In order to answer these questions, it requires thediscussion regarding the law in relation to FOB contract, the duties andobligation of the parties under FOB contract, the buyer and seller remedies,arbitration, governing law for arbitration and so on. Let’s have a detaileddiscussion of the questions based on the facts of this case study areconsidered as below.
From the facts, it seen that the sellerLondon Exporters Ltd and the buyer Berlin Trading Company agreed to sell 20ktones of the British potatoes under the FOB terms. In this context, it can beargued that under a FOB get the seller duty is to stack the stock on a shipwhich is chosen by the buyer at the demonstrated port. Regardless, the standardcommitment of the vendor under the FOB contract is recharging. The seller mustpass on the items on driving gathering of the vessel, at a place where thebuyer has formally recognized as the port of stacking and inside the season ofshipment which the get-togethers showed in the understanding of offer. Name ofthe port in a FOB contract is a condition. Fromfacts, it seen that the seller and the buyer is identified under the contractof sale. In this case, the seller agreed to ship 20,000 tones of BritishPotatoes under the contract FOB trade term within 20th December. Therefore,it also appears from the facts, that the seller received the goods from thesupplier on 15th December.
But for the unavailability of vessels theseller had to rent a warehouse for storing the goods came from the supplier on23rd December. On 29th December, the goods had been loaded onthe board of ship at the port of shipment successfully. In this case, it can beargued from the facts that a breach of condition is committed by the seller andthe buyer received it after discovering the potatoes as unsatisfactory qualityand rejected the goods as well as refused to pay money (Manbre S. Co Ltdv Corn Co.
Ltd)1.Here it can be argued that seller had a duty to inform to the buyer delayingshipment and to insure him that the goods will be shipped at delay the noticemust be given without delay. But, London Exporter won’t take any measure orsteps to insure potato shipment to the Berlin Trading Co. Under the FOB get anydisregard to haul out, or information, impact the seller to even now in dangeron the items in the midst of sea travel. In any case, the seller under the FOBcontract has an opportunity to get answer for the shipment, if it hasinadequate time to do. Here it can be fought that the seller passed on theitems on a ship’s rail, London exporters won’t be prepared to do any damages ordisasters after that. It is accepted that property has been conceded as aresult of the mistake of the parties; this won’t impact the passing of risk (Inglisv Stock)2.It appears from the facts that the port of shipment isidentified by the Berlin Trading Company and had a duty to nominate the vessel3.
In the given scenario, buyer was able to nominate a ship only named vessel “A”,where he failed to nominate vessel as because of the unavailability of theother vessel at that time before 24th December at the identified portof loading. In the context of a FOB contract, it is said that, three optionsmust be chosen, namely that the seller can pick the port of shipmen, also, thebuyer picked it in conclusion, the understanding is lift for ambiguously in (Davidt.Boyd & CO. Ltd v Louis Louca)4.In this context, it appears from the facts that the buyer had a duty to give anappropriate vessel to stacking. He needed to decide a transportation period,put, and furthermore should give the notice for inaccessibility of vessel tothe London Exporters and in addition one might say that status to the vessel (BunseCorporation v TradaX Export SA)5.
Also, “Nomination of Vessel” is a condition of the agreement. At thepoint when the Seller’s inability to choose vessel, the buyer can reject theagreement and claim damages, unless generally concurred, the buyer can likewisemake a moment assignment inside a shipment period, if the first is inadequate.In the given fact, the purchaser Berlin Trading CO. under the FOB contract, topay the cost is resolved, the buyer must pay the cost in due when the sellerLondon exporters conveyed the goods to the agreement.As indicated by FOB contract, “Berlin TradingCompany” must pay all expenses to the products for the shipment. In thismanner, it can be contended from the realities that, when the potatoes are seton load up the vessel, the buyer has a title of the goods, since property inproducts hangs loose. Another explanation behind this Berlin Trading turns intoa shipper of the goods after shipment and they had a legally bindingassociation with the bearer.
In any case, the issue may emerge when potatoesshould be passed on the shipment. This could leave the seller presented to thedanger of no to be paid the adjust of the maximum. In this manner, property inproducts won’t go until the point when the maximum is paid and structure ofstacking is conveyed to the buyer (Mitsu & co Ltd v FLota MercanteGrancolunbiana Sa)6.From the facts, it appears that, Berlin Trading Co.against London Exporters agreed that the discovery of potatoes was 20thDecember. It may argue from the facts that in the formation of contract of thesale agreement between the parties regarding the transference of the absolutelegal title or ownership is significant (Mercer V Craver)7.
In this circumstance, London Exporters received the goods from the suppliers onthe 15th of December, and Berlin Trading was able to nominate a shiponly named Vessel “A” as because of unavailability of the other vessel at thattime. As a result, the seller had to rent a warehouse for storing the goodscame from the supplier. It is clear that vessel “A” will not be available atthe position of loading in until 29th December. From the fact, it seen that London Exporters deliveredthe goods to the Berlin Trading at the port of the destination. But the buyerrefused to pay the money for the potatoes were checked for not satisfactory asit was instructed to deliver. In this particular case, it must be consideredthat whether contract of sale of potatoes were not satisfied either it was notgood or “bad” under the sale of contract. For this reason, Section 5 ofthe Sale of Goods Act 1979 must be considered.
