Cases of International Sale Contracts

Within the context of the UN Convention on Contracts for the International Sale of Goods, explain with relevant case examples:

UN Convention Law of Contract:

A contract is an agreement giving rise to obligation which are enforced or recognized by the law. The factor which distinguishes contractual from other legal obligation is that they are based on the agreement of the contracting parties. This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in.

OFFER:

An offer is an willingness by one party to enter into a contract and this intention can be through return proper or by conduct for offer to be effective it must be made with the intention being binding (upon acceptance) and its terms clearly status .

An offer is the offer or promise, an acceptance the offeror’s assent to the offeror’s. terms

No agreement will arise therefore if the offer or’s terms or purport to accept them the subject to qualification, or purport to accept terms not on offer. Neither, of course, will agreement arise if no offer is made, or if the offer is withdrawn before acceptance.

As well as being the penultimate act leading to formation of contract, an offer also servers the purpose of starting the terms on which you prepared to be bound

The offer acceptance formula develop in the (19 Century) indentifies a moment of formation when the parties are of one mind .This classical approach to contract formation has been weakened by development in the law estoppels ,misleading conduct ,mispresentation and unjust approach to contract formation has been weakened by development in the law of estoppels, misleading conduct misrepresentation and unjust enrichment.

Most offers are Bilateral, i.e. such as offer consist of a promise made in return for a promise.

In a sale of goods contract, for example, the offeror promise to take a pay for goodssend the offeror promises to supply goods of an appropriate description and standard.

A Unilateral offer is a promise made in return for the completion of a specified act. . An offer of a reward for the return of lost property all into this category.

A legally binding offer will includes.

Clearly stated terms;

Intention to do business;

Communication of that intention

These must all exist for a valid offer to have been made.

Case example:

Hillas v Arcos (1932,HL)

A contract to supply wood for one year contained an option permitting the buyer to buy more wood the next year, but it did not specify the terms on which the supply would be made.

Held: this was a valid offer .clarification of this rather vague option could readily be gleaned from the previous business dealing of the parties, as well as from custom and practice in the timber tarde .

Invitation to treat:

Statement advertising goods or land services for sale and not usually by the court as indicating the necessary intention to from an offer .Such statement invite customer to make an offer.

Catalogues, price, list, menus, and circular advertise so called ‘Cheap Offers’ at local business are interpreted this way. In Partidge v Crittenden (1968, HL) it was held that a managanize advertisement says ‘Bramble Finch and Hens 25 shillings each’ was an

Invitation to Treat. An offer came from those responding to it asking to buy the birds,

A display of goods in a shop window, without a price tag, is merely an Invitation to Treat.

The distrinction between offer and invitation to treat is often hard to draw as it depends upon the intention of the person making the statement.

If is an offer, then the customer can accept it by indicating his desire to buy the item and the shopkeeper must them sell it to him at the started price. If on the other hand it is an Invitation to treat, The offer is made by the customer in seeking to buy the item, and the shopkeeper can accept or refuse the offer as he wishes.

Case example:

Pharmaceutical Society (GB) v Boots Cash Chemist (Southern) (1953, CA)

Boots introduced self service including its patient medicines and was prosecuted by the Pharmaceutical Society under the Pharmacy and Poisons Act 1933 which made it illegal to sell certain drugs ‘without supervision of registered pharmacist.

Held: No offence had been committed. The medicines on display were merely an invitation to treat. The customer made an offer when putting the goods into the basket. A pharmacist was present at till where the offer was made by the customer which could be refused if appropriate.

An Counter offer:

An offer how against made an offer by the new party is called Counter Offer. It is a new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror. Making a counter offer automatically rejects the prior offer, and requires an acceptance under the terms of the counter offer or there is no contract.

In order to amount to a counter-offer, the offeree’s reply must itself be capable of acceptance. That is, it must contain either expressly or impliedly all the necessity terms.

Case example:

Hyde v Wrench (1840)

The defendant offered to sell his farm for £1000. The claimant at first said that he would pay only £950, but after few a day’s said he would pay the price. He heard nothing from the defendant.

