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LEGAL OBLIGATIONS :THE OFFER
Australia commences its new business year from the first day in July of any given year; and with it FTNX website pages are often fully updated with new forms and new tested trading aspects. Important matters to do with the offer, and the mistakes we keep on encountering at this aspect, are specified below in a straightforward manner. The supplier and end buyer should observe the following aspects as relevant when considering business with FTNX
THE QUOTE: Orthodox aspect
The supplier may submit a simple quote to the buyer where the grade of goods on offer is clearly stipulated. The quote is to inform the buyer about the price of goods. The buyer may confirm the quote, which has no legally binding status on the condition the word “quote” is apparent. The quote may be advised as an email text message without the need of a PDF in support. The quote once confirmed and returned to the supplier signifies that the buyer would like to examine a full offer. This is the proper international aspect.
FTNX in-house Aspect “AOS”
When dealing with a buyer such as FTNX however, the supplier may also submit a quote; however FTNX has devised a much simpler method to enact with the supplier for the benefit of both parties. FTNX needs more information upfront as we mostly conduct business on large revolving FCL or NBC deliveries, where a revolving contract of supply is apparent. These kind of dealings are much more complex, requiring a very refined set of procedures that only long term experienced and informed traders can propagate. FTNX has replaced the quote aspect, with one that is more comprehensive by introducing the virtues of a FTNX initiated AOS, which, like the quote, is not legally binding. However even though the AOS is not legally binding, the intent it bears is. It could become a criminal matter if the AOS is served where it is later found that once a deal is closed , that the supplier did not have the products to offer in the first place as indicated on the AOS advice, as secured long before the commencement of any active deal. Likewise the same effect applies to FTNX when dealing with its clients (end buyers.)
The Trading Process
With the FTNX “AOS” form, the supplier will be informed about the deal and process as indicated on the form itself. This means when FTNX attempts to buy such goods - no surprises are apparent with the supplier, allowing for a straightforward clean and legally applied transaction to proceed all the way to first delivery–without hindrance. What if the supplier cannot accept what is specified on the AOS? Before FTNX makes an attempt to buy offered goods; knowing in advance that FTNX is unable to accept variations to matters stated on the AOS; saves a lot of wasted time, frustration, and effort to the parties involved. The supplier accepts the vitues of the AOS or they advise their own offer for FTNX to consider.
In other words, FTNX is applying safe and strict trading matters and that the best option is what’s being sought by FTNX. If the supplier cannot accept an AOS, a full proper legally binding offer would be expected in its place, as produced by the supplier. The informal ‘AOS’ aspect makes it clear from the very start of the deal what will happen when FTNX attempts to buy ‘assured’ goods. Once FTNX attempts to buy offered goods within the validity period stipulated on the AOS, ( not less than 3 months-longer the better ) a strict routine is established, all the way to first delivery. This routine breaks down the steps that parties will need to take to complete first delivery.The informal aspects of the AOS also delivers added expert opinions and insight for the added guidance and benefit of the supplier. We look after our interest as well as the interest of the people we trade with, in a ‘fair, reasonable and informed manner’ at all times.
An ‘AOS’ is easy to fill in and serve for suppliers who simply are busy all the time. The supplier only needs to submit an in house form defined as AOS (Assurance of Supply) to be filled in and sent to FTNX as a PDF. The ‘AOS’ aspect is an informal document and not legally binding until the purchase aspect commences with a formal purchase offer, as issued and advised by FTNX who is the buyer to the supplier. The 2025 AOS form may be downloaded from the FTNX library. To verify that the supplier has read this website page, please use the following code to open the AOS form once downloaded. This code can be used to open any other relevant documents yet to appear in the FTNX library, as marked, suited for use by suppliers or end buyers worldwide. The ‘AOS form’ code to open the document once downloaded is FTNXaos1725.
Even though we have reduced the number of ill informed traders, we still see ill informed and intermediaries plying an ICPO which has no legal basis internationally and is mostly circulated via USA based intermediaries, where such documents do not have force of international applied laws.The irrevocable aspect of a corporate purchase offer if advised and acted upon within the USA is legally binding, if offered internationally - it’s not. In a country like Australia a pro-forma invoice, promissory notes, and matters of finance factoring has the same effects– if applied locally.
