shall prevail.
The contract shall become effective when the contract is signed by both parties. the effective period of the contract shall be years. based on the willingness to continue the contract, both parties shall submit a application to relavant department of Chinese government for the extension of the contract or reach a new contract when the contract expires.
PartyA : (signature)on behalf of (company)
PartyB: (signature)on behalf of (company)
Witnessed by (signature)