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This 15 page Class Notes was uploaded by Mrs. Keith Dickinson on Wednesday September 23, 2015. The Class Notes belongs to BLAW340 at Drexel University taught by RosalieKreider in Fall. Since its upload, it has received 56 views. For similar materials see /class/212244/blaw340-drexel-university in Legal Studies at Drexel University.
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Date Created: 09/23/15
RuheeRathodgmailcom September 23 2011 Trade Advantages Specialization Growth Economic Technology Cultural Globalization Interdependence Builds relationships Finds markets for surplus goods No Capital Investment More Variety of Goods Lower prices because the cost to produce in other countries are much less ex China Trade Disadvantages Interdependence More difficult to compete Quality control you need to be specific about describing your goods Example so you order dolls What kind of doll do you want Plastic Rubber Yarn When you are negotiating your contract ask the seller to send a sample When the seller gives the buyer a sample this becomes part of the contract the product you receive will be exactly like the sample Trade Barriers Tariffs Quotas Embargo Regulations chapter 4 regulations on medical equipment resulting in a breach of contract ifyou are the buyer of the goods you need to make sure that you make it clear in your contract any prohibitions Ex Toy has no led in it Increases gaps between wealthy and poor nations Other countries exert pressures Lax local regulations Environment Child labor Loss of Currency Control Damage to goods Loss of goods due to theft or destruction transported to a longer distance than in domestic trade This creates Transport Risks Seizure of Goods You need to think ofpackaging of goods INCOTERMS international chamber of commerce publishes NEED TO LOOK AT TRADE TERMS TO FIGURE OUT WHEN THE RISK OF LOSS PASSES AND IS ELIMINATED Resolutions of disputes There is a problem if there is a breach of a contract Choice of Law Choice of Forum Events beyond the parties control war economy weather natural disasters piracy disease weather is a somewhat foreseeable risk This needs to be considered when drafting a contract Excuse clauses weather clauses Majesure Language Translator Gaskin Case Page 37 Stone handle Gaskin did not provide an English translation of the contract One of the stipulations was a forum clause saying it would be settled in German courts instead ofthe US He didn t understand the German language the forum selection clause was ineffective Courts found in favor of Stonhandle Court dismissed the case Licensing and Franchising Advantages Less Capital Grows Brand Royalties Brand name recognition and facilitation Lower Prices Overcomes the transportation problems More employment Support from other Franchises Knowledge of the local customs and culture and language Easier to market Entry Avoid trade barriers Local Repairs and Parts Disadvantages FeesLicensee Have to share profits Less control of the quality Communication and Timezone issues Lack of Flexibility 9282011 BLAW Page 15 FFA Case o At Will K Foreign Direct Investment 0 Advantages 0 0000000000 0 Avoid Trade Barriers More Control Recover Investment Enter New Markets Regional Expertise Resources Avoid Domestic Laws Fewer Currency Issues Avoid Taxes Control of Inventory in region Local parts and repairs Government incentives so they can improve their economy Adapt to local cultures 0 Disadvantages 0 00000000 0 Political instability Wars Large initial costs Language cultural barriers Brib eryethics Good WillReputation Expropriation Profit repatriation Currency Instability Unfamiliar with Regulations Taxes Local Laws Intellectual Property etc Legal Systemcorruption Lack due process Due Diligence pave way Case on P 27 0 Forum Non Convenient relevant evidence in gopal india Case on P40 HW Problems Question and Case Problems 6 Seller should write the contract in the language of the buyer Samples Buyers were upset because it was the wrong type of chicken than what they needed to be used for Could have put the intended use within the contract Sample is the best if the buyer wants to minimize riskguarantee Managerial Implications September 30 2011 Public International Law 0 Relationship between states 0 Treaties Private International Law 0 Deals with the rights and responsibilities of private individuals or corporations operating in an international setting Agreements SELF EXECUTING versus non SELF EXECUTING Treaties Conventions Case Page 51 Case Page Sosa V Alvaraz Machain 542 US 692 2004 o In light of this framework the Supreme Court reversed the Ninth Circuit s decision stating that Alvarez s arrest and detention in this case did not violate any treaty with the United States nor did they violate an international norm meeting the quotspecific universal and obligatory standard Case 54 2 Customs 3 General Principles of Law recognized by civilized nations Good faith Estoppel 1 Comity the willingness of one court or department of government to resiect the rules or decisions of another or to grant it some privilege or favor 2 Sovereign