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Business EnglishLecture 1 Contract for International Sale of Goods Definition of contract Contract for International Sale of Goods Form of contract for International Sale of Goods Law applicable to contract for the International Sale of goods Contract: 合同 Contract for International Sale of Goods: 国际货物买卖合同 Form of Contract: 合同形式; Promise: 允诺 Meeting of minds/Mutual assents: 合意/意思表示一致; Agreement: 协议 Place of business: 营业地 CISG: 联合国国际货物买卖合同公约Definition of contract Contract is “a promise or a set of promises” for the breach of which the law gives a remedy. Contract is a “meeting of minds or mutual assent” with which one person or more is obliged to give a thing, to do or not to do a thing to one person or more persons. contract is a legally binding agreement, or an agreement creating an obligation. The substance of the definition of a contract is that by mutual agreement or assent, the parties create enforceable duties or obligations. Contract for International Sale of Goods an agreement between two parties whose places of business are in different countries, under which “one party (the seller) is bound to deliver the goods and transfer the property in the goods sold and the other party (the buyer) is obliged to pay the price and accept the goods. 1. International: place of business principle 2. Sale: delivering the goods and transferring the property in the goods; paying price and accepting the goods 3.Goods: movable property or personal property Seller, in State A, entered into negotiations with buyer in State B for a complex and important contract for the manufacture of machinery. To complete the negotiations, seller sent senior officials and a supporting stuff to the city in State B where buyer had its headquarters. Sellers representatives rented a suite of rooms for a month; most of the negotiations and the final execution of the contract took place in that suite. Question: Are the places of business are in different countries?Contract for International Sale of Goods Analysis: The place of business in CISG should be construed to mean a permanent and regular place for the transacting of general business, and would not include a temporary place of sojourn(逗留、旅居) during ad hoc (特别、专门)negotiations. So the places of business to the parties are in different countries.Form of contract for International sale of goods It means whether a contract is made in writing or orally No form required in CISG (CISG art.11) A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.Form of contract for International sale of goods Sabate France sold wine corks to Chateau, a winery in Canada. The sale took place through Sabates California subsidiary, Sabate USA. In talks, Sabate claimed that the corks would not distort the taste of wine. The parties agreed by telephone on the quantity, price, payment and shipping terms. No other terms were discussed, and the parties had never done business before. After a second order, totaling eleven shipments, a total of 1.2 million corks had been sold. An invoice accompanied each shipment stating that “Any dispute arising under the present contract is under the sole jurisdiction of the City of Perpignan.” Chateau took delivery, remitted payment, and after bottling the wine, discovered that the cork had tainted the wines flavor. When Chateau sued for breach of warranty, Sabate argued that the forum selection clause required that the case be heard in France. Chateau countered, claiming that a valid and enforceable verbal contract had already existed, and that the subsequent forum selection clause was not a part of it.Form of contract for International sale of goods Analysis: The verbal contract for the purchase of corks was valid and binding under CISG, because the contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. The attempt by the seller to later include a new and material term (the forum selection clause) in the invoices was not effective. The buyer did not assent to the new term simply by receiving and paying for the goods. Law applicable to contract for International sale of goods Convention on Contracts for the International Sale of Goods (CISG), which was made by U.N. Commission on International Trade Law (UNCITRAL) in 1970s In 1980, CISG was passed by diplomatic conference. Unlike many other U.N. codes that are not binding, the CISG is a convention or agreement among nations that is binding once the legislature of a country adopts it. Around 70 countries have joined it, but up to now, UK has not ratified it yet.Lecture 2: Entering into the contract: offer Offer:要约 Withdrawal of offer:要约的撤回 Revocation of offer:要约的撤销 Lapse:失效 Expression of intent:意思表示 Invitation offer:要约邀请 What is offer The requirement of an offer When an offer becomes effective The withdrawal of an offer The revocation of an offer Lapse of an offerDear SirsSubject: 100% Cashmere Sweaters Thank you very much for your enquiry of April 1 for our 100% Cashmere Sweaters. We are now making you a firm offer subject to your reply reaching us before April 30, 2005: Mens large US $ 50.00 per piece Ditto(同上) medium US $ 48.00 per piece Ditto small US $ 45.00 per piece The above prices are based on CIF Vancouver basis net. Payment: By confirmed irrevocable L/C payable by draft at sight. Shipment: June/July, 2005 provided the L/C reaches the seller one month before the time of shipment. 