Group assignmentinternational trade and business law advanced legal english 2 topic analyze a cisg case

Microsoft Word ALE2 MINISTRY OF JUSTICE HANOI LAW UNIVERSITY GROUP ASSIGNMENT INTERNATIONAL TRADE AND BUSINESS LAW ADVANCED LEGAL ENGLISH 2 Topic Analyze a CISG case Ha Noi, 2023 Group 06 Class 4529 –[.]

MINISTRY OF JUSTICE HANOI LAW UNIVERSITY

INTERNATIONAL TRADE AND BUSINESS LAW

ADVANCED LEGAL ENGLISH 2 Topic: Analyze a CISG case

Ha Noi, 2023

Class: 4529 – N01 Lecturer: Mr Ngo Trong Quan

BIÊN BẢN XÁC ĐỊNH MỨC ĐỘ THAM GIA VÀ KẾT QUẢ THAM GIA LÀM BÀI TẬP NHÓM

- Ngày nộp: 17/4/2023

- Tổng số thành viên của nhóm: 07 người

- Nhóm trưởng: Nguyễn Thị Thu Mỵ (MSSV: 452938)

- Có mặt: 07 người

- Môn học: Tiếng Anh pháp lý nâng cao 2

- Tên bài tập: Bài tập nhóm: Choose a CISG case Prepare a case analysis of 4-5 pages

- Quá trình làm bài của nhóm 06 như sau:

 Tìm kiếm thông tin và trao đổi phương hướng

 Phân công nhiệm vụ trả lời câu hỏi

 Tổng hợp nội dung và rà soát

 Tham khảo ý kiến từng thành viên trong nhóm và góp ý chỉnh sửa

 Thực hiện chỉnh sửa bản word

 Lên kế hoạch thực hiện bản trình chiếu

 Phân công thành viên thuyết trình

 Đánh giá kết quả khách quan và công bằng

STT Mã SV Họ và tên

Đánh giá/

Xếp loại của SV

Đánh giá của GV

A B C

SV

kí tên

Điểm (số)

Điểm (chữ)

1 452937 Nguyễn Thùy Nhung X

2 452938 Nguyễn Thị Thu Mỵ X

3 452939 Lê Trần Thảo Ly X

4 452940 Nguyễn Thị Thu Hà X

5 452941 Phan Bảo Ngọc X

6 452942 Đào Thùy Linh X

7 452943 Hoàng Trung Hiếu X

Hà Nội, ngày 17 tháng 4 năm 2023

NHÓM TRƯỞNG

Nguyễn Thị Thu Mỵ

Đánh giá của giáo viên:

Kết quả điểm bài viết:

- Giáo viên chấm thứ nhất:.………

- Giáo viên chấm thứ hai:.………

Kết quả điểm thuyết trình:………

- Giáo viên cho thuyết trình:………

Điểm kết luận cuối cùng:………

- Giáo viên đánh giá cuối cùng:…………

TABLE OF CONTENTS

INTRODUCTION 1

DEVELOPMENT 1

1 The facts of the case 1

2 Legal issue 1

3 Arguments 2

3.1 Plaintiff’s legal arguments 2

3.2 Defendant’s legal argument 2

4 Judgment of the Tribunal 3

5 Case comment 4

CONCLUSION 5

ANNEX 6

LIST OF REFERENCES 7

1

INTRODUCTION International commerce operations are getting more and more common as globalization progresses In order to identify new partners, boost income, and maximize profit, an increasing number of enterprises are engaging in international trade in goods Yet, mistakes made during the negotiation process will undoubtedly result in disagreements and conflicts between the two parties over the legality of the contract The group will explain the topic of the contract's legality when the offer is modified in the essay that follows

DEVELOPMENT

1 The facts of the case

On 5 June 2000, the Seller (defendant) offered the Buyer (plaintiff) 10,000 metric tons

of rapeseed dregs, for which the standard of quality was set at above 38% of oil protein, and below 12.5% of moisture content The price term was US $78 per ton, FOB, Zhang Jia Gang, China

On 7 June, the Buyer accepted the Seller's offer and required the Seller to fax the contract and the terms of the Letter of Credit [L/C] to him On 9 June, the Seller faxed Sales Contract No SF0610 with seal

The Buyer deleted the language that "A ship with the age of above twenty years is not accepted" in the original contract, and modified " Carriage paid" to "Carriage shall be paid according to the charter-party" and authorized Milan Company, Italy to sign and seal the contract, and to fax it to the Seller

On 14 June, the Seller faxed to the Hong Kong representative office of the Buyer, stating that because the Buyer modified the contract unilaterally, the Seller could not confirm the contract, and would suspend the performance of the contract, and required the Buyer

to suspend issuance of the L/C

Disputes then arose between the parties concerning the validity and performance of the contract They failed to resolve the disputes through conciliation On 23 July 2001, the Buyer submitted the application for arbitration to the Arbitration Commission

2 Legal issue

 Does the modification made by the buyer materially alter the terms of the contract under article 19 CISG?

