(LLM) DO Viet Anh Thai

dovietanhthai@ftu.edu.vn

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Foreign Trade University Faculty of Law

I. Definitions

Sale: "the passing of title from the seller to the buyer

for a price" [UCC 2-106(1)]. The price may be payable in

money, goods, services, or land.

Goods: tangible personal property

If a transaction involves both goods and services, a

court determines which aspect is dominant.

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II. Terms in a sales contract Upon parties' agreements

Rules: clear and sound terms can avoid dispute later

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Essential terms in a sale contract

1. Parties of the contract

2. Good

3. Quality

4. Quantity

5. Price

6. Payment

7. Transportation and delivery

8. Inspection

9. Limitation of damages/Force majeure

10. Governing law

11. Dispute resolution

12. .

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1. Parties of the contract Full legal name and address of Buyer and Seller

Ex: Microsoft Corporation, Unilever Bestfoods LLC

Full name and title of the representative

=> Attention: Verify the capacity to enter the contract of both parties

=> Question:

Is a sales contract signed by the Vice President in charge of Sale valid?

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2. Goods Methods for drafting goods provision: - Goods with Commercial name : Basa Catfish

- Goods with Scientific name : Pangasius bocourti

- Goods with local of production: Buon Me Thuat coffee, Bordeaux wines

- Goods with utility: lotion anti-wrinkled

- Goods with serial number/model : Air conditionner model number 111.222.333

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3. Quality

By description

By sample

The goods delivered shall be exactly as sample

=> Be careful if, for marketing aim, you provide sample with the best quality!!!

By standard

=> Keep the standard up to date

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4. Quantity Exact quantity

Example: 200 computers

with tolerance

Example: 2000 pounds of rice +/- 5%

=> mostly to cover natural loss during transportation

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5. Price Fixed price : the price is determined at the formation

of the contract

Floating price : the price will be determined later

Ex: market price on the day of delivery

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6. Payment Time of payment:

- A fixed date (Goods shall be delivered at September 1st 2012)

- A deadline (Goods shall be delivered before September 1st 2012)

- A period (Goods shall be delivered in September 2012)

Payments currency:

Attention: if payments currency is different from prices currency, you must insert an exchange rate between 2 currencies

Method of payment

- Bank transfer

- Letter of credit

- Etc

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7. Transportation and delivery

Method of transportation: boat, air, truck

Who pay the transportation fee?

=> International sale: INCOTERMS ( FOB, CIF )

Time of delivery

Announcement of delivery

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8. Inspection

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Seller Buyer

Certificate of

Quality Survey Report ?

9. Force majeure Force majeure: an impediment beyond a partys

control and that a party could not reasonably be expected to take the impediment into account at the time of the conclusion of the contract or have avoided or overcome its consequences.

Breaching party is not liable for the breach of contract due to a force majeure

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10. Governing law Domestic contract : not necessary => Governing law is

the law of the country of the parties

International contract : compulsory => choice between:

- Law of Buyers country

- Law of Sellers country

- Law of other country

- International Treaty

- Etc

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11. Dispute resolution - Negotiation

- Conciliation/Mediation

- Court Litigation

- Arbitration

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Criteria Court Arbitration

Fee ( cost) Not expensive Very expensive

Time Longer Faster

Secrecy No Yes

Finality of the decision Appeal possible No appeal

Choice of judge/arbitrator

Impossible Right of the parties

Enforcement of the decision

Decision is enforced by the executive branch of the court

Parties must ask the executive branch of the court to enforce arbitral decision

Review a contract CONTRACT No 1/2015

The Buyer: Unimex Thai Binh

Adress: 01 Hai Ba Trung, Le Hong Phong district, Thai Binh

Tel: 84 36 3730 190

Fax: 84 36 3730 191

The Seller: Asian Network Samoa (ANS)

Adress: C/O : Space, 4, Leng Kee Road, Singapore 159088

Tel: +65 6269 2269

Fax: +65 6269 2268

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CONTRACT No 2/2015

[]

Article 1. Goods:

Illicium verum

Article 2. Quality:

- Percentage of breakage:

CONTRACT No 3/2015

Article 15: Force majeure

Any delay or failure in the performance by the Seller shall be excused if and to the extent caused by the occurrence of a Force Majeure, for example flood, storm, hurricane, tsunami.

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II. Implied terms

Watch out with implied terms by statutes

Correspondence with description

Sale by sample

Merchantable quality

Fitness for purpose

Title, quite possession

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Case study 1

Kim purchases $200 of fruit and vegetables from an On-line

Supplier called Food on the Go ltd. The products are

described on the web page with photos and prices per

kilogram.

When the fruit and vegetables are delivered, Kim notices that

half the fruit she ordered is unfit to eat and the potatoes are

not the variety she ordered.

=> What should Kim do?

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Case study 2

Gus purchased a pair of jeans that were on sale (20% off) at

Northshore Jeanery Pty.Ltd.

The first time Gus wore the jeans, the zip broke and the

stitching around the waistband became loose.

Gus returns the jeans and requests a refund, but the sales

assistant points to a sign displayed above the cash register,

which states No refunds or exchange on Sale items.

=> What should Gus do?

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Case study 3

David goes to an electrical shop, which specializes in

selling TVs, DVD players and other sound systems

and asks for an all region DVD player.

When he inserts a new DVD imported from US, he

discovers that it will not play because DVD player

does not carter for that region.

=> Which implied terms have been breached?

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III. Exclusion Clauses: the Position at Common Law An exclusion clause is a term of the contract that limits or

excludes a liability from one party that they would otherwise be

subject to.

The function of an exclusion clause is to limit or exclude liability

for breach of an express/implied term, or even negligence in a

contract.

The courts approach to interpreting such a clause is to interpret

them narrowly.

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Once you sign the contract, it is assumed that you are

bound regardless of the fact that you read it or not

With an unsigned document, an exclusion clause will

be binding only if the clause was brought to the notice

of the customer. This notice must be reasonable

notice and is determined objectively by the courts.

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Previous Course of Dealing

If the customer has had previous dealings with the

defendant, the court will more readily infer knowledge of

the exclusion clause.

If the customer knows about the clause through his

previous dealings then he/she will be bound by it

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Contra Proferentum Rule

The contra proferentum rule is a rule of interpretation used by the courts. The rule provides that the courts will interpret the exclusion clause against the party relying on the clause

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Exclusion Clauses: The Position under Statute Law

Given the view that exclusion clauses are generally

considered to be unfair to consumers, legislation has

been enacted to modify the operation of exclusion

clauses in relation to the sale of goods/services.

They are void for consumer contract

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