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International Commercial Law Assignment Sample

QUESTION NUMBER ONE

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Based on Fact Pattern A above, what rights and remedies, including possible lost profits, does CSC have against CHC for the 25,000 units of computer hardware that had a manufacturing defect?

Answers-   

In this case, the buyer is CSC, and the seller is CHC. As it is given in the case study, that out of 100000 units which were being delivered by the seller to the buyer, when inspected by the buyer that is CSC, it was found that there were around 25000 units of the goods which were having a manufacturing defect[1].  

As the contract of sale has been taken on FOB that is free-on-board Incoterm’s rules 2000 basis. The risk here is transferred on the board itself and thus the risk of damaging the hardware products is transferred to the buyer that is CSC at that time only but is only for the delivery of the product of the quality which has been agreed between the parties.

The term contract of sale is defined as the agreement between the buyer that is CSC and the seller that is CHC, where the seller has agreed for delivering or selling something to the buyer for a consideration[2] or the price agreed between them. With this contract, there is the transfer of risk as well as the ownership both take the place.

But the contract of sales states that if the seller that is CHC has delivered the goods with some quality deficiencies or the manufacturing defect, then the buyer who is CSC has certain legal remedies against him. It is the obligation[3] of the seller that is CHC to deliver the goods which do not have any material defect. The manufacturing defects are the defects that occurred during the production or the construction of the products or the goods.

To get the legal remedies when the buyer gets the goods that are having a manufacturing defect from the seller then, the buyer that is CSC must inform the seller who is CSC about the manufacturing defects in a timely and orderly manner. The seller would be liable in a complementary nature. The legal rights[4] and the remedies of the buyer are discussed as-

  • He might revoke the contract of the sale by notifying that he would return the goods to the buyer.
  • He also could detain the goods being sold to him and also might reduce the reduction in the price of the purchasing in the proportion of the manufacturing defects. That is each unit of the goods cost 25000* 100 US dollars = 2,500,000 US dollars must be returned by the seller to the buyer, within a specified time and if not returned the money in a specified time then the seller would also be liable[5] for the interest on the 2,500,000 US dollars.
  • He also might call for free reparation for the goods being sold by the seller to the buyer at the cost and the expenditure of the seller itself.
  • The buyer also has the option to move to the consumer forum under the act of consumer protection.
  • Due to those defects in the goods, the buyer was also not able to fulfill his agreement with the blooming dales, and then the buyer also has to charge the cost of the damage to CSC because of the breach of his contract with the blooming dales, because the breach has occurred because of the manufacturing defect goods supplier by CHC. And thus, CHC is also liable for such damages[6].  As the CSC was selling the goods to blooming dales for a profit, and due to this breach of the contract regarding the quality of the goods,  he that is CSC has suffered from a loss of 7500 US dollars (50 units*[300-150] US dollars), then CHC will also be liable for the same.

Total amount t be paid by CHC = 2,500,000 US dollars+7500 US dollars= 2507500 US dollars.

  • And at last, he also might ask for the replacement of the things which are being sold by the seller with those goods that are quality goods.

Conclusion-

Hereby, it is concluded there are various options as legal rights and the remedies which are available to the company CSC as a buyer against the seller that is CHC. And the company CHC is legally liable towards the company CSC for supplying the products having manufacturing defects in that goods. As it has been proved that these 25000 units were having manufacturing defects and thus the company is liable to remedies[7] the loss suffered by the buyer that is CSC.  

QUESTION NUMBER TWO

Based on Fact Pattern A above, what rights and remedies does CSC have against the owners of the SS Speedy Delivery for the 25,000 units of computer hardware that were waterlogged?  

Answers-

In this case, CHC has sold its product to CSC on a FOB basis. So, the transfer of the good which is being sold by CHC is considered on two bases that is risk and ownership or the title of the goods. So, we where consider the rules of Incoterm FOB[8] basis sales and its rule has stated that the transfer of risk takes place on the board itself and thus the risk of damaging the hardware products is transferred to the buyer that is CSC at that time only. But when the contract of the sale is on a Free on-board basis, then the transfer of the title takes place when the seller would hand over the goods to the delivery agents.   

