Lesson Seventeen

Quantity of Goods

       In China's import and export transactions, a good grasp of the quantity of imports and exports affects not only the fulfillment of our foreign trade business but also the carrying out of China's foreign trade policy and our business intention. According to the business laws of some capitalist countries, the quantity of goods delivered by the exporter must conform with the quantity clause stipulated in the contract. If the quantity delivered by the exporter is less than that stipulated in the contract, the importer has the right to refuse the delivery. If the quantity of goods delivered by the exporter is more than that stipulated in the contract, the importer has the right to refuse the extra or refuse the whole delivery. If the importer accepts the extra or refuse the whole delivery, he must pay according to what has been signed in the contract. Therefore, the quantity of goods in import and export transactions is of critical importance.

       Measurement units for the quantity of goods

       When the quantity of certain goods is decided by the two contracting parties, measurement units must be agreed upon at the same time. Different measurement units are adopted for different goods in different countries. The following measurement units are usually used in the international trade:

1.Weight: metric ton, long ton, short ton, gram, kilogram, pound, ounce, etc. These measurement units are largely good for natural commodities and their products, such as minerals, iron and steel, salt, wool, as well as farm and sideline products.

2.Number: piece, pair, set, dozen, gross, ream, etc. These measurement units are largely good for industrial products and groceries.

3.Length: meter, foot, and yard. These measurement units are largely good for textiles and metal cords.

4.Area: square meter, square foot, etc. These measurement units are largely good for glass and textiles.

5.Volume: cubic meter, cubic foot, and cubic yard. These measurement units are largely good for wood and chemical gas.

6.Capacity: litre, gallon, and bushel. These measurement units are largely good for grains and petroleum.

   Since different measurements are used in different countries, the same measurement unit may represent different quantity. In the present international trade, more than one measurement system are being used: the International System of Units(S.I.); the Metric System(M.S.): the British System(B.S.); and the U.S. System(U.S.S.). The same measurement unit used in these different systems will have its different weight standard, such as the difference in the case of metric ton, long ton and short ton. So in the conclusion of a business contract, we must definitely state clearly which measurement system and what measurement units are adopted lest some misunderstanding or dispute should emerge.

   Measurement of Weight

   In international trade, many goods are measured by their weight. There are generally the following ways to weigh the goods imported or exported:

1. Gross Weight: Gross weight refers to the weight of the goods themselves plus the tare, i.e. the goods weight and their packing weight altogether.

2. Net Weight: This refers to the actual weight of the goods themselves, exclusive of their tare. In international trade, most goods are measured by their net weight.

Sometimes it is not easy or necessary to separate the goods from their tare, such as webs of paper, and there are times when prices of the goods, with or without their tare, are nearly the same, such as grains, fodder, and farm and sideline products. Thus, the net weight is counted the same as the gross weight. This is called Gross for Net. For example: " China’s northeast soybeans, 1,000 metric tons, in new singlejute bags, each 100kgs, gross for net." Measurement of net weight is gross weight minus tare, i.e. packing. Measurement of tare is as follows:

(1)    Actual tare: Packing of the whole goods is weighed one by one.

(2)    Average tare: Packing materials and grades are usually similar on the part of some goods. So weighing of the packing of some of the goods can bring about the average packing weight of the whole goods.

(3)    Customary tare: Some goods have their standardized packings, so their packing weights are generally acknowledged and universally accepted. Thus, there is no need to weigh them any more.

(4)    Computed tare: The packing weight is computed and agreed on by the two parties and signed in the contract. So there is no need to do specific weighing.

   In international trade, net weight, sometimes, includes the packing.Take candy as an example. Candy paper is concluded in the net weight of candies. As to some precious metals and chemical materials,net net weight(Nett) is needed, which refers to the weight of the goods themselves, exclusive of their packing weight.

3. Conditioned Weight: The weight is achieved by using scientific methods to extract water from the goods, and then adding the standardized water content. This method of measurement is good for the goods whose water content is unstable such as wool and raw silk.

4. Theoretical Weight: Some goods have fixed and standardized grades, such as tin-plates and steel plates, which have standardized forms, lengths and breadths. As long as their grades, lengths and breadths are the same, or nearly the same, the weight can be measured according to their numbers only.

   Quantity Clause

   Quantity Clause in the contract is very important. It is the basis for delivery and acceptance of the goods, and also the basis for handling the dispute about quantity problems if they should happen. The elementary content of quantity clause is the stipulation of the quantity of a delivery and the measurement units agreed on. If the goods need to be measured on their weight, specific weight terms must be made clear, such as gross weight, net weight, net net weight, conditioned weight, or theoretical weight. For example: "China’s rice, 500 metric tons, in gunny-bags, gross weight."

   There are such goods which are not easily measured, or liable to change their weight or their properties on account of weather conditions, or which are restricted in packing and transportation. Consequently, quantity of the actual delivery, sometimes, is not up to the quantity clause stipulated in the contract. In order to carry out the business and avoid unnecessary dispute concerning quantity problems, the two contracting parties should agree on certain flexible extent in advance on the quantity of the delivery. Generally there are two clauses about the flexible extent on the quantity of the delivery in the contract:

1. More or Less Clause: It is stipulated that the quantity of the delivery may be more or less to a certain extent than the actual quantity, but the more or less stipulation is not allowed to be over a certain percentage of the whole delivery. The flexible extent is usually 5% more or less according to the international business law. More or less clause is usually presented by the seller. Take the quantity clause of China’s rice export contract as an example: "China’s rice, 10,000 metric tons, gross weight, 2% more or less at seller’s option."

More or less clause is sometimes presented by the buyer if the buyer sends ships for shipment.

2. About or Circa or Approximate: Put the word About, Circa or Approximate before the quantity of a delivery. For example:

   "China’s Datong Steam Coal, about 5,000 metric tons." As to the implication of the word About, Circa or Approximate, different countries have different definites. Some define it as 2.5%, others 5%. According to certain international law, it should be defined as not over 10% more or less.

Notes:

1.       Gross Weight毛重

2.       Net Weight净重

3.       Tare Weight皮重

4.       Conditioned Weight公量

5.       Theoretical Weight理论重量

6.       More or less短溢装

7.       About or Circa or Approximate“约”量