• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.51
• /
• pp.187-210
• /
• 2011

International transactions have the threat of non-payment by the buyer or non-performance by the seller. Parties tend to search for additional means of securing performance and payment beyond the mere agreement in the contract. Such security may be achieved by means of a letter of credit. When contracting parties have agreed to pay by means of a letter of credit, the buyer's bank takes upon itself the obligation to pay the purchase price when the seller tenders the documents that are stipulated in the letter of credit. The documents must comply strictly with the terms of the credit.. The documents play a crucial role in letter of credit transaction. The principles of abstraction, separability and strict compliance governing the letter of credit transaction are considered. The concept of fundamental breach of Article 25 CISG was discussed. This article examines whether a failure to deliver documents conforming to the terms of the letter of credit can constitute a fundamental breach of the sales contract as defined by Article 25 of the CISG by the seller and thereby enable the buyer to avoid the contract. For letter of credit transactions it should be accepted that the delivery of non-performing documents constitutes a fundamental breach, if the result of this breach is that the bank refuses to pay the price for the goods. On the other hand, in the interpretation of Article 25 CISG, it should be noted that if the parties have agreed to payment by means of a letter of credit, they have simultaneously agreed to apply the strict compliance principle to the delivery of documents in the sales contract. Finally the parties should ensure that inconsistency between the requirements under the documentary credit and the requirements under the contract of sale is avoided, since the buyer may be in breach of his payment obligation if the seller cannot get paid under the documentary credit when his documents conform with the contract of sale.

• International Commerce and Information Review
• /
• v.19 no.3
• /
• pp.215-235
• /
• 2017

The United Nations Convention on Contract for the International Sale of Goods(CISG) is legislated for unified of international sale of goods, but does not cover all concerns related to that. Arilce 4 provides the exclusions of CISG. These exclusions might be govern by a domestic law. This paper analyses what are excluding under CISG Article 4, and then provides the Korean and Chinese domestic regulations related to them. At first, whether some issues are excluding based on the interpretation of CISG Article 4 depends on the agreement of parties concerned. An issue that a national law applies even might be invalid if it does not follow the general principles of CISG. In Conclusion, CISG does not cover the validity of the contract and the property in the goods sold under CISG Article 4. a company who trades with Chines company should understand the differences of both countries' regulations about the validity of the contract and the effect of property transfer and be careful to decide a govern law to avoid unnecessary disputes about these issues even though their contract is govern by CISG.

• Journal of Korea Trade
• /
• v.27 no.3
• /
• pp.43-64
• /
• 2023

Purpose - This paper studies whether CISG can be a suitable governing law for pure service contracts. When CISG was first drafted, there was little disagreement on the fact that contracts for the sale of goods and those for the provision of services were two different types of contract. Based on this understanding, CISG explicitly provides that the Convention will apply to contracts where the preponderant part of the contractual obligation is on the sale of goods, not services. However, as more sales transactions have come to include more elements of services, mainly due to the advancement of the IoT industry, the distinction between goods and services became more blurred. Based on the observation of recent changes, some scholars even argue that such a change supports the applicability and suitability of CISG to even pure service contracts. The purpose of this paper is to critically analyze and evaluate their argument. Design/methodology - This paper focuses on two separate but related issues: CISG's 'applicability' and 'suitability' to service contracts. For the first issue, this paper will examine the rules of interpretation of international treaties under the Vienna Convention on the Law of Treaties of 1969, and will apply its rules to find the proper answer. For the second issue, this paper will perform logical and empirical analyses on the reasoning employed by scholars claiming the suitability of CISG to service contracts. Findings - This paper concludes that CISG does not, and should not, apply to pure service contracts. The argument that CISG applies to pure service contracts directly contravenes Article 3(2) of the Convention, which expressly states that it does not apply to a contract wherein the preponderant part of its obligation is about services rather than sales. Similarly, CISG is not a suitable governing law for pure service contracts because it aims provide rules specifically tailored to the needs of transactions of sales of goods, not services. Servitization of sales of goods transaction does not change this conclusion. Originality/value - This paper presents different views from those offered by some eminent scholars on the issue of applicability and suitability of CISG to service contracts. By doing so, it is hoped that the confusion caused in discussions so far are clarified. Hopefully, this paper can also provide practical guidance to practitioners engaged in the fields of international sales, services, and IoT industries.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.66
• /
• pp.95-118
• /
• 2015