immunity supreme and absolute power that governs an independent state or nation States of one country cannot hear cases brought against the government of another country Courts cannot involve themselves in the internal affairs of another country Soverign Immunities Act of 1976 Exceptions Waiver by statute or agreement in a contract Commercial activity Violation of international law torture terrorism Expropriation Lawsuits ofmoney for torts committed within the United States October 5 2011 US Great BritainColonies Common Law Countries Common law country case decisions are based on stare decisis quotlet the decision stand Precedents Case decisions Japan Germany ect Civil law countries Codes are more comprehensive establishing general principles gat are interpreted by judges and applied to the case before tem difference ofjudges Both civil and common law rely on legislative codes or statutes as the primary source of law Case M Aslam Khaki v Syed Mohammad Hashim o Illustrates the con ict between Islamic Law and the Modern Business Class 0 Payment ofinterest by banks on loans to be contrary to Islamic Law 0 The rule against interests cannot be applied to non muslims CHAPTER 4 CISG Article 1 Of the UCC 1 Commercial sale of goods tangible and moveable 2 Places of business in different states article 20 3 Ratified code Choice oflaw clause in K page 123 come from Article II Article II of the UCC Sales Excluded from CISG page 124 Consumer goods sold for personal family or household use 2 Goods bought at an auction 3 Stocks securities negotiable instruments or money 4 Ship vessels or aircraft 5 Electricity it is a good it has a physical and tangible purpose October 7 2011 Tarbert Trading Ltd v Cometals Inc 0 A court will not enforce contracts that violate the law In this case a contract calling for the delivery of fraudulent certificate is illegal Red beans are from Africa not from Europe The contract stipulates that they desire a certificate of origin regarding the beans to ensure that they are from Europe Delivery ofbeans angered the buyer The buyer was not impressed with the goods and refused payment 0 Seller sued the buyer and lost because of the illegality issue 0 Parol Evidence Rule 0 A court may not consider in evidence any written or oral statement that were made by the parties prior to or at the time of concluding a fully integrated written contract INTEGRATED CONTRACT a written document or documents that evidence the final and complete agreement of the parties Article 6 allows parties to quotexclude the application of this convention or vary from any ofits provisions Article 11 No Writing Required Subject to Article 12 writing req article 96 Article 8 3 Prior Course ofDealing multiple similar recent transactions Allows a court when considering the intent of the parties to a contract to consider quotall relevant circumstances of the case including negotiations any practices which the parties have established between themselves usages and any subsequent conduct of the parties PAGE 127 lower right Article 9 Usage of Trade Customs The only trade usages that can be used to interpret or fill in the gaps of a contract are 0 1 Those to which the parties have agreed or that they have established between themselves and o 2 Those usages of which the parties knew or ought to have known and that are widely known in international trade or at least in those countries in which both buyer and seller are located and regularly observed in the industry or trade involved MUTUAL ASSENT mutual agreement regarding the essential terms of the contract Article 141 Intent Communication between parties is considered an offer when 1 It is a proposal for concluding a contract 2 It is sufficiently definite and indicates the intention of the offeror to be bound Article 14 An offer is considered sufficiently definite if Indicates or describes the goods Implicitly specifies the Price Implicitly specifies the quantity Article 55 If the price is not fixed the price will be charged for the price will be that charged for such goods sold under comparable circumstances in the trade concerned Article 23 K concluded 0 142 ads catalogs brochures Not offers unless the following 0 An offer is affected when it reaches the offeree FIRM OFFERS UCC 0 An offer may be revoked at any time prior to the acceptance 0 Under the UCC an offer may not be revoked if it is made in a signed writing that gives assurance that it will remain open for a stated period of time not to exceed three months FIRM OFFERS CISG o Firm offers are valid even if they are not in writing 0 An offer may not be revoked if the offeree reasonably relies on the offer as being irrevocable and the offeree has acted in reliance on the offer PRO FORMA INVOICE Page 130 DO NOT CONFUSE WITH COMMERCIAL INVOICE this is the final bill for the goods that accompanies the request for payment 0 Formal document addressed to a specified buyer indicating the products described according to certain terms and conditions ACCEPTANCE CISG 0 Article 15 Offer Effective reaches offeree 0 An acceptance may take the form ofa statement or conduct by the offeree that indicates