1. What is offer An offer is an expression of an intent to enter into a contract with another person E.g. We offer you 2,000 dozen Mens Shirts at US $ 54 per dozen, net, CIF New York, shipment August, terms of payment by an irrevocable L/C. 2. The requirement of an offer 1. it should be addressed to one or more specific persons; 2. An offer must be sufficiently definite It shall include main conditions of a contract. (CISG art 14) (1)indicates the goods; (2) specifies the quantity or determinable quantity; (3)specifies the price or determinable price of the goods On June 1, Buyer telexed Seller, “Can you ship me 1,000 bales of No.1 cotton?” Seller replied, “Accepted your offer. Cotton at $ 110 per bale will be shipped July 1”. Buyer responded, “My telex was only an inquiry, Can not agree to your terms”. Seller answered, “Accepted your offer and will hold you to the contract.” Are the parties bound to the contract? Analysis: The parties are not bound to the contract. Under CISG article 14 (1), Buyers “proposal” may not be construed as an “offer”: it was not “sufficiently definite” because it didnt “expressly or implicitly” fix or make “provision for determine the price” (3) To indicate the intention to be bound it shall be binding on the offeror as soon as it is accepted by offeree.Dear SirsSubject: 100% Cashmere Sweaters Thank you very much for your enquiry of April 1 for our 100% Cashmere Sweaters. We are now making you a firm offer subject to your reply reaching us before April 30, 2005: Mens large US $ 50.00 per piece Ditto(同上) medium US $ 48.00 per piece ditto small US $ 45.00 per piece The above prices are based on CIF Vancouver basis net. Payment: By confirmed irrevocable L/C payable by draft at sight. Shipment: June/July, 2005 provided the L/C reaches the seller one month before the time of shipment. Please quote us (your lowest price) for 2000 dozen mens 100% Cashmere Sweaters. Invitation offer Invitation offer (also called “invitation” or “invitation to treat”) It means that one party is merely inviting offers, which he is then free to accept or reject. Generally, the auctions, advertisements etc. are invitation.3 when an offer becomes effective CISG (art.15 para.1): An offer becomes effective when it reaches the offeree. the offer reaches the offeree once it is delivered to either to the offeree personally or to its place of business or (electronic) mailing address. (under the offerees control) There is no need to come into the hands of the offeree or actually be read by the offeree.4. The withdrawal of an offer 2. The offeror is free to change his mind after dispatch of offer but prior to the time the offer reaches the offeree. CISG (art.15 para.2): An offer, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer. Once the offer is withdrawn, it has never become effective. On June 1 seller mailed to buyer a letter offering to sell buyer specified goods at stated price. The offer also stated: “this offer is binding and irrevocable until July 1.” A letter from seller to buyer takes a week for delivery. On June 6, before buyer received sellers June 1 letter, seller phoned buyer and said, “disregard the letter that I mailed to you on June 1, I have decided to withdraw the offer contained in the letter.” On receipt of sellers letter buyer replied “I accept your June 1 offer.” Question: whether the above parties are bound by the contract? Analysis: The above parties are not bound by the contract, because, on June 6, the offer had not yet reached the offeree, and therefore was not yet “effective”. The statement that the offer could not be revoked until July 1 would have become binding, when it reached the offeree. But the offer never became “effective” because of the withdrawal that reached the offeree in advance of the offer. 5.The revocation of an offer 6.1 Offers as a rule revocable: CISG art.14until a contract is concluded an offer may be revoked if the revocation reaches offeree before he has dispatched an acceptance Indication of irrevocability contained in the offer. if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable 1. “price and other conditions are not good after 1 September”. 2. “this is a firm offer” 3. “we shall stand by our offer until we receive your answer.” Dear SirsSubject: 100% Cashmere Sweaters Thank you very much for your enquiry of April 1 for our 100% Cashmere Sweaters. We are now making you a firm offer subject to your reply reaching us before April 30, 2005: Mens large US $ 50.00 per piece Ditto(同上) medium US $ 48.00 per piece ditto small US $ 45.00 per piece The above prices are based on CIF Vancouver basis net. Payment: By confirmed irrevocable L/C payable by draft at sight. Shipment: June/July, 2005 provided the L/C reaches the seller one month before the time of shipment. 