By applying the way thatLondon Exporters potatoes fall inside the classification of particular goodsunder Section 61 (1) of the Sale of Goods Act 1979. This implies the goods areknown specified to the seller and buyer preceding the understanding8.After the formation of sale of goods contract, it mustrequire the discussion regarding express and implied terms of the agreement. Soas to apply the express terms of the contract, it seems that the seller agreesto ship 20,000 tones of British Potatoes on 20th December. In thiscase it can be argued that contract will have express terms which the parties inthis case studies have agreed. It seen from the fact that due to unavailabilityof vessel “A” before 24th December at the part of loading, sellerhad to rent a warehouse for storing potatoes, and therefore the potatoes weredelivered to buyers on 29th December. So, it would be treated as abreach of express terms. Therefore, there may likewise be implied terms thatare perused into assention by the suggested through statute.
Terms impliedthrough stature are basically with the end goal of shopper insurance. The twoconditions and guarantees might be suggested A condition real term of theagreement and right now is a minor term. The refinement is insignificant as itinfluences the cures accessible to the blameless party if the term is broken9. It appears under Section 13 of theSale of Goods Act 197910that the goods which are transported must match the agreement description.
Fromthe certainties, unmistakably dispatching goods did not relate to the agreementdepiction. For this situation, Section.16 of Sale of Goods Act 1979, may applyand it can be contended that the goods must be found out for going of property11.Notwithstanding, Section 17 of Sale of Goods Act 1979 propertypasses when the gatherings mean. In any case, in FOB understandings, propertyfor the most part passes when the goods cross the ship’s rail, the generalstandard is property and risk pass on shipment. In this manner, the data overthe property and risk go to the buyer when London Exporters stacked the BritishPotatoes which is found out on board.On 29th December, it seen from the facts, thatLondon Exporters shipment of potatoes was delivered to the Berlin Trading andthe potato’s quality was checked by Berlin.
In this scenario, the terms impliedby statutes must be considered. This is because, Section 14(2) of Sale ofGoods Act 1979 is significant for this situation contemplate, whichgives that the products are of satisfactory quality. In this unique situation,goods are of attractive quality on the off chance that they meet the standardthat a sensible individual would view as agreeable, assessing any depiction ofthe given products, the cost and the various applicable conditions.
It isimpossible that a reasonable person could look at that as a rupture which wasrendered unusable because of free legs was acceptable (Stevanson VRogers)12.From the reality, it might be certain that Berlin Trading is in breach of theterm suggested by Section 14(2) of Sale of Goods Act 1979. From thecertainties, it might likewise contend Section 13 of Sale of Goods Act 1979, adeal by portrayal, this is on account of, there is an implied condition thatgoods will compare to the depiction given. By applying with the certainties, itseen that Berlin Trading got the potatoes and declined to instalment.
In thisway, it might be certain that it was breach of Section 13 of Sale of Goods Act1979.In contrast through the application under Section27 of Sale of Goods Act 197913,where London Exporter Ltd. can argue that the Berlin Trading Co. cannot refusethe potatoes, wrongfully.
This is because, London Exporter Ltd. for thecontract with, Berlin trading can argue that conferring to the Section27 of Sale of Goods Act 1979 must be perused in conjunction withthe Section 37 Sale of Goods Act 1979. That allot obligation on the buyer forrejecting or being careless isn’t talking conveyance of the goods.Consequently, if there should arise an occurrence of instalment, the obligationto pay the cost is principal to contract of sale under application underSection 8(2)of Sale of Goods Act 197914.From this case study, it also requires the discussionwhether the parties can go for arbitration or not. In this case, it can be saidthat the parties can go for arbitration by the rules laid down under the retentionof title clause, into their contract of sale, it will go along to protect themin the event of goods supplied not being paid for.
In this case, the partiesmust rely on Section 19(1) Sale of Goods Act 1979 which givesthat where there is an agreement for the sale of particular products or wheregoods are accordingly appropriated to the agreement. Be that as it may, fromthe actualities it can be contended that London Exporters may, by the terms ofagreement or assignment, hold right of transfer of the merchandise until thepoint when certain conditions are satisfied, and in such a case, despite theconveyance of the products to the buyer, the property in the goods does not goto the buyer until the point that specific conditions forced by the seller are fullfilled. In this context, the condition of London Exporter would want to imposewould be reserve to themselves property in the goods until payment has beenmade (Alumunium industrie Vaassen BV v Romalpa ALumumium Ldt)15.The parties in this case study can also resolve the disputes by applyingarbitration rule for the extra warehouse payment and the remedies the lossoccurred. Therefore, when the buyer received the goods here potatoes, they havea right to reject under FOB contract. Having acknowledged the goods if thebuyer found any non-similarity on the goods with contract, they can at presentreject the goods. After discussing the arbitration matter the next issue isto arise regarding the governing law for arbitration.
