Sale of Goods Past Paper PDF

[Sale of goods] - Obligations of seller and buyer and remedies of both parties **Article 25** -- starts with notation of fundamental breach of contract -- critical for termination and avoidance which are synonymous in this context "A breach of contract committed by one of the parties is fundame...

[Sale of goods] - Obligations of seller and buyer and remedies of both parties **Article 25** -- starts with notation of fundamental breach of contract -- critical for termination and avoidance which are synonymous in this context "A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract objective dimension, unless NOW WE SEE EXCEPTION the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result" - Highlights objective dimension of this type of breach - Convention detaches itself from objective approach and suggests if party in breach could never have foreseen this type of result we are describing, the court should not deem it as a fundamental breach of contract -- shows subjectivity of this approach -- this is a peculiarity - Possibility of termination contract - Also possibility of asking for specific performance of the obligations described in the contract -- fulfilment in natura **Article 28** "If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention." **FIND EXPLANATION OF THIS missed it** [Obligations of the Seller:] - Delivery of goods, and handing over of documents, art 31 of the convention - What if the parties never agree where the goods were to be handed over? - Where is jurisdiction? Which court is competent If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists: (a) if the contract of sale involves carriage of the goods\--in handing the goods over to the first carrier for transmission to the buyer; when carrying from one country to another, where is the place of delivery? Imagine no terms of where in the contract, you would then apply 31(a) and say it is where the goods were handed towards the first carrier despite the fact the final destination could be elsewhere, this is important when it comes to transfer of risk, unless additional agreement between buyer and seller -- at this very money of carrier hand over, the risk is transferred to the seller (b) if, in cases not within the preceding subparagraph, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew that the goods were at, or were to be manufactured or produced at, a particular place\--in placing the goods at the buyer\'s disposal at that place; if parties were aware then that's the place where exchange happens (c) in other cases\--in placing the goods at the buyer\'s disposal at the place where the seller had his place of business If no provision whatsoever and above a and b cannot be applicable at the time of the conclusion of the contract - If its explicit, then you go there -- end of - Incoterms can determine jurisdiction and places of deliveries if incoterm is stipulated in the contract, Vienna convention makes no reference to incoterms If no provision on time -- the convention says the goods must be delivered within a reasonable time -- article 33 - If provision, must be followed The seller must deliver the goods: (a) if a date is fixed by or determinable from the contract, on that date; (b) if a period of time is fixed by or determinable from the contract, at any time within that period unless circumstances indicate that the buyer is to choose a date; or (c) in any other case, within a reasonable time after the conclusion of the contract. Termination or specific performance available if goods do not confirm to specification established in the contract -- **Article 35** \(1) The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract. \(2) Except where the parties have agreed otherwise, the goods do not conform with the contract unless they: Formula for when the goods conform to the contract (a) are fit for the purposes for which goods of the same description would ordinarily be used; (b) are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller\'s skill and judgement; must be respected by the seller because it was made know to the seller, controversy here is that sometimes these specific purposes are implicit and are not explicitly in contract, may be conversations of assumptions as a result of negotiations between parties -- lacks legal certainty as contract is not only source of legal obligations, letters, emails, conversations etc. Weight of this diminished in same para tho (sellers skill set) (c) possess the qualities of goods which the seller has held out to the buyer as a sample or model; sometimes will show a model to buyer (d) are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods. \(3) The seller is not liable under subparagraphs (a) to (d) of the preceding paragraph for any lack of conformity of the goods if at the time of the conclusion of the contract the buyer knew or could not have been unaware of such lack of conformity **Article 38** established type of awareness buyer must show when they receive the goods \(1) The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances. \(2) If the contract involves carriage of the goods, examination may be deferred until after the goods have arrived at their destination. \(3) If the goods are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at the new destination. Lose legal remedies the convention makes available to them if not conformity **Article 39** \(1) The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it. \(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee. Explicit deadline, only on subsidiary basis because if you are able to examine the goods and to make the seller aware of defects before the period of two years you must do so, if not the period of 2 years will not apply Established the obligations of the seller to deliver goods which are free from rights of third parties -- IP rights, - we must know what kind of rights the goods must be free from, see part a)**Article 42** 1\) The seller must deliver goods which are free from any right or claim of a third party based on industrial property or other intellectual property, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property: \(a) under the law of the State where the goods will be resold or otherwise used, if it was contemplated by the parties