CASE STUDY
案例
Introduction
The following case covers all the telexes exchanged between a firm in Holland (the buyer) and an import and export company of our country (the seller) for a transaction on 200 M/T of some primary product. In this transaction, the buyer raised a dispute against the seller on breach of firm offer. And the dispute was solved by costing extra RMB ￥230,000.00 from the seller.
From studying the case the students will get a general idea of all the steps involved in one deal and through discussing the case they will get to know the ways of solving some complicated matters in foreign business.
Dispute on Breach of Firm Offer 因违约引起的纠纷案
(1) 27/6/19 -- OUT:
REFER TO YOUR TLX 26. NOW WE ARE OFFERING U SUBJECT TO YOUR IMMEDIATE REPLY COMMODITY C514 200 M/TONS AT RMB ￥1,950 PER TON CIF ROTTERDAM. PAYMENT BY IRREVOCABLE SIGHT LC. PROMPT SHIPMENT.
(2) 2/7/19 -- IN:
TKS FOR YR TLX26 OF COMMODITY C514 200M/TONS. OUR FINAL BUYERS BEGINNING TO SHOW POSITIVE INTEREST. WE ARE AFRAID THAT THE NEGOTIATION WILL BE RATHER LONG. THEREFORE WE REQUEST OPTION FOR 10 DAYS OF 200 M/TONS. IF POSSIBLE INCREASE THE QUANTITY AT REDUCED PRICE. PLS REPLY, REGARDS.
(3) 3/7/19 -- OUT:
YR TLX 2 RECEIVED. WE HAVE INCREASED THE QUANTITY OF COMMODITY C514 TO 300 M/TONS. WE WL KEEP THE OFFER OPEN TILL 15/7. PLS NEGOTIATE AND REPLY SOONEST.
(4) 7/7/19 -- IN:
RE: COMMODITY C514
YR TLX 3. THANKS FOR YOUR COORPERATION.
PLS AIRMAIL 2 KILOS OF SAMPLE IMMEDIATELY.
PLS CONSIDER FURTHER PRICE REDUCTION N QUANTITY INCREASE.
REGARDS.
(5) 10/7, OUT:
RE: COMMODITY C514
WE AIRMAILED 2 KILOS OF SAMPLE TO U YESTERDAY. FOR QUANTITY 300 M/TONS AVAILABLE. BEST PRICE IS RMB ￥1,900. REPLY ASAP. REGARDS.
(6) 14/7, IN:
YR TLX 10. SAMPLE OF COMMODITY C514 STILL UNRECEIVED. SO WE REQUEST U TO PROLONG THE OPTION OF 300 M/TONS RMB ￥1,900. ESTIMATELY WE NEED ABOUT ONE WEEK TO MAKE FINAL DECISION AFTER THE ARRIVAL OF SAMPLE.
(7) 17/7, OUT:
YR TLX 14 COMMODITY C514 300M/TONS AGREE PROLONG TILL 25/7.
(8) 22/7, IN:
YR TLX 17/7. COMMODITY C514 WE ACCEPT 300 M/TONS AT RMB ￥1,900 ON CIF ROTTERDAM BASIS. PAYMENT BY IRREVOCABLE SIGHT L/C. PROMPT SHIPMENT. NET SHIPPED WEIGHTS. BESIDES USUAL SHIPPING DOCUMENTS WE REQUIRE PHYTOSANITARY CERTIFICATE, CERTIFICATE OF ORIGIN N WEIGHT LIST BASED ON WEIGHTS SHIPPED FROM CHINESE PORT. PACKING SHOULD BE SEAWORTHY BAGS.
(9) 24/7, OUT:
SORRY FOR YR TLX 22. AS WORLD MARKET FOR COMMODITY C514 CHANGED. WE REGRET GOODS ALREADY SOLD BEFORE RECEIPT OF YR TLX. BEST REGARDS.