Under the rules stated by Incoterms[9] 2000, Free on Board simply meant that the risk of loss is said to be transferred to the buyer of the goods from the seller of the goods as once the goods have passed over the rail of the ship, and in modern days, it is when the goods have been loaded on to the carrier or the ship.

The trade term FOB that is freight on board, discussed in the rules of Incoterms® 2000, and as it would require the seller that is CHC to place the goods which are being sold, onboarding[10] the vessel that is nominated by the buyer that is CSC.  In a classic contract regarding FOB, the seller that is CHC is authorized to pay the cost of transportation as well as the cost of handling and also to ship the goods at the port of shipment[11].

From that point of view, the risk of any kind of damages to the goods has been transferred to the buyer that is CSC.

Since there was also a contract between SS speedy delivery and CSC, then the company SS speedy delivery was also liable to deliver the goods to CSC. Thus, SS speedy delivery was having a responsible to take reasonable care for delivering the goods to its buyer. And the storm was violent and unexpected thus it could be concluded that the SS speedy delivery has taken all the reasonable care to make good delivery and thus is not liable for any loss or damages.  

But SS delivery was not liable for the damages of 25000 units of the good in the waterlogging, because there was no notice or any information about the storm to the delivery agent, and he has done his part of the performance with all due reasonable care and due diligence. Thus, the delivery agent has acted bonafide[12] on his part and thus it is also concluded that he is not liable for the 25000 units of the goods that computer hardware that was waterlogged.

With the reference to case law, Stock v Inglis of the year 1884, it was stated by the court that the risk and the property[13] both are transferred from the seller to the buyer, once the goods cross the rail of the ship, and as soon as the risk is transferred to the buyer, he must acquire an interest that is insurable and could have the capability to insecure them.      

Conclusion-

Thus, it is hereby concluded that the risk and the property both are transferred from the seller that is CHC to the buyer who is CSC. Once the goods cross the rail of the ship, and as soon as the risk is transferred to the buyer who is CSC, and he must acquire an interest that is insurable and could have the capability to insecure them.

There are no rights and the remedies[14], that CSC is having against the owners of SS speedy Delivery for the 25000 units of the hardware that have been logged in the water. The only right and remedies that CSC is having for the 25000 units of the hardware that have been logged in the water against its insurance, if any, then the insurance company would be liable for remedies to CSC where these goods have been insured.

CASE LAWS

Stock v Inglis of the year 1884.

 

 

 

 

 

 

 

REFERENCES

Block-Lieb, Susan. "Soft and Hard Strategies: The Role of Business in the Crafting of International Commercial Law." Mich. J. Int'l L. 40 (2018): 433.

Cai, Wei, and Andrew Godwin. "Challenges and Opportunities for the China International Commercial Court." International & Comparative Law Quarterly 68, no. 4 (2019): 869-902.

Dickinson, Andrew. "Oiling the machine: overriding mandatory provisions and public policy in the Hague Principles on Choice of Law in International Commercial Contracts." Uniform law review 22, no. 2 (2017): 402-421.

Dona, José Rafael Mata. "Book review: The Impact of EU Law on International Commercial Arbitration, by F. Ferrari.(Juris, 2017)." b-Arbitra| Belgian Review of Arbitration 2018, no. 2 (2018).

Hayes, Paul. "Book Review: UNIDROIT Principles of International Commercial Contracts: An Article-by-Article Commentary, Eckart J. Brödermann. The Netherlands, Alpha aan den Rijn: Wolters Kluwer. 2018." Journal of International Arbitration 37, no. 3 (2020).

Heidemann, Maren. "Editorial Article: The Future of the Commercial Contract in Scholarship and Law Reform–A Work in Progress." European Business Law Review 29, no. 6 (2018).

Kova?, Mitja. "Duty to renegotiate in international commercial law and uncontemplated behavioral effects." Maastricht Journal of European and Comparative Law 27, no. 4 (2020): 445-464.

