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  1. Week 14 Complaint, Claim and Settlement

  2. In international trade, once a contract is signed between the exporter and the importer, both parties are under the obligation to carry out the contract. Sometimes no matter how perfect the organization maybe, complaints or claims still arise. Any party’s breach of the contract entitles the other party to secure himself against the losses sustained. In practice, it is not infrequent that the exporter or the importer fails to perform any of his obligations, which gives rise to breach of contract and various trade disputes. The party which make the complaints or claim we call them affected party, The party who is been complained or claimed is called defaulter. Background info for complaint and claim

  3. COMPLAINTS CLAIM • the affected party, in consideration of the good relation with the other party, or the loss incurred being a minor one, sometimes does not lodge a claim against the suppliers, but rather requests him to make sure that such things will not happen again, or ask the defaulter to solve the problem. • the affected party is entitled to request the defaulter to make up his losses according to the relevant provisions under the contract. Such request the affected party makes for compensation is called “claim”, and that the party responsible for the losses or damage takes measures to deal with the claim one way or another is called “settlement of claim”. Distinct complaint and claim

  4. The sales contract shall have a legal binding force upon the contracting parties. Breach of a contract occurs when any party of a contract does not follow the stipulations of the contract. Any party who has violated the contract shall be legally held responsibilities for the breach, and the injured party is entitled to remedies according to the stipulations of the contract or the relevant laws. Reasons for Complaints or claim

  5. 1.The justified or genuine complaints that due to the following reasons: • refusal of making delivery, • shipment overdue, • goods wrongly delivered, • goods arrived damaged or late, • shortage, • inferior quality, • improper packing, etc. Reasons for Complaints or claimbuyer against seller

  6. 2. The second type of complaint is unjustified complaint, which arises when there is a change of market or when the buyer realizes he has made a bad bargain. At this moment, the buyer finds fault with the goods as an excuse to escape from their contract obligations. In this case, they either do not need the goods any more have found something cheaper from other sources. So it is important for the seller to distinguish the different kinds of complaints and find the right way to settle them. Reasons for Complaints or claimbuyer against seller

  7. An buyer may breach a contract: under an L/C, he fails to open the relevant L/C according to the stipulated period where he wrongly refuses to accept the goods; under FOB, he fails to dispatch the vessel according to the stipulations of the contract. Reasons for Complaints or claimseller against buyer

  8. Settlement of claims refers to the action conducted by the party in breach that he entertains and settles the other party’s claim. The first step in the settlement of claims is to find out what the problem is and what the liabilities are and carefully asses the amount of damage or loss due to breach of contract together with the other party. The second step is to work out a mutual acceptable scheme for compensation. Generally, the party in breach may settle the claims by replacing the cargo, giving a discount or cash compensation. Settlements

  9. 1. Setting the scene; 2. Explaining the complaint; 3. Recommending action; 4. Making your position clear. Components of a complaint or claim letter

  10. In the first part, we give full details such as: dates of delivery and/or order, quantity ordered, account number and invoice number, etc. • This part is usually a short paragraph describing what has gone before, so that your complaint has a background, and can be understood in context. • This requires simple narrative language to describe the circumstances behind the complaint. the general structure of a complaint of claim letter

  11. In the second part of complaint letter, details are given such as damaged or defective goods, late delivery, incorrect bills, poor quality, delivery mistakes and so on. It is a good idea to enclose a copy of any documentation you have, such as a sales receipt, an order form, delivery note or an invoice. • In this part you should also refer to the inconvenience that you have had to suffer, and if appropriate, mention the cost to your company of this inconvenience. Be sure to avoid using over-emotional or offensive language. the general structure of a complaint of claim letter

  12. The last part of the complaint letter is usually very short. It should state clearly what exactly you want the company to do. You should request rather than demand. Your tone should be polite but firm. the general structure of a complaint of claim letter

  13. Sample Letter

  14. 收到订单里的货物后,经过检查,发现第4包货物由于包装不当致使货物被严重染色甚至腐烂;同时,第2包货物的质量跟样品质量相差很远。因此,向对方提出申诉,希望对方尽快处理此事。收到订单里的货物后,经过检查,发现第4包货物由于包装不当致使货物被严重染色甚至腐烂;同时,第2包货物的质量跟样品质量相差很远。因此,向对方提出申诉,希望对方尽快处理此事。 Letter 1 Complaint

  15. AMAZA GARMENT CO. 45 Wythe Ave,Brooklyn, NY11211 15 September 2010 Mr.Victor Pon General Manager Xiamen Textile Manufacturing Limited 34 Zhangshan Road Xiamen Dear Pon , Order No.XE23003 The order mentioned above was delivered to us on 4 September 2010. It is with great regret we have to complain about the packing of Bale 4 and the quality of the material in Bale 2. Bale 4 does not appear to have packed in waterproof material and has become very sodden on arrival. As a result, the 500 meters of your material AC303 it contained has been very badly stained and show signs of rotting.