Held: there was no contract between the parties: the defendant had not accepted the offer from the claimant, who had destroyed the defendant’s original offer by his counter offer of a reduced price. The claimant’s subsequent statement that he would pay the asking price could not revive the original offer. It was a new offer which the defendant never accepted.

(2) Assuming that the UN Convention on Contracts for the International Sale of Goods applies, explain the rights and liabilities of the parties involved

United nations conventions has made a contract for the international sale for Goods which has been recognized as the most sucessful to attempt a unity an broad area of commercial law at the international levels. The mission and vission for CIGS is to reduce obstacles to international trade, particularly those associated with choice of law issues, by creating even-handed and modern substantive rules governing the rights and obligations of parties to international sales contracts.

CISG is a project for united Nation commission on Interantioal Trade Law, which is create in early 1970s undertook to create a successor to two substantive international sale treaties- convention relating to a uniform law on the formation of contracts for the internation sales of goods. ULF and the convention relating to a uniform law for the International Sale of Goods (ULIS). ULF and ULIS they both are sponser for the organization as a internation institude for the unification of private law (UNIDROIT). The goals for UNCITRAL was to create a convention that would effect to increase particpation in uniform for international Sales rules. The text of the CISG was finalized and approved by the six offical Languages of the united Nations at the United Nations Conference on Contracts for the International Sale of Goods, held in 1980, in Vienna. The CISG entered into force in eleven initial Contracting States on 1 January 1988, and since that time has steadily and continuously attracted a diverse group of adherents.

The CISG governs international sales contracts if (1) both parties are located in Contracting States, or (2) private international law leads to the application of the law of a Contracting State (although, as permitted by the CISG (article 95), several Contracting States have declared that they are not bound by the latter ground). The autonomy of the parties to international sales contracts is a fundamental theme of the Convention: the parties can, by agreement, derogate from virtually any CISG rule, or can exclude the applicability of the CISG entirely in favor of other law. When the Convention applies, it does not govern every issue that can arise from an international sales contract: for example, issues concerning the validity of the contract or the effect of the contract on the property in (ownership of) the goods sold are, as expressly provided in the CISG, beyond the scope of the Convention, and are left to the law applicable by virtue of the rules of private international law (article 4).

Among the many significant provisions of the CISG are those addressing the following matters:

Interpretation of the parties’ agreement;

The role of practices established between the parties, and of international usages;

The features, duration and revocability of offers;

The manner, timing and effectiveness of acceptances of offers;

The effect of attempts to add or change terms in an acceptance;

Modifications to international sales contracts;

The seller’s obligations with respect to the quality of the goods as well as the time and place for delivery;

The place and date for payment;

The buyer’s obligations to take delivery, to examine delivered goods, and to give notice of any claimed lack of conformity;

The buyer’s remedies for breach of contract by the seller, including rights to demand delivery, to require repair or replacement of non-conforming goods, to avoid the contract, to recover damages, and to reduce the price for non-conforming goods;

The seller’s remedies for breach of contract by the buyer, including rights to require the buyer to take delivery and/or pay the price, to avoid the contract, and to recover damages;

Passing of risk in the goods sold;

Anticipatory breach of contract;

Recovery of interest on sums in arrears;

Exemption from liability for failure to perform, including force majeure;

Obligations to preserve goods that are to be sent or returned to the other party

CASE:

Axel, a German furniture manufacturer, ordered 2,000 metres (m) of a particularly high quality coloured cloth from Beni, an Italian cloth manufacturer. 1,000 m of the cloth was to be red and the other 1,000 m green. When the cloth was delivered Axel found that the green cloth had been replaced by blue cloth.

In spite of the change in the colour Axel used all the cloth without informing Beni and managed to sell all the furniture covered with it at its usual price. However he refused to pay Beni the full contractual price for the blue cloth as it was not what he had ordered.

According to the UN conventions on contracts for the international sale of goods, the rights and liabilities of the parties involved are as follows :

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Shears.P , Stephenson.G ,(1996) “James Introduction to English Law” Butterworths a division of rees Elsevier, Thirteenth Edition, London, UK

Bossche.P (2005) “The Law and Policy of the World Trade Organization” 4th Edition, London, UK

Adams.A ,(2008) “Law of Business Students” 5th Edition, Pitma publishing ,London,UK , p-112

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