• Journal of Arbitration Studies
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• v.15 no.2
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• pp.93-123
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• 2005

As the international commercial transaction has drastically grown up with the mainland China, commercial disputes that are required to settle through ADR have tremendously increased during the last decade. Since China has not been fully exposed to the Free World for a long period of time, there would have been a great amount of misunderstanding about their competency and integrity to deal with internationally oriented commercial transactions with a view to internationally acceptable manner. This arbitration case was related to the contract in dispute of C&A Inc. as the importer v. China XX Importation Co. as the exporter for the sale of Silicon Metal. But after the contract were formed, exporter(respondent) declined to deliver the goods under the contracts because the market price of Silicon Metal increased according to the argument of the importer(claimant). Importer had to purchase alternative goods from other companies to substitute for the goods subject to the contracts in dispute. Importer purchased silicon metal of the same quality as under the contracts from two other Chinese companies as the necessary measure to mitigate the loss, paying prices higher than the contract price. Since exporter had breached the contracts, importer's loss should be compensated by the exporter as the Arbitration Tribunal decided for supporting importer's claim of loss for the substitute goods. This study is aiming at analyzing the rationale of the arbitral awards made by the Shanghai Commission in terms of (l)Place of Arbitration, (2)Applicable Law, (3)Validity of the Contracts, (4)Doctrine of Frustration, (5)Responsibility for the Mitigation of Damage by the Importer.

• Korea Trade Review
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• v.44 no.6
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• pp.285-302
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• 2019

Good faith is difficult to define due to the facts that there is not an objective and concrete concept of good faith, and good faith in contracts for the international sale of goods is a principle that parties to the contract must act with sincerity as members of a social community. The Korean Supreme Court shall pay attention to setting the applicable standards that can be universally applied to good faith based on the self-established criteria. Through such effort, it is possible not only to realize the value of concrete validity pursued by the general clause of good faith but also to realize the value of legal stability by assuring the predictability of results when applying good faith. In the modern sense, it can be said that the arbitrary application of general rules rather than the escape and general clauses is a problematic situation in the application of good faith, but this problem can be solved by setting a reasonable standard of good faith. This paper studies good faith in the view of Korean law, international laws, and related cases in contract law. The purpose of this paper is to find the problems and solutions of the practical application of good faith by analyzing the Korean case (2009Da86000), which undermined the legal stability of good faith in Korea.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.62
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• pp.3-32
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• 2014

Article 77 sets forth the principle of prevention applied in several legal systems. Under this principle the party threatened by ooss as a consequence of a breach of contract by the other party is not permitted to await passively incurrence of the loss and then sue for damages. He is obliged to take adequate preventive measures to mitigate his loss. If the injured party abstains from taking such excessive measures he will not be considered to have failed to mitigate the loss under Article 77. The sanction provided in Article 77 against a party who fails to mitigate his loss only enables the other party to claim reduction in the damages. The reduction in damages under Article 77 is equal to the amount by which the loss should have been mitigated if the injured party had taken reasonable measures to avert or to lessen it. The aim of Article 77 is to encourage mitigation of the loss. The duty to mitigate the loss applies not only to a breach of contract in respect of an obligation whose performance is currently due. but also to an anticipatory breach of contract under Article 71. Article 85 contemplates that the buyer is in delay in fulfilling the latter obligation, or else that he fails to pay the price when payment is to be made concurrently with delivery of the goods by the seller. In both these situations of default, the seller who is either in possession of the goods or otherwise able to control their disposition must take measures, reasonable in the circumstances, to preserve them. The right of retention of the goods y the seller exists until he is reimbursed by the other party for the reasonable expenses incurred. Article 87 and Article 88 of the Convention grant different rights to the party obligated to take steps to preserve the goods; Article 87 allows him to deposit them in the warehouse of a third person, and Article 88 to sell them by whatever means appropriate. A difference exists between paragraph Article 88 (1) which grants the right to sell, and paragraph (2) which imposes the duty to take reasonable measures to sell the goods.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.42
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• pp.133-160
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• 2009

