Week 7

Question 1

What are the options for time of performance?

Answer 1

1. Fixed date
2. Fixed period of time
3. Reasonable time after conclusion of contract

Question 2

What are the cumulative conditions for conformity of goods?

Answer 2

1. In conformity with specifications of the contract regarding quantity and quality
2. Fit for ordinary purposes -> the seller does not have to consider where all clients could be unless made aware to seller or seller has previous knowledge
3. Fit for particular purpose if made known to the seller
4. In conformity with the quality of the sample
5. Adequate packaging

Question 3

What is the passing of risk?

Answer 3

Means the risk of the good being destroyed or being lost is moved

Question 4

How does the passing of the risk occur?

Answer 4

1. according to the contract
2. The risk will pass at the moment of delivery

Question 5

What are the buyer’s obligations?

Answer 5

1. Take delivery
2. Payment of purchase price
3. Examine goods within reasonable time
4. Give notice of non-conformity to the seller. Without notice, you are assumed to have accepted as conformed

Question 6

What are incoterms?

Answer 6

Incoterms is not a regulatory framework, but a contractual clause. It stands for international commercial terms

Question 7

When does incoterms apply?

Answer 7

Applies if inserted in the contract:
1. Expressly
2. Impliedly
3. Specified the chosen version

Question 8

How is the incoterm inserted?

Answer 8

Term -> place -> version

Question 9

What are the 4 basic categories of incoterms?

Answer 9

1. C -terms-> seller pays carrier to agreed destination, but does not bear risk during carriage. So the risk during transportation between states is not held
2. D-terms -> seller bears cost of carriage and risk until arrival at agreed destination
3. E-terms -> ex works of the seller. So they only pay and hold risk until warehouse
4. F-terms -> Delivery and risk passes when we give goods to a third person paid by the buyer

Question 10

Sales contracts also include specific clauses on:

Answer 10

1. Payment conditions
2. Place of inspection of the goods:
   buyer must examine goods ASAP depending on practicality.
3. Boilerplate clauses
4. Choice of law and jurisdiction clause
5. Recent responses to unfair practices

Question 11

What is representation?

Answer 11

Often, you have agents and intermediaries that represent buyers.

Question 12

What are limiting factors of making deals directly?

Answer 12

1. Geographical proximity
2. Market knowledge
3. Network of contacts
4. Time and time difference
5. costs

Question 13

What is indirect representation?

Answer 13

Agent acts in the name of the agent, but on behalf of the principal

Question 14

What is direct representaiton?

Answer 14

Agent acts in name and behalf of a principal. Agent is not a third party

Question 15

What is actual authority?

Answer 15

Giving power to agent for intentions to create or affect legal relations between principal and counterparty. Perform all acts necessary in circumstances to achieve purposes for which authority was granted

Question 16

What is apparent authority?

Answer 16

When the agent does not have authority anymore to represent the principal, but the counterparty rightfully believes the agent has authority

Question 17

When does a counterparty have apparent authority?

Answer 17

1. Conduct principal that induces counterparty to believe the agent has authority .
   e.g failure to give notice about the change in authority,
2. Surrounding circumstances
3. other circumstances

Question 18

what is usual authority?

Answer 18

The authority which a person occupying or put into the same kind of position as the agent would normally possessW

Question 19

What is agency of necessity

Answer 19

When an agent acts on your behalf to avert an imminent risk. in this scenario, authority is not given, while usually, an agent’s authority is conferred to him by the principal

Question 20

What are the cumulative conditions for agency of necessity to occur?

Answer 20

1. Principal’s property is under imminent risk
2. Urgent action is needed to save it
3. Agent is unable to contact principal

Question 21

What are the consequences as the agent during agency of necessity?

Answer 21

You must take the necessary remedial action. Note that the costs pertaining to the remedial action is given to the principal, UNLESS you make contact with them as then the costs are on the agent

Question 22

what is commercial agency?

Answer 22

A type of direct representation. It is a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of the principal, or to negotiate and conclude such transactions on behalf of and in the name of the principal

Question 23

So what is the definition of self-employed?

Answer 23

1. Agent is not an employee of principal
2. Agent can organize his business activities as he wants
3. Agent can schedule his own timesheet

Question 24

Does the self-employeed agent need to work exclusively for the principal?

Answer 24

No, unless there is a written clause. if so, then they become a tied agent

Question 25

Can the self-employed agent work with subagents

Answer 25

Yes, as long as the ordered tasks are not: 1. Personal in nature 2. Reasonably expected to be executed by the Agent

Question 26

what does the self-employed agent have authority to do?

Answer 26

1. To negotiate agreements. So this means contact and foster discussions with clients to conclude an agreement. They are not a broker as brokers only bring people together. ; OR 2. Negotiate and conclude agreements

Question 27

what does continuing authority mean?

Answer 27

Agent has durable and stable relation with the principal. This can be demonstrated through: 1. number of affairs arranged 2. regular meetings

Question 28

What are formal requirements to conclude an agency agreement?

Answer 28

1. Written agreement; or 2. Oral agreement Written document can be requested to prove the existence of agreement though

Question 29

what are the obligations of the Agent?

Answer 29

1. Look after his principal's interests 2. Act dutifully and in good faith. A catch-all clause can be included which requests extra obligations like reaching certain targets. 3. Make proper efforts to negotiate/conclude contracts by being proactive 4. communicate to principal all necessary information available 5. Overview of agent's results without the need for timesheet 6. Comply with reasonable recommendations and not instructions given by principal

Question 30

What are the obligations of the principal in an agency agreement?

Answer 30

1. Act dutifully 2. In good faith 3. Pay a remuneration to agent 4. Provide agent with necessary documentation relating to good/services concerned 5. Provide information necessary for the performance of agency contract

Question 31

What is the remuneration of agent and what about costs?

Answer 31

Payment can be: 1. Fixed amount 2. Comission 3. Combination Costs are held by the agent

Question 32

What are the termination rules of the agency agreement.

Answer 32

If the agreement is indefinite, then the parties can terminate the agreement by notice with a notice period. 1m -> 1y, 2m -> 2y, 3m -> 3y+ If agreement is fixed term, the agent will remain the agent within the fixed term unless there is a contractual clause that allows the termination.

Question 33

What is the restraint of trade clause

Answer 33

An agreement restricting the business activities of a commercial agent following termination. So it doesn't allow agency to work for competitors for max 2 years

Question 34

Conditions for the validity of a restraint of trade clause:

Answer 34

1. Written clause; and 2. It relates to the geographical area of original firm and the kind of goods covered by the agency under the agency agreement. It cannot be the same So nature and price of goods and geographical area cannot be same. look at examples on doc

Question 35

What are franchising agreements?

Answer 35

Using the brand and logo of another company. The economical risk weighs on the franchisee, and they are independent and entirely on its own behalf.

Question 36

What is distribution?

Answer 36

Reselling goods