Outline of International Business Transactions law
PART I: OVERVIEW OF INTERNATIONAL SALE OF GOODS
1) INTERPRETATION OF COMMERCIAL TERMS
2) DOCUMENTS OF TITLE
Steps of a Unconfirmed Letter of Credit applied to hypo and Â“Payment with LOCÂ” chart on LOC flow chart:
1) Value Industries (buyer-applicant) and Globo Industries (seller-beneficiary) K for payment by LOC.
2) Value Industries (buyer-applicant) goes to its bank, Mid America Bank, OH (issuing bank-drawee) and applies for LOC by presenting a pro forma invoice or purchase order.
3) Mid-America Bank (issuing bank-drawee) issues LOC in Globo IndustriesÂ’ (seller-beneficiary-drawer) favor for $63,750
4) Globo Industries (seller-beneficiary-drawer) presents Mid-America Bank (buyerÂ’s bank) with required documents
5) Mid-America Bank (issuing bank-drawee) pays Globo IndustriesÂ’ (seller-beneficiary-drawer)
6) Mid-America Bank (issuing bank-drawee) forwards documents to Value Industries (buyer-applicant)
7) Mid-America Bank (issuing bank-drawee) debits Value IndustriesÂ’ account (buyer-applicant)
Steps of a Confirmed Letter of Credit applied to hypothetical and Â“Payment with LOCÂ” chart on LOC flow chart:
1) Value Industries (buyer-applicant) and Globo Industries (seller-beneficiary-drawer) K for payment by LOC.
2)Value Industries (buyer-applicant) goes to its bank, Mid America Bank, OH (issuing bank) and applies for LOC by presenting a pro forma invoice or purchase order.
3) Mid-America Bank (issuing bank) issues LOC in Globo IndustriesÂ’ (seller-beneficiary-drawer) favor for $63,750
4) Globo Industries (seller-beneficiary-drawer) demands confirmed LOC from Banco de Brasil
bank (beneficiaryÂ’s bank-advising bank-confirming bank-drawee)
5) Banco de Brasil (beneficiaryÂ’s bank-advising bank-confirming bank-drawee) issues LOC confirmation in Globo IndustriesÂ’ (seller-beneficiary drawer) favor
6) Globo Industries (seller-beneficiary-drawer) ships goods to Value Industries (buyer-applicant)
7) Globo Industries (seller-beneficiary-drawer) submits drafts and other documents to Banco de Brasil bank (beneficiaryÂ’s bank-advising bank-confirming bank-drawee)
8) Banco de Brasil bank (beneficiaryÂ’s bank-advising bank-confirming bank-drawee) provides Globo industries (seller-beneficiary-drawer) with payment.
9) Banco de Brasil bank (beneficiaryÂ’s bank-advising bank-confirming bank-drawee) submits drafts and other documents to Mid America Bank, OH (issuing bank)
10) Mid America Bank, OH (issuing bank) reimburses Banco de Brasil bank (beneficiaryÂ’s bank-advising bank-confirming bank-drawee)
11) Value Industries (buyer-applicant) reimburses Mid America Bank, OH (issuing bank)
Biddell Brothers v. E. Clemens Horst Co.
Facts: Seller (U.S.) (brewing hops); Buyer (England). Contract terms: Â”C.I.F. to London, Liverpool, or HullÂ”, Â”Terms net cash.Â” Buyer refused to pay against documents because they wanted a sample and seller refused to send samples. So instead, buyer stated that they will only pay against goods. Seller argues that a third party (i.e. S.F. Merchant Exchange) provided buyer with a certificate of quality. Buyer does not trust the S.F. Merchant Exchange. Seller refuses to ship the goods arguing that the buyer breached because they refused to accept the goods. Buyer believes that they have a CIF contract and so they can decide whether they want to accept goods and pay or accept documents and pay. Seller argues that in a CIF contract you must pay against documents and that this is a Â“terms net cashÂ”, which means that payment must be made against documents.
Issue: Must the buyer make payments against documents or against delivery of goods or either?
Holding: It does not make any sense to give the buyer the choice of Â“symbolic deliveryÂ” or Â“actual deliveryÂ”. By using a negotiable bill of lading, which you must, and if the negotiable bill of lading is something of value (i.e. title to the goods) and the seller delivered the bill of lading, but the buyer asks for delivery of goods, then the seller would be performing/paying twice (a. delivery of bill of lading and b. delivery of goods). Further, CIF and Â“terms net cashÂ” mean that the Â“delivery of the bill of lading when the goods are at sea can be treated as delivery of the goods themselves.Â” (i.e. Lex Mercatoria = the customary law between merchants)
-Rule: If it is a CIF contract, the buyers have to pay against documents
-The fact that CIF was used does not make Â“payment against deliveryÂ” but the fact that there was a bill of lading and they said CIF made Â“payment against deliveryÂ” an option.
