Authority of Shipper's Representatives - Essay Example

 As stipulated under the Uniform Commercial Code Subsection (2) of Section (2-210), Unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risks imposed upon on him by his contract, or impair materially his chance of obtaining return performance. Under any circumstances, the shipper’s representative once recognized by its principal is empowered to make definitive decision and adjustments in behalf of the company or principal (Investment, Cambodian Online, n.d.) In this manner, all the rights of the seller or company are delegated to its representative who will transact business for them within the scope of authority. In the case of the Shipper’s Representative s/he must have the knowledge of the company’s terms and conditions of shipments, the agreement reached between the company and buyer, discounts given, financial arrangements (advances, personal commitment if there’s any), accommodations, and mode of collections/payments. In subsection (b) of section (2-504), the shipper’s representative may also obtain and promptly deliver or tender in due form any document necessary to enable the buyer to obtain possession of the goods. The Shipper’s Representative should give prompt attention to the completion of orders up to its delivery. After delivery is consummated, it is the responsibility of the Representative to submit complete documentations of said transaction to the accounting section for whatever actions deemed applicable to its final completion. Thus, the role of the Shipper’s Representative in any transaction concern- ing shipments or transfer of goods to the buyer must not only end during delivery but it Authority of Shipper’s Rep.3 will be a cycling process. Shipper’s Representative is authorized to aid Production Scheduling for shipment by use of work orders daily. This includes screening of customer purchase order vs. company work orders for agreement, preparation of shipping invoices and/or packing lists, preparation of international export documentation (if any), determines method of shipment and preparation of appropriate carrier’s paperwork using established guidelines. S/He affixes shipping labels on packed cartons. Compares identifying information and counts, weighs or measures items of incoming and outgoing shipments to verify information against bill of lading, invoices, order, or other records. S/He is authorized to keep and maintains inventory of shipping materials and supplies. Section 2-504 Shipment by Seller. The seller must see to it that shipment schedule is met. Where the seller is required or authorized to send goods to the buyer and the contract does not require him to deliver them at a particular destination, then unless otherwise agreed he must under Subsection (a) of Section 2-504, Part 5, he must put the goods in the possession of such a carrier and make such contract for their transportation and promptly notify the buyer of the shipment. However, any quotation or forecast on an order acknowledgment is only an estimate of the time required to make shipment and seller will not assume liability, substantial or otherwise, because of any delay or failure to deliver all or any part of any order for any reason, including its active or passive negligence. The seller reserves the right to allocate inventories and current production in any way it deems desirable. Authority of Shipper’s Rep. 4 Section (2-505). Seller’s Shipment under Reservation, Subsection (1) stipulates “where the seller identified the goods to the contract by or before shipment”. The provisions of this section authorized the seller or his nominee to procure a negotiable bill of lading to his own order that binds him the security of interest in the goods. It gives him the right to effect transfer of the goods to the named person or buyer. In like manner a non-negotiable bill of lading also reserves him/her the possession of the goods as security. However, except in the case of conditional delivery under subsection (2) of Section (2-507), this instrument reserves no security to the seller even though he’s in the possession of the documents. This section also authorized the seller or his nominee to execute instruments that avoid any statements that could impair the rights given to the buyer over his goods and the right or power of the sellers as a holder of the negotiable document. Section 2-507. Effects of Seller’s Tender; Delivery on Condition & Section 2-509. Risk of Loss in the Absence of Breach. Tender of delivery requires that the seller put and hold conforming goods at the buyer’s disposition and give the buyer any notification reasonably necessary to enable him to take delivery. The manner, time and place for tender are determined by the agreement. Example, under the shipment contract, the seller is authorized to deliver the goods to a carrier, make a contract for their transportation that is reasonable given the nature of the goods and other circumstances, obtain and promptly deliver or tender to the buyer any document necessary to enable the buyer to obtain possession of the Authority of Shipper’s Rep. 5 goods from the carrier, and promptly notify the buyer of the shipment (Mann & Roberts, n.d. p. 394). Once notice and proper documents is received by the buyer, this entitles the buyer to accept the goods and effect payment thereof. The buyer is obliged to accept conforming goods and to pay for them according to the contract terms Section 2-301 (Mann & Roberts, n.d., p. 397). The seller or his nominee must conform to her/his tender of goods exactly to the requirements stipulated in the contract. Section (2-508) subsections (1-2) Cure by Seller of Improper Tender of Delivery; Replacement. The buyer has the right to re-examine the goods or cause them to be re-examined at the destination of the goods within a short period deemed applicable in the circumstances. Then within the reasonable time after he has disco- vered a lack of conformity of the goods, he should give notice to the seller specifying the nature of the lack of conformity. The seller then made a prompt response, expressing to accept the rejection (Huang, 2004). This immediate action of the seller proved his adhe- rence to the contract entered by both parties. That, whatsoever circumstances involve in the delivery that have caused unexpected damages or unconformity of the goods is his/her sole responsibility. Nonetheless, every seller or his nominee is deemed authorize to act with dignity in resolving or curing the situation. This authorization will also served as security for the buyer of the goods since they are assured that any unconformity or discrepancies resulting from mishandling of goods or any legal reason will be attended promptly by the seller. After establishing the facts involved in the rejection or returned of the goods, the Authority of Shipper’s Rep. 6 seller must replace it and effect delivery in conformity of the contract. The Shipper’s representative to be effective must personally assist the delivery of the replacement so as to maintain the rapport