(10)25/7, IN:
YR TLX 24. YR INFORMATION THAT 300 M/TONS C514 ALREADY SOLD UNACCEPTABLE SINCE YR TLX 17/7 PROLONGED OUR OPTION ON THIS PARCEL UNTIL TODAY 25TH JULY THEREFORE WE INSIST ON YOUR ACCEPTANCE OF OUR ORDER. WITHDRAWAL OF FIRM OPTION CONTRARY TO INTERNATIONAL BUSINESS RULE. IF SOME SMALL PRICE INCREASE IS REQUIRED WE TRY RENEGOTIATING WITH CUSTOMERS. HOWEVER WE CANNOT GUARANTEE RESULT. WE ARE EXPECTING YR REPLY.
(11)29/7 OUT:
YR TLX 25. WE HAVE REALLY SOLD OUT THE 300 M/TONS OF COMMODITY C514 OFFERED FORMERLY. WE ARE MUCH APOLOGIZING.
BUT IN SUIT YOUR REQUEST WE MADE OUR BEST ENDEAVOUR IN SECURING 200 M/TONS FROM SUPPLYING SOURCE AND NOW MAKE YOU AN OFFER ON 200 M/TONS OF C514 AT RMB ￥2,650/TON CFR EMP, SHIPMENT IN SEPTEMBER. THIS OFFER IS VALID SUBJECT REPLY HERE BEFORE 31/7.
(12)30/7, IN:
YR TLX 29 OF COMMODITY C514 IS UNACCEPTABLE. WE ARE COMPELLED TO RESERVE OUR RIGHTS ON ARBITRATION THROUGH FOREIGN TRADE ARBITRATION COMMISSION CHINA COUNCIL FOR PROMOTION INTERNATIONAL TRADE AND POSSIBLE ALSO THROUGH NETHERLAND COMMODITY TRADE ASSOCIATION FOR TECHNICAL ARBITRATIONS OR OTHER APPRICIATE AUTHORIZED ORGANIZATION. WE MUST INSIST ON EXECUTION CONTRACT AS PER OUR TIMELY ACCEPTANCE OF YOUR OFFER VIDE OUR TELEX 22/7. WE CAN AGREE THE SHIPMENT OF 300 M/TONS IN AUGUST/SEPTEMBER INSTEAD OF PROMPT SHIPMENT AS CONTRACTED. FAILING WHICH WE WILL CLAIM FOR RMB ￥232,950 ACCORDING TO YOUR INDICATION VALUE NOW RMB ￥2,650 CFR WHEREAS CONTRACTED PRICE RMB ￥1,900 CIF.
(13)2/8, OUT:
REGARDING OFFER 300 M/TONS COMMODITY C514 WHAT WE PROLONGED IN OUR TLX 17/7 TILL 25/7 IS WE AGREE PROLONG THE DURATION OF THE OFFER N NOTHING WAS SAID SUCH BEING FIRM OFFER NOR IN ANY OUR PREVIOUS TLX MENTIONING SUCH BEING FIRM OFFER. AS OUR OLD CUSTOMER YOU SHOULD KNOW THAT OFFERS SUBJECT OUR FINAL CONFIRMATION IS OUR USUAL PRACTICE. CONSIDERING OUR PAST AND FUTURE FRIENDLY TRADE RELATIONS WE DID MAKE YOU ON 29/7 FROM OUR NEW SUPPLY AN OFFER OF 200 M/TONS AT RMB ￥2,650 BUT ASTONISHED TO LEARN FROM YOUR TLX 30 RAISING QUESTION OF ARBITRATION. AFTER FURTHER RECONSIDERATION WE PREPARE QUOTING YOU PREFERENTIAL PRICE ON THIS NEW OFFER 200 M/TONS. PLS GIVE YOUR FRIENDLY OPTION THANKS.
(14)4/8, IN:
YOUR TLX 2/8 C514 REGRET DISAGREE YOUR VIEW AND REASONING BECAUSE WE HAD YOUR OFFER FOR REPLY TILL 25/7 AND REPLIED TIMELY ON 22/7 AS RECOGNIZED BY YOU. WE ARE AWFULLY SORRY HAVE TO CLAIM CORRECT EXECUTION OF CONTRACT 300 M/TONS C514 AT RMB ￥1,900 CIF FOR WHICH WE CAN ACCEPT AUGUST/SEPTEMBER SHIPMENT SHOWING OUR GOOD WILL. WE ARE READY TO OPEN OUR L/C AS SOON AS YOU INFORM CONTRACT NUMBER. IF YOU DO NOT AGREE THERE IS NO ALTERNATIVE BUT TO RELUCTANTLY SUBMIT MATTERS TO IMPARTIAL JUDGEMENT. LOSE NO TIME TO TELEX BACK VIEW RAPID DEVELOPMENT C514 MARKET. HOWEVER HOPE YOU EXECUTE 300 M/TONS IN AUGUST/SEPTEMBER AVOID ARBITRATION.