  16. The material in Bale 2,750 meters of AC223, is not up to the standard of the similar material we ordered from you on 4 May 2010. It appears to be too loosely woven and pulls out of shape very easily. Under separate cover by air parcel post we have sent you a cutting of this material and also one from the material we obtained from you on your previous visit to us. You will be able to compute the two for yourselves. We have always been able to rely on the high quality of your materials and packing in the past. We are, however, disappointed on this occasion as we have received orders which need these materials for production. We will, therefore, appreciate it if you can let us know without delay what action you can take to help us to get over present difficulty. I look forward to your prompt reply. Yours faithfully Leona Managing Director

  17. 货物到达后,经检验,发现很多窗帘布料已经严重受损了。经过调查,发现损失是由于不当的包装而引起的,因此向卖方提出索赔。货物到达后,经检验,发现很多窗帘布料已经严重受损了。经过调查,发现损失是由于不当的包装而引起的,因此向卖方提出索赔。 Key points: 1.货物遭受损失 2.查明属于卖方责任 3.希望对方予以赔偿 Letter 2 Claim

  18. Dear Sirs; Re:Claim on Curtain Materials The captioned goods you shipped per S.S.“Dongfeng”on May 2 arrived here yesterday. On examination, we have found that many of the curtain materials are severely damaged. Considering this damage was due to the rough handling by the steamship company, we claimed on them for recovery of the loss, but an investigation made by the surveyor has revealed the fact that the damage is attributable to improper packing. For further particulars, we refer you to the surveyor’s report enclosed. We are therefore, compelled to claim on you to compensate us for the loss, $23,600, which we have sustained by the damage to the goods. We trust that you will be kind enough to accept this claim and deduct the sum claimed from the amount of you next invoice to us. Sincerely,

  19. Acknowledging the complaint; Describing the action you have taken since receiving it; Stating briefly your decision; Offering compensation if appropriate. Components of a reply letter

  20. When you are writing a reply letter for a complaints or claim you need be aware of the following points: 1.In such letter, remember to keep the tone positive by avoiding negative words such as damage, defective, poor quality, etc. A sincere apology for the inconvenience caused can be contained here, even if you have later to point out the complaint was not really justified at all. Attention!!

  21. 2.If the complaint is justified, you should explain briefly why the mistake took place, and assure the mistake will not occur again. If you accept responsibility and agree to adjustment, you should simply confirm arrangements for compensation. Even if you deny responsibility, it is also a good idea to offer a compromise so as to keep the customer happy. Attention!!

  22. Sample Letters

  23. 收到对方的申诉信后,卖方对此事件的发生表示诚挚的歉意。关于第4包货物的包装,派专人去调查;关于第2包货物,由于工人的疏忽,装错了货物,因此予以替代。收到对方的申诉信后,卖方对此事件的发生表示诚挚的歉意。关于第4包货物的包装,派专人去调查;关于第2包货物,由于工人的疏忽,装错了货物,因此予以替代。 Key Points: 1.对对方的申诉表示道歉 2.包装问题派专人调查 3.第2包货物由于工人的疏忽而错装 4.保证尽快处理申诉 Reply to letter 1

  24. Xiamen Textile Manufacturing Limited 34 Zhangshan Road Xiamen 22 September 2010 Ms Leona Amaza Garment Co. 45 Wythe Ave,Brooklyn,NY11211 Dear Ms Leona, Thank you for your letter of 15 September in which you complain about the packing for Bale 4 and the quality of the material contained in Bale 2. We are sincerely sorry this has happened and trust we can help you overcome your difficulties.

  25. With regard to Bale 4, we regret we are at a complete loss to understand how this came to be packed without any waterproofing material inside the Hessian covering. Our packers have a very good reputation and normally every possible precaution is taken to ensure our export packing is well up to standard. In response to your complaint, we are sending John Smith, our representative, to inspect the bale, and subject to their report, we will replace the part that can’t be used. We trust,however, that most of this material can be saved. We will be most grateful if you will assist him to inspect the bale.

