Law for International Trade

Topics: Common law, Contract, Contract law Pages: 11 (3406 words) Published: August 11, 2012
International Trade Law

Assignment 2

Jesse Cooper, 21476608

Part A:

On the face of it, or prima facie there are three issues that are raised in this case. Firstly, the jeans were delivered late; secondly, the jeans were mouldy and stained; and finally, an incorrect number of jeans were delivered.

In order to determine the rights and obligations of Punked Jeans, and which remedies could be availble, there are a number of steps to be taken.

What are the governing laws of the case?

The governing law of an international contract is important because is defines which domestic system of laws apply to the contract. The governing law is used in the case of disputes between the buyer and seller in the international sale of goods.

In Australia, determining the governing law of a contract is based on two cases, John Kaldor v Mitchell Cotts Australia (1989) 90ALR 244 and Akai Pty Ltd v The People’s Insurance Co Ltd [1996] HCA 39 (PM69). These cases create three ways to determine the governing law of a country, the contract itself; the contract and surrounding documents; and the objective test, which determines which laws the contract has the most real and substantial connection to, based on a variety of factors. Because no terms in the contract or surrounding documents explicitly stated which governing law would be used it will be decided by the objective test.

The most real and substantial connection is based on factors including the country in which the majority of the obligations under the contract are performed, e.g. manufacture, packaging, delivery; where the contract was formed, and what the currency of payment is. In this case the manufacture and packing is conducted in Australia, and the payment is in dollars and not yen, which would indicate the governing law is that of Australia.

Under Australian law the rights and obligations of the parties are based on the contract, the Convention on International Contracts for Sale of Goods (CISG), and because Punked Jeans is based in Melbourne, the Goods Act 1958 (Vic) also applies.

The CISG is an international sales code which attempts to balance the interests of the buyers and sellers. Countries can choose to become a signatory to the convention, which then acts as a net to hold terms not expressly covered by the contract. Both Australia and Japan are signatories to the CISG and so under CISG Article 1(1)(a) the CISG will apply to the contract. However there are exceptions where even if both parties have signed the CISG it still won’t apply. These exclusions are contained in CISG Article 2. In this case the exceptions aren’t applicable, and the parties haven’t explicitly excluded it (CISG Article 6), so the terms of the CISG will be enforced.

Under CISG Articles 14-24 it can be shown that SurfLife and Punked Jeans entered into a legally binding contract. This contract contains the express terms, which is this case include the cost of the goods, the inclusion of CPT Incoterms 2010, the port of delivery (Osaka), the order amount and type, the due date, and the buyer and seller. The implied terms of this contract include the CISG provisions and the Goods Act (Vic) provisions.

The CPT Incoterms which were set out as express terms in the contract detail the obligations surrounding the delivery and transportation of the goods that the buyer and seller have.

Issue 1 – Lateness of Delivery:

The first issue to be discussed is that of the late delivery, with the goods ordered to be delivered no later than the 1st of April, and arriving in Osaka on the 17th of April. If the goods were found to be delivered late it would be considered a breach of CISG Article 33. The time at which goods are considered to be delivered is determined by the CPT (Carriage Paid To) Incoterms. Under these Incoterms delivery is considered complete when the seller delivers the goods to the first carrier at the named place of shipment. As the goods were loaded onto the...
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