1、Chapter 4 Contract Law for the International Sale of Goods1. Definition 2. Form writing or orally e.g. provisions of U.K.,U.S., civil law countries, CISG Art.11, Chinese Contract law,3. Validity and Formation3.1 Validity Under the common law, a valid contract is an agreement that contains all of the
2、 essential elements of a contract.,3.1.1Elements of contract:1)It is an agreement between the parties entered into by their mutual assent,2)The contract must be supported by legally sufficient consideration.(e.g., the exchange in the contract as bargained for by the parties).,3) The parties must hav
3、e legal capacity .(e.g., that the parties are not minors, legally incompetent, or under the influence of drugs or alcohol).,4) The contract must not be for illegal purposes or to carry on an activity that is illegal or contrary to public policy.,The civil law countries have similar stipulations to t
4、hat except for the legally sufficient consideration.,3.2 Formation3.2.1 Offer & Invitation OfferAn invitaion offer is used to invite others to make offer and not capable of being turned into a contract by acceptance.,An offer is a proposal by one person to another indicating an intention to enter in
5、to a contract under specified terms.,Requirements of Offer(Art.14)An offer must be a proposal for concluding a contract.2)It must indicate an intention to be bound in case of acceptance.3) An offer must be “sufficiently definite.”,The Binding of an OfferAs a general rule, an offer isnt binding on th
6、e offeree. If the offeree doesnt accept it, he has no obligation to give a notice to the offeror. Whether or not an offer is binding on the offeror is rather complex.,Lapse of OfferReasons (U.K.) : On the death either of the offeror or the offeree before acceptance. 2) By non-acceptance within the t
7、ime prescribed for acceptance by the offeror.3) When no time for acceptance is prescribed, by non-acceptance within a reasonable time.,Revocation of OfferRevocation of Offer means that the offeror notifies the offeree before acceptance of the invalidity of the offer so as to be free from it.,3.2.2 A
8、cceptanceThe acceptance is the offerees manifestation of the intention to be bound to the terms of the offer.Requirements of AcceptanceAn acceptance must be made by the offeree.2)An acceptance must be made within the period of validity.,3)An acceptance must match the terms of the offer exactly and u
9、nequivocally. Time of Acceptancecommon lawmail-box rulecivil law reciept theoryForm of AcceptanceSilence is not necessarily acceptance.,Sellers ObligationsDelivery of the Goods “Delivery” under CISG is a limited concept, relating to transfer of possession or control of the goods.1 )Place for deliver
10、y CISG recognizes four distinct types of delivery terms:Delivery contracts, in which the seller must deliver to the place specified in the contract;,b. Shipment contracts, in which the contract “involves carriage of the goods”, but does not require delivery to any particular place;c. Sales of goods
11、at a known location which are not expected to be transported;d. Sales of goods whose location is not known or specified, and which are not expected to be transported.,2. Turning over of documents3. Sellers assurance of the quality of goods 4. Sellers assurance of the ownership of the goods5. Buyers
12、obligations to pay the price 6. Buyers obligations to take delivery of the goods,Breach of ContractDefinition: a breach of contract is committed when a party without lawful excuse fails or refuses to perform what is due from him under the contract, or performs defectively or incapacities himself fro
13、m performing.,ClassificationAccording to CISG, breach of contract can be classified into fundamental breach of contract and non-fundamental breach.Another theory of breach is anticipatory breach of contract.,Remedies for Breach of ContractGeneral Principles of Remedies Theoretically, a claimant coul
14、d claim compensation on one of a number of different grounds.,Buyers RemediesA seller may breach a contract in a number of different ways: the most common are failing to make an agreed delivery, 2. delivering goods that do not conform to the contract, and 3. indicating an intention not to fulfill th
15、e obligations under the contract.,Specific Performance2. Avoidance3. Price Reduction4. Refusing Early Delivery and Excess Quantity,C. Sellers RemediesThe remedies that are unique to the seller are to compel specific performance, (2) to avoid the contract for a fundamental breach or failure to cure a
16、 defect, and (3) to obtain missing specifications. Clearly, the sellers remedies are rather similar to those of the buyer.,D. Remedies Available to Both Buyers and Sellers1.suspension of performance 2. avoidance in anticipation of a fundamental breach 3. avoidance of an installment contract 4. avoid
17、ance 5. damages,Case DiscussionPrutch v. Ford Mortor CompanyFacts: Carl and Sam Prutch, the plaintiffs, purchased a tractor, plow, disc harrow (圆盘耙), and hay baler from Baldridge Implement Company. The Prutches contend that they suffered crop damages as a result of defects in those farm implements.,
18、The Prutches sued Baldridge and the manufacturer of the farm equipment, Ford Motor Company, for breach of express and implied warranties. The trial resulted in a verdict in favor of the Prutches against Ford Motor Co. in the amount of $60,200. Ford appealed.,The court of appeals overturned the jury verdict. The Prutches appealed to the Supreme Court of Colorado.Issue: Can the manufacturer be expressed to foresee the defects of its products?,
