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CONSIGNMENT PROCESSING CONTRACT


This contract is made and entered into on  ¿ù .  ÀÏ.  ¿¬µµ by and between A Co., Ltd., a ____company with its office at A ȸ»çÁÖ¼Ò(¡°A¡±) and B Corp., a corporation with its office at B ȸ»çÁÖ¼Ò(¡°B¡±)

Whereas B requests A to manufacture the Products;

Whereas A is willing to engage in the processing of the Products under this Contract ;

Now, in consideration of the mutual promises and covenants contained herein, A and B agree as follows:


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Article 1 Products and Processing Charge

A agrees to process the raw materials and components of Article 2 hereof into and deliver to B, the Products at the following processing charge.

Items  / Unit  /  Spec. /  Quantity  /  Unit Charge  /  Total Amount



Article 2 Raw Materials and Components

(1)  B will supply A the following raw materials and components which are necessary for manufacturing the Products under Article 1 at no commercial value.

Items  / Unit  /  Spec. / Quantity  / Unit Price / Total Amount

(2)  A shall use the above materials and components for the manufacture and process of the Products described in Article 1, which A shall keep in the factory and may not remove outside factory without the prior written consent of B.

(3)  All materials or components for the products other than those supplied hereabove (1) shall be procured and used by A at A¡¯s costs and expense. 



Article 3 Ownership of Raw Materials and Components etc.

(1)  Raw materials and components supplied by B shall remain the property of B. A shall maintain them as a bona-fide holder, hold out to all others as B¡¯s property and may not sell, or otherwise dispose of them.

(2)  A shall take out an insurance with an insurance company acceptable to B, at its expenses, for the raw materials and components and the semi-processed or the finished Products.



Article 4 Processing

(1)  A shall manufacture/process the Products in accordance with the samples & the specifications and other instructions given by B, deviation from which shall require the prior written approval of B.

(2)  A shall not assign or subcontract all or any part of this Contract to others without B¡¯s prior written approval.

(3)  B may give A instructions, technical or otherwise, or working orders at any time, relating to processing, packing and transporting the of Products, which A  shall follow. 



Article 5 Shipment

(1)  A shall make custom clearance of the Products and deliver them in accordance with shipping schedule as stipulated in L/C(Letter of Credit).

(2)  A shall bear and pay all costs and charges incurring up to the FOB(INCOTERMS 2010) shipment of the Products; any costs and charges occurring thereafter shall be borne by and paid B.



Article 6 Payment of Processing Charge

B shall pay the processing charge by the letter of credit upon presentation of bill of lading and other shipping documents as set forth in the letter of credit.



Article 7 Claims

If any dispute or complaint is established against B from the buyers or end-users of  the Products, B shall notify it in writing to A and when such claims are proved as resulting from A¡¯s fault, A shall be responsible therefor and shall indemnify and hold harmless B therefrom. In this case, B shall make all reasonable efforts to reduce the claims as much as possible in consultation withy A.



Article 8 Arbitration

All disputes, controversies, or differences which arise between the parties out of or in relation to or in connection with this Contract or for the breach thereof, shall be finally settled by arbitration in Seoul, Korea in accordance with Commercial Arbitration Rules of the Korean Commercial Arbitration Board and under the Laws of Korea. The award rendered by arbitrator(s) shall be final and binding upon both parties concerned.


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives on the date first above written.

B                                                                A
----------------------------------------                      -------------------------------------------
By: _______________________           By : _______________________
Name:                                                   Name :
Title:                                                   Title :




* Incoterms 2010  ¼³¸í.

Incoterms 2010 is the eighth set of pre-defined international contract terms published by the International Chamber of Commerce, with the first set having been published in 1936. Incoterms 2010 defines 11 rules, down from the 13 rules defined by Incoterms 2000. Four rules of the 2000 version ("Delivered at Frontier"; DAF, "Delivered Ex Ship"; DES, "Delivered Ex Quay"; DEQ, "Delivered Duty Unpaid"; DDU) were removed, and are replaced by two new rules ("Delivered at Terminal"; DAT, "Delivered at Place"; DAP) in the 2010 rules.

In the prior version, the rules were divided into four categories, but the 11 pre-defined terms of Incoterms 2010 are subdivided into two categories based only on method of delivery. The larger group of seven rules may be used regardless of the method of transport, with the smaller group of four being applicable only to sales that solely involve transportation by water where the condition of the goods can be verified at the point of loading on board ship. They are therefore not to be used for containerized freight, other combined transport methods, or for transport by road, air or rail.

Incoterms 2010 also formally defined delivery. Before, the term has been defined informally but it is now defined as the point in the transaction where "the risk of loss or damage [to the goods] passes from the seller to the buyer."

Under the Incoterms 2010 standard published by the International Chamber of Commerce, FOB is only used in sea freight and stands for "Free On Board". 
The term is always used in conjunction with a port of loading.
Indicating "FOB port" means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. 
The buyer pays the cost of marine freight transport, insurance, unloading, and transportation from the arrival port to the final destination. 
The passing of risks occurs when the goods are loaded on board at the port of shipment. For example, "FOB Vancouver" indicates that the seller will pay for transportation of the goods to the port of Vancouver, and the cost of loading the goods on to the cargo ship (this includes inland haulage, customs clearance, origin documentation charges, demurrage if any, origin port handling charges, in this case Vancouver). 
The buyer pays for all costs beyond that point, including unloading. Responsibility for the goods is with the seller until the goods are loaded on board the ship. 
Once the cargo is on board, the buyer assumes the risk.
The use of "FOB" originated in the days of sailing ships. 
When the ICC first wrote their guidelines for the use of the term in 1936, the ship's rail was still relevant, as goods were often passed over the rail by hand. In 1954, in the case of Pyrene Co. Ltd. v. Scindia Steam Navigation Co. Ltd., Justice Devlin, ruling on a matter relating to liability under an FOB contract, described the situation thus:
                    {Only the most enthusiastic lawyer could watch with satisfaction the spectacle of liabilities shifting uneasily as the cargo sways at the end of a derrick across a notional perpendicular projecting from the ship's rail.}
In the modern era of containerization, the term "ship's rail" is somewhat archaic for trade purposes, as with a sealed shipping container there is no way of establishing when damage occurred after the container has been sealed. The standards have noted this. Incoterms 1990 stated,
                    {When the ship's rail serves no practical purpose, such as in the case of roll-on/roll-off or container traffic, the FCA term is more appropriate to use.}
Incoterms 2000 adopted the wording,
                    {If the parties do not intend to deliver the goods across the ship's rail, the FCA term should be used.}
The phrase passing the ship's rail is no longer in use, having been dropped from the FOB Incoterm in the 2010 revision.
Due to potential confusion with domestic North American usage of "FOB", it is recommended that the use of Incoterms be explicitly specified, along with the edition of the standard. For example, "FOB New York (Incoterms 2000)". Incoterms apply to both international trade and domestic trade, as of the 2010 revision.











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