Law Flashcards
what regulates social life
Law, social norms, market and technology
what is a contract
legal framework setting out obligations for the parties to satisfy their interest and expectations (meeting of minds)
stages of a contract
Precontractual Stage; Formation of the Contract; Performance of the contract
common law and civil law differences
civil law system is based on legal codes
while common law is based on judicial precedent
examples of common law and civil law countries
US, UK , Australia, India are examples of countries that use common law
Italy is the main example since the ancient romans developed civil law
to a contract to be valid there needs to be
step 1: existence of a contract
- meeting of minds
- offer and acceptance of the contract
otherwise parties are still negotiating and there is no actual contractual bond between them
step 2 : capacity of the parties and error
- do the parties have the actual capacity to meet the expectations and fulfill the contract
- was the consent of the contract manifested in a free conscious way
Was the consent expressed enforceable in the legal framework? (minors, disabled people, people under the influence of alcohol cannot be )
step 3 : general limits to party autonomy
- law, binding legal rule
good morals
CISG def
United Nations Convention on Contracts for the International Sale of Goods.
multilateral treaty that establishes a uniform framework for international commercial sales of goods, aimed at promoting consistency and reducing uncertainty in cross-border transactions.
I.I sphere of application by the CISG articles 1 to 6
Direct Applicability (Art. 1.1): If businesses are located in different Contracting States, CISG applies directly to their contract.
Indirect Applicability (Art. 1.2): This covers situations where the rules of private international law lead to the application of the law of a Contracting State.
Exception: Article 95 (applicable to the U.S.), where certain reservations have been made.
Sale of Goods (Article 2 CISG):
This refers to contracts for the sale of goods but excludes certain transactions. Article 2 lists specific exclusions like sales of stocks, ships, or electricity.
Contract for Sale (Article 3 CISG):
Supply of Goods to be Manufactured: If a contract involves the manufacturing of goods, it is considered a sale if a substantial part of the contract relates to goods.
No Sale: If the predominant part of the contract obligations is the supply of services (rather than goods), the CISG doesn’t apply.
Excluded Issues (Article 4/5 CISG): Certain matters are not governed by the CISG, including:
-> Validity of Contracts (legal validity),
-> Property (transfer of ownership rights),
-> Liability for Personal Injury.
These areas are governed by local laws and not by the CISG.
Private Autonomy (Article 6 CISG):This article emphasizes the principle of “private autonomy,” meaning that parties are free to exclude the application of the CISG or to modify its provisions as they see fit.
rules for how the CISG is interpreted (articles 7 to 13)
Article 7: Interpretation of the Convention
This article guides how the CISG should be interpreted:
The Convention must be interpreted to promote uniformity in its application and in accordance with the principle of good faith in international trade.
Gaps in the CISG should be filled by using the general principles of the Convention or, if no principles are found, by applying the law determined by private international law.
Article 8: Interpretation of Party Statements and Conduct
Governs how statements and conduct of the parties should be interpreted:
Subjective approach: Consider the intent of the party making the statement, if the other party knew or should have known that intent.
Objective approach: If subjective intent isn’t clear, interpret according to what a reasonable person would have understood in the same situation.
Consideration must also be given to relevant circumstances like negotiations, established practices, and usages.
Article 9: Usages and Practices
Specifies that parties are bound by:
Any usage to which they have agreed.
Established practices between the parties.
International usages that are widely known and regularly observed in the specific trade sector involved, unless otherwise agreed.
Article 10: Place of Business
Determines how to identify the place of business for parties that have more than one location:
The place most closely related to the contract and its performance is to be considered.
If no place of business exists, the party’s habitual residence is used.
Article 11: Form of the Contract
Contracts for the international sale of goods do not need to be in writing and can be evidenced by any means, including oral agreements and witness testimony.
Article 12: Reservation on Written Form Requirement
Allows contracting states to declare that they will require contracts or modifications to be in writing, overriding Article 11 in cases where such declarations have been made.
Article 13: Definition of “Writing”
Defines “writing” broadly to include all forms of communication, such as telegrams and telexes (covering older communication technologies), ensuring flexibility in proving the existence of contracts.
articles 14 to 23 Formation of the Contract
Article 14: Definition of an Offer
Defines what constitutes a valid offer to form a contract:
->An offer must be sufficiently definite (i.e., include details such as the goods, quantity, and price).
->It must show the offeror’s intention to be bound if the offer is accepted.
->A proposal to an unspecified group of people (e.g., advertisements) is generally considered an invitation to negotiate, not a binding offer.
Article 15: Effectiveness of Offer
->An offer becomes effective when it reaches the offeree.
->It can be revoked at any time before the offeree dispatches an acceptance, unless the offer is irrevocable.
