CHAPTER 4

specific performance

(1) buyer has not resorted to another remedy, (2) seller failed to deliver conforming goods, (3) buyer gave timely notice to the seller, (4) buyer made a timely request that the seller provide substitute goods.

cisg exemptions for impediments beyond control

(1) due to an impediment beyond control, (2) impediment was not reasonably foreseeable at the time of contract signing, (3) the impediment was unavoidable and could not be overcome, and (4) notice was given to the other party of the impediment and its effect.

battle of forms under cisg

- Acceptance containing new terms that do not materially alter become part of the contract unless there is a prompt objection - If new terms materially alter then it is rejection of the offer and a counteroffer (not a contract without the new terms)

when silence is effective

- Common law: acceptance effective upon dispatch (mailbox rule) - CISG: acceptance is effective when it reaches offeror (Article 16). Thus an acceptance can be withdrawn if it overtakes the acceptance

anticipatory breach

- Either party may suspend performance when one Party clearly sees the other party will not perform - Right to Suspend Performance - Right to Avoid for Anticipatory Breach - Avoidance of Installment Contracts applies to each delivery

nachfrist period

- Gives parties additional time to perform, as long as there is no "unreasonable delay" or "unreasonable inconvenience" - If seller asks for additional time and the buyer does not respond, the seller may have the additional time. CISG tries to keep parties in their contract.

money damages

- May include compensatory damages, measured by difference between contract price and current market price of substitute - May include consequential damages for lost profits, if foreseeable

implied warranties

- UCC: creates implied warranties on goods - CISG: seller must deliver goods that are of the quantity, quality, and description required by the contract, called conforming goods

battle of the forms under ucc

- Written confirmation is acceptance, even though additional terms unless acceptance is conditional on assent - Merchants: new terms become part of contract unless there is an express limitation

performance of buyer, inspection, and notice of nonconformity

- buyer must inspect goods within as short as period as possible under the circumstances - buyer must give notice of nonconformity as soon as possible

us uniform commercial code

- created in 1951 - the primary body of commercial law for domestic transactions in the US - covers many areas of commercial law, including bank deposits, negotiable instruments, and sales of goods

CISG does not provide rules for:

- determining a contracts validity - whether a party has legal capacity - whether fraud or misrepresentation has occurred - also, consideration is not mentioned and is not required under the CISG

comercial impracticability

- extreme hardship - difficulty or unreasonable expenses - unforseen events - shortages and market price fluctuations

specific implied warranties

- goods fit for a particular purpose - goods fit for purpose as would be ordinarily used - possess qualities held out by seller to the buyer - adequately packaged

price reduction

- if there is only a partial shipment or goods are nonconforming, buyer may adjust price - can be used whether or not breach is fundamental

UNCITRAL

- the UN thru UNCITRAL led to the adoption of the CISG in 1960 - became the basis for widely accepted body of international sales law adopted by more than 70 nations

sales excluded from the CISG

1. consumer goods 2. auction 3. stocks 4. vessels, aircraft, ships 5. preponderant part for labor or services 6. death or personal injury 7. parties agree to opt out

valid contract requirements

1. entered into by mutual assent 2. must be supported by consideration 3. parties must have legal capacity 4. contract must not be for illegal purposes

CISG applies if the transaction:

1. involves a commercial sale of goods 2. is between parties whose places of business are in different countries 3. and the places of business are in countries that have ratified the CISG

CISG remedies (5)

1. seller's right to remedy or cure 2. price reduction 3. money damages 4. specific performance 5. anticipatory breach

exceptions to fundamental breach

1. the breaching party could not forsee the circumstances 2. a reasonable person would not have foreseen the result