6.2 Irrevocable offers On June 1 seller delivered to buyer an offer that included this statement: I will hold this offer open until June 15.” On June 2 seller delivered to buyer the following statement “I hereby revoke my offer of June 1.” On June 14 buyer informed seller that he accepted the offer of June 1. Sellers attempt to revoke the offer was ineffective. Buyer accepted within the period set by seller; the parties are bound by contract. On June 1 seller delivered to buyer an offer that included this statement: I will hold this offer open until June 15.” On June 2 seller delivered to buyer the following statement “I hereby revoke my offer of June 1.” On June 14 buyer informed seller that he accepted the offer of June 1. Sellers attempt to revoke the offer was ineffective. Buyer accepted within the period set by seller; the parties are bound by contract. Reliance by offeree on irrevocability of offer If it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. On May 1 builder asked supplier to submit an offer for the sale to builder of a specified quantity of bricks. Builder explained that he needed the offer to use in computing a bid on a contract to construct a building. Builder added that he must submit the bid by June 1 and that the bids would be opened and the contract awarded on June 15. on May 7 supplier gave builder an offer for the bricks, and builder used the offer in preparing his June 1 bid for the building contract. On June 10 supplier notified builder that he revoked his offer. On June 15 the bids were opened and builder was awarded the contract. Builder thereupon informed supplier that he accepted suppliers offer. it was reasonable for the builder to rely on the offer as being irrevocable since supplier knew that builder would use the offer in compiling its bid. In addition, builder acted in reliance on the offer in submitting a bid that led to a contract binding it to construct the building at an agreed price. So suppliers attempt to revoke his offer is ineffective. 7. Lapse of an offer On the death either of the offeror or the offeree before acceptance. By non-acceptance within the time prescribed for acceptance by the offeror When no time for acceptance is prescribed, by non-acceptance within a reasonable time. The offer is rejected The offer is revoked.On December 1, Seller sent to Buyer an offer to sell 5,000 widgets to Buyer for $25 a piece, the offer stated: “the offer will remain open until December 31.” On December 10, Buyer answered:” The price is too high, I dont accept your offer.” Then, on December 15, Buyer changed his mind and sent a telegram stating:” I accept your December 1 offer after all.” Seller replied:” Your acceptance is too late, since you already rejected the offer.” In turn, Buyer answered:” The acceptance is good, since you promised to keep your offer open until December 31.” There is no contract because buyers rejection of December 10 terminated the offer even though it would otherwise have been binding until December 31. Lecture 3: Entering into contract: AcceptanceWords & expression Acceptance: 承诺 Late acceptance: 承诺迟延 Delay in transmission: 传递迟延 Modification/alteration of acceptance Material alteration/modification: 实质性变更 Non-material alteration:非实质性变更 Dear Sirs: Subject: 100% Cashmere Sweaters Please quote us (your lowest price) for 2000 dozen mens 100% Cashmere Sweaters. Dear Sirs Re: 100% Cashmere Sweaters Thank you very much for your enquiry for our 100% Cashmere Sweaters. We are now making you a firm offer subject to your reply reaching us before April 30, 2005: Mens largeUS $ 50.00 per dozen Ditto(同上) medium US $ 48.00 per dozen Ditto small US $ 45.00 per dozen The above prices are based on CIF Quanzhou. Payment: By confirmed irrevocable L/C Shipment: June/July, 2005, provided the L/C reaches the seller one month before the time of shipment. Dear Sirs Re: 100% Cashmere Sweaters Thank you very much for your offer of 100% Cashmere Sweaters. we think your prices are quite reasonable. We should like you to send us the following: Article No. Prices Quantity Mens large US $ 50.00 per dozen 500 dozen Ditto medium US $ 48.00 per dozen 1000 dozen Ditto small US $ 45.00 per dozen 500 dozen total: US$ 95500. CIF QUANZHOU Payment: By confirmed irrevocable L/C. Shipment: June, 2005. If they are not delivered by that time, we shall have to cancel the order.Contents 1. What is acceptance 2. Requirements of an acceptance 3. When acceptance becomes effective 4. Withdrawal of acceptance 5. Late acceptance 6. Delay in transmission 7. Modification of acceptance1. What is acceptance An acceptance is the expression of an intention by the offeree to assent to the offer 2. Requirements of an acceptance an acceptance must be made by the offeree an acceptance must be made within the time of acceptance an acceptance must match the terms of the offer. A sends B an offer on Monday by e-mail, urging B to reply a.s.a.p. although on previous occasions A and B had already communicated by email, B accepts As offer by letter which reaches A on Thursday. Is there a contract between A and B? Analysis: Bs acceptance is too late since under the circumstances an acceptance by a letter which reaches A three days after its email was not made a.s.a.p. 3. When acceptance becomes effective CISG : An acceptance of an offer becomes effective when the indication of assent reaches the offeror. the acceptance reaches the offeror once it is delivered to either to the offeror personally or to its place of business or (electronic) mailing address. (under the offerors control) The contract is concluded once the acceptance becomes effective!4. Withdrawal of acceptance An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance. But the acceptance is irrevocable, because once the acceptance reaches the offeror, the contract is concluded.5. Late acceptance A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect. 5.1 Late acceptance is normally ineffective If the a

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