  26. As far as the contents of Bale 2 are concerned, we are sorry to say this is not AC223 at all, but AC224, an inferior material that is not for export. Our packing Department is always extremely busy,and unfortunately 750 metres of AC224 were accidentally packed in your Bale3. We greatly regret this has happened and we are at present arranging to ship the replacement to you. We sincerely hop this bale will arrive in time to meet your production deadline.

  27. We would like say again how very sorry we are that you have been put to so much trouble in this matter. We hope it will not affect our future business dealings. We will, of course, do all we can to ensure the mistakes made on this occasion are not repeated. In order to offer you some slight additional compensation for the inconvenience caused. We will be pleased to offer you an additional 5% discount on the next order you place with us. We assure you of our best services at all times. Yours sincerely Victor Pon General Manager

  28. 兹确认收到对方索赔信函,经过调查后,发现货物损失不是卖方造成的,而是在运输过程中产生的,因此,卖方建议与买方共同承担赔偿的责任。兹确认收到对方索赔信函,经过调查后,发现货物损失不是卖方造成的,而是在运输过程中产生的,因此,卖方建议与买方共同承担赔偿的责任。 Key points: 1.确认收到索赔信函 2.查明致损原因 3.共同承担责任 Settlement letter for letter 2

  29. Dear Sirs: We have received your letter of 15th May, inform us that the certain materials we shipped to you arrived damaged on account of imperfectness of our packing. Upon receipt of your letter, we have given this matter our immediate attention. We have studied your surveyor’s report very carefully. We are convinced that the present damage was due to extraordinary circumstances under which they were transported to you. We are therefore not responsible for the damage; but as we do not think that it would be fair to have you bear the loss alone, we suggest that the loss be divided between both of us, to which we hope you will agree. Sincerely,

  30. 1. All disputes in connection with this contract or the execution thereof shall be settled amicably by negotiation. 凡涉及本合同的争执或在执行本合同中所发生的一切争执应通过友好协商来解决。 2. The color deviation is so big that we cannot help lodging a claim against you. 色差如此之大以至于我们不得不向你方提出索赔。 3. Owing to your delay in shipment, we have no choice but to make apology to our customers and trouble them for L/Coextension. 由于你方装运延迟,我们不得不向客户致歉并麻烦他们展证。 4. We immediately looked into the matter and found that the wrong goods were shipped to you through an error on the part of our packers. 我们迅速介入此事,发现这批货物发运错误是由于我方装箱人员的错误导致的。 Useful expressions

  31. 5. After inspection we found that the goods were short-delivered by 20 tons. 检验后发现,货物短交20吨。 6. Since you have refused to negotiate an adequate offer of compensation, we will seek other suppliers and halt all business dealings with your company. 因你方拒绝就补偿事宜磋商,我们将寻找新的供应商并终止与你方所有的业务往来。 7. We have no record of your claim for compensation and ask you to resubmit a copy of the original. 我方没有你方的索赔记录,请您将索赔信函原件的副本递交给我们。 8. The total shortage amounts to 1250kg. 短重总共达1250公斤。

  32. 9. The buyer submits a claim for USD3,000 on account of breakage. 买方对货物的破损要求赔偿3000美元。 10. Since the dispute cannot be settled through negotiation, we agree to settle it by arbitration. 由于争议无法通过谈判解决,我们同意通过仲裁解决。 11. We are sorry to inform you that your claim against us for short weight is unsuited to the international insurance claim standards. 歉告,你方提出的短重索赔与国际保险索赔标准不相适应。 12. We hope that you will not take this case as a breach of the contract and refrain from making any claims against us as the loss can be negligible. 我们希望你方不要将此事视为违约,也不要提出索赔,因为这些损失是可以忽略不计的。

  33. 13. The shortage you raised might have occurred in the course of transit, and that is a matter over which we can exercise no control. 你方提出的短重可能是在运输途中发生的,其中的情况我们是无法控制的。 14. We should be grateful if you would give us a complete refund for the defective goods delivered. 对于已交付的这批有瑕疵的货物,如贵方能全数退还货款,我方将不胜感激。 15. We appreciate your offer to keep the goods wrongly delivered, and we are ready to allow 10%off the invoice price if you would like to accept. 我们感谢贵方保留错发的货物,如果贵方愿意接受这批货物,我们愿按照发票价给予10%的折扣。