In International trade the buyer and seller are normally separated from on another not only by distance but also by differences in language and culture. It is rarely possible for the performance of obligations to be simultaneous and the performance of contracts therefore calls for trust in a situation in which the parties are unlikely to feel able to trust each other unless they have a longstanding and successful relationship. Thus the seller under an international contract of sale will not wish to surrender documents of title to goods to the buyer until he has at least an assurance of payment, and no buyer will wish to pay for goods until he has received them. A gap of distrust thus exists which is often bridged by the undertaking of an intermediary known and trusted by both parties who will undertake on his own liability to pay the seller the contract price in return for the documents of title and then pass the documents to the buyer in return for the reimbursement. This is a common explanation of the theory behind the documentary letter of credit in which the undertaking of a bank of international repute serves as a "guarantee" to each party that the other will perform his obligations. The independence principle, also referred to as the "autonomy principle", is at the core of letter of credit or bank guarantee law. This principle provides that the letter of credit or bank guarantee is independent of the underlying contractual commitment - that is, the transaction that the credit is intented to secure - between the applicant and the beneficiary ; the credit is also independent of the relationship between the bank and its customer, the applicant. The most important exception to the independence principle is the doctrine of fraud in the transaction. A strict interpretation of the rule that the guarantee is independent of the underlying transaction would lead to the conclusion that neither fraud nor manifest abuse of rights by the beneficiary would constitute an objection to payment. There is one major problem related to "Independent guarantees", namely abusive or unfair callings. The beneficiary may make an unfair calling under the guarantee. The countermeasure of beneficiary's unfair calling divided three cases. First, advance countermeasure namely by contract. In other words, when the formation of the contract, the parties must insert the Force Majeure Clause, Arbitration Clause to Contract, and clear statement to the condition for demand calling. Second, post countermeasure namely by court. Many countries, including the United States, authorize the courts to grant an order enjoining the issuer from paying or enjoining the beneficiary from receiving payment under the guaranty letter. Third, Export Insurance. For example, the Export Credit Guarantees Department is prepared, subject to certain conditions, to cover the risk of unfair calling. Of course, KEIC in Korea is cover the risk of the all things for guarantees. On international projects, contractor performance is usually guaranteed by either a standby letters of credit or Independent guarantee. These instruments will be care the parties.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.53
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• pp.49-74
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• 2012

This study primarily concerns the seller's right to require performance under the United Nations Convention on International Sale of Goods(1980) (here-in-after the CISG). By virtue of art. 62 of the CISG, the seller may require to pay the purchase price, take delivery or perform his other obligations. The right is known as a process whereby the aggrieved seller obtains as nearly as possible the actual subject-matter of his bargain, as opposed to compensation in money for failing to obtain it. The study describes and analyzes the provisions of the CISG as to the seller's right to require performance, focusing on the questions of what the seller can require the buyer to perform, and what the restrictions of his right to require performance are. It particularly deals with main controversial issues among scholars as to whether art. 28 of the CISG is applied to the seller's action for the price and so that it opens the door domestic traditions and national preconditions that prevent judges and enforcement authorities in some contracting states, and whether the seller's to require performance is subject to the duty to mitigate loss within the meaning of art. 77 of the CISG. On the basis of the analysis, the study puts forward the author's arguments criticizing various the existing scholars' views. In addition, this study provides legal and practical advice to the contracting parties when it is expected that the CISG is applicable as the governing law.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.62
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• pp.135-178
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• 2014

The Uniform Commercial Code (UCC) sets the standards of good faith in a commercial transaction for the sale of goods. With every sales contract, there is an implied obligation for both the seller and the buyer to negotiate the contract and perform under the terms of the contract in good faith. The agreement between both parties and the customs in the industry determine how the good faith standard should be applied to a particular transaction. Generally, the meaning of good faith, though always based on honesty, may vary depending on the specific context in which it is used. A person is said to buy in good faith when he or she holds an honest belief in his or her right or title to the property and has no knowledge or reason to know of any defect in the title. In section 1-201 of the UCC good faith is defined generally as "honesty in fact in the conduct or transaction concerned." Article 2 of the UCC says "good faith in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." The sales contract will generally determine which party is required to perform first. This provision helps to determine if the buyer or the seller is in breach of the agreement due to failing to perform as stated by the contract. Either the seller must deliver the items before the buyer is required to accept and pay or the buyer must pay for the items before the seller has the duty to act in good faith and deliver the items in a reasonable manner. If the contract does not specifically define who is required to perform, industry customs and fair trade may determine what is acceptable for the transaction. Under the UCC, the buyer is required to pay for the goods when they are delivered, unless the contract states otherwise. Therefore, the UCC imposes an obligation of good faith on the performance of every contract or duty under its purview. The law also generally requires good faith of fiduciaries and agents acting on behalf of their principals. This article discusses problems of the principles of good faith under the UCC. Specifically, this paper focuses on the interpretation of UCC sections and analysis of various cases. By comparing, also, UCC and Korean law, the paper proposes some implications of good faith issues for Korean law.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.15
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• pp.33-57
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• 2001

