由 lltx1822 Contract Clause Design for DAP and DDP: Definition of Rights, Responsibilities, and Dispute Prevention
In international trade, the design of contract clauses is crucial for clarifying the rights and responsibilities of both parties under DAP (Delivered at Place) and DDP (Delivered Duty Paid). It directly impacts the smooth progress of transactions and the prevention of potential disputes.
When using the DAP term, contract clauses should emphasize the specific delivery location and method of the goods. For example, the contract should clearly stipulate, “The goods will be delivered at the warehouse of Terminal 1, Port of Rotterdam. The seller is responsible for unloading the goods onto the warehouse floor, and the buyer must complete the receipt confirmation within 24 hours of the goods’ arrival.” Additionally, it is necessary to define the risk transfer point during transportation, stating, “The risk of the goods is transferred when the seller places the goods at the buyer’s disposal at the specified location.” Furthermore, the liability attribution and compensation methods for situations such as transportation delays and goods damage should be detailed in the contract. For instance, “If the goods are delivered more than 7 days late due to the seller’s reasons, the seller shall pay the buyer a penalty of 0.1% of the total contract amount for each overdue day.” Clear breach of contract clauses can effectively reduce transaction risks.
The design of DDP contract clauses is even more complex. Since the seller assumes the responsibilities of import customs clearance and tax payment, the contract needs to specify in detail the calculation methods and sharing principles of taxes and fees. For example, it can be stipulated that “The import duties and value – added tax will be paid on behalf of the buyer by the seller according to the amount determined by the customs of the destination country. The relevant invoices must be provided to the buyer for verification within 5 working days after the completion of customs clearance.” At the same time, the liability for possible issues during the customs clearance process should be clearly defined. For example, “If the customs clearance is hindered due to the buyer providing false goods information, the buyer shall bear all losses and additional expenses.” Moreover, considering the impact of exchange rate fluctuations on tax costs, an exchange rate adjustment clause can be included in the contract, stating, “If the exchange rate fluctuates by more than 5% from the contract signing date to the customs clearance date, both parties shall negotiate to adjust the total contract price,” which enhances the contract’s flexibility and risk – resistance.
For both DAP and DDP contracts, the document delivery process should be clearly defined. This includes the delivery time, method, and responsibilities of key documents such as commercial invoices, bills of lading, and certificates of origin. Avoiding document shortages or delayed deliveries can prevent negative impacts on customs clearance and goods pickup. Through rigorous contract clause design, the rights and responsibilities of both parties can be effectively defined, potential disputes can be reduced, and the smooth progress of international trade can be ensured.