#15493 - Price Payment Delivery - International Commercial Law

Agreeing price

SGA S8-9

• Most circs, parties will agree price

• Can be done in a number of ways:

1. By fixed price list or quotation;

2. Agreed during negotiation (shld be documented);

3. Determined by a consistent course of dealing between parties;

4. Price fixed by valuation of a third party (contract void if does not happen – s9)

Price lists & quotations:

• Important to specify length of time for which quoted price or price list will remain valid

• Specify what is included in price

Price escalation clauses:

• If likely that costs of raw materials or labour will increase between signing contract and delivery, can include price escalation clause

• Absent clause, S will not be able to change the price

• B2B: clause subject to reasonableness test under s3 UCTA

VAT:

• Price taken to include VAT unless otherwise specified (VAT Act 1994, s19 (2))

• If exclusive, must be expressly stated

Duty to pay the price -

SGA SS 27-28

• Under s27 SGA, it is B’s duty to pay the price

• Where contract provides for cash on delivery, B cannot claim possession unless it is able to pay in accordance with the contractual terms agreed

• Only payment in full will discharge B’s liability (unless agreed otherwise)

Time for payment:

• SGA 28 states time for payment is when goods are delivered (unless agreed otherwise).

• Where payment linked to invoice, Ps may wish to agree that:

1. Payment is made in advance

2. B is given a credit period (say 30 days from delivery of invoice) in which to pay

• SGA 10 (1) unless expressly stated, time of payment not of the essence

• Means failure to pay not breach of condition entitling S to treat contract as repudiated + sell goods elsewhere.; limits S’s right to price+damages for late payment.

Method of payment:

• SGA 28 seller entitled be paid in cash (unless contrary agreement):

1. If S accepts cheque, treated as conditional payment; if cheque not honoured, S may sue for price either as breach of SOG contract or on cheque being contract in itself; shld include provision that payment only occurs when cheque clears

2. Payment by credit card usually treated as absolute payment; S cannot sue B

Late payment:

• In absence of contrary agreement, damages payable for late payment by English courts:

• Law (Reform) Miscellaneous Provisions Act 1934

• Late Payment of Commercial Debts (Interest) Act 1998

• Late Payment of Commercial Debts Regulations 2013

• Contract should provide for late payment (n provision under SGA); not punitive but genuine estimate of loss

EU provisions

• EU governed by Directive 2011/7/EU on Combating Late Payment in Commercial Transactions; only B2B; implied reference date for payment is 30 days; extension by agreement but absolute cap at 60 days; penalty interest 7% points above ECB

International provisions

• CISG 58 unless agreed, B must pay when goods placed at disposal, subject to examination; no provision for method; interest payable for late payment (Art. 78)

• UCC similar provision in Art 2-310;

• PICC all obligations must take place simultaneously unless agreed otherwise (6.1.4); payment may be in any (ordinary) form and cheque conditional on being honoured (6.1.7)

• PECL delivery should be rendered at same time as payment (7:104); payment may be ‘in any (ordinary) form and cheque conditional on being honoured (7:107);

UK provisions

• SGA 27 duty of S to deliver goods

• No general duty of S to transport goods to B; absent agreement, place of delivery is S’s place of business (SGA 29(2)

• Goods must comply with contract (implied condts. under s12, 13, 14 & 15

• Failure B can reject goods

International provisions

• Mirror UK provisions

• CISG 30

• UCC 2-301;

• No express delivery oblig. In PICC or PECL

UK provisions

• S required to deliver right quantity:

1. B may reject goods if less (30 (1))

2. If greater, B may accept contract quantity + reject rest, or may reject whole (s30 (2)); if B accepts whole, must pay for excess at contract rate (s30 (3))

3. B not obliged to accept delivery in instalments (30 (1))

International provisions

• CISG delivery of wrong quantity amounts to delivering goods which don’t conform to contract; must be remedied w/in rble time (35)

• UNIDROIT similar provision. (7.1.4)

• UCC implied oblig. of merchantability (2-314)

• PECL wrong quantity = non-performance

• SGA 28 delivery + payment should happen at same time, subject to contrary agreement

• Unlikely party will want to rely on that, so aspects usually dealt with in contract.

• SGA 35 (1) B deemed to have accepted goods when:

1. Tells S has accepted them; or

2. Does any act inconsistent w/ ownership of S (e.g. sells to TP or uses them)

• SGA 35(2) acceptance will not take place until B has had rble period to examine goods to ensure conform with contract

• SGA 35 (4) B deemed to accept goods if fails to notify S within rble time that wishes to reject

Passing of the risk:

• SGA 20(1) risk passes with property in goods, e.g. w/ title to or ownership of goods

• SGA 32(1) where goods delivered to carrier authorised by, transfer of possession to carrier constitutes delivery; goods at B’s risk from point at which in carrier’s possession.

• SGA 20 (2) if delay in delivery, during period of delay goods are at risk of party who caused delay (can be varied by contract)

• International provisions (p. 59)

Place of delivery:

• SGA 29(2) default provision = place of delivery is S’s place of business or residence

• Contract should expressly deal with where delivery should occur

Date of time or delivery:

• Default should take place within a ‘reasonable time’ (SGA 29(3))

• ‘Reasonable time’ depends on the circumstances and facts at time of delivery

1. Where S delivers goods, delivery time is when goods are handed to B

2. Where B collects, delivery is when B physically removes goods from S possession

3. Where delivery is to a carrier, delivery will be when S hands goods to carrier

• Must be at a reasonable hour (29(5))

Express delivery dates:

• SGA 10(1) time of payment not of the essence unless parties agree otherwise

• SGA 10(2) parties can agree whether time of the essence wrt any contractual terms

• Hartley v Hayman: where delivery date specified, implied term that time is of the essence (condition); may be...