In order to answer these questions, it requires the
discussion regarding the law in relation to FOB contract, the duties and
obligation of the parties under FOB contract, the buyer and seller remedies,
arbitration, governing law for arbitration and so on. Let’s have a detailed
discussion of the questions based on the facts of this case study are
considered as below.

From the facts, it seen that the seller
London Exporters Ltd and the buyer Berlin Trading Company agreed to sell 20k
tones of the British potatoes under the FOB terms. In this context, it can be
argued that under a FOB get the seller duty is to stack the stock on a ship
which is chosen by the buyer at the demonstrated port. Regardless, the standard
commitment of the vendor under the FOB contract is recharging. The seller must
pass on the items on driving gathering of the vessel, at a place where the
buyer has formally recognized as the port of stacking and inside the season of
shipment which the get-togethers showed in the understanding of offer. Name of
the port in a FOB contract is a condition. From
facts, it seen that the seller and the buyer is identified under the contract
of sale. In this case, the seller agreed to ship 20,000 tones of British
Potatoes under the contract FOB trade term within 20th December. Therefore,
it also appears from the facts, that the seller received the goods from the
supplier on 15th December. But for the unavailability of vessels the
seller had to rent a warehouse for storing the goods came from the supplier on
23rd December.

On 29th December, the goods had been loaded on
the board of ship at the port of shipment successfully. In this case, it can be
argued from the facts that a breach of condition is committed by the seller and
the buyer received it after discovering the potatoes as unsatisfactory quality
and rejected the goods as well as refused to pay money (Manbre S. Co Ltd
v Corn Co. Ltd)1.
Here it can be argued that seller had a duty to inform to the buyer delaying
shipment and to insure him that the goods will be shipped at delay the notice
must be given without delay. But, London Exporter won’t take any measure or
steps to insure potato shipment to the Berlin Trading Co. Under the FOB get any
disregard to haul out, or information, impact the seller to even now in danger
on the items in the midst of sea travel. In any case, the seller under the FOB
contract has an opportunity to get answer for the shipment, if it has
inadequate time to do. Here it can be fought that the seller passed on the
items on a ship’s rail, London exporters won’t be prepared to do any damages or
disasters after that. It is accepted that property has been conceded as a
result of the mistake of the parties; this won’t impact the passing of risk (Inglis
v Stock)2.

It appears from the facts that the port of shipment is
identified 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 the
other vessel at that time before 24th December at the identified port
of loading. In the context of a FOB contract, it is said that, three options
must be chosen, namely that the seller can pick the port of shipmen, also, the
buyer picked it in conclusion, the understanding is lift for ambiguously in (David
t.Boyd & CO. Ltd v Louis Louca)4.
In this context, it appears from the facts that the buyer had a duty to give an
appropriate vessel to stacking. He needed to decide a transportation period,
put, and furthermore should give the notice for inaccessibility of vessel to
the London Exporters and in addition one might say that status to the vessel (Bunse
Corporation v TradaX Export SA)5.
Also, “Nomination of Vessel” is a condition of the agreement. At the
point when the Seller’s inability to choose vessel, the buyer can reject the
agreement and claim damages, unless generally concurred, the buyer can likewise
make 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, to
pay the cost is resolved, the buyer must pay the cost in due when the seller
London exporters conveyed the goods to the agreement.

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As indicated by FOB contract, “Berlin Trading
Company” must pay all expenses to the products for the shipment. In this
manner, it can be contended from the realities that, when the potatoes are set
on load up the vessel, the buyer has a title of the goods, since property in
products hangs loose. Another explanation behind this Berlin Trading turns into
a shipper of the goods after shipment and they had a legally binding
association with the bearer. In any case, the issue may emerge when potatoes
should be passed on the shipment. This could leave the seller presented to the
danger of no to be paid the adjust of the maximum. In this manner, property in
products won’t go until the point when the maximum is paid and structure of
stacking is conveyed to the buyer (Mitsu & co Ltd v FLota Mercante
Grancolunbiana Sa)6.

From the facts, it appears that, Berlin Trading Co.
against London Exporters agreed that the discovery of potatoes was 20th
December. It may argue from the facts that in the formation of contract of the
sale agreement between the parties regarding the transference of the absolute
legal title or ownership is significant (Mercer V Craver)7.
In this circumstance, London Exporters received the goods from the suppliers on
the 15th of December, and Berlin Trading was able to nominate a ship
only named Vessel “A” as because of unavailability of the other vessel at that
time. As a result, the seller had to rent a warehouse for storing the goods
came from the supplier. It is clear that vessel “A” will not be available at
the position of loading in until 29th December.