between the two parties. The Represen- tative must show sincere concern of the problem to preserve the mutual business relationship. Under this provision, the seller has the full authority to meticulously investigate the circumstances resulting thereof and in like manner show utmost civility to preserve the trust of the buyer. Section 2-702. Seller’s Remedies on Discovery of Buyer’s Insolvency. This provision authorizes the seller or his nominee to refuse delivery of goods except for cash including payment for all goods theretofore delivered under the contract, and stop delivery. It also authorizes the seller to reclaim the goods upon demand made within ten days after the receipt. However, the right of the seller to reclaim is subject to the rights of the buyer in ordinary course or other good faith purchaser. It is very clear that when the seller finds the buyer to be insolvent, he has all the right not to serve his order on credit except on cash basis. This is to avoid non-payment of the delivery of goods. In normal business transactions, the seller or his nominee would predetermine the solvency of the buyer before tendering any delivery of goods. If in the course of verification, the result found to be true, the seller will hold shipment of orders. The buyer also has the right to be notified of the decision of the seller so as to keep him aware of his status. If the financial condition of the Buyer at any time is such as to give the seller, in its judgment, reasonable grounds for insecurity concerning Buyer’s ability to perform its Authority of Shipper’s Rep. 7 obligations under the agreement, the Seller has the right to cancel the agreement without judicial intervention or declaration of default of Buyer and without prejudice to any right or remedy which may have accrued or may accrue thereafter to Seller. In these circumstances the Seller or his nominee has the right to require full or partial payment in advance and suspend any further deliveries for continuance of the work to be performed by Seller until such payment has been received or make shipments on cash basis. Patent Protection. The seller or his nominee has the right to defend the buyer at its own expense, as set forth herein, against any claim that the design or manufacture of any standard product furnished constitutes and infringement of any patent of other industrial property rights. Buyer shall notify the Seller promptly in writing of any such claim of infringement and shall give the Seller authority, information and assistance in settling or defending such claim. Seller shall have no liability whatsoever with respect to any claims settled by the buyer without seller’s prior written consent. Seller shall not have any liability to the Buyer under any provision of this clause if any patent infringement or claim thereof, is based upon the use of the goods as modified by any person other than the Seller or in combination with equipment or devices act made by Seller, or in a manner for which the goods were not designed. Propriety Rights. Seller retains for itself all proprietary rights in and to all designs, engineering details, and other data and materials pertaining to any Products Buyer warrants that it will not divulge, disclose, or in any way distribute or make use of Authority of Shipper’s Rep. 8 such information. Under the conditions stated in Section 2-706 Seller’s Resale Including Contract for Resale, the seller is authorize or has the right to resell the goods and claim damages for breach from the buyer. The damages consist of the difference between the contract price (the price the buyer agreed to pay) and the price recovered on resale, less costs of the sale, and incidental damages. The resale must be reasonably identified as referring to the broken contract, but it is not necessary that the goods be in existence or that any or all of them have been identified to the contract before the breach (Noonan, 2005) Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any other incidental damages allowed under the provisions of this section. Retention of Title. The seller or his nominee is authorized to exercise the right of retention over the goods sold to which the debtor has title where such merchandise is in the possession of the seller with consent of the buyer and upon the condition that the retention right is exercised over the merchandise involved in the transaction while such possession exits. If he seller loses possession of the goods sold, he may not exercise the retention right over them. In this regard, the law assumes that the seller is in possession of the goods when: It is place in his warehouse or ships, or in those of his agent; It is in a customs or other public or private warehouse at the disposal of the seller Authority of Shipper’s Rep. 9 It is in transit, if the seller holds the bill of lading issued or endorsed in favor of the seller or his agent. The right of retention may be exercised even when the buyer has transferred the title of the goods to a creditor or the goods have been delivered by a third party on behalf of the buyer, considering that the transfer to the buyer was previous condition, otherwise, the procedure will not be considered a retention. The right is not applicable when its exercise is not compatible with the instructions given by the buyer to the seller before or after delivery of the goods. Limited Warranty – Limitation of Remedies. Except as otherwise specified, the sellers or his representative warrants the products: to be free from defects in any materials and workmanship and to perform in the manner and under the conditions as specified by the seller for a period of six (6) months from delivery This warranty is the only warranty made by seller with respect to the products and no representative or person is authorized to bind or obliged seller for any obliga- tions or liabilities beyond the warranty in connection with the sales of Seller’s goods. This warranty is made to the original purchaser only at the original locations and is nontransferable and may only be modified or amended by a written instrument signed by a duly authorize officer of the Seller. Goods or parts which are replaced or repaired under this warranty are warranted only for the remaining unexpired portion of the original warranty period applicable to the specific product. All products which the buyer considers defective shall be returned to Sellers office as designated. Authority of Shipper’s Rep. 10 References: 1. Sales: Uniform Commercial Code [UCC] – Article 2 (n.d.), UCC: Uniform Commercial Code. Cornell University Law School. Retrieved March 4, 2008 from 2. Huang, Y. (2004). Grasp the Key to the Case. China International Economic and Trade Arbitration Commission, South China Sub-Commission. Retrieved March 04, 2008 from . 3. Mann, R.A. & Roberts, B. (n.d.). Smith and Roberson’s Business Law. Google Book Search. Retrieved: March 4, 2006 from . 4. Noonan, R. (2005). Seller’s. Contracts. Law for Layman. Retrieved: 04 March 2008 from http://www.rnoon.com/law_for_laymen/contracts/sellers.html Read More