The place of examination is subject to the agreement of both parties. It may be on pre-shipment inspection , nonetheless, it is inconvenient for the buyer to do so if he is in another country and has no representative at the place of shipment . In Bragg v Villanova , the seller received the documents and paid the price before taking the delivery and finding that the goods was not of contract quality. The court found that he was considered as not accepting the goods until he had reasonable opportunities to exercise examination, therefore, he had not lost his right of rejection. The two rights of rejection in FOB contract are applied at the similar principle of CIF contract as discussed. In particular, if the documents are inconsistent with the contract, the buyer is entitled to reject them and give the seller opportunity to correct the defects; he may reject the non-conforming goods even though he accepts the documents . Under section 51(3) of the Sale of Good Acts 1979, the damages are measured by: ‘… the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered, or (if no time was fixed) at the time of the refusal to deliver’. In case of the ‘classic’ FOB contract, the place assigned in the contract for shipment is deemed the place where the market is relevant . The time when the goods ‘ought to have been delivered’ is considered as the time at which they ought to have been placed free on
Any contract for transporting freight or personnel by vessel, aircraft, bus, truck, express, railroad, or oil or gas pipeline where published tariff rates are in effect;
Within a contract consideration must be made to the creation of the contract. The terms of the contract define the obligations of the parties. It is by analysing the terms that you can find out what has to be done to discharge those obligations. For example in Cehave NV v Bremer Handelsgesellschaft mbH [1976] QB 44; [1975] 3 All ER 739, the buyer Cehave did not want to accept the delivered goods because they were not in ‘good condition’ although they were in satisfactory condition to perform their purpose which was to be used as animal feed.
8. When is a buyer considered to have accepted performance regarding goods that are delivered pursuant to a contract?
* If the arrangement includes a general right of return relative to the delivered item, where the delivery or
III. If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor.
Reduction below list or catalog price that is negotiated in setting the price of goods.
* Terms allowing parties to vary the contract price known as a price variation clause.
This lends itself to issues such as a seller charging more because of higher shipping costs to a specified buyer. Price differences are also allowed in regards to changing market conditions “such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.”(2) An example of this maybe providing a discount for Christmas decorations as December 25 approaches or cheese as the sell by date
Even the contracts are expressly agreed to by the parties, those terms need to be inter-preted and the court must ascertain the terms and meaning of the parties to the con-tract. According to the UCC, the court would look to the relevant course of perfor-mance, course of dealing and usage of trade to determine the meaning of the words of agreement.
If goods are sold _____________ and are in transit at the end of the period, they should be included in the seller’s inventory.
a. in CIF, the goods are delivered past the ship’s rail, but S does not possess them until the port of destination. This is distinct from the FOB where delivery and possession occur at same time.
d. a price that includes both the cost of the product plus transportation to the buyer
ANSWERS TO QUESTION 1 OF CONTRACTS EXAM Exam 5003 – AThe letter sent by B was an offer. An offer may be defined as a communication, having sufficient definiteness to eliminate the need for further negotiation, and creating the impression of manifest intent to enter into a K. An offer may be made to the general public, as in a mass mailing or advertisement, or to an individual. The letter was sufficiently definite. It provided the description of the product, a price, and a quantity. The quantity, while not particular, first created the impression of a great many pieces available. Second, it operated as an offer for a requirement K by UCC 2306. Such a requirement K need not be explicit in the quantity; it is
Price refers to freight rate at which one container is decided by shipping company to transport from one place to another. Due to much competition in this sector and limited number of operators, bargaining power of buyer has increased in relation to freight price.