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Assignments IBL2 November 2009-11-24
All subgroups number 1:
Answer the following questions:
a. end of chapter 10 questions number 1, 4, 5 and 6
b. give your opinion on the following situation:

Intermediary Oil Co. (IOC) of Country A purchased fuel oil that was at sea aboard a tanker. IOC then contracted to sell the oil to Big City Power Co. (BCPC) in Country B. At the time that IOC purchased the cargo of fuel oil, it received a certificate from the foreign refinery that had produced the oil certifying that its sulfur content was 0.52 percent. When IOC contracted to sell the oil to BCPC, IOC stated that the sulfur content of the oil was 0.5 percent (IOC rounded off the 0.52 percent as was the custom in the trade).

During its negotiations with BCPC, IOC learned that BCPC was allowed by local regulations to burn oil containing up to 1.0 percent sulfur and that BCPC mixed the oils that it received containing greater or lesser percentages to maintain that amount. When the tanker arrived with the oil at BCPC’s storage depot, the oil’s sulfur content proved to be 0.92 percent. BCPC rejected the shipment. IOC immediately offered BCPC a reduced price, but BCPC rejected this.

The next day IOC offered to cure the defective shipment by substituting conforming oil that was on a tanker that was due to arrive approximately 4 weeks after the original delivery date. BCPC rejected this offer to cure. IOC then sued for breach of contract. The trial court, applying the United Nations Convention on Contracts for the International Sale of Goods (CISG) as the governing law, held for IOC, concluding that IOC’s timely offer to cure had been improperly rejected and that BCPC was required to accept the substitute shipment. BCPC appealed. Should the appeals court affirm?

All subgroups number 2:

Give your opinion on and discuss the two following situations: Situation 1:
Mellow Wine Co. of Country C (in Europe) produces and exports wines. It sold 1,245 cases of its wine to Tippler Distributing Co. in Country D (in North America). The contract did not use any trade terms or specify any delivery terms to any specific destination. Mellow, through its agent in Country D, selected Bigport for the port of entry in Country D. Mellow then delivered the wine to an ocean-going carrier at a port in Country C for transport to Country D on July 5 of last year. The shipping documents and the markings on the goods identified the wine as belonging to Tippler. Some six weeks later, on August 20, Tippler learned that the wine had been lost on the high seas on July 19 when the ship sank with all hands aboard. Tippler refused to pay Mellow. Mellow then sued Tippler for the full purchase price, claiming that the risk of loss had passed to Tippler, the buyer, at the time the wine had been delivered to the carrier. Tippler answered that because Mellow had not given it prompt notice of the shipment (not until after the ship was lost at sea) that the risk of loss had not passed from Mellow. Both Countries C and D are signatories of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the parties’ contract designates the CISG as the governing law. Is Tippler liable for the purchase price of the wine?

Situation 2:
Weaver Mills Co. in Country F contracted to purchase 100,000 yards of jute from Natural Fiber Co. in Country G at US$ 0.64 per yard. Natural delivered 22,228 yards to Weaver at Weaver’s plant, but it then informed Weaver that it would deliver no more. Several other of Weaver’s suppliers also defaulted, so Weaver was forced to purchase a total of 164,503 yards of jute in the market a month later at a price of US$ 1.21 per yard. Weaver then sued Natural for the difference between the market price it had paid and contract price on the 77,772 yards of jute that Natural had not delivered. Both Countries F and G are signatories of the United Nations Convention on Contracts...
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