(15)9/8, IN:
REFER TO OUR TLX 4/8 C514 MISSING YOUR REPLY RUSH.
(16)12/8, OUT:
YOUR TLX 4 RECEIVED. CONSIDERING OUR FRIENDLY TRADING RELATIONS WE DECIDE SELLING YOU 300 M/TONS C514 AT RMB ￥1,900 PER TON CIF ROTTERDAM OF WHICH 200 M/TONS BE SHIPPED IN SEPTEMBER N THE REMAINING 100 M/TONS SHIPMENT IN OCTOBER OWING THAT WE STILL HAVE TO SECURE STOCK. FOR SHIPPING DOCUMENTS NO CERTIFICATE OF ORIGIN ISSUABLE. PACKING BY SINGLE GUNNY BAGS 75 KILOS NET PER BAG. MARKS AT SELLERS OPTION. PAYMENT BY IRREVOCABLE L/C SIGHT DRAFT.
(17)13/8, IN:
YOUR TLX 12. WE ACCEPT YR DECISION AND AGREE THE SHIPMENT OF 200 M/TONS IN SEPTEMBER N 100 M/TONS OCTOBER. PLS TELEX CONTRACT NUMBER FOR OPENING L/C. WE UNDERSTAND YOUR POSITION WAS DIFFICULT BUT HOPE FUTURE BUSINESS MORE REMUNERATIVE FOR YOU BASED ON OUR GOOD RELATIONS. REQUEST AIRMAIL 1 KILO OUTTURNS SAMPLE. REGARDS.
Notes
1. dispute v.i. v.t. n. 争议，争执，争端，争论
dispute with (or: against) sb. on (or: about) sth. 同某人争论某事
The buyer disputes with the seller on delay of shipment. 买方与卖方为迟交货物发生争论。
settle (adjust) a dispute 解决（调解）争端
2. positive adj. 明确的，积极的，绝对的
3. option n.
① 选择、选择权；
② 买卖的特权（指在契约期内按照规定价格买卖指定的股票、货物等的权利）；
③ 在规定时间内要求履行合同的特权；
④ 被保险人对赔款方式的选择权。
at buyer's option 由买方选择
at seller's option 由卖方选择
We request you to keep the option for one week. 请保留报盘有效期七天。
4. prolong v.t. 延长；拉长；拖延
The agreement has been prolonged for another two years. 协议延长了两年。
prolongable adj. 可延长的，可拖延的
The validity of the L/C is not prolongable. 信用证的有效期不可延长。
5. phytosanitary certificate 卫生检疫证明书
sanitary inspection certificate 卫生检验证书
6. based on weights shipped from Chinese port 以中国口岸装船重量为基础
7. in suit your request 为满足你方要求
8. Netherlands Commodity Trade Association for Technical Arbitrations 荷兰商品贸易技术仲裁委员会
9. other appreciate authorized organization 其它相应有权的机构
10.vide v. 〔拉〕请看，参看
vide the attachment 参看附件
11.usual practice 惯例；习惯做法
Payment by irrevocable letter of credit at sight is our usual practice. 以不可撤消的即期信用证支付是我方的惯例。
12.preferential price 适宜的价格；优惠的价格
preferential treatment 优先处理；优惠待遇
preferential tariff 特惠关税
13.alternative n. 选择；抉择；取舍；两者挑一
have no alternation but… 除……外别无选择
14.impartial adj. 公正的，不偏袒的，无偏见的
impartial judgement 有报酬的，有利的
15.remunerative adj. 有报酬的，有利的
16.outturn n. 产品，产量
Exercise
Study the case carefully, analysing in what respects the transaction is a failure. Imagine that you are the seller, stating out in what ways you will try to avoid or extricate from the passive position.
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