  34. 16. We may compromise, but in no case should the compensation exceed $800. Otherwise, this case will be submitted to arbitration. 我们可以让步,但赔偿金额不能超过800美元,否则将提交仲裁解决。 17. The seller said the quantity of the shipment was correct. On the contrary, the surveyor testifies that the goods are short-delivered by 50 tons. 卖方说装运的数量准确,但正相反,检验人员证实货物短交50吨。 18. Claim can be defined as a demand made upon a person or persons for payment on account of a loss sustained through its negligence. 索赔是指由于一方的疏忽而造成了损失,另一方向其提出赔款的赔偿要求。

  35. 19. We take all our customers’ comments seriously. We shall arrange for a replacement consignment to be sent to you immediately and would be grateful if you could return the faulty products to us. We shall reimburse freight charges. 我们非常重视顾客的评价,并会即刻安排替换那批货物,如果你方能够把残次货物退还我方,我们将补偿运费。 20. We have investigated the case carefully, but found no error on our part. We packed the goods according to the contract. They were in good condition as shown by the certificate of packing inspection. The clean B/L further proved that. We suggest you file a claim with the insurance company. We shall try our best to assist you in your claim. 我们已就这件事做了仔细的调查,发现错误不在我方。我方是按照合同规定进行的包装,而且包装检验显示包装良好,清洁提单可进一步证明之,建议你方向保险公司提出索赔,对此我方会尽力帮助。

  36. Translate the following terms and expressions: 1. file a claim 2. claim for short weight 3. refuse the claim 4. inferior quality 5. breach of contract 6. arbitration clauses 7. 仲裁裁决 8. 理赔 Exercises

  37. Translate the following sentences: 1. 我们希望你不要将此事视为违约,也不要提出索赔,因为这些损失是可以忽略不计的。 2. 我们仔细进行了调查,但认为责任不在我们。我们按照合同对货物进行包装,检验证明书表明货物状况良好,清洁提单进一步证明了这一点,我们建议你方向保险公司提出索赔,对此我们将尽力协助。 3. 我们总是认真对待客户的意见,我们将立即安排给你们换一批货,如果把有问题的产品退给我们,我们将不胜感激,我们将偿还运费。

  38. 4. Please inform us soon whether you can deliver the goods by the end of July. If your answer is the negative, we shall have to cancel the order as we cannot possible wait any longer. 5. The intact packing evidenced that the goods were damaged before shipment. 6. We apologize for your trouble and promise to execute your future orders with maximum care and efficiency.

  39. Refer to the following information write a claim letter XX先生: 现随函寄去无锡商检局签发的第20号检验报告, 该报告证明所购货物的质量与以前送来的样品相差甚远。由于这些货物对我方毫无用处,因此我方要求贵方归还这批货物的发票金额和商检费用,共计5000美元。

  40. Translate the following terms and expressions: Shipping advise 2. clean, on board B/L 3. Transshipment and partial shipment allowed 4. Ready for delivery 5. commercial invoice 6. Shipping space 7. port of loading 8.Mode of transportation 9.起运价格 10. 分批或分期装运 11. 凭样交货 12. 过境货 Answer to Transportation

  41. Translate the following sentences 由于直航于我们港口的蒸汽船一个月只有一班并刚刚开走了,货物只能于下周起运了。 2. 我们借此机会通知您上述货物已经在S/S号上装运完毕,明天将向您的港口方向起航。随信附上一套船运文件请查收。 3.As these goods are apt to break if not handle with care in transportation, we suggest that the parcel should be sent by container vessel, to avoid possible damage in loading and discharge. 4. We are glad to inform you that your consignment of 100 sets of TV sets has been loaded on S.S. “East Wind”, which is due to sail for New York on March 25 the estimated time of arrival is on April 10.

  42. V. Translate the following letter into English: Dear Sirs, We are in receipt of your letter of December 15, 2010. We regret very much to inform you that, despite great efforts made by us, we are still unable to book space on a direct vessel sailing for Marseille. The shipping company here told us that, for the time being, there is no regular vessel sailing between ports in China and Marseille. Therefore it is very difficult for us to ship these 1000 metric tons of sugar to Marseille direct. In view of the difficult situation faced by us, please allow transshipment at HongKong where arrangements can easily be made for transshipment. Your agreement to our requests and your understanding of our position will be highly appreciated. Yours faithfully,