This study is focused on the problems and the suggestions of proper ideas for solving them which are arisen from appling CIF, Incoterms 1990 into the contract of sale after reviewing of the contents of traditional CIF contract and the main changes of CIF, Incoterms 1990. This study summerized as follows: First, when the seller provide the buyer with non-negotiable sea waybill or inland waterway document instead of negotiable bill of lading, it is my feeling that the essence of symbolic delivery in traditional CIF contract is fading. And if the buyer has paid for the goods in advance, or a bank wishes to use the goods as security for a loan extended to the buyer, it is not sufficient that the buyer or the bank be named as consignee in a non-negotiable document. This is true because the seller by new instractions to the carrier could replace the named consignee with someone else. To protect the buyer or the bank it is therefore necessary that the original instructions from the seller to the carrier to deliver the goods to the named consignee be irrevocable. Second, CIF term can only be used for sea and inland waterway transport. When the ship's rail serves no practical purposes such as in the case of roll-on/roll-off or container traffic, CIP term instead of CIF term is more appropriate to use. Third, the EDI method still contains many legal and technical problems to be solved in order to be used thoroughly' in the international sale of goods. Therefore, the parties wishing to replace the traditional paper-based trade documents by electronic messages must exchange the agreement on EDI each other in order to prevent and sol ye unexpected problems. Forth, it may be that the goods are to be carried in bulk without such marking or naming of consignee as would amount to appropriation. Then the risk will not pass until effective appropriation has been made. Therefore, the seller needs to appropriate by issuing of separate bills of lading or delivery orders for parts of the bulk cargo. And in case the goods are bought while they are carried at sea, some problems on the passing of risk would arise. One possibility is that the buyer might have to assume risks which have already occured at the time when the contract of sale is entered into force. The other possibility would be to let the pissing of the risk concide with the time when the contract of sale is concluded. The parties are advised to ascertain the applicable law and any solution which might follow there form. Finally, Incoterms are restricted to deal with the main principles for the division of functions, costs and risks between the parties and the rest is left to their individual contract as supplemented by the custom of the trade, the individual terms of the contract of sale and the applicable law. Thus, the parties are advised to ascertain the applicable law on their individual contract of sale in order to solve the problems on the transfer of property, the remedy and so on.
The fact that one of the parties to the sale contract has had to pay demurrage to the shipowner under LD clauses in the charterparty does not of itself mean that he can recover that loss from his sale counter party under the sale contract: the route to such recovery is through express clauses in the sale contract itself. LD clauses in a sale contract stand free and independent of their counterparts in the relevant charterparty. LD clauses in a sale contract should be construed and applied as clauses in sale contracts, not as adjuncts to charterparties. Their interpretation should therefore be coloured not by decisions on laytime and demurrage in charterparties, but by their relationship to the contractual duties of CIF and FOB sellers and buyers. The results discussed here have implications for the drafting of LD clauses in sale contracts. If unwelcome surprises are to be avoided, it seems to advisable to start from the principle: what exactly do traders want or need in LD clauses. They need a clause which covers them against charterparty losses where those losses are the result of dealy caused by the counterparty to the sale contract. The parties to the sale contracts are well advised to prepare LD clauses concentrating on that purpose and bearing in mind the followiing questions. First, should the loading and discharge code in the sale contract appear in traders' or trade associations' standard terms and conditions or should they be left to ad hoc negotiation in contract sheets? Second, should that code be as complete as possible, covering loading or discharge periods or rates, demurrage and despatch, or is it enough for only some of those matters to be covered explicitly, leaving other matters to be governed" as per charterparty"? Third, does the introduction or incorporation of a stipulation for the giving of a notice of readiness make the start of laytime more or less predictable as between seller and buyer? Finally should a loading and discharge code in a sale contract actully be called a "laytime and demmurrage clauses"?