the offeree s intention to be bound to the contract 0 Article 18 quotA statement made by or other conduct of the offeree indicating assent to an offer is an acceptance 0 offeree may accept by dispatching goods or payment of the price without notice to the offeror o This would constitute an acceptance Article 24 Reaches Business or expressed orally declaration of acceptance A3 Article 161 Revoke Before Sending Offeree accept 0 Unless a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched the acceptance 2 Irrevocable o Ifit indicates whether by stating a fixed time for acceptance or otherwise that it is irrevocable o It it was reasonable fore the offeree to rely on the offer being irrevocable and the offeree has acted in reliance on the offer OCTOBER 12 2011 o This is not like a firm offer according to the UCC o This is just basically saying that this offer is irrevocable COMMON LAW CONTRACT ACCEPTANCE RULES 0 Under Common Law a contract is formed when the acceptance is dispatched by the offerer o The time of the dispatch if the time it is put into the hands ofpostal authorities mailbox rule 0 The buyers power to withdraw the offer to purchase ended at the time the contract was formed CISG follows a different approach ACCEPTANCE Under Article 18 Article 18 ACCEPTANCE 182 quoteffective as soon as it reaches the offeror Even ifit is postmarked it is effective but not received and does not count as a contract 0 Article 161 protects the offeree by stating that the dispatch of an acceptance cuts off the offeror s power to revoke o sending acceptance ends power to revoke TERMINATING AN OFFER An offer can be terminated prior to being accepted An offeree may not accept an offer which has been terminated How do offers terminate 1Revocation of offer by offeror 2Counteroffer by offeree 3Rejection by offeree 4Lapse of time stated time in offer no stated time Consider what is a reasonable time 5Death or disability ofa party to the contract prior to acceptance 6Subsequent illegality REVOCATION No particular form or use ofwords required Notice Revocation must be communicated to offeree to be effective receipt by offeree of notice or communication is required Receipt is enough letter reaches offeree does not matter if the offeree actually reads it Indirect revocation offeror sells subject of offer to another and offeree learns ofit If an effective acceptance is made PRIOR to effective revocation a CONTRACT CAN BE FORMED Offer is open until 10212011 at 5PM suppose you send an acceptance on the 19th You know that the contract is not valid at this point because the offeror sent the revocation on the 18 before you sent the acceptance There is a revocation sent on the 18th to the offeror As long as you have not received the revocation then it has no meaning contract Article 2 2 May Withdraw an Acceptance before the contract reaches the offerror Or before at the same time of acceptance Article 192 Minor Changes Contract unless the offeror makes quotminor changes Or if there are objections to the terms of the offer PERFORMANCE OF CONTRACTS o The primary responsibility of the buyer is to pay the price for the goods and take the delivery at the time in the manner promised Articles 5360 o The primary responsibility ofthe seller in performing a contract for the sale of goods is to deliver conforming goods in the manner specified within the time called for in the contract Articles 3035 Article 41 Warranty of good title Article 42 Free ofintellectual property claims Page 143 case They are talking to you about the rule oflaw when you have this Going by a decision made by a court in Germany This is an international case and set precedent The convention is law in the United States Article 79 excuse exemption A9 a party is not liable for a failure to perform any of his obligations if he proves that the failure was due to o Impediment beyond control 0 Unforeseeable 0 At time make K Excuses FROM failure to perform page 154 Force Majeure clause in a contract that excuses a party from failing to perform on the occurrence of one or more specified events Piracy Acts of Nature War Higher Taxes Finance issues Page 166 Bangue de Depots V Ferroligas o The issue here is who has the bill of lading and who owns the good Bozel committed fraud against the bank In this litgation the bank ordered the seizure of goods This cargo had been shipped by Bozel from Rio De Ianiero to Brazil The court did not have the right to seize this shipment since he is not the owner 0 The bank has the right to seize only his assets 0 The issue here is who owns the goods 0 Who has the bill of lading O 0 Since bozel no longer had the bill oflading he is no longer the owner Since he is not the owner the bank does not have the right to seize these goods 0 The court got it wrong 0 The court should have ordered the seizure of the bill oflading 0 However this is problematic because they legally do not have the right to do so 0 The case is in here to remind one of the bill oflading as a negotiable document representing ownership 0 The bank should have ordered the seizure of both the cargo and the bill of lading 0 There was a collecting