Facts: Seller, Luis De Ridder, loads 1,120 tons of grain/rye onto a ship, the Julia, to ship to Belgium. The carrier gives the seller (Luis De Ridder) a negotiable bill of lading made out to Belgian Grain, who is the sellerÂ’s agent in Belgium. While the ship is en route, seller contracted to sell 500 tons of the rye to Boerenbond Belge (buyer): 500 tons of rye for $5000, CIF Antwerp, Payment against documents. Seller does not give buyer a bill of lading, because he wants to split up the goods that are listed on the bill of lading and sell to multiple buyers and if he hands over a bill of lading that would be essentially selling all of the goods. Instead, seller gives belgian, his agent, a delivery order, and it is the responsibility of the agent to deal with the buyers. Along with the delivery order there are two different insurance certificates, one was for marine risks and one for war risks. Seller has possession of the insurance certificates and his agent, belgian, has the delivery order. All of these documents (i.e. insurance certificates and delivery order) are delivered to Van Bree who is the sellerÂ’s cargo superintendent. Van Bree is required to stamp/endorse the order, making a note that acknowledges obligation of delivery to the buyer. Van Bree delivers the delivery order, provisional invoice (the bill), and two insurance certificates to the sellerÂ’s agent (i.e. Belgian Grain) because Van Bree is not authorized to deal with the buyer. Buyer accepts the documents: the delivery order, provisional invoice, and two insurance certificates (but no bill of lading because the seller needs to hang on to the bill of lading under the circumstances of this case).
WHAT WAS SUPPOSED TO HAPPEN?:
1) Shipment arrives at port
2) Buyer hands over the delivery order plus a check for freight charge to its own cargo agent (Carga)
3) Carga gives the check for the freight charges and the delivery order to the sellerÂ’s sales agent (Belgian Grain)
4) Belgian Grain notes that the freight charges have been paid and hands the delivery order to the sellerÂ’s cargo superintendent (Van Bree)
5) Van Bree issues an order to its workers to release the goods (lasissez suivre) to the buyer.
But the goods are still on board the ship so…
*6) Van Bree gives the bill of lading to the shipÂ’s captain.
*7) ShipÂ’s captain gives the (laissez suivre) order to release the goods.
*Two key elements of this transaction
WHAT ACTUALLY HAPPENED?:
-There is war in Europe, so the rye is diverted to Lisbon, Portugal instead and sold at a loss (sold at a loss because Lisbon was one of few ports open in Europe, so it is likely that others were dumping their rye off there as well.)
-Buyer has the option to seek remedy through insurance, but the buyer wants a refund of the full purchase price.
Issue: Can the buyer recover the purchase price in a CIF K?
Holding: This is a CIF K. Therefore, since the sellers have delivered the documents, the buyer cannot recover the purchase price. In a CIF contract, the seller cannot deliver any goods that it wants, there must be Â“transfer of titleÂ” (i.e. document that gives title to the goods). In this case, the bill of lading was nonnegotiable, thus non-transferable. It would have to be negotiable in order to be transferable. Lack of goods (i.e. proper documents) caused a lack of consideration. Here, the buyers only received the delivery order (i.e. part performance; preliminary steps, without any legal significance), which was only a portion of the bill of lading.
-Must look at the parties intent as to what they wanted the documents to mean. Cannot just look at the words Â“CIFÂ” and know what the parties intended, it must have the essential characteristics of a CIF.
-Delivery order gives you rights against the seller (and his agents) but not against other parties. Must have a negotiable bill of lading to give the buyer rights against everyone (i.e. alienability or fully transferable rights)
-If parties expressly agree in writing that a delivery order was intended to be a document of title then it can be viewed as a document of title by the courts.
Requirements of intending a delivery order to be a document of title: a) seller writes: Â“whoever has delivery order has Legal Rights to the goodsÂ” and b) it is a sale between sophisticated merchants.)
