Tuesday, January 20, 2009

Importing Watches to Alberta from Taiwan

Terms to include in the sales agreement for import of watches to Alberta from Taiwan:

Description of goods: May choose to include UN Standard Classification of Goods description as well as make, model number, colour, serial numbers, etc.

Section: 8 - Miscellaneous manufactured articles
Division: 88 - Photographic apparatus, equipment and supplies and optical goods, n.e.s.; watches and clocks
Group: 885 - Watches and clocks
Subgroup: 885.3 - Wrist-watches, pocket watches and other watches (including stop-watches), with case of precious metal or of metal clad with precious metal
Basic heading: 885.31 - Wrist-watches, battery or accumulator powered, whether or not incorporating a stopwatch facility

Measurement of quantities: Specify number of units or pieces. Negotiated result: Agrees to buy higher volumes on lower unit costs.

Purchase price: Unit and total prices identifying currrency of payment. Canadians might naturally seek to pay in Canadian dollars to avoid exchange-based risk. May seek US currency as concessionary currency of payment. Negotiated result: Taiwanese agrees.

Time, place, method of payment: Open account the buyer's preferred method of payment. Negotiated result: Compromise draft on L/C.

Quality standards: Rolex logo watches should be certified original or risk confiscation for trademark or intellectual/property rights infringements at Canadian customs. Any and all watches should be provided with certificates of authenticity in such a case or be branded as counterfeit. Negotiated result: Taiwanese agrees.

Origin of goods: Certificate of origin required especially in the case of third party transhipments via Taiwanese broker. Negotiated result: Taiwanese agrees.

Specified trade terms: Would prefer CIP or DDU/DDP. Compromise met with CIF.

Warranties: Specify sellers obligations and consequences in failing to meet them. Negotiated result: Taiwanese agrees to meet or match manufacturer's warranty.

Force majeure: Provisions for Acts of God are not in the importer's interest. Negotiated result: Taiwanese insists with CIF.

Provision for acceptance: Vaildity deadlines on all offers made to the Taiwanese exporter required. Negotiated result: Numerous counter-offers reciprocated until final deal is reached.

Taiwanese exporter's preferred sales agreement:

Description of goods: No problems with UN Standard Classification of Goods description if these are legitimate products.

Measurement of quantities: Ideally would like to see higher prices for lower volumes.

Purchase price: Would prefer pricing in New Taiwan dollar to avoid exchange risk.

Time, place, method of payment: Cash with order, or draft against L/C preferred method of payment.

Quality standards: No problem certifying bona fide watches with certificates of authenticity but will charge more for the cost of certification.

Origin of goods: Certificate of origin not a problem for Taiwanese broker but it will cost more.

Specified trade terms: Would prefer FOB.

Warranties: Will only offer warranties for higher unit prices.

Force majeure: Provisions for Acts of God absolutely in the exporter's interest on CIF terms.

Provision for acceptance: Might like to make many counter-offers prior to acceptance.

*Should the contract between Sam and Rachel be governed by the Vienna Sales Convention?*

Rachel might seek to govern the contract by Canadian or common laws only as The Vienna Convention appears to favour the seller in terms of limitations on rejection of goods.

*Does the Convention automatically apply?*

No it does not as Taiwan has not signed it.

*What wording is necessary to exclude it?*

Excluding The Vienna Sales Convention: "The parties specifically exclude the application of the provisions of the Vienna Sales Convention." Rachel might like to include, "The Domestic Law of Alberta shall govern this contract." However the Taiwanese may not go for that.

*Do any concerns arise if the watches bear the “Rolex” logo?*

Yes, certify, certify, certify or else expect it to be a fake. Rachel would have to be a fool to deal unless Sam is an authorized or affiliated Rolex dealer in Taiwan. According to Rolex only authorized dealers may display the offical authorized dealer plaque which itself might be easily forged as well the Rolex itself must have authorized COSC (Swiss Official Chronometer Testing Institute) testing results.

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