Mahmoodi Kordi, Zahra, Mehdi Zahedi, and Seyyedeh Atefeh Ghadirinezhad. "From Lex Mercatoria to Transnational Commercial Law in Proper Sense." Private Law Research 8, no. 31 (2020): 65-85.

OLOUMI, YAZDI HAMID REZA, and REZA HAZEGHPOR. "Basics and some examples of acceptance of transnational commercial law in Iranian law." (2019): 1-28.

Patra, Chinmoy. "Avenues of International Commercial Laws." Splint International Journal of Professionals 7, no. 2 (2020): 48-54.

Pislevik, Stefan. "Precedent and development of law: Is it time for greater transparency in International Commercial Arbitration?." Arbitration International 34, no. 2 (2018): 241-260.

Roberts, Anthea. "Introduction to the Symposium on Global Labs of International Commercial Dispute Resolution." American Journal of International Law 115 (2021): 1-4.

Yasoda, W. "Non-performance of contractual obligations in international commercial contracts in the wake of Coronavirus: A legal perspective."



[1] Heidemann, Maren. "Editorial Article: The Future of the Commercial Contract in Scholarship and Law Reform–A Work in Progress." European Business Law Review 29, no. 6 (2018).

[2] Dickinson, Andrew. "Oiling the machine: overriding mandatory provisions and public policy in the Hague Principles on Choice of Law in International Commercial Contracts." Uniform law review 22, no. 2 (2017): 402-421.

[3] Roberts, Anthea. "Introduction to the Symposium on Global Labs of International Commercial Dispute Resolution." American Journal of International Law 115 (2021): 1-4.

[4] Pislevik, Stefan. "Precedent and development of law: Is it time for greater transparency in International Commercial Arbitration?." Arbitration International 34, no. 2 (2018): 241-260.

[5] Dona, José Rafael Mata. "Book review: The Impact of EU Law on International Commercial Arbitration, by F. Ferrari.(Juris, 2017)." b-Arbitra| Belgian Review of Arbitration 2018, no. 2 (2018).

[6] Yasoda, W. "Non-performance of contractual obligations in international commercial contracts in the wake of Coronavirus: A legal perspective."

[7] Cai, Wei, and Andrew Godwin. "Challenges and Opportunities for the China International Commercial Court." International & Comparative Law Quarterly 68, no. 4 (2019): 869-902.

[8] OLOUMI, YAZDI HAMID REZA, and REZA HAZEGHPOR. "Basics and some examples of acceptance of transnational commercial law in Iranian law." (2019): 1-28.

[9] Hayes, Paul. "Book Review: UNIDROIT Principles of International Commercial Contracts: An Article-by-Article Commentary, Eckart J. Brödermann. The Netherlands, Alpha aan den Rijn: Wolters Kluwer. 2018." Journal of International Arbitration 37, no. 3 (2020).

[10] Patra, Chinmoy. "Avenues of International Commercial Laws." Splint International Journal of Professionals 7, no. 2 (2020): 48-54.

[11] Mahmoodi Kordi, Zahra, Mehdi Zahedi, and Seyyedeh Atefeh Ghadirinezhad. "From Lex Mercatoria to Transnational Commercial Law in Proper Sense." Private Law Research 8, no. 31 (2020): 65-85.

[12] Kova?, Mitja. "Duty to renegotiate in international commercial law and uncontemplated behavioral effects." Maastricht Journal of European and Comparative Law 27, no. 4 (2020): 445-464.

[13] Block-Lieb, Susan. "Soft and Hard Strategies: The Role of Business in the Crafting of International Commercial Law." Mich. J. Int'l L. 40 (2018): 433.

[14] Hayes, Paul. "Book Review: UNIDROIT Principles of International Commercial Contracts: An Article-by-Article Commentary, Eckart J. Brödermann. The Netherlands, Alpha aan den Rijn: Wolters Kluwer. 2018." Journal of International Arbitration 37, no. 3 (2020).

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