 Whether the contract between the two parties is legally enforceable?

 Is the Seller really just an agent, and had no contractual relationship with the Buyer?

2

3 Arguments

3.1 Plaintiff’s legal arguments

The Seller sent a fax on June 14th saying that the Seller could not confirm the contract and would suspend the performance of the contract, and requested the Buyer to suspend issuance of L/C On 22 June, the Buyer replied to the Seller in a letter, explaining that because the price term in the contract was FOB, the modification of the age of the ship and the payment of freight would not affect the Seller’s performance of the contract The Buyer also reminded the Seller that if the Seller failed to perform its obligation of delivering the goods, it would breach the contract, and also that the Buyer would have

to purchase substitute goods to fulfill its obligation to its other contract

On June 23, in its reply letter, the Seller stated that due to the nullity of the contract, the contractual obligations and liabilities should be considered void

Because the Seller refused to perform the obligation, the Buyer had to buy substitute goods at a higher price of $98.5/ton from Company XX, Singapore in order to perform its obligations under the other contract with the Italian customer

Although the Buyer has modified the contract signed by the parties, such modification does not affect any of the Seller’s rights The amendment also does not constitute a material amendment of the offer as defined in Article 19 of the CISG Furthermore, the Seller failed to object to the modification promptly The Seller was therefore bound by the Buyer’s modification and the contract was established

For the above reasons, the Buyer petitioned the Arbitration Tribunal to grant the following awards:

(i) The Seller shall pay to the Buyer US $150,675.00, the amount of damages Buyer incurred as a result of having to purchase the substitute goods;

(ii) The Seller shall pay the loss of interest in the amount of US $10,547.25 (at the annual interest rate of 7%, and with the interest accruing period ending on 9 June 2001); (iii) The Seller shall pay the arbitration fee and attorneys' fee incurred by the Buyer for the present case

3.2 Defendant’s legal argument

Facing the Buyer's charges, the Seller defended that:

In June 2000, the Seller and Yueyang XX Company agreed through negotiation that the Seller would act as an agent for Yueyang XX Company to export 10,000 tons rapeseeds dregs Yueyang XX Company authorized the Seller to sign the contract with the Buyer,

3

and the Seller was responsible for the arrangement of the goods and the shipment When the disputes arose, the Seller did not know the details Now the Buyer has applied for arbitration However, since the Seller was in deficit for more than RMB 10 million and was on the edge of bankruptcy, the Seller was unable to resolve the disputes In addition, the Seller was only an agent, and had no relationship with the Buyer The Buyer should contact Yueyang XX Company to resolve the dispute

4 Judgment of the Tribunal

 The applicable law

CISG applies to the present case because the States where the parties have their places

of business are Contracting States

 Legal issue 1: Whether a contract was concluded?

The Arbitration Tribunal finds that when accepting the offer, the Buyer made notes on the contract However, the Arbitration Tribunal also notes the price term in the contract was FOB According to Incoterms 2000, under FOB, the Buyer is responsible for shipment at its own expenses, and thus as far as the Seller is concerned, the age of the ship and the payment of the freight were irrelevant issues The Buyer's modifications of the clauses regarding the age of the ship and payment of the freight did not "materially modify the offer" as defined in Article 19 of the CISG Moreover, the Seller failed to object to this modification within a timely manner It was not until 14 June 2000 that the Seller indicated that it would not confirm the contract Based on the above facts and

in accordance with the relevant law, the Arbitration Tribunal holds that Contract No SF0610 was validly concluded between the Buyer and the Seller, and that the parties are obligated to perform according to the contract

 Legal issue 2: The agency defense of the Seller

The Seller claimed it was only an agent, and had no relationship with the Buyer, and therefore that the Buyer should contact Yueyang XX Company directly to solve the dispute The Arbitration Tribunal holds that the parties to Contract No SF0610 were the Buyer and the Seller, and not Yueyang XX Company In addition, the Seller did not submit any evidence to prove that it had ever disclosed Yueyang XX Company to the Buyer Thus, the Arbitration Tribunal holds that Seller, who signed Contract No SF0610 under its own name, was a party to the contract and of the present case, and shall be bound by the contract The legal relationship between the Seller and Yueyang

