Understanding the Bitumen Sales Contract: Key Terms and Conditions
Bitumen is a crucial material in road construction, waterproofing, and various industrial applications. When engaging in bitumen trade, a well-defined sales contract ensures transparency and trust between buyers and sellers. This blog explores the essential elements of a standard Bitumen Sales Contract, outlining its key clauses and how they protect the interests of both parties.
1. Introduction to the Bitumen Sales Contract
A Bitumen Sales Contract establishes a legal agreement between a buyer and a seller, defining the terms of the sale, including product specifications, pricing, delivery conditions, and payment terms. Typically, these contracts cover bitumen grades such as 60/70, 80/100, and 85/100, commonly used in road construction and industrial applications.
2. Key Clauses in a Bitumen Sales Contract
ARTICLE 1: Object & Definitions
This section defines critical industry terms used throughout the contract, such as:
- FOB (Free on Board): Seller delivers goods to the designated shipping port.
- CIF (Cost, Insurance, and Freight): Seller covers the shipping and insurance costs up to the buyer’s port.
- TT (Telegraphic Transfer): A swift and secure international payment method.
- USD Currency: All transactions are conducted in U.S. dollars.
ARTICLE 2: Commodity Specifications
- Product: Bitumen 60/70 (or other grades as agreed)
- Origin: Iran (from petroleum bitumen refineries)
- Contract Type: One-party agreement, specifying delivery terms and obligations.
ARTICLE 3: Guaranteed Product Specifications
The quality of bitumen is crucial, and the contract ensures compliance with international standards such as ASTM (American Society for Testing and Materials). Some critical specifications include:
- Penetration at 25°C: 60-70 (ASTM D-5)
- Softening Point: 49-56°C (ASTM D-36)
- Flash Point: Minimum 250°C (ASTM D-92)
- Solubility in CS2: Minimum 99.5% (ASTM D-4)
3. Pricing and Delivery Terms
ARTICLE 4: Quantity & Price
- The contract specifies the total metric tons (MT) to be delivered.
- Pricing is typically based on FOB Bandar Abbas, Iran, ensuring competitive rates.
- Prices are subject to currency exchange fluctuations and valid for a specified period.
ARTICLE 5: Delivery Schedule
- Port of loading: Bandar Abbas, Iran.
- Partial shipments: Allowed, based on logistical agreements.
- Timeline: Delivery is typically completed within 14 days after the advance payment.
4. Payment Terms and Conditions
ARTICLE 6: Payment Terms
- Advance Payment: 30% upon contract signing.
- Final Payment: Paid against shipment documents, including:
- Certificate of Quality and Quantity (issued by independent inspectors such as SGS, GeoChem)
- Commercial invoice
- Bill of Lading (showing freight status)
- Certificate of Origin (from Tehran Chamber of Commerce)
- Seller’s Liability: If the product fails to meet the specifications, the buyer can reject the shipment at the seller’s cost.
5. Packaging and Shipment Requirements
ARTICLE 9: Packaging Standards
Bitumen is packed in New Steel Drums to prevent leaks and contamination:
- Drum Thickness: Minimum 0.6mm, painted black.
- Net Weight per Drum: 178-182 kg.
- Markings: Each drum must have a white-printed identification label.
ARTICLE 11: Inspection and Quality Assurance
To ensure product integrity, independent inspectors verify:
- Weight and Quality: SGS Iran or equivalent authorities certify compliance with contract standards.
- Drum Condition Report: Ensuring proper sealing, labeling, and packaging.
- Container Condition Report: Containers must be seaworthy, free from rust, and damage-proof.
6. Legal Terms and Buyer-Seller Responsibilities
ARTICLE 13: Insurance
The buyer is responsible for insuring the shipment upon loading onto the vessel.
ARTICLE 15: Penalty for Late Delivery
If the seller fails to meet the delivery deadline, a penalty of USD 10,000 per day is imposed.
ARTICLE 17: Arbitration and Dispute Resolution
In case of disputes, the contract stipulates arbitration under Singaporean law, ensuring a neutral legal environment.
ARTICLE 22: Governing Law
The contract is legally bound by the laws of Iran and the United Arab Emirates (UAE).
Conclusion
A well-structured Bitumen Sales Contract protects both buyers and sellers, ensuring transparency in pricing, quality control, and timely deliveries. By defining precise specifications and legal terms, the contract minimizes risks and enhances trust in international bitumen trade.
If you are looking to source high-quality Bitumen 60/70, 80/100, or 85/100, our team at PetroGold ensures seamless procurement, competitive pricing, and reliable delivery. Contact us today for more details!
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