bank no confirming bank 0 Buyers bank 0 A Bill of Lading can facilitate international trade when you have one sheet of paper Biddell Brothers V E Clemens Horst Co 0 Decided in the early 1900s these cases are long withstanding rules 0 Basse and Selve b Bake ofAustralasia o What was shipped was not the same as the samples 0 The bank should have inspected it 0 Based on what was negotiated on the contract the bank did what was told o It was oppenheimer who did not keep up his end The inspector deals with the sample 82 and 183 Read 1 0 Article Concept of Risk and Loss Always begins with the seller And eventually must transfer to the buyer Does not go from seller to carrier to buyer Who is going to lose the money if something happens to the goods while it is in transit Seller has the make the goods available The buyer has to come pick them up or higher a carrier The seller notifies the buyer that the goods are read and the risk passes to the buyer FOB CFR CIF The moment the cargo crosses the ships rail risk has passed to the buyer This is why the buyer wants the insurance They are the one who has to worry about the loss The expectation and willingness to accept risk 69 S Pauls Guardian Ins Co V Neuormed Medical Cif delivery terms Sent from germany MRI machine When it arrived at the final destination it was damaged The insurance was the plaintiff The risk of damage to loss occurred Remained at the seller The CIF clause is not applicable because it is governed by german law Incoterms should be used Therefore the CIF clause is applicable Kumar Corp v Nopal Lines Ltd Kumar was able to sue He was a self insurer The risk was on Kumar until it got to Venezuela The other issues of language in the contract Kumar was going have risk because he never bought the insurance The risk of loss stays with him He then becomes the party ofinterest because he bears the risk ofloss He lucks out because he really needs these goods He wants to have the risk ofloss so he has the power to sue for the loss and theft It never got onto the ship it was not across the rail It hasn t crossed Chapter 5 Questions 1 Brutrix stalls them with a bill of lading for cargo for security interest The issue is who has the right to the washing machine Is it the bank based on the loan or commissioner based on the tax It is the bank The bank has the bill of lading because it represents ownership of goods Sometimes you need to take a loan and the bill of lading helps secure the loan This is like a title to your car They don t want the borrower to sell the property out from under you 2 The risk of loss transfers to the buyer Seller is finished They have not breached the contract Doesn t matter if they knew about the strike No the buyer becomes liable for the goods 3 The sugar was not going to be released only stored The restriction was no excuse for the buyer s nonpayment The CIF changed to a Destination contract This language did not change it from CIF The buyer is not sure where is the best place to have the sugar delivered Before the sugar is shipped the buyer needs to decide The seller is finished the sugar was on the vessel The buyer needs to pay 4 Force Majeure issue 2 Yes they are foreseeable risks in the transport of goods Kife is not excused Yes the train wreck is excusable d The reason that the risk of loss stays with kife is because he agreed to make the boots and DELIVER them to Ghana So this becomes his responsibility until the boots get to Ghana If Kife would just ship them then bende would bare the risk of loss Kifes risk would end wen it loaded on to the carrier He would not have to worry ab out derailment ect Kife would have to go after the carrier Bende would sell Kife though 6 Under CISG this is considered a material change You are changing the quantity of what is inside each one of these This would appear to be a counter offer That would mean they do not have a contract 6 no mailbox rule No contract until it is received 7 no neither These are both beyond control ofparties but are foreseeable risks 10 The buyer wants to include Warranty of fitness for a particular use The seller knew and had reason to know of the special use The buyer relied on the sellers knowledge Breach ofwarranty October 26 2011 o Carriage of goods Statute of limitations one year File a lawsuit COSGA Visible damage IMMed Report other damages 0 3 days after delivery Bailment Perils Dangers and Accidents at the Sea most important when considering problems at sea COGSA errors of navigation issue and list of exceptions carrier fails to use due diligence Liable if they fail to use this to train crew or navigate then they have a problem with navigation They will be held liable for failure to do the following sea worthy vessel to have a sea worthy vessel Ifthey do all these things and then have a problem with navigation they will be excused Loss of the goods actually have a shortage The shipper puts it to transit 1 carrier is liable to full value 2 carrier is liable for statutory amount unless you declare the full value of the cargo the statutory amount is 500 dollars per package
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