3) CONTRACT OF AFFREIGHTMENT (101-107)
F.D. Import and Export Corp. v. M/V Reefer Sun
Facts: F.D. Import arranged the shipment of bananas from Ecuador to the Ukraine. F.D. Import contracted with suppliers and carriers to have the bananas shipped. In the contract was a Â“Charter PartyÂ” that listed private carriers and was signed by the private carriers, who agreed that Â“all disputes arising under [the] Â‘Charter PartyÂ’ are to be referred to arbitration in London.Â” The bananas didnÂ’t meet the specifications and were fraudulently packed so F.D. Import brought this action against suppliers and carriers. All defendants moved to dismiss on the ground of the arbitration clause.
Issue: Are the parties bound to the arbitration clause?
Holding: Yes. Although F.D. Imports did not have actual notice of the broad arbitration clause, it is clear that they had constructive notice.
-Broad Arbitration Clause: Â“All disputes arising … are to be referred to arbitration.Â”
-Narrow Arbitration Clause: Â“All disputes arising among party X and Y … are to be referred to arbitration.Â”
4) THE BILL OF LADING (107-130)
Negotiable vs. Nonnegotiable BOL:
-Bill of lading names the consignee as Â“To order of the shipper.Â”
-Carrier must deliver the goods to any party with a properly endorsed BOL.
-Carrier cannot deliver the goods unless the party hands over the properly endorsed BOL.
-Bill of lading names a specific consignee
-Carrier must deliver goods to the consignee or its agent
Fruit of the Loom v. Arawak Caribbean Line Ltd.
Facts: FRUIT contracted with ARAWAK, an ocean carrier, to carry goods from Jamaica to FRUITÂ’s warehouse in Kentucky. The goods were to be shipped by Â“multimodal transportÂ” first by a sea carrier from Jamaica to Florida then by trucks from Florida to Kentucky. FRUIT used a nonnegotiable through bill of lading. ARAWAK sub-contracted with SEASIDE, who was responsible for picking the goods up from Florida and transporting them by truck to Kentucky. The goods made it safely to Florida, however, when they were in SEASIDEÂ’s trucks and en route to Kentucky the trucks were hijacked and the goods stolen. The Contract between FRUIT and ARAWAK had a Â“Clause ParamountÂ” which states that COGSA applies to all forms of transportation, as long as it is in the possession of the carrier or his agent (This is how we know that ARAWAK can be responsible for the trucking portion of the shipping). Further, there is a Â“Himalaya clauseÂ” which Extends liability to an agent or subcontractor (non-ocean carriers) (We know that Seaside is subject to the terms of COGSA because of this clause). Lastly, the contract had an exceptions clause, which limited liability if it were due to Â“acts of public enemies, thieves, pirates, or assailing thieves. Fruit argues that this clause should not apply in this case because they believed that it was an inside job.
Issue: Which law should apply: a) Carriage of Goods by Sea COGSA (which Arawak wants to apply because of the $500 limited liability of the act; or b) The Interstate Commerce Act
Holding: COGSA applies; Fruit bargained for a transportation contract with Arawak wherein Fruit assumed the risk of cargo loss resulting from criminal hijackings due to the exceptions clause.
-Through bill of lading: When a bill of lading is issued to a destination, which requires multimodal transport, all connecting carriage is subject to the bill of lading.
Steel Coils, Inc. v. M/V Lake Marion
Facts: Ship Owner (Lake Marion, Inc) was in a time charter (rental of boat) with carrier (Western Bulk). The ship manager (Bay Ocean Mgmt. Inc) was in a management contract with ship owner (Lake Marion, Inc.) to manage the ship. Steel CoilsÂ’ goods were damaged during the shipment. Steel Coils filed suit under COGSA against the ship (M/V Lake Marion in rem; because of added value; filing in rem makes it a maritime case, rather than an international case, because maritime cases come under special rules of civil procedure, which are very favorable), against the ship owner (Lake Marion, Inc.), the ship manager (Bay Ocean Mgmt) and the carrier (Western Bulk). Under the COGSA burden shifting procedure, plaintiff first made a prima facie case by showing that the goods were loaded in an undamaged condition and unloaded in a damaged condition. The burden then shifted to defendants to show that cause of loss was due to fault of someone/something other than defendant. Can show that the loss was caused by a COGSA exception: (a) latent defect not discoverable by due diligence (b) that loss caused by perils, dangers, accidents of sea, or (c) due diligence that the vessel was seaworthy.
