Week 11: Legal Issues / International Standardisation

Question 1

Why Do We Import?

Answer 1

• Comparable goods may not be obtained / produced locally
• Imported goods may be cheaper / better quality
• Local production may not be of sufficient volume to satisfy demand

Question 2

Benefits of Importing Consumer Goods

Answer 2

• Lower prices / encourages competition
• Increases supply / variety of goods
• More choice for consumers

Question 3

Benefits of Importing Industrial Goods

Answer 3

• Reduces production costs for manufacturers

- Conserve precious local resources

Question 4

Problems of Importing

Answer 4

• Need exports to pay for imports
• Local companies can’t compete with imports
• Increases competition from imports lead to loss of sales

Question 5

UN Convention on Contracts for the International Sales of Goods (CISG)

Answer 5

Developed by UN Commission on International Trade Law – signed in Vienna in 1980 – came into force Jan 1st 1988
Treaty that attempts to facilitate international trade by providing uniformity in international sales law
Includes total of 101 articles that address:
- Formation of international sales contracts
- Rights / obligations of contractual parties
- Remedies available for breaching contracts

Question 6

Why is CISG Important?

Answer 6

• Ratified by Australia
• Is a defacto international sale of goods act
• Illustrates many of the difficult issues facing export managers
• Applies only to the extent that the parties have not otherwise agreed

Question 7

Limitations of CISG

Answer 7

• Issue on title of goods isn’t covered
• Doesn’t apply if seller’s obligation is in the supply of labour / other services rather than the supply of goods
• Doesn’t apply to franchise agreements

Doesn’t apply to sale of:

• Goods bought for personal / family / household use
• Goods by auction
• Ships / vessels / hovercraft / aircraft
• Electricity

Question 8

International Arbitration

Answer 8

Involved parties to choose a disinterested by informed individual / body (as a referee) to determine that merits of the case and make a judgement that both parties will honour

Question 9

Benefits of Arbitration

Answer 9

• Speedy proceedings
• Informal / private
• Cheaper than litigation through court system

Question 10

Problems of Arbitration

Answer 10

• Enforceability of awards made in one country in another country?

Question 11

Differences between Arbitration and Litigation

Answer 11

Litigation involves determining issues through court

Arbitration involves two parties in dispute who agree to work with a disinterested third party in attempt to resolve dispute

Question 12

What are Standards?

Answer 12

• Documented agreements
• Contain technical specifications to be use consistently as rules, guidelines or definitions of characteristics
• Ensures that materials, products, process and services are fit for their purpose