This study examines the Buyer's Remedies in respect of Defects in Title under SGA. As SGA divides contractual terms into a condition and a warranty, its effects regarding a breach of a condition or a warranty are different. Where a stipulation in a contract of sale is a condition, its breach may give rise to a right to treat the contract as repudiated and to claim damages. Where there is a breach of a warranty in a contract of sale, the aggrieved party may have a right to claim damages. Regarding a breach of a condition under SGA s 12(1), although the buyer may have his right to terminate the contract, he may lose that right when he accept or is deemed to have accept the goods by intimating his acceptance to the seller, acting inconsistently with the ownership of the seller, or retaining the goods beyond a reasonable time without rejecting them. Furthermore, the buyer may claim the estimated loss directly and naturally resulting from seller's breach. SGA contains the principle of full compensation and so the suffered loss and the loss of profit are compensable. As to specific performance under SGA, the court has been empowered to make an order of specific performance to deliver the goods in conformity with the terms of the contract and so it is not a buyer's right. This order should be made only where the goods to be delivered are specific or ascertained goods and the court must think fit to grant the order. However, among these remedies, the buyer cannot have the right to terminate the contract where there is a breach of warranty by the seller under SGA s 12(2).

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.75
• /
• pp.1-28
• /
• 2017

Article 67 of CISG which provides for the passing of risk of loss of the goods applies to the contract of sale involving carriage of the goods. The risk here is in nature the price risk. Under Article 67(1), if the seller is bound to hand the goods over to a carrier at a particular place, the risk passes to the buyer when the goods are handed over to the carrier at that place; if the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the carrier. In these cases, the risk passes even though the seller duly retains documents controlling the disposition of the goods. Article 69 of CISG applies to the contract of sale that does not involve carriage of the goods. Under Article 69(1) which covers the situation that the buyer is bound to take over the goods at the place of business of the seller, the risk passes when the buyer takes over the goods, however if the buyer does not take over the goods in due time, the risk passes at the time when the goods are placed at the buyer's disposal and he commits a breach of contract by failing to take delivery. Under Article 69(2) which covers the situation that the buyer is bound to take over the goods at a place (including his own place of business) other than the place of business of the seller, the risk passes when delivery is due and the buyer is aware of the fact that the goods are placed at his disposal at that place. Under these provisions of CISG, this study suggests what should be the definition of the contract of sale involving carriage of the goods. This study goes further to looks into what should be the concepts of the handing over of the goods by the seller to the carrier, the taking over of the goods by the buyer and the placing the goods at the buyer's disposal by the seller. This study may, we hope, provide a guidance for clearer understanding of the exact time of passing of risk under CISG.

• International Commerce and Information Review
• /
• v.8 no.1
• /
• pp.243-257
• /
• 2006

This study is to introduce the Chinese Contract Law against non-performance of the contract and to solve the wide range of problems involving to executing the trading contract. The parties' liability for the period of performance, the place of performance, the failure to deliver conforming goods together with it's nature of the lack of conformity, and the methods of compensation against damages and the force majeure clauses application. Those issues affect directly to commercial transactions in international business. The focus is more on the interrelationship of private individuals in its trade and on aiming to remove the legal obstacles from the Chinese Contract Law to freely flow of international trade. Reference may include foreign corrupt practices, Conventions on Contracts for the International Sale of Goods and Laws of England, France, and Japan. This study has brought the efforts of these issues in the full spectrum of performance and with concentrations on effectiveness to avoid the different viewpoints of the general principles of CISG and commercial practice founded pre-eminently. This study, in presenting the legal framework, will contribute to a better understanding of the purpose of rules of Chinese Contract -Law as they interact to the benefit of the parties involved in international trade transactions. The writer believes that a problem-oriented approach and the concentration as outlined above would offer a different perspective for law faculty teaching in this area and hope that this study can be sufficiently diverse to satisfy many of those views.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.60
• /
• pp.3-26
• /
• 2013

Seller's obligation on the Delivery of Goods and Handing over the Documents are key elements in Contracts for the International Sale of Goods. The United Nations Convention on Contracts for the International Sale of Goods(CISG) has been entered into force on 1 January 1988 to create international certainty and uniformity in the law and to govern issues that arise in an international sale of goods transaction. The Incoterms were first published by the ICC in 1936 and were most recently revised in 2010. Incoterms 2010 are entering into force on 1 January 2011. The Incoterms focus on the seller's delivery obligations and reflect the principle that the risk of loss or damage to the goods passes from the seller to the buyer when the seller has fulfilled its obligations to deliver the goods. This study highlights basic rules covering seller's obligation of delivery of goods and handing over the documents under the Incoterms 2010 and the United Nations Convention and Contracts for the International Sale of Goods. In the second chapter, this study will provide analyses and compare these two legal systems in relation to the basic rules governing delivery of goods and passing of risks in contract of sale. This chapter evaluates the meaning of Article 31 and Article 67(1) and FOB, CFR, CIF & FCA, CPT, CIP terms of Incoterms 2010. Chapter Three will focus on handing over the documents. Article 30 CISG imposes the seller's primary obligations to deliver the goods and to hand over documents relating to them. Article 34 CISG supplements the seller's obligation in relation to documents by providing that the seller must hand over documents relating to the goods. In contrast, Article 58(1) CISG imposes on the buyer the obligation to pay only when it has received the goods or documents controlling their disposition. I reviewed only some of the documents relating to the goods are documents controlling their disposition. This chapter considers the meaning of the phrase "documents that control the disposition of the goods and do not control disposition of the goods." Finally, the fourth chapter will assess the meaning of rules of CISG and Incoterms 2010.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.42
• /
• pp.33-66
• /
• 2009