Issue: Did the district court err in the following respects: a) improperly shifted the burden to M/V LAKE MARION to prove that the steel cargo was not in good condition prior to loading or was in undamaged condition at discharge; b) finding that LAKE MARION failed to exercise due diligence to ensure that the vessel was seaworthy at the commencement of the voyage; and ci) disregarding LAKE MARIONÂ’s defenses to COGSA liability of peril of the sea and cii)latent defect?
Holding: The district court did not err: a) substantial evidence in the record supports the district courtÂ’s conclusions as to the damage evident at unloading; b) Because the duty to exercise due diligence to ensure the seaworthiness of a vessel is nondelegable, the district court here did not reversibly err in concluding that the vessel interests failed to exercise due diligence in part because they did not test the watertightness of the hatches; and ci) storm at sea did not constitute Â“peril of the seaÂ” so it could not fit under that exception of COGSA; cii) there was no latent defect, because the evidence establishes that the crack was caused by gradual deterioration, not by a defect in the metal and thus, the fracture was old and the latent defect defense cannot stand.
COGSA Burden Shifting: (p. 116)
Plaintiff: Makes a prima facie case that the goods were loaded in an undamaged condition and unloaded in a damaged condition.
-A clean bill of lading will help make this showing because it shows that the goods were undamaged when loaded.
Defendant: Explain Cause of loss due to fault of other than defendant. Can show that the loss was caused by a COGSA exception (i. latent defect not discoverable by due diligence; ii. that loss cause by perils, dangers, accidents of sea; iii due diligence that the vessel was seaworthy.)
Plaintiff: Show that defendantÂ’s negligence was at least a contributing cause to the damage
Defendant: Demonstrate proportion of damage attributable to COGSA exception.
5) MARINE INSURANCE (123-130)
American National Fire Insurance Co. v. Mirasco, Inc
Facts: Mirasco shipped meat that it got from IBP Corp. to Egypt. While the meat was en route the Egyptian Government passed Decree #6 which stated that as of January 14, 1999 there would be no more imports from IBP Corp as well as any company with which it is associated. Mirasco sent an order of beef liver to Egypt on December 31, 1998, 60.5% of which consisted of meat that the Egyptian government had rejected in the past. The decree had gone into effect after the vesselÂ’s departure but prior to the vesselÂ’s arrival. Mirasco unsuccessfully attempted to convince the Egyptian authorities that the IBP cargo of the vessel should be exempted from the Decree because the shipment sailed prior to the issuance thereof. The Egyptian government still rejected the meat and as a result Mirasco had to ship all of the meat back to its place of origin. Consequently, Mirasco wants to recover from its insurance company under the Â“Rejection Cover,Â” although the Â“Rejection CoverageÂ” does not cover government embargoes. Insurer argues that the goods were rejected because Egypt issued an embargo against IBP and government embargoes are not covered by the rejection policy. They further argue that even if this was not a rejection because of a government embargo, there still must be proof that the goods were rejected at the foreign port and in this case Egypt did not officially issue a Â“rejectionÂ” letter. The insurance company and Mirasco moved for summary judgment
Issue: Does the government embargo (i.e. Decree #6) apply although the goods were shipped prior to the embargo?
Holding: Since the ship had set sail before the embargo was announced, the goods are still covered by the rejection policy.
-The rejection of the sale resulted in loss of market value, not loss of market, and therefore it was covered by the Â“rejectionÂ” coverage
-Loss of market means that there is an actual change in supply and demand.
-Insurance company argues: Loss of market in this type of contract means that you lost your market in the place you were shipping, not that there was a loss of market in the U.S., where the goods had to be re-sold.
More about this outline:
I. International Sales of Goods
UN Convention on Contracts for the Intl Sale of Goods (CISG)
Governs transactions between US and 62 intl parties unless expressly opt out
US Reservation limits application of CISG when 2 K states are part of CISG-if other K party in non-CISG state then UCC governs
It is self-executing treaty.
Purpose-reduce legal obstacles to intl trade, and promote orderly development
Acts much like Article 2 of UCC of US lawÂ—differences marked at UCC portion of supplement.
Remember donÂ’t use term Â“as isÂ” in contract if CISG applies.