at the time of the conclusion of the contract that the goods would be resold or otherwise used in that State; or \(b) in any other case where there was no agreement whatsoever, under the law of the State where the buyer has his place of business. -- reasonable to agree your seller must make sure gods will be free from any IP rights applicable under the jurisdiction of my domicile   \(2) The obligation of the seller under the preceding paragraph does not extend to cases where: \(a) at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim; or \(b) the right or claim results from the seller\'s compliance with technical drawings, designs, formulae or other such specifications furnished by the buyer. Obligations of the buyer are ones concerning payment of price and taking of delivery of the goods handed over by seller, these are two basic obligations of the buyer - When it comes to payment of price -- peculiarity of Vienna convention, under Spanish law, if contract has no provision concerning determination of the price of purchase agreement/sale of goods contract, not even by preference of third parties, that contract is null and void, price under Spanish law is therefore an essential element of the contract - This is not the position of the Vienna convention, absence of price in contract does not make it null and void unlike Spanish law e.g article 55 convention **Art 55** Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned. Price paid -- differences between Vienna and Spanish contract law, resolution is extremely different, Spanish law follows original provision of roman law - Vienna says both parties are considered to have implied or made reference to the price generally charged at time of conclusion of the contract for such goods under comparable circumstances, this would amount to the need for the parties to produce evidence concerning what price is generally charged under the same circumstances in the same trade in order to determine price in that contract which had no clause identifying the price **Art 57** \(1) If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller: - if in contract, then there \(a) at the seller\'s place of business; or \(b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place. Place of payment is made at place of handing over   \(2) The seller must bear any increases in the expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract. **Art 58 -- timing** \(1) If the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer\'s disposal in accordance with the contract and this Convention. The seller may make such payment a condition for handing over the goods or documents. \(2) If the contract involves carriage of the goods, the seller may dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against payment of the price. \(3) The buyer is not bound to pay the price until he has had an opportunity to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are inconsistent with his having such an opportunity. **Art 59** The buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller. **Art 60** The buyer\'s obligation to take delivery consists: \(a) in doing all the acts which could reasonably be expected of him in order to enable the seller to make delivery; and \(b) in taking over the goods. What happens when one party breaches their obligations? - Legal remedies for both parties are essentially the same Termination, specific performance, compensation of damages Need to understand interrelation between these remedies: - Termination and specific performance are incompatible, if we chose termination we discard specific performance - Need to foresee consequences as a lawyer and undertaking legal analysis to see whether or not the legal requirement for these two types of remedies occur in this case -- and to understand outcomes! - Compensation of damages is compatible with both other remedies, can accumulate in a single claim both termination and damages etc Termination - Only entitled to ask for this in cases of which we are also able to prove the existence of a fundamental breach of contract "substantially deprived of what he or she were expecting in contract etc" definition - Consequences are on the one hand, it no longer produced effect, both parties freed from the obligations and rights established in the contract - Goods and prices already delivered/paid must be recovered by the parties who delivered the goods i.e seller or who paid the price i.e buyer Damages defined **in article 74** - Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract. Last sentence introduces one of the rules that stops your client is able to recover, limits the amount via the foreseeability clause, it is seen beyond the foreseeable amount by the person who breached because more than this is seen as excessive Notion represent cost of loss you suffered, also covers loss of profit Establishes some nuances with definition of damages Rules governing calculation of compensation of damages - Causality -- the fact that the breach of contract must be the cost of damage covered, essentially purely physical rule and the fact that one of the parties breached the contract from a fact of the case, the breached physically caused something, is there a direct and physical link between breach and consequence -- it is possible other things played a part - Foreseeability -- fact that the compensation will not exceed the type of loss that party in breach foresaw or could have foreseen consequences derived from breach of contract - Mitigation of damages -- obligation of the damaged party **Art 77 (**very counterinitiative)... A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated. Law asks for active behaviour from the victim in order to avoid damages -- party responsible for breach when argued the victim could have avoided some extent os loss when acting under the law e.g under Spanish law there is no positive rule of law which instigates this rule except the Spanish insurance act which openly contemplates this mechanism - this doctrine has been openly rejected by the French supreme court, and say this doctrine does not apply Counter argument is what could have been done from the buyer to mitigate the circumstances? Establish better conditions? All areas contemplated - What could have happened to mitigate damages