Customs, practices and trade usages in UCC

Allow past practice and industry practice to fill in the gaps

open price terms

Both UCC and CISG allow filling in an open price term

seller's right to cure

Seller has the right to cure or remedy, and the buyer cannot avoid until the time for performance expires

firm offers

UCC between merchants signed writing or record may not be revoked for 3 months. Under CISG, not revocable even if oral

the writing requirement

UCC requires contracts for the sale of goods $500 to be in writing but - cisg does not require contracts to be in writing

mutual assent under CISG

Under CISG, party may accept by sending goods or payment (article 18), if this is accepted in the trade or was a practice with the parties

buyer's right to avoidance

When one party fails to perform, the contract is not automatically terminated. The contract or certain provisions, may be "avoided" by one of the parties where there is a fundamental breach`

mailbox rule

a contract is formed when the acceptance is dispatched by the offeree in the case of an acceptance by letter or written document, the time of dispatch is the time the letter is put into the hands of the postal authority

frustration of purpose

a party performance could be excused if some unforeseen event occurred that frustrated the purpose of the contract

effect of illegality

agreements that violate the laws of a nation are void and unenforceable

fundamental breach

breach that results in one party being substantially deprived of what he is entitled to expect under the contract

Seller's right to avoidance

can avoid if buyer fails to take delivery or pay

supervening illegality

contract becomes impossible to perform and the parties excused when performance becomes illegal or prohibited

parol evidence under CISG

court may consider all relevant circumstances

conformance to laws and regulation in buyer's country

each country sets technical standards for product design and performance

force majuere

excuses a party from failing to perform on the occurrence off one or more specified events - a superior force

pro forma invoice

formal document addressed to a specific buyer to sell goods according to certain terms and conditions

law of sales

generally the body of law which governs contracts for the present or future sale of goods - us law originally derived from law merchant and english sales law - most countries now have updated codes

invitation to deal

invitations to the public to make an offer

impossibility of performance

it must be impossible for anyone to perform, not just this particular party

terms and conditions

limit client's liability by placing greater responsibility on the other party

liquidated damages

monetary awards set forth and agreed to by the parties within the express terms of a breached agreement

battle of the forms under ucc and cisg

no contract exists if different terms

mirror image rule

no contract if changes or additions - becomes a counteroffer

mutual assent

parties much reach a mutual agreement and understanding about the essential terms of a contract

choice of law provisions

parties negotiate for choice of law to govern the contract - PARTIES MAY OPT OUT OF THE CISG

public offers

presumption that an advertisement is not an offer unless there is clear evidence of the contrary

performance of the seller

primary responsibility is to deliver conforming goods

trade usage

rules derived from the widespread customs of an industry, the practices of merchants and their past dealings, and the uses of trade terminology and language

lost profits

seller may be liable in breach of contract

lex mercatoria

set of customs for exchanging goods for money - an unwritten code that protected their words, gave them the benefit of their bargains, and helped foster community and trade

consequential damages

special or indirect damages arising as a reasonably foreseeable consequence of the breach

intention to be bound

sufficiently definite

place of business requirement

the country that has the closest relationship to the contract and where it will be performed

purchase order

the description and quantity of goods ordered, a delivery address, and authorized buyer's signature

compensatory damages

the method of measuring money damages depends on whether the non breaching party has been able to enter into a substitute transaction

unification of sales law

the process of making national laws more uniform

order confirmation

the seller's formal confirmation of the buyer's order, either accepting the order, rejecting it, or modifying its terms

Customs, practices and trade usages in CISG

to those which parties agree to or past dealings or those usages that the parties ought to have known are observed in trade or industry

sale

transfer of ownership and possession of tangible goods

CISG

tries to keep parties in the bargain - incorporates national differences in approach to contract law

parol evidence under common law

under UCC, if contract is final written expression, then parole evidence is not admissible to contradict

sales contracts

uniform method of conducting commercial transactions - set out parties rights and duties - terms and conditions - quantity and price - choice of law and forum

silence not acceptance

unless there is an established practice or if that was the terms of the acceptance

integrated contract

written document that evidence the final an complete agreement of the parties