Incoterms 2010 have been revised in line with the latest changes in contemporary commercial practice. An understanding of Incoterms 2010 is essential. The Incoterms rules on the use of domestic and international trade terms, facilitate the conduct of global trade. Reference to an Incoterms 2010 rule in a sale contract clearly defines the parties' respective obligations and reduces the risk of legal complications. In 1980 the United Nations Convention on Contracts for the International Sale of Goods(CISG) was introduced to create international certainty and uniformity in the law and to govern issues that arise in an international sale of goods transaction. This paper focuses on harmony and ability of the CISG and Incoterms 2010 to govern contracts for the sale of goods.
This study is focused on the review of buyer's remedy resulting from the breach of seller's duty in contracts for the international sale of goods focusing on UNCCIS, 1980 and the problems and suggestions of proper ideas for solving the problems. First problem on the buyer's remedy is related to the breach of seller's duty on del ivory of the contracted goods. When seller has failed to deliver the contracted goods to buyer within the stipulated periods, buyer can treat the contract as avoided and claim damages from seller. By the way, since UNCCIS does not provide any stipulation on the time of buyer's avoidance of the contract, buyer can delay the time of avoidance when the price of contracted goods is rising rapidly and enlarge the amount of damages, Since this stipulation is clearly unreasonable, proper solutions are required for UNCCIS. Second problem is related to the breach of seller's duty on deliver of goods which are of the quantity, quality and description required by the contract and which are contained or packged in the manner required by the contract. When seller has failed to deliver goods which are confirm with the contract, buyer may have one of the two rights of damages and the price reduction according to UNCCIS provided that he does not choose the avoidance. But, since the character and position of the price reduction as a buyer's remedy are not sufficient solutions, more detailed review on this point is required. Third, Seller's duty to provide documents is very important for overseas trade, but UNCCIS does not provide any specific buyer's remedy in comparison with the other remedy and also does not provide any stipulation on the Letter of Credit which have important roles for a device of setting payment in overseas trade. This means that trade customs and practice have not sufficiently reflected in UNCCIS. As the problems mentioned above may decrease the evaluation of buyer's remedy in UNCCIS and, furthermore, that of UNCCIS itself, proper solutions on these points are needed.
Purpose: This study aimed to deal with disputes between the seller and the buyer in connection with the Letter of Credit (LC) in a sales contract. The Contracts for the International Sale of Goods (CISG) provides the rules on the fundamental breaches which can lead to termination of the sales contract but the CISG is not enough to govern issues arising from the LC disputes when the sales contract is not clear about the payment terms. This paper tried to find some solutions to the disputes by considering international rules, such as the Principles of European Contract Law (PECL). Research design, data and methodology: The methodology applied in this study was an analysis of some court decisions and extended literature review. Results: The study revealed that in contracts for the sale of international goods, the buyer was obliged to open an LC as manner of payment. If the buyer failed to open an LC or amend the terms of the LC, the seller could avoid the contract because this could deprive the seller's expected interest. Conclusions: Few studies in Korea have been comprehensively analyzed in terms of the obligations of regarding the LC with respect to the CISG in court cases. This study suggests safeguarding the buyer and seller when the LC is considered absolute or conditional.
In contracts for the international sale of goods, a seller must deliver appropriate goods and hand over relevant documents according to a contract, which will transfer the ownership of the goods to a buyer. In this case, if there are defects in the contracted goods, the warranty liability will occur. However, in the United Nations Convention on Contracts for the International Sale of Goods (CISG), a term-the conformity of the goods to the contract-is used universally instead of the warranty. According to the CISG, a seller must deliver goods in conformance with the relevant contract in terms of quantity, quality, and specifications, and they must be contained in vessels or in packages according to the specifications in the contract. In addition, a certain set of requirements for conformity will be applied implicitly except when there is a separate agreement between parties. Further, the base period of conformity concerning the defects of goods is the point when the risk is transferred to the buyer. A seller shall be obliged to deliver goods that do not belong to a third party or subject to a claim then, and such obligations shall affect the right or claim of a third party to some extent based on intellectual property rights clauses. If the goods delivered by the seller lack conformity, or incur right infringement or claim of a third party, then it shall be regarded as a default item per the obligation of the seller. Thus, the buyer can exercise diverse means of relief as specified in Chapter 2, Section 3 (Article 45-Article 52) of the CISG. However, such means of relief have been utilized in various ways for individual cases as shown in judicial precedents made until now. Contracting parties shall thus keep in mind that it is best for them to make every contract airtight and they should implement each contract thoroughly and faithfully to cope with any possible occurrence of a commercial dispute.
