Oxbridge Notes | Table Of Clauses - International Commercial Law

Clause	Summary of Clause’s Effect	Issue 1: Amend?	Issue 2: Effect of Complete Removal
Exc-Clause UCTA ’97 P.94	SEE note on Exclusion Clauses
1. Definitions and Interpretation P.7	- 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.	- 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.
2. Sale of Goods P.24	- Defines the purpose and scope of the contract. - 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.	Yes – It includes a Prevail clause p.9 & p 27 and we want to negotiate it.	- Lack of certainty in interpreting the purpose and scope of the contract and the obligations of the parties under the contract. - Removes certainty in the event of variations to the contract.
3. Price P.44	- Provides certainty as to price, calculation and validity. - Provide framework to charge VAT outside (s.19(2) Value Added Tax Act 1994) - Provide framework for change of price (price escalation clause) - Avoid (UK) ss.8(2) and (3) of SGA 1979 - Avoid (internationally) s. 55 Vienna Convention and UNIDROIT	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 – Clauses 3.2 & 3.4 state that VAT is excluded. Will B agree?	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 “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.
4. Delivery P.48	- 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 not of the essence.	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 delivery to be within a reasonable time.	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 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. Rejection of delivery - s.35(2) B has a reasonable time to inspect the goods and confirm that they comply with the contract. Acceptance will not occur until that time has lapsed. - s.35(4) B is deemed to have accepted to have accepted the goods if it fails to notify the seller within a reasonable time that it wishes to reject the goods. - s.36 if B rightfully rejects the goods after delivery, B is not obliged to return goods to S. S will want a non-rejection clause (which is subject to reasonableness under s.3 or s.6 UCTA). - s.37 B is liable for costs incurred by S due to B’s neglect or wrongful refusal of delivery. Attempts to limit B’s liability for breach of the implied duty to accept delivery...

Exc-Clause

UCTA ’97 P.94

SEE note on Exclusion Clauses

1. Definitions and Interpretation

P.7

- 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.

- 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.

2. Sale of Goods

P.24

- Defines the purpose and scope of the contract.

- 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.

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

- Lack of certainty in interpreting the purpose and scope of the contract and the obligations of the parties under the contract.

- Removes certainty in the event of variations to the contract.

3. Price

P.44

- Provides certainty as to price, calculation and validity.

- Provide framework to charge VAT outside (s.19(2) Value Added Tax Act 1994)

- Provide framework for change of price (price escalation clause)

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

- Avoid (internationally) s. 55 Vienna Convention and UNIDROIT

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

– Clauses 3.2 & 3.4 state that VAT is excluded. Will B agree?

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 “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.

4. Delivery

P.48

- 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 not of the essence.

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 delivery to be within a reasonable time.

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 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.

Rejection of delivery

- s.35(2) B has a reasonable time to inspect the goods and confirm that they comply with the contract. Acceptance will not occur until that time has lapsed.

- s.35(4) B is deemed to have accepted to have accepted the goods if it fails to notify the seller within a reasonable time that it wishes to reject the goods.

- s.36 if B rightfully rejects the goods after delivery, B is not obliged to return goods to S. S will want a non-rejection clause (which is subject to reasonableness under s.3 or s.6 UCTA).

- s.37 B is liable for costs incurred by S due to B’s neglect or wrongful refusal of delivery. Attempts to limit B’s liability for breach of the implied duty to accept delivery...

Table Of Clauses - International Commercial Law

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