Lecture 5 - sales law Flashcards
What is the standard view on sales law?
There is always only two parties involved, any other belong either to the seller or buyer. Legislation is based on the case that the buyer goes to the seller to pick up goods, and pay with physical money. The buyer is the passive part of the contract.
In B2C cases consumer law is mandatory and can’t be set aside, since there is a difference between the parties.
What are the parts of the CISG?
CISG applies when both parties of a contract are a part of the UN, and when the buyer and seller are in different countries.
Four parts:
- General provisions
- Formation of contract
- The sale of goods
- Final provisions and exemptions.
How should a seller deal with a sale to fulfil a contract?
- deliver goods in conformity to the contract (quality, quantity, description, packed correctly). Quality is not dictated in law since it is subjective, need to set specific terms in contract to be able to enforce.
- hand over any document (origin certificates etc)
- transfer the property in the goods (title, ownership, free of claims)
What is implied about delivery time in a sales contract?
- Delivery time should be determined in the contract. If not, should be done within reasonable time.
- Seller must give notice to the buyer specifying parcels if they are not properly marked
- Seller should make contracts necessary for arranging carriage of goods, not bound to effect insurance (but provide information upon request from buyer).
What are remedies for sellers breach of contract?
- Buyer may require performance. If delivered goods lack conformity and constitute a fundamental breach of contract, they can demand substitute goods if the buyer has given notice within due time.
- Buyer may require the seller to remedy the lack of conformity by repair, unless unreasonable.
- Buyer may fix additional time.
- Seller may remedy at own expense, if the reimbursement can be done without unreasonable delay and inconvenience/uncertainty for buyer.
- Reducing the price. This can be seen as a new contract, since it is a partial annulment/cancellation and an amendment of the contract.
- Last resort: buyer declaring the contract avoided, for example in the case of non-delivery. This must be done within reasonable time. If you are wrong you will be the suffering part, you go back to point 0.
What is a fundamental breach of contract?
Results in detriments to the other party that substantially deprive him of what he is entitled to expect under the contract,
“unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.”
What are buyer’s obligations in a sales contract?
- Be active and contribute/be loyal to the contract
- Must examine delivered goods within as short time period as practicable (can be deferred to arrival if carriage is involved)
- In case of lack of conformity, give notice to seller within reasonable time after discovery, or when it ought to have been discovered
- In any event, maximum period of 2 years from date of handed over to buyer, can be contractual guarantees.
What are remedies for buyer’s breach of contract?
- Require the buyer to pay the price
- Take delivery back
Why are damages as a remedy for breach of a sales contract not very efficient?
We can’t “unscramble” the egg, the issues still remain.
What is instalment?
Instalment = amortisation = partial payment
What is avoidance?
The lawful cancellation of a contract when it is implausible to continue being bound by the contract or it is not profitable to maintain the terms and conditions as the contract was written. It requires an acceptable legal ground (for example fundamental breach fo contract), and all parties involved are released from obligations and responsibilities of the contract.
What is anticipatory breach of contract?
It is clear and almost certain that either the seller or the buyer will fundamentally breach the contract
Why must it be clearly identified in a contract when the burden of risk shifts?
After risk has passed to the buyer, any loss or damage to the goods does not discharge him from the obligation of paying (unless it is due to an act or omission of the seller).
What Incoterms apply for any mode of transport?
- EXW
- FCA
- CPT
- CIP
- DAP
- DDP
- DPU
What Incoterms apply for maritime / inland waterway transport?
- FAS
- FOB
- CFR
- CIF