The purpose of this article is to examine the Delays of Performance under UN Convention on Contracts for the International Sale of Goods. In theory, there exist three clearly distinguishable categories of breach of contract, namely non-performance, non-conforming performance and late performance. In particular, delays of performance are the most common breach of sales contract including late delivery, late payment or late performance of any other obligation. In this regard, this article examines how parties can, through careful drafting, avoid or minimize legal problems in case of delay in performance. Especially, the export perspective focuses on the seller's interests, which require that sanctions be as lenient as possible if the seller has breached the contract but that there are prompt and adequate sanctions if the buyer has breached the contract. Furthermore, the seller should ensure that a short or medium delay in delivery will not entitle the buyer to declare the contract immediately avoided and take precautions against late payment, including delayed opening of a letter of credit.
The CISG has been legislated for playing roles as uniform rules which govern international sale of goods. The job of getting unification of the diverse domestic legal systems required almost half century of work. In the process of making the Convention some rules resulted from compromises of nation's relevant interests. The Convention, however, promoted both the legal certainty and harmonization in international trade in that the uniform rules suggest the appropriate resolution to the legal problems in the course of concluding a contract as well as in remedies for breach of contract. This paper focuses systematically on the scope of applicability of the CISG. The Convention deals with contracts for the international sale of goods. However, it does not apply to all kinds of the international sale of goods. The CISG confines the sphere of applicability to a certain type of sales. First of all, the CISG is limited to those contracts having been concluded between a particular group of persons, which is called a personal aspect of applicability. Secondly, the CISG covers a specific category of sales, which is called a material aspect of applicability. Thirdly, the CISG are concluded within a particular period of time, which is called a temporal aspect of applicability. Lastly, the CISG is limited to contracts falling within a given territorial sphere, which is called a territorial aspect of applicability.
The Incoterms which is one of the most useful international instrument for sale of goods provides when a contract goods deliver, risk passes and how costs are allocated between seller and buyer on the contract as long as they agree to use a rule of the Incoterms rules. The Incoterms rules have come into effective to use for an international or domestic trade of goods since January 2011, which have been modified several times since these established by ICC in 1936. The origin of Incoterms rules may had been appeared from English traditional FOB terms that had been affected to American regulations for the sale of goods. The Incoterms rules which had been started from the traditional English FOB terms and American FOB terms have been expanded other trade terms, such as CIF. Although FOB is based on the COD(Cash on Delivery), it is possible replaced COD to CAD(Cash against Delivery) through the use of Bill of Lading and Letter of Credit in the international sale of goods between seller and buyer according to the development of infrastructures on the international commercial transactions. This article exercises the process of transition of the Incoterms rules, being based on the English and American traditional FOB contract form through review literatures, judical precedents and provisions. Then this article provides some feasible alternatives to attempting to resolve some regulation problems of FCA, CPT, CIP, and D-rules in the Incoterms$^{(R)}$ 2010.
As the CISG has been legislated for a new legal system playing roles as uniform rules which govern international sale of goods, it requires appropriate criterion of interpretation. The Convention distinguishes between two levels of interpretation. One concerns the interpretation of the rules of contract law contained in the CISG itself, and the other the interpretation of specific statements or the conduct of the individual parties to a transaction.
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