Article 3 Agreement to Purchase

3.1 Agreement to Sell and Purchase — The Seller agrees to sell to the Buyer and the Buyer agrees to buy from the Seller:

[(a) identification of the Purchased Goods ordered, including, if applicable, model numbers;]

[(b) quantity;]

[If representing the Buyer, you want to add the follow­ing: provided that the Buyer shall have the option to increase

С. А. Семко, В. В. Сдобников, С. Н. Чекунова

such quantity by an amount up to * on the same terms and conditions with no additional costs if [telex, telecopy or other agreed means of communication] of exercise of such option is sent by the Buyer to the Seller on or before *.]

[(c) requested Delivery Dates;] and

[(d) shipping details and address.]

[If this list is lengthy or complicated, it should be set out in Schedule 1.]

3.2 Specifications — The specifications of the Purchased
Goods are set forth in Schedule 2 hereof.

[Governmental Approval — Depending on the circum­stances, one of the Parties may wish to advise the other party of a particular law or regulation, etc., and require compliance.]

Condition Precedent

3.3 [Government Approval — It is recognized that after
this Agreement is executed by both Parties, it is subject to ap­
proval by [the appropriate agency] of the government of [Buy­
er's country]. It is agreed that the Seller shall not be obligated
to commence performance until the date that the Buyer has
notified the Seller that the required approvals of the Govern­
ment of* have been received and instructed the Seller to pro­
ceed with the work.

In the event that the approval is denied or that approval is made conditional upon any modification of any of the provi­sions of this Agreement neither Party shall have any obliga­tion to the other except to the extent that the Buyer has agreed to reimburse the Seller for services rendered or work performed in expectation of obtaining approval of this Agreement.]

OR Condition Subsequent

The Buyer shall obtain any required * export license and any required import license or any other governmental au­thorization, permit and satisfy all formalities as may be re-

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quired to carry out the terms of this Agreement in accordance with the law and regulations. [The Seller agrees to use rea­sonable efforts in assisting the Buyer in obtaining any such licenses or authorizations.] The Seller is not liable if any li­cense or governmental authorization is delayed, denied, re­voked, restricted or not renewed and the Buyer shall not be relieved thereby of its obligations to pay the Seller for the Pur­chased Goods and any other costs or charges which are the responsibility of the Buyer under this Agreement.

3.4 Delivery Terms — All deliveries of the Purchased Goods shall be [insert appropriate INCOTERM]. Unless otherwise provided in this Agreement, [INCOTERM] shall be construed in accordance with INCOTERMS 1990 of the International Chamber of Commerce. [If act­ing for Seller, you may want to insert the following: Partial deliveries shall be permitted.] Upon any delivery, title to the Purchased Goods, all risk of loss or damage to or delay of the Purchased Goods shall pass to the Buyer. [If acting for the Seller, you may want to insert the following: Delivery times are approximate and are dependent upon prompt re­ceipt by the Seller of all material and information necessary to produce and/or supply within the scheduled time.] [If act­ing for the Buyer, you may want to insert the following: Shipment ofthe'Purchased Goods shall commence no earlier than * and shall be completed no later than *. All of the provisions of this Agreement regarding the time within which the Seller must ship the Purchased Goods to the Buyer are of the essence, and a failure to strictly comply with the shipment schedule shall be considered a breach which impairs the val­ue of the entire Agreement. If the Seller fails to meet the ship­ment schedule as to any shipment, the Buyer may, at its op­tion and to addition to all other rights it may possess, cancel this Agreement, purchase elsewhere, and hold the Seller ac­countable for all additional costs or damages incurred. The acceptance of late or defective deliveries shall not be deemed

С. Л. Семко, В. В. Сдобников, С. Н. Чекунова

a waiver by the Buyer of its right to cancel this Agreement, or to refuse to accept further deliveries. Prior to shipment, the Seller must obtain an inspection certificate from * certifying that the Purchased Goods conform to contractual specifica­tions and samples.]

3.5 Modification of Qrdets — The Purchased Goods
shall not be modified or cancelled except upon the written
agreement of both Parties. The materially agreed changes
to the Purchased Goods shall be subject to the provisions
of this Agreement whether or not the written agreement
of modification so states.

