INTERNATIONAL LAW OF SALE OF GOODS

INTERNATIONAL LAW OF SALE OF GOODS

 

 

Free On Board contract (FOB) is a trade term requiring the seller to deliver goods on board a vessel designated by the buyer. ( Butler, P. (2008). The seller fulfills its obligation to provide the goods they have over the ship rail. The involved individuals have to underline the laws governing the contract. The seller who in our case, is the New Fad Ltd has to pay for the transportation of the goods to the port of shipment plus loading costs. The buyer who is the Bell Ltd from Nigeria has to pay the cost of marine freight, insurance, unloading, and transportation from the arrival port to the final destination. (Chuah, J. (2009). According to the FOB contract, the seller is liable for risk until goods are on the ship. The goods loaded on board the vessel becomes the responsibility of the buyer.

Is the contract L/C basis contract?

This is not L/C basic contract. L/C primary contact is an instruction wherein a customer request the bank to issue, advice, or confirm a letter of credit for a trade transaction. An LC substitutes a banks name and credit for that of the parties involved. He then presents the drafts and document to the advising bank. ( Bal, A. B. (, 2009). In this case, the contract between the New fads Ltd and Bell Ltd is not a L/C contract because it does not involve any bank in their agreement.

What is the mode of payment?

The method of payment used is referred to as the Cost Insurance and Freight (CIF), in this the seller will cater for the insurance cost until the named port of destination then the buyer will take over. The cost of transporting goods from the seller to the buyer is assumed by the seller. The seller, therefore, who in our case, is the New fab Ltd pays insurance, transportation cost and other cost associated with the transit of goods until the more by takes possession of the goods. ( Chuah, J. (2009).

Did the Fax meet the provision of the correspondence in the contract?

The buyer’s fax complied with the provision of the correspondent in the contract. This is because they submitted their commitment in time to the seller so that they could ensure that the shipment would be ready by the dates specified to avoid expiry of the contract and to ensure that all the computer components were loaded into the ship with the specified time.

Are the employees’ mistakes legally accused?

The mistake of the New Fads cannot be legally excused; this is because the seller has to incur all the risks and all the cost involved until the goods reaches the buyer. This means that if all the computer components will not have been loaded into the ship, then the New Fad ltd has to incur some more cost to compensate on that and so that they can assure the Bell Ltd from Nigeria that they are going to deliver the goods in good time.

Conclusion.

In FOB contract indicates that the risk incurred by the goods during shipping is covered by the buyer. (Butler, P. (2008). Therefore, all the damages that may be accrued during the shipping are recorded in the buyer’s inventory. It also enlightens that any mistake done by the workers cannot be prosecuted since the risks are covered by the buyer.

 

References.

Fawcett, J., Harris, J., & Bridge, M. (2005). International sale of goods in the conflict of laws. OUP Catalogue.

Schlechtriem, P., & Butler, P., (2008). UN Law on international sales: The UN Convention on the international sale of goods. Springer Science & Business Media.

Mukherjee, P. K., & Bal, A. B. (2009). A legal and Economic analysis of concept under issues in perspective. J. Mar. L. & Com., 40, 579.

Chuah, J. (2009). Law of international trade: cross-border commercial transactions. Sweet & Maxwell.

Schwartz, A. (2000). Contract theory and theories of contract regulation.