In this case the partiescan rely on Section 46 of the Arbitration Act 199616, whichgives that the law picked by the gatherings as an appropriate to the substanceof the question 17.Therefore, it appears from the fact that the contract between UK’s seller named”London Exporters LDT” are regulated under the sale of goods. Thegoverning statute will be the Sale of Goods Act 1979. The characterizing normalfor the agreement of sale are contained in Section 2 of Sale of Goods Act.The agreement of sale might be restrictive Section 2(3), an eventual fate ofsale, Section 2(5), or an agreement to sell, Section 2(6) of Sale of Goods Act1979.
From the contracts among the parties it seems that London ExportersLtd is original seller and “Berlin Trading Company” would be treated asoriginal buyer of the contract. In this case, both the seller and buyer musthave limit and focused on selling and buying (Weiner V Harris)18. It appears from the fact thatLondon Exports agreed to ship 20,000 tones of British Potatoes. As the givenscenario, Berlin Traders refused to pay the due amount to seller. This isbecause, the goods were not satisfactory when it was discovered. The issue argued that if the products are damaged whileat the seller hazard and the goods won’t be required or replaced, the sellerwill be liable for breach of contract, unless the London Exporters is able tobe excused. But in this case vessel A will not be available before 24thDecember at the part of loading, and it was the duty if Berlin Trade to arrangeanother vessel therefore London Traders had to rent a warehouse for storingpotatoes, so, London terms claim for remedy under the Sale of Goods Act 1979.Here, seller may contend that, he stands ready to be paid remedy where buyerneglects to play out his commitments under the agreement.
The seller remediesare partitioned into real and personal remedies. In this context of personalremedy Section 49 of Sale of Goods Act 197919provides that the seller can satisfy the statutory claim there is norequirement to prone less. London express can also consider Section 50of Sale of Goods Act 197920,which gives that where the seller can’t fulfil a statutory claim at the costthat it might continue for damages where the buyer wrongfully declines toacknowledge and pay for the goods.
The seller anticipated that would relievetheir misfortune by looking for and substitute buyer for the products in themarket (Ben V International Agritrade)21.Thereare two possible results for this circumstance analyze, the seller passed onthe potatoes as determined above and stock were hurt for detachment of vessels.Another likelihood is more applicable for this case. London Exporters is hopingto reject to potatoes or to get pay for the decreasing in its quality. Undercommon law, there are two concepts of breaches which are the breach ofcondition and the breach of warranty. In case Berlin Trading reject the stock,it will be breach of condition and he can ensure for damages for non-transportaccording to Section 50 of Sale of Goods Act 1979. If Berlintrading grabbed pay for the lessening in the stock quality, it will be break ofcertification and he can state for hurts for crack of assurance as showed by Section53 of Sale of Goods Act 1979 and if agreeable Section 54 of Saleof Goods Act 1979.
It should not be ignored; the buyer has a benefit tomidway rejection as showed by the new Section 35A of Sale of Goods Act1979. If the stock were not completely hurt, the buyer may recognizethe items which were not hurt and expel the stock which were hurt. Upabove discussion it may conclude that the contract the FOB contract between theparties.
It may also conclude that the parties can go for arbitration beforegoing to the Court and they can settle the disputes. In this case, the contractwas held in UK and the governing law is under the UK contract law. Therefore,the parties can rely on the Sale of Goods Act 1979. Instead, the partiescan also go to the court to settle the disputes arise between them. For thisreason, they buyer and seller can get remedies under the Sale of Goods Act1979. 1 1915 1KB 1982 1885 10. APP. Cas.
263.3 Indira Carr, International Trade law (4th Edition,Routledge-Cavendish, 2010), P.344 Louca 1973 1 LIYAD” s Rap.2095 1918 All ER6 1989 ALER9517 1994CLC 328.8 Indira Carr, International Trade law (4th Edition,Routledge-Cavendish, 2010), P.359 Indira Carr, International Trade law (4th Edition,Routledge-Cavendish, 2010), P.3610 Available at: http://www.legislation.
gov.uk/ukpga/1979/54/section/13 (access date:10.12.2017). 11 Ewan mckendric, Contract law (8th Edition, Palgravemacmillan, 2009), p.
16512 1999 1All ER 61313 Available at: http://www.legislation.gov.uk/ukpga/1979/54/section/27 (access date:16.12.2017).
14 Available at: http://www.legislation.gov.uk/ukpga/1979/54/section/8 (access date: 16.12.2017). 15 1976 WLR 67616 Indira Carr, International Trade law (4th Edition,Routledge-Cavendish, 2010), P.
63517 Chukwumerije, ‘Applicable substantive law in International CommercialArbitration’ (1994) Anglo-Am LR 265. 18 1910 1KB 28519 Available at: http://www.legislation.gov.
uk/ukpga/1979/54/section/49 (access date:16.12.2017). 20 Available at: http://www.
legislation.gov.uk/ukpga/1979/54/section/50 (access date:16.12.2017).
21 1999 1Lloyd’s Rep. 729