XX Company was a different one, which does not fall within the scope of this hearing; the Arbitration Tribunal will not rule on this issue

4

 Damages incurred in connection with the purchase of substitute goods

According to the evidence provided by the Buyer and article 75 of CISG, the Arbitration Tribunal found the Buyer had bought 7,350 tons of substitute goods Thus, the Arbitration Tribunal supported the Buyer's claim that the Seller shall pay for the damages the Buyer incurred by purchasing substitute goods; and the calculation formula shall be:

(US $98.50/ton - US $78.00/ton) * 7,350 metric tons = US $150,675.00

 Interest

According to the article 78 of CISG, the Buyer is entitled to loss of interest from the Seller However, the Arbitration Tribunal finds the annual interest rate claimed by the Buyer was too high, and the interest period was too long, while the evidence does not support all of the Buyer's claims for the amount of interest The Arbitration Tribunal holds that it is reasonable for the Seller to pay the interest at the annual rate of 3%, for the period starting from June 2000 and ending on the date this Arbitration Tribunal grants its award

 Attorneys' fee

The Arbitration Tribunal does not support Buyer's claim for the attorneys' fee, because the Buyer did not submit relevant evidence to support this claim

 The arbitration fee

The Arbitration Tribunal holds that the Seller shall pay 90% of the arbitration fee, and the Buyer shall pay the remaining10%

5 Case comment

This case has become one of the typical cases of CISG in the framework of dispute settlement at the China International Economic and Commercial Arbitration Commission (CIETAC) regarding the elements constituting the acceptance of minor modifications to the contract (in the case of FOB sales) when the offeror's objection is not made immediately In our opinion, the argument of the dispute settlement body has resolved the controversy related to the determination of the validity of the contract signed by the two parties under Article 19 of the CISG, as well as the clarification of the compensating principle That is the dispute in the interpretation of legal terminology within the WTO framework for the "materially modify" term in article 19 CISG and the condition that one party is entitled to claim compensation for the failure of the other party to perform its contractual obligations More specifically, it is the right of the aggrieved party when they have to make a replacement transaction and claim the

5

difference between the contract price and the replacement sale price, thereby determining the exact interest rate for seller Judging by the application of the CISG, CIETAC has made many arguments to explain the content of the CISG provision in the specific context of the case The interpretation of CISG regulations by CIETAC has contributed to increased flexibility in applying CISG regulations in practice

The CIETAC ruling has contributed to a variety of CISG precedents In addition, the practice of resolving disputes related to CISG at CIETAC in this case is also a valuable experience that helps to adjudicate disputes in upcoming similar cases on international commercial contracts

CONCLUSION Through the analysis of the above case, the terms of the offer, the amendment of the offer as well as the acceptance of the offer have been clarified in practice Also, a clear explanation of the notion of compensation for contract breaches by one side would help future courts decide similar cases involving international business agreements

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ANNEX CISG - United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980)

1 Article 19

"(1) A reply to an offer which purports to be an acceptance but contains

additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer

"(2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect If it does not so object, the terms of the contract are the terms of the offer with the

modifications contained in the acceptance

"(3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially."

2 Article 75

"If the contract is avoided and if, in a reasonable manner and within a

reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction

as well as any further damages recoverable under article 74."

3 Article 78

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74."

7

LIST OF REFERENCES

1 CISG case 1114 Available at: https://www.unilex.info/cisg/case/1114

2 Selected Compilation of Awards of CIETAC: 1995-2002, Law Press, page

585-592

3 United Nations Convention on Contracts for the International Sale of Goods Available at:

https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/19-09951_e_ebook.pdf

4 2016 UNCITRAL Digest of case law on Art.19 CISG

Available at:

5 2016 UNCITRAL Digest of case law on Art.75 CISG

Available at:

6 Calculation of damages under CISG articles 75 and 76

Available at: https://www.trans-lex.org/500158/_/cisg-advisory-council-opinion-no-8:-calculation-of-damages-under-cisg-articles-75-and-76/

7 2016 UNCITRAL Digest of case law on Art.78 CISG

Available at:

8 Vo, S M (2014) In the formation of contracts under the CISG, how does Article

19 solve the battle of forms issue? Journal of International Economics and Management, (62), 17-25 Retrieved from

https://jiem.ftu.edu.vn/index.php/jiem/article/view/97