3.6 Export Regulations — The Buyer shall supply to
the Seller on a timely basis with all necessary information
and documentation requested by the Seller in order to
permit the Seller to export the Purchased Goods with re­
spect to any sale or order solicited by the Buyer hereunder.

Article 4 Contract Price

4.1 Price — The total price for the work specified in Article 3 shall be * United States Dollars (U. S.$).

[Note that this is a lump sum clause. Depending on the circumstances, it may be appropriate to have a separate price (i. e., equipment vs. labour price), estimated prices, bonus charges, a currency clause linking the price to the exchange rate, price escalation provision or hardship clause which specifies the maximum amount of price esca­lation which permits the Seller to renegotiate or termi­nate the contract.]

Article 5 Payment

5.1 Payment — The Buyer shall effect payment to the Seller by means of an irrevocable letter of credit which the Buyer shall cause to be opened by a bank in *, U. S. in

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favour of the Seller, within * (*) working days of receipt from the Seller of this Agreement containing the author­ized signature of the Seller.

5.2 Letter of Credit — The letter of credit shall be in the total amount of U. S. $ *. [If acting for the Buyer and you have inserted the option to the Buyer to increase the order in paragraph 3.1 and a letter of credit is being used, the following should be inserted: which may subsequently be increased up to U. S. $ * if the Buyer exercises the option provided in paragraph 3.1] and shall remain available for drafts drawn thereon (subject to the terms thereof), up to*. The letter of credit shall, among other things, provide as follows:

(a) Drafts shall be drawn at sight against presentation
of shipping and title documents covering each shipment
[INCOTERM and place of shipment should be specified,
or such other delivery which has been agreed upon] in con-
formance with this Agreement and the terms of the letter
of credit.

(b) Shipping documents shall include any inspection
certificate provided for in paragraph *.

[(c) If the minimum quantity set forth in the shipment schedule referred to in paragraph * of this Agreement is not delivered within the period allowed for such minimum quantity, the letter of credit shall cease to be available for that or any subsequent shipment.]

[Delete subparagraph (c) above whenever a shipment schedule is not required.]

(d) Amendments to the letter of credit shall only be made in conformance with amendments to this Agree­ment. The Buyer shall request the opening bank to effect any such amendments to the letter of credit by notifying the advising bank by [telex or telecopy]. The Seller agrees to confirm the acceptance of the initial letter of credit to _fae advising bank and of any amendments thereto made

С. А. Семко, В. В. Сдобников, С. Н. Чекунова

in conformance with this Agreement within [*] days of tel­ex advice by the advising bank to the Seller.

(e) Notwithstanding the foregoing, in the event that the Seller requires amendments to the letter of credit to permit use of changed shipment schedules or for other ur­gent reasons which the Buyer approves, amendments to such terms may be made by [telex or telecopy] exchanged between the Seller and the Buyer, and the Buyer shall amend the letter of credit in conformance therewith. [Pro­visions, if any, for any performance bonds, partial/final payments against delivery/timely completion or other spe­cial payment provisions should be stated in this paragraph.]

If acting for the Seller, where the Buyer comes from a country with foreign exchange restrictions, a clause simi­lar to the following should be considered.

5.3 Foreign Exchange Control — The Buyer has obtained the appropriate government approval of * required for the Buyer to enter into this Agreement permitting the Buyer to make payments to the Seller for the Purchase Price of the Purchased Goods in United States dollars in the United States.

Article 6 Taxes and Duties

6.1 Taxes and Duties — The Buyer shall be solely re­sponsible for and shall pay, or reimburse the Seller for, all taxes, duties, import deposits, assessments and other gov­ernmental charges, however designated, which are now or hereafter imposed under or by any governmental authori­ty or agency, that are: associated with the performance by the Seller of its obligations hereunder; the payment of any amount by the Buyer to the Seller pursuant to this Agree­ment; based on the Purchased Goods or their uses, or re­late to the import of the Purchased Goods into [name of destination] in accordance with then prevailing law or reg­ulations.

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6.2 Net Amounts — All payments to be made by the Buyer to the Seller pursuant to this Agreement represent net amounts the Seller is entitled to receive and shall not be subject to any deductions for any reason whatsoever. In the event any of said charges become subject to taxes, du­ties, assessments or fees of whatever kind or nature levied outside the United States, said payments shall be increased to such an extent as to allow the Seller to receive the net amounts due under this Agreement.