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Table Of Clauses Notes

LPC Law Notes > International Commercial Law Notes

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1

Int. Com. Law Work Shop 1

Clause Exc-Clause UCTA '97 P.94

1. Definition s and Interpreta tion P.7

Summary of Clause's Effect

Issue 1: Amend?

SEE note on Exclusion Clauses

- Defines terms and sets ground rules for how to interpret the contract. (Define terms only, do not impose any liabilities) Refers to specific clauses if the relevant term is used only in the context of that clause

NO
- The terms are neutral, and should not contain any obligations.

- Defines the purpose and scope of the contract.

2. Sale of Goods P.24

3. Price P.44

Issue 2: Effect of Complete Removal

- Sets out the general obligations of the seller to supply to buyer and of buyer to buy from seller.
- Provides certainty in the event of variations to the contract.
- Provides certainty as to price, calculation and validity.

Yes
- It includes a Prevail clause p.9 &
p 27 and we want to negotiate it.

- Avoid (UK) ss.8(2) and (3) of SGA 1979

Maybe
- Clause

3.3 gives uncertainty to buyer as to price. Seller can modify the price unilaterally before delivery if the cost of raw materials increases. Good for S but bad for B

- Avoid (internationally)

- Clauses 3.2

- Provide framework to charge VAT outside (s.19(2) Value Added Tax Act 1994)
- Provide framework for change of price (price escalation clause)

Lack of certainty in interpreting the parties' obligations and intention. Increased potential for disputes during performance. When there is conflict/confusion between the recitals and the operative part of the contract the Operative part will take precedence. Only in the event of an ambiguity in the operative part will a clear statement in the recitals direct its meaning. Lack of certainty in interpreting the purpose and scope of the contract and the obligations of the parties under the contract.
- Removes certainty in event of variations to contract.

the the

Clause 3.3 in T&C is a price escalation clause and is subject to reasonableness under s.3 UCTA UK:
- ss.8(2) and (3) of SGA 1979 applies if parties fail to state the price:
? may cause problems as the price will be determined on the basis of reasonableness.
? it will be debatable whether or not there is a contract at all.
? may result in an

2

Int. Com. Law Work Shop 1

Clause

Summary of Clause's Effect

s. 55 Convention UNIDROIT

4. Delivery P.48

Vienna and

- Clause 4. of the contract states that delivery happens when the goods are delivered to an independent carrier chosen by the supplier. This is in line with s.32(1). The B will take the risk from that point on.
- S is restricting liability for late delivery, howsoever caused.
- Time is essence.

not

of

the

Issue 1: Amend?

& 3.4 state that VAT is excluded. Will B agree?

May Be. Does B want the goods to be delivered within strict timeframes? If so, the clause is protecting S for late delivery. Buyer wants the default Common Law Position that Time is of the Essence by specifying a delivery date: Hartley v Haymans Seller wants Time NOT to of the essence in order to avoid breaching the Contract for late delivery. It will want

Issue 2: Effect of Complete Removal "agreement to agree (p.29)" which will not be enforceable by the courts for uncertainty.
- s.19(2) Value Added Tax Act 1994 applies and price will be inclusive of VAT (unless agreed otherwise) Internationally:
- The Vienna Convention +
UNIDROIT
+
have similar provisions "the price generally charged for such goods sold under comparable circumstances in the trade concerned. Seller's Duties UK:
- By s.27 SGA S has a duty to deliver (transfer possession) the goods to B. There is no duty to transport the goods to B.
- S is to comply with ss. 12, 13, 14 and 15, failure to do so gives B the right to reject delivery.
- s.29(2) Place of delivery is the S's place of business if none, his residence
- s.29(3) S is to deliver the goods to B within a reasonable time Internationally:
- Similar provisions under Art 31 Vienna Convention + Art

6.16 UNIDROIT + Art 2-308 UCC
+ Art 7:1-1 PECL Passing of risk
- s.17 Property passes when it is intended to pass.
- s.20(1) risk passes with the property in the goods (i.e. with the ownership (title) of the

3

Int. Com. Law Work Shop 1

Clause

Summary of Clause's Effect

Issue 1: Amend?
delivery to be within a reasonable time.

Issue 2: Effect of Complete Removal goods)
- s.20(2) risk is with the party who caused any delay
- s.29(2) place of delivery is S's place of business or residence.
- s.29(3) delivery should take place within a reasonable time and at a reasonable hour s.29(5). "Reasonable Time" depends on the circumstances at the time of delivery.
- s.10(1) Time of is not of the essence
- s.10(2) parties can agree if time is of the essence with regards to any term of the contract (i.e. including delivery in principle) But the Common Law position is that when a delivery date has been specified time is of the essence for delivery (Hartley v Haymans) and a condition of the contract giving B the right to repudiate the contract + damages. This may be rebutted. P.52 +P.52 Independent carrier
- s.32(1) transfer of possession to the carrier constitutes delivery to B and the goods are at B's risk from that point at which they are in the carrier's possession. B should ensure the goods. Costs
- s.29(6) in the absence of contrary agreement, S is responsible for the costs of putting the goods into deliverable state. There is no default position on costs of delivery but it's usually B. Quantity
- s.30 If S delivers less quantity B may reject goods.

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