Although the parties did not expressly incorporate Incoterms into their contracts, Incoterms which have reflected a generally authorized principles and custom might be a part of sale contract. As indication of Introduction in Incoterms 2000, although the D-terms are different in nature from the C-terms, since the seller according to the D-terms is responsible for the arrival of the goods at the agreed place or point of destination at the border or within the country of import. Therefore, according to importance of Incoterms, although Incoterms 2000 have been revised in line with the most current commercial practice, because mentioned problems in this paper can be raised, they must be revised through Introduction, Rules or Guide Book of Incoterms.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.67
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• pp.23-47
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• 2015

European Commission drafted and proposed the Common European Sales Law(CESL) to the European Parliament for the realization of a uniform set of international private law rules within the EU internal market. Since its purpose is for free international commercial activities for the sale of goods, for the supply of digital content and for related services, it was proposed to enable EU Member States to adopt or supplement as their substantive law according to their options. This study is relate to the legal bases on termination of a contract under CESL, they are composed of three parts: damages and interest, restitution and prescription. Damages and interest are divided into damages, general provisions on interest on late payments, and late payment by traders. Damages are explained by dividing into right to damages, general measure of damages, foreseeability of loss, loss attributable to creditor, reduction of loss, substitute transaction, and current price. Restitution is described by dividing into restitution on revocation, payment for monetary value, payment for use and interest on money received, compensation for expenditure and equitable modification. Prescription is explained by dividing into general provisions, periods of prescription and their commencement and extension of periods of prescription. General provisions explain right subject to prescription into a right to enforce performance of an obligation and any right ancillary to such a right. Regarding period of prescription, the short one is two years and the long one is ten years. However, in the case of a right to damages for personal injuries, period of prescription for such right is thirty years. Regarding commencement, the short one begins to run from the time when the creditor has become, or could be expected to have become, aware of the facts as a result of which the right can be exercised, while the long one begins to run from the time when the debtor has to perform. However, in the case of a right to damages, the CESL clarifies that it begins to run from the time of the act which gives rise the right.

• Korea Trade Review
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• v.45 no.1
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• pp.83-100
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• 2020

This study aimed to provide the most accurate analysis possible regarding the buyer's duty to examine goods and give notice, or the like, of non-conformity to the seller under Belgian law in comparison with the CISG and CESL. Even though Belgium is the capital of the Europe Union, most of its laws remain untranslated in English. Therefore, this study may offer key insights into the specificities of Belgian law, which while being derived from the French Napoleon Code has its own practices coded into its Case Law. It also makes a comparison with the new CESL and CISG in order to evaluate their respective influence on national law and other infructuous attempts to harmonize Belgian law for the internal European market. Evaluating the differences of each system in the spirit of comparative law may be a good basis for the development of laws in each jurisdiction.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.12
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• pp.201-225
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• 1999

This article is focused on the review of price reduction and measuring damages under the CISG together with the law relating to sale of goods in main countries when the goods delivered did not conform with the contract. And also reviewed on the election of remedies for the aggrieved party, that is, which one between the two remedies would provide more compensation for the non-conformity. This article can be summarized as below. 1. Price reduction has its principal significance when the buyer accepts non-conforming goods and plays important role only when the seller is not liable for the non-conformity because the same price reduction formula applies for all circumstances. Of course, the buyer must bear any further damages, such as shutdown expenses and other consequential damages. 2. If the seller is liable for the damages and the price level rises, the buyer normally will claim damages since this approach is much more favorable result than price reduction. 3. In case the seller is liable for the damages and the buyer suffers no consequential damages, if the price level falls, price reduction would provide more compensation for the non-conformity than would damages and if there is no change in the market level, the allowance for defects in the goods will be normally the same under the price reduction and damages. By the way, In case the seller is liable for the damages and the buyer suffers consequential damages, it is desired that the buyer firstly elect the price reduction and later seeks to claim for consequential losses when the price level falls and unchanged.