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International Sale Of Goods Notes

LPC Law Notes > International Commercial Law Notes

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ICL Workshop 4

INTERNATIONAL SALE OF GOODS INTERNATIONAL SALE OF GOODS International sale contract has all the familiar elements of normal sale contract, however, international aspect may mean: (i) There is a difference in the governing law & jurisdiction. (ii) Increased distance between parties (more risk of damage, higher cost of transport); (iii) Payment problems (because of increased distance).
? Sellers like payment in advance to help cash flow;
? Buyer will want a credit period delaying payment.
? Issue of trust (S won't want to part with goods until it knows it has been paid etc).
- Domestic solution? retention of title.
- International sales? not practical, ownership of goods governed by the law of country where they are situated.
- UCTA 1977: s26? Act doesn't apply to international contracts (thus, makes it easier for seller to exclude liability). o Choice of law (what is the law that will apply to the contract) (Subject to Rome I) o Choice of jurisdiction. (the courts that will hear the dispute) (Subject to Brussels I) o Not uncommon for courts to have to apply foreign law? in such a situation, expert evidence will be obtained on the foreign law from foreign lawyers.

1. Choice of jurisdiction: (Brussels I) Apply when EU Member States fail to make express Choice of Jurisdiction o Advantages & disadvantages of suing party in their own jurisdiction (may be easier to enforce the judgement there); o Brussels Regulations: generally allows parties to choose jurisdiction.

2. Choice of law: (Rome I) Apply when EU Member States fail to make express Choice of Law o Rome 1 regulation: allow parties to choose their own law.
? Best to choose same jurisdiction & law as it avoids situations where the court will have to apply foreign law.
? Done by including a clause in contract (making it clear what law &
jurisdiction will govern the contract).
? Goods have to be transported further (thus, more expensive & greater risk of damage).
? Parties will have to think about who bear the cost of transport & the risk of damage.
? Parties need to agree who is obliged to insure the goods.
? Always a chance that they will get these terms wrong, therefore, very common to use STANDARD TERMS & CONDITIONS.
? Most common? INCOTERMS (all parties will have to say in contract is that a particular set of incoterms apply- latest terms 2010). INCOTERMS: o Not a complete contract. o Determine: a) Who will arrange and pay for main legs of journey. There are three main stages to transport of goods>
(i) From S's premises to port. (ii) Loaded on ship, then transported to port in B's country (FRATE contract). (iii) Transported from port to Buyer. b) Which party bears the risk of damages for each leg of journey. c) Which party arranges and pays for insurance for each leg. d) Which party must obtain import and export clearance (Non-EU1. Intro

2. Jurisdictio

n & choice of law P.157

3. Transport

arrangem ents

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