Sphere of Application of CISG
Main purpose to avoid conflicts of law problems
Sphere of application defined in first 6 Articles
Article 1-requires Â“sale of goodsÂ” K to be both intl and bear stated relation to K states
No definition of Â“contract,Â” Â“sale,Â” or Â“goodsÂ”
Intl-between parties whose places of business are in different states; location of goods or negotiation is not dispositive
Place of Business- Article 10A-permanent establishment required, neither warehouse nor office of sellerÂ’s agent qualifies; Â“that which has the closest relationship to K and its performance.Â” Limited to those circumstances known to parties before K formed
Permits parties to state in K which office is pertains
AND either both states are K states, or only 1 state is and private intl law choice-of-law rules lead to application of law of K state
US reservation strikes the latter, instead US law for domestic sales transactions would govern, typically UCC
Article 6-Opt out capacity is always available to parties to K
Choice of Law Clauses
Article 6-parties may expressly determine not to be governed by CISG (opt out)
Must be done unambiguously-CISG does not apply; X law does apply
If contract doesnÂ’t have choice of law clause, then cts will look for place of contract formation and choice of law principles of the forumÂ—important for KÂ’s between US and a non-CISG party.
if under ECC Conv Art 4.2-looks at habitual residence of the corp forming the K; however, Art 4.5 looks at the circumstances in total
Other Scope Issues
Article 3-expressly includes K for the sale of goods not yet produced, unless buyer undertakes to supply Â“substantial partÂ” of the necessary materials
Includes sales involving combo of goods and services, unless Â“preponderant partÂ” of sellerÂ’s obligation concerns labor or other services
Article 2-expressly excludes K for sale of commercial paper, investment securities, ships, aircraft, hovercraft, and electricity
Perhaps similar to other Â“intangiblesÂ” or Â“immovablesÂ” but ambiguous
Software-important ambiguity; discs are goods, but K to develop is not
Article 2-expressly excludes intl sales of goods to consumers as to not conflict with consumer protection laws which are often Â“mandatory lawÂ”
Also execution sales and auctions are excluded
Article 5-CISG doesnÂ’t govern causes of action against seller Â“for death or personal injuryÂ” even if arising out of sales transaction; conflicts mandatory law
Article 4-CISG governs only the formation of K and the rights and obligations of parties to the K
Held to pre-empt State law on Promissory Estoppel , but not tort law
DoesnÂ’t govern validity of K, effect on title, or rights of 3rd parties
Contract of sale not definition-problems with consignments (buyer may return goods which cannot be sold), countertrade (goods are exchanged for other goods and not for money), and conditional sales (seller retains title to secured pmt)
General Provisions of CISG
Article 7-assists in interpreting the convention itself
Art 7(1)-Intended to stop local cts from applying local law to intl disputes
Art 7(1)-only refers to good faith in interpretation of CISG, not K, by cts
this is different from UCC Â§1-203 where there is good faith on each of the parties to a sale
Art 7(2)-gap fillers-since intl law may not have relevant answer, ct may default to their own applicable law or choice-of-law provision
in US this could mean UCC
Article 8-est rules for interpreting the K itself and its terms with 3 tier hierarchy
Where parties have common understanding or intent-should be used
Art 8(1)-If diverge, if one knew the other sides intent, that intent prevails
Art 8(2)-Unaware of divergence-stmts and conduct subject to Â“reasonable personÂ” standard under
Art 8(3)-requires that ct give consideration to all relevant circumstances- clear direction to consider parol evidence even when there is subsequent written agreement
Ct can look to negotiating history of K and actual administration of term of K by parties
Art 9(1)-allows parties to include Â“any usageÂ” to which they have agreed
Art 9(2)-allows for incorporation of usages by implication but only if Â“parties knew or ought to have knownÂ” of it, must be a usage in intl trade, must be widely known and must be Â“regularly observedÂ”
Art 11-K for intl sale of goods is enforceable even if not written and can be proven by any means
No equivalent to Statute of Frauds
Art 12 and 96-allow contracting state to declare reservation that its local law shall govern the form requirements if the party has place of business in that state
If Art 96 reservation declared, parties may not circumvent under Art 10
Art 13-how to satisfy writing requirement; includes telex or telegram
Contract Formation (Part II of CISG)
Art 92-allows state to declare it will not be bound by section II of CISG
No consideration and no formality requirements
Offer (Art 14-17)
Art 14-definition offer with 3 reqs
Must be proposal for concluding K
Must indicate intention to be bound in case of acceptance
Art 14(2)-proposals to general public not offers
Must be sufficiently definite re 3 terms: description, quantity, price
Price can be flexible if sufficiently defined like index
More restrictive than UCC Â§2-305
Art 55-offeror may implicitly agree to pay current price-price K is concluded becomes fixed price