From the fact, it seen that London Exporters delivered
the goods to the Berlin Trading at the port of the destination. But the buyer
refused to pay the money for the potatoes were checked for not satisfactory as
it was instructed to deliver. In this particular case, it must be considered
that whether contract of sale of potatoes were not satisfied either it was not
good or “bad” under the sale of contract. For this reason, Section 5 of
the Sale of Goods Act 1979 must be considered. By applying the way that
London Exporters potatoes fall inside the classification of particular goods
under Section 61 (1) of the Sale of Goods Act 1979. This implies the goods are
known specified to the seller and buyer preceding the understanding8.

After the formation of sale of goods contract, it must
require the discussion regarding express and implied terms of the agreement. So
as to apply the express terms of the contract, it seems that the seller agrees
to ship 20,000 tones of British Potatoes on 20th December. In this
case it can be argued that contract will have express terms which the parties in
this case studies have agreed. It seen from the fact that due to unavailability
of vessel “A” before 24th December at the part of loading, seller
had to rent a warehouse for storing potatoes, and therefore the potatoes were
delivered to buyers on 29th December. So, it would be treated as a
breach of express terms. Therefore, there may likewise be implied terms that
are perused into assention by the suggested through statute. Terms implied
through stature are basically with the end goal of shopper insurance. The two
conditions and guarantees might be suggested A condition real term of the
agreement and right now is a minor term. The refinement is insignificant as it
influences the cures accessible to the blameless party if the term is broken9.

It appears under Section 13 of the
Sale of Goods Act 197910
that the goods which are transported must match the agreement description. From
the certainties, unmistakably dispatching goods did not relate to the agreement
depiction. For this situation, Section.16 of Sale of Goods Act 1979, may apply
and it can be contended that the goods must be found out for going of property11.
Notwithstanding, Section 17 of Sale of Goods Act 1979 property
passes when the gatherings mean. In any case, in FOB understandings, property
for the most part passes when the goods cross the ship’s rail, the general
standard is property and risk pass on shipment. In this manner, the data over
the property and risk go to the buyer when London Exporters stacked the British
Potatoes which is found out on board.

On 29th December, it seen from the facts, that
London Exporters shipment of potatoes was delivered to the Berlin Trading and
the potato’s quality was checked by Berlin. In this scenario, the terms implied
by statutes must be considered. This is because, Section 14(2) of Sale of
Goods Act 1979 is significant for this situation contemplate, which
gives that the products are of satisfactory quality. In this unique situation,
goods are of attractive quality on the off chance that they meet the standard
that a sensible individual would view as agreeable, assessing any depiction of
the given products, the cost and the various applicable conditions. It is
impossible that a reasonable person could look at that as a rupture which was
rendered unusable because of free legs was acceptable (Stevanson V
From the reality, it might be certain that Berlin Trading is in breach of the
term suggested by Section 14(2) of Sale of Goods Act 1979. From the
certainties, it might likewise contend Section 13 of Sale of Goods Act 1979, a
deal by portrayal, this is on account of, there is an implied condition that
goods will compare to the depiction given. By applying with the certainties, it
seen that Berlin Trading got the potatoes and declined to instalment. In this
way, it might be certain that it was breach of Section 13 of Sale of Goods Act

In contrast through the application under Section
27 of Sale of Goods Act 197913,
where London Exporter Ltd. can argue that the Berlin Trading Co. cannot refuse
the potatoes, wrongfully. This is because, London Exporter Ltd. for the
contract with, Berlin trading can argue that conferring to the Section
27 of Sale of Goods Act 1979 must be perused in conjunction with
the Section 37 Sale of Goods Act 1979. That allot obligation on the buyer for
rejecting or being careless isn’t talking conveyance of the goods.
Consequently, if there should arise an occurrence of instalment, the obligation
to pay the cost is principal to contract of sale under application under
Section 8(2)of Sale of Goods Act 197914.

From this case study, it also requires the discussion
whether the parties can go for arbitration or not. In this case, it can be said
that the parties can go for arbitration by the rules laid down under the retention
of title clause, into their contract of sale, it will go along to protect them
in the event of goods supplied not being paid for. In this case, the parties
must rely on Section 19(1) Sale of Goods Act 1979 which gives
that where there is an agreement for the sale of particular products or where
goods are accordingly appropriated to the agreement. Be that as it may, from
the actualities it can be contended that London Exporters may, by the terms of
agreement or assignment, hold right of transfer of the merchandise until the
point when certain conditions are satisfied, and in such a case, despite the
conveyance of the products to the buyer, the property in the goods does not go
to the buyer until the point that specific conditions forced by the seller are full
filled. In this context, the condition of London Exporter would want to impose
would be reserve to themselves property in the goods until payment has been
made (Alumunium industrie Vaassen BV v Romalpa ALumumium Ldt)15.
The parties in this case study can also resolve the disputes by applying
arbitration rule for the extra warehouse payment and the remedies the loss
occurred. Therefore, when the buyer received the goods here potatoes, they have
a right to reject under FOB contract. Having acknowledged the goods if the
buyer found any non-similarity on the goods with contract, they can at present
reject the goods.