Common law makes a distinction between partial breach and material breach. Attempted definitions of material breach are notoriously unsatisfactory, and the concept of partial breach does not necessarily bear an inverse relationship to substantial performance. This study will review the basic structure of common law contract remedies together with how these remedies are reflected in UCC Article 2 for sale of goods contracts. The matter is complicated because availability of remedy depends on the seriousness of the breach, and the right to cure, and (for sale of goods) these in turn depend on whether the contract is an installment contract or a single performance contract. Common law jurisdictions relegate specific performance of contracts to a last place in the hierarchy of contract remedies. Common law lawyers should recognize that this is the result of historical accident and not the product of some kind of superior intellectual effort. Not only is the attitude of civil law systems toward specific performance quite different, but for international sales contracts in developing nations, a remedy system based on the notion that substitute contracts are readily available(and therefore damage remedies are appropriate) is unrealistic. English common law courts were largely restricted to remedies in the form of monetary damages. For that reason the primary contract remedy at common law has never been specific performance. Rather, common law courts have struggled to develop an appropriate measure of monetary damages for breach of contract. Today, specific performance is viewed as an equitable remedy rather than common law. In the United States the dual court system has been abolished by a merger of law and equity courts into a single court structure. However some historical distinction linger on. The most important is that jury trials are generally not available in actions that seek equitable relief. If a plaintiff seeks in personam relief, such as specific performance of a contract, the action will be viewed as equitable and there will be no entitlement to a jury. Further, equitable relief will be granted only in those situations where the plaintiff pleads and proves that the remedy at law is inadequate. The purpose of this study aims to analyze the remedy system of breach of contract of U.K. and U.S. in the international commercial transactions with criterion of commercial rationality.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.67
• /
• pp.1-21
• /
• 2015

U. N. Convention on Contracts for the International Sale of Goods (hereinafter the 'CISG' or the 'Convention') has been in force more than 37 years. The CISG responds to the need for uniform sales law. First of all, the biggest barrier against the uniformity in sales law is so-called "homeward trend". Professor Honnold, who served as secretary of UNCITRAL during the time in which the CISG was developed, pointed out the danger of "homeward trend" like this in his Article. "One threat to international uniformity in interpretation is a natural tendency to read the international text through the lenses of domestic law." CISG Article 79 is the principal provision governing the extent to which a party is exempt from liability for a failure to perform any of his obligations due to an impediment beyond his control. So-called 'Manfred Forberich' decision regarding the article 79 represents the most extreme example of what is likely the most dangerous error that tribunals applying the CISG can make. CISG Article 79 only governs impossibility of performance, and there is a controversy whether a disturbance which does not fully exclude performance, but it considerably more difficult or onerous(hardship, change of circumstances, economic impossibility) can be considered as an impediment. Unlike PICC and PECL, the CISG governs contract of sale. Therefore, events such as a sudden increase in the price of raw materials or a dramatic devaluation of currency, will not allow the seller to avoid his liability for non-delivery of the goods or to require renegotiation of the terms of the contract of sale. We should bear in mind that the CISG should be interpreted and applied in the context of the CISG itself.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
• /
• v.71
• /
• pp.1-36
• /
• 2016

Unlike continental European legal systems (civil law systems), specific performance in common law refers to an equitable remedy requiring exactly the performance that was specified in a contract. It usually granted only when money damages would be an inadequate remedy and the subject matter of the contract is unique. Thus, under common law specific performance was not a remedy, with the rights of a litigant being limited to the collection of damages. Consistent with the practice in civil law jurisdictions, United Nations Convention on Contracts for the International Sale of Goods (CISG) makes specific performance the normal remedy for breach of a contract for the sale of goods. Therefore, the buyer may require a breaching seller to deliver substitute goods or to make any reasonable repair. Likewise, the sellermay require the buyer to taker delivery of goods and pay for them. Despite this, Article 28 of the CISG restricts the availability of specific performance where it would be unavailable under the domestic law of the jurisdiction in which the court is located. Thus, the CISG's more liberal policy toward specific performance is restricted by common law. There are some legal issues in CISG's specific performance availability by Article 28. This paper analyzes these issues as interpreting Article 28 of CISG, by examining various theories of application to actions for specific performance and comparing CLOUT cases involving CISG Article 28.