->If the offeree receives the revocation notice before accepting, the offer is no longer valid.
Article 16: Revocation of an Offer
->An offer can be revoked if the revocation reaches the offeree before they dispatch acceptance.
However, an offer cannot be revoked if:
It states a fixed time for acceptance.
The offeree has acted in reliance on the offer being irrevocable, such as preparing to perform the contract.
Article 17: Termination of Offer
->An offer is terminated if a rejection by the offeree reaches the offeror, even if the acceptance period has not expired.
Article 18: Acceptance of an Offer
Defines when and how an offer is accepted:
->Acceptance is a statement or conduct that indicates assent to the offer and becomes effective when it reaches the offeror.
->Silence or inactivity alone does not amount to acceptance.
->Acceptance must occur within the time fixed by the offeror, or if no time is fixed, within a reasonable time.
->An acceptance may be effective upon performance, such as shipping the goods.
Article 19: Modifications to an Offer
->A reply that modifies the terms of the offer is considered a rejection and a counter-offer.
->If the modifications are minor and do not materially alter the offer (e.g., about delivery times or payments), the reply can still be considered an acceptance unless the offeror objects without undue delay.
Article 23: The contract is concluded when the acceptance becomes effective.
Part III: Sale of Goods Chapter I: General Provisions (Articles 25–29)
Article 25: Defines a fundamental breach (a breach that substantially deprives the other party of what they are entitled to under the contract).
Article 26: Declaration of avoidance of contract must be made to the other party.
Chapter II: Obligations of the Seller (Articles 30–52)
Article 30: The seller must deliver the goods, provide the necessary documents, and transfer ownership.
Article 31: Specifies the place of delivery.
Article 35: Goods must conform to the contract in quality, quantity, and description.
Article 38: The buyer must examine the goods within a reasonable time.
Article 46: Allows the buyer to request substitute goods or repair in case of non-conformity.
Chapter III: Obligations of the Buyer (Articles 53–65)
Article 53: The buyer must pay the price and take delivery of the goods.
Article 58: The buyer must pay the price when the seller places the goods at their disposal.
Article 59: The buyer must pay the price without needing a request from the seller.
Chapter IV: Passing of Risk (Articles 66–70)
Article 66: The buyer bears the risk of loss or damage to goods after the risk has passed to them.
Article 67: Risk passes when the goods are handed over to the carrier.
Chapter V: Provisions Common to Both Parties (Articles 71–88)
Article 71: Either party may suspend performance if it becomes clear that the other party will not perform their obligations.
Article 74: Damages for breach of contract are calculated based on the loss suffered, including lost profit.
Article 78: A party can claim interest on late payments.
Key Concepts in the CISG
Uniformity: The goal of the CISG is to provide a consistent legal framework across jurisdictions.
Autonomy of the Parties: Parties to a contract have the freedom to opt out of the CISG or modify its provisions.
Breach of Contract and Remedies: The CISG provides remedies for breaches, including damages, specific performance, and avoidance of contract.
Risk of Loss: The point at which risk transfers from the seller to the buyer is crucial in determining liability for loss or damage.
what are incoterms
set of globally recognized rules created by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers involved in international trade.
EXW (ex works)
incoterm where the risk passes to the seller to the buyer the moment it leaves the sellers premisses
FOB (free on board)
incoterm where the risks and the costs follow the seller through all the process until they get loaded until the vessel or aircraft, those costs transfer directly to the buyer
CIF (cost insurance and freight)
incoterm where the risks passes through the buyer until they are loaded in the aircraft, those costs will transfer to the seller to the buyer when they get to the port of destination
DDP (delivery duty paid)
incoterm where the seller will be responsibles for the risk until the goods get unloaded on the buyers premisses
why is the pre contractual phase important
Clarification of Intent: Each party can clarify their objectives, ensuring they agree on key terms before formalizing the contract.
Risk Assessment: Parties evaluate potential risks and benefits, negotiate terms to mitigate those risks, and ensure they are making informed decisions.
Avoiding Disputes: Thorough negotiations help identify and address potential points of conflict, reducing the likelihood of future disputes.
Building Trust: Establishing good faith and transparency in this phase fosters trust, which is essential for long-term collaboration.
Memorandum of Understanding (MOU)
typically takes place at the pre contractual stage of a business relationship or transaction.
The MOU serves to outline the basic terms and intentions of the parties and is usually non-binding.
It clarifies the goals, responsibilities, and expectations of each party during the negotiation phase.
Civil Law Approach in negotiation (pre contractual stage)
Civil law countries generally take a more structured and regulated approach to pre-contractual liability, often recognizing a duty of good faith and reliance as key principles during negotiations. (they may be held liable for damages)