After discussing the arbitration matter the next issue is
to arise regarding the governing law for arbitration. In this case the parties
can rely on Section 46 of the Arbitration Act 199616, which
gives that the law picked by the gatherings as an appropriate to the substance
of 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. The
governing statute will be the Sale of Goods Act 1979. The characterizing normal
for 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 of
sale, Section 2(5), or an agreement to sell, Section 2(6) of Sale of Goods Act
1979. From the contracts among the parties it seems that London Exporters
Ltd is original seller and “Berlin Trading Company” would be treated as
original buyer of the contract. In this case, both the seller and buyer must
have limit and focused on selling and buying (Weiner V Harris)18.
 It appears from the fact that
London Exports agreed to ship 20,000 tones of British Potatoes. As the given
scenario, Berlin Traders refused to pay the due amount to seller. This is
because, the goods were not satisfactory when it was discovered.

The issue argued that if the products are damaged while
at the seller hazard and the goods won’t be required or replaced, the seller
will be liable for breach of contract, unless the London Exporters is able to
be excused. But in this case vessel A will not be available before 24th
December at the part of loading, and it was the duty if Berlin Trade to arrange
another vessel therefore London Traders had to rent a warehouse for storing
potatoes, 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 buyer
neglects to play out his commitments under the agreement. The seller remedies
are partitioned into real and personal remedies. In this context of personal
remedy Section 49 of Sale of Goods Act 197919
provides that the seller can satisfy the statutory claim there is no
requirement to prone less. London express can also consider Section 50
of Sale of Goods Act 197920,
which gives that where the seller can’t fulfil a statutory claim at the cost
that it might continue for damages where the buyer wrongfully declines to
acknowledge and pay for the goods. The seller anticipated that would relieve
their misfortune by looking for and substitute buyer for the products in the
market (Ben V International Agritrade)21.

are two possible results for this circumstance analyze, the seller passed on
the potatoes as determined above and stock were hurt for detachment of vessels.
Another likelihood is more applicable for this case. London Exporters is hoping
to reject to potatoes or to get pay for the decreasing in its quality. Under
common law, there are two concepts of breaches which are the breach of
condition 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-transport
according to Section 50 of Sale of Goods Act 1979. If Berlin
trading grabbed pay for the lessening in the stock quality, it will be break of
certification and he can state for hurts for crack of assurance as showed by Section
53 of Sale of Goods Act 1979 and if agreeable Section 54 of Sale
of Goods Act 1979. It should not be ignored; the buyer has a benefit to
midway rejection as showed by the new Section 35A of Sale of Goods Act
1979. If the stock were not completely hurt, the buyer may recognize
the items which were not hurt and expel the stock which were hurt.

above discussion it may conclude that the contract the FOB contract between the
parties. It may also conclude that the parties can go for arbitration before
going to the Court and they can settle the disputes. In this case, the contract
was 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 parties
can also go to the court to settle the disputes arise between them. For this
reason, they buyer and seller can get remedies under the Sale of Goods Act

1 1915 1KB 198

2 1885 10. APP. Cas.263.

3 Indira Carr, International Trade law (4th Edition,
Routledge-Cavendish, 2010), P.34

4 Louca 1973 1 LIYAD” s Rap.209

5 1918 All ER

6 1989 ALER951

7 1994
CLC 328.

8 Indira Carr, International Trade law (4th Edition,
Routledge-Cavendish, 2010), P.35

9 Indira Carr, International Trade law (4th Edition,
Routledge-Cavendish, 2010), P.36

10 Available at: (access date:

11 Ewan mckendric, Contract law (8th Edition, Palgrave
macmillan, 2009), p.165

12 1999 1
All ER 613

13 Available at: (access date:

14 Available at:  (access date: 16.12.2017).

15 1976 WLR 676

16 Indira Carr, International Trade law (4th Edition,
Routledge-Cavendish, 2010), P. 635

17 Chukwumerije, ‘Applicable substantive law in International Commercial
Arbitration’ (1994) Anglo-Am LR 265.

18 1910 1
KB 285

19 Available at: (access date:

20 Available at: (access date:

21 1999 1
Lloyd’s Rep. 729


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