Quantity-can be left open for requirement, output, exclusive dealings-if provision for determining
Assortment-CISG doesnÂ’t require that the offer specify goods, so presumably authorized if assortment left open so long as parties take care in describing the type of good from which assortment will be selected
Art 16-revocability-offer revocable unless indicates it is not
Can indicate by stating fixed time for acceptance
Acceptance (Art 18-22)
Art 18(1)-definition acceptances as either stmt or other conduct by offeree indicating assent to an offer
Silence may be sufficient if followed by affirmative conduct
Art 18(2)-determines when indication of acceptance is effective for concluding K
Not effective till it reaches the offeror; risk of loss on offeree
With Art 16(1)-offeror power to revoke terminated upon dispatch of acceptance, however offereeÂ’s power to withdraw acceptance terminates only when acceptance reaches offeror (analog to mailbox rule)
Art 18(3)-acceptance by conduct without notice is possible only when allowed by offer, usage, or prior course of performance
Art 19-battle of forms-if different then offer, rejection, counter-offer (original offer terminated under Art 17); no K and parties not bound
Last shot rule-implied from Art 17, 18(3), and 19
compared to UCC in supp
Art 23-K concluded (binding) when acceptance of offer becomes effective
Art 30-seller is obligated to deliver goods and any related docs and to transfer the property in the goods to the buyer; goods must conform to K as to qty, qlty, title
Domestic law determines whether property passes from seller to buyer at the conclusion of K, delivery, or other time, whether certificate of title is reqd; whether seller may retain title as security for purchase or debts
Delivery-transfer of possession or control of the goods
Art 31-4 types of delivery terms
Delivery K in which seller must deliver to place specified in K
Goods must be conforming when delivered, not shipped, unless excused by force majeure under Art 79 and 69
Shipment K-involves carriage of goods but not required delivery
Seller no obligation to deliver goods to particular location, but independent 3rd party carrier is involved (FOB or CIF)
Art 31(a)-seller must hand over goods
Art 31(b-c)-sellers obligation is to put goods at buyers disposal at the appropriate place
Art 32(1)-if goods not clearly id to K by shipping docs or markings, seller must notify buyer of consignment
Art 32(2)-K may req seller to arrange transport of goods, in which case seller must K for appropriate carriage
Art 32(3)-seller must either effect insurance or at buyers request, give info so buyer can get insurance
Sales of goods at a known location which not expected transported
Sales of goods unknown location and not expected transported
Art 33-time requirements-goods or docs must be delivered on or before a stated or determinable date set in K or within reasonable time (precludes immediate delivery though is not defined)
Art 34-requires that seller conform to terms of K; seller who delivers defective docs early may cure the defects until the date due under K and buyer must accept even if caused damage to buyer
Art 35-obligates seller to deliver goods of the qty, qlty, description, and packaging reqd by K; results similar to warranty structure of UCC (UCC Â§2-314)
Art 35(2a)&(d)-goods must be fit for ordinary use and proper pack
Art 35(2b)-must be fit for any particular use made known to seller (UCC Â§2-315)
Art 35 (2c)-must conform to any models held out
No conditions on the imposition on seller of the obligation of fitness for ordinary use
Seller is relieved of any obligation under Art 35(2) against defects in quality whenever buyer is aware or could not have been unaware of a defect at time K is concluded
generally seller not obligated to supply goods that conform to the public laws and regulations of the buyerÂ’s state with 3 exceptions listed below.
Medical Marketing Intl v Internazionale Medico Scientifica-seller not obligated to supply goods that conform to public laws and regulations in buyers state unless:
If laws are identical to ones of sellers state
Buyer informs seller of laws
Buyer knew or should have known of laws in buyers state
Art 36(1)-obligations begin at time when risk of loss passes to buyer-any nonconformity which exists at time of risk of loss passes is actionable, even if discovered later; buyer must prove defect present at delivery
Art 40-obligation to notify buyer of any nonconformity known to seller or of which he could not have been unaware
Art 41-title-obligation to deliver title free of encumbrances or claims of 3rd party
Must also be free from patent, trademark and copyright claims
Seller can exclude any of these obligations by K (Art 6)
Remedies for SellerÂ’s Breach
Seller may be in a significantly better position under CISG than under UCC b/c seller has right to cure any defects without the UCC time limits or expectation requirements.
Basic types of remedy
Art 46-gives buyer who has not received delivery right to specific performance with 2 qualifications (not required, can seek damages)
About the Author/s and Rewiever/s
References and Further Reading
About the Author/s and Reviewer/s
Mentioned in these Entries
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