THE OFFER
Orthodox aspect
No legal contract is apparent, unless a full offer has been accepted first. One a quote is advised as confirmed, it's returned to the supplier, who in turn advises an offer. While the quote is not legally binding once returned , this aspect changes with the issuance of a formal offer. The buyer reads the offer intently and asks for changes as necessary. The supplier will consider such requests–or reject such a request where the buyer may respond with a counteroffer defined as an “Offer to Procure” (OTP) for the supplier to now consider; is another FTNX created aspect. The offer is a very important document, so much so that the intention of the party is to sign a contract and enact on its basis a legally binding aspect. In short, if the offer is signed, and returned by email, it's legally binding–whereas an AOS is not.
FTNX Will Consider an Offer
FTNX will also consider an offer from a supplier after the quote is confirmed,as this is the correct orthodox aspect, however experience over a great period of time, has produced a situation where supplier often may make demands and offer higher prices to FTNX that they would not make its end buyers /users. Often the offer is also poorly applied with important elements missing. This now adds to the idea that the ‘AOS’ once served means when FTNX is ready to make a purchase it will advise its own Offer to Procure (OTP) to the supplier to consider intently in full support of the orthodox trading aspect. Again this aspect supports the advice served on the AOS and saves everyone a lot of time and effort if the ‘AOS; is not accepted or where it could be accepted if some very trivial changes are made. In this case the previous ‘AOS’ is cancelled and a new one is advised with trivial changes applied.
Elements of a Contract
All contracts are agreements whereas not all agreements are contracts. 7 elements are needed to create a contract, which all starts when a deal is formed based on the intent of the parties involved. The offer must be initiated accordingly.
The 7 elements are ;
- Intention: Parties to create a legal relationship
- Offer: No contract is apparent if an offer is not first accepted.
- Valuable Considerations: Contract cannot exist without a price
- Legal capacity: Lunatics, a drunk, a minor. etc. cannot sign a contract.
- Genuine consent: Parties directly privy to the contract are signing the contract
- Legal aspect of objects: Illegality at Common law or by Statute
- Mutual Understanding:All trade contracts are written in English language and signed buy participants who comprehend the English language.
The offer must be signed as served, in a manner undestood by all invoivled. Any alterations or new markings found on the body of offer once it’s signed and returned to the supplier is a rejection of the offer. When the offer is accepted a legally binding position on both parties to the offer apply. The supplier must now perform; the end buyer is now obligated to perform as well. The supplier is allowed to charge the end buyer loading operations and expenses incurred thereafter if the end buyer fails to perform, after signing an offer. Legal challenges on this matter in recent times reinforces this aspect intently. A buyer could face expenses pertaining to loading operations and expenses incurred therein, often measured in hundreds of thousand of dollars, when the offer is cancelled later rather than sooner.
If the offer is rejected , the best course of action is to issue the new offer bearing a new date and transaction codes as this is the document that must be provided in case of an argument or dispute developing, during the course of an ongoing deal, which must be settled amicably in the first instance.
FTNX Perspective to the Above Aspect
FTNX applies the orthodox aspect, when applying the offer; unless the offer states differently. If a different aspect is made apparent, the legality of the offer still remains in place. The aspect that would stand firm in a legal challenge is the idea that the offer had clearly stated that the supplier may not commence any formal preparation or loading operations for goods accepted under an offer, until contracts are signed. This is an allowable aspect that only an informed PCT could apply, an aspect not available to a supplier acting with an end buyer directly on a live trade deal, as the legal binding aspect is that; the ‘offer once signed is legally binding.’ A PCT acting as an intermediate buyer doesn’t not have these aspects imposed because it is neither a supplier or end buyer or user of the products being traded upon. In this light a supplier or end buyer uses FTNX as a buffer to mitigate its own position–serves another excellent reason to use FTNX when buying or selling commodities.
In international trade business, English language applies; not unlike it applies to customs, all ship and airline captains and traffic controllers, and the likes. All USCT members acting as a PCT, end buyers and supplier should be applying the same aspects; alas some major suppliers have failed to comprehend the strong trading basis on offer; major suppliers and end buyer which are found as citations in legal publications, after expensive matters of taking legal action to enforce a breach of contract condition have been recorded in such publications. When dealing with FTNX , mitigating such legal actions is supported by using safe, strictly applied and legally enforceable trading procedures.
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