Electronic Commerce Law: Passing of Property and Risk - Essay Example

Electronic Commerce Law: Passing of Property and Risk Introduction In order for one to understand the various responsibilities and rights of a shipper, the consignee termed as the cargo owner and the seller have to necessary understand the title of goods passes under the sale contract and especially when there is the existence of passing the risk of goods. The selling rule is complex and clear in explaining the full infinite details in necessitating a return to the contracts basic rules (Spindler & Börner, 2002). A complete explanation of this law of sale has a rather simple outline presented as part of law of sale that assists the determination of who has the right against which carrier when the goods are lost. The underlying concern of a cargo defendant is the amount of risk and moment in which goods are shipped from the seller to the buyer or from the seller to the consignee. However it is clear that, an individual is much concerned with the risk transfer rather than that of damage and loss of goods which are under the carriage contract. In addition to this, in the United Kingdom and its environs which usually treats its virtues on persuasive or as a binding tittle and not risk as an important taking suit criterion. On the transfer risks, in both laws generally, the law of goods carriage and the law of sale meet the international sale of goods. In the house of lords, ruled that legal ownership title is the important criterion in determining who sues the carrier in tort compared to the risk, where it was deliberated that it with the use of the tittle of goods that someone can recover substantial loss and damage s to goods incurred, where the risk bearer carries substantial liability in paying for the loss, or damages. Rejecting the risks as the basis on the right to recover the loss from the carrier states that there exist no good reason as to why the risk passing between the seller and the buyer should be held as a decision of the right of recovery of substantial goods damages, when the exist as a fact the risk of both the mercantile and maritime contracts or the vice vasa, is going to be covered with the cargo insures (Spindler & Börner, 2002). This seem to ignore the fact that the majority of goods are not fully insured, while there are also many trades I n the American states which are barely insured at all. If the courts are going to fully rely on goods insurance arguments, they are then liable to determine a trial if there also exists insurance of damaged goods. The insurance argument is being used by the court system to avoid the detailed investigations of as to who is liable to the risk incurred in the shipped goods, and the fault is usually a dangerous and erroneous dictum. Verdict which deals with the title of goods rather the risks associated tend to go behind and against the visible trends in the sale of goods law. In a real world example, the ultimatum Act of the United Nations on the international sale of goods that explains the party which may claim and sue in case of good loss and damages are incurred. Definition of Sale Transfer or agreement to transfer In a sale contract, it is not only the contract in which goods are transferred for an instant pricing but may also be the agreement involving the transfer of good for a later price and payment, and under some special circumstances and particular terms of purchase and conditions. This means that both the agreement to sell and sale are all contracts of sale (Spindler & Börner, 2002). The difference between the two is very important for in the sale agreement, the title to goods and risk passes on upon making a contract while on the agreement to sell the title of goods and risk passes on at a later time, I a summary it is clear that a contract of sale consists of a sale which is the transfer of goods and an agreement to sell which refers to an agreement to transfer the goods at a later date or under special terms and condition. Sale of Goods Act This sale of goods act is the further sale of goods acts in which the English terms defines the contracts of sale as follows, making a sale contract of goods, a contract in which the seller agrees or transfers the goods to the buyer through a price consideration (Snijders, & Weatherill, 2003). It can be also referred to as a distinction made between an agreement to sell and a sale agreement, as the sale of goods. Under this contract, the seller of the goods transfers them to the buyer and in the contract of sale, the transfer only occurs at a future time or on the subject to special conditions and terms. Consequently an agreement to sell occurs and materializes to a sale when the stipulated time elapses, or when the agreed upon conditions are fulfilled by the concerned party. Uniform Commercial Code – Sale This is a form of an American uniform commercial code which is used to distinguish between a present sale, a contract to sell goods at a later date and a contract for sale. The contract for sale includes the both the contract to sell goods at a later date and the present sale contract. This means that this contract consists on the passing of the goods title from the seller to the client on an agreed on price while a present sale states a sale accompanied by establishing a contract. Civil law This is a law that recognizes and distinguishes between the sale and agreement to sell bot not as clear and precise as the common law states. In this law, the sale is termed as an agreement by which one of the parties is obliged deliver as well as in paying as per their obligations. It is also perfected that the both parties and the properties are acquired by the purchaser in regards to the seller as soon as they come into a suitable price although no payment or delivery has occurred. However, the promise of sale entails the reciprocal consent from both parties as agreed to the price. Conformity In a sale agreement, a directive is entitled which obliges the seller to deliver goods conformity to the instructions and the requirements in the contract. Goods delivered are assumed to be of conformity if they all comply with the description made by the seller which must possess all the qualities and elements of goods which the seller had ditched out a sample to the buyer. However this goods must fit their particular purpose for which they are intended to serve, they should also show the performance and quality which normal goods of the same type possess, and what the consume reasonably expects, on the nature of goods which when taken into account should meet the description and performance measures stipulated by the seller, or the marketing authority representatives. The effects of conformity are clear when the goods are in good condition and meet both the seller and the buyer specifications and description. It is correct to conclude that goods are not in conformity if any of the specifications agreed upon by either the seller or the buyer is not met. According to the good supplied and delivered to Batiatus, they are not the same as the goods offered and so they do not confront to nature as they are specified in the order. This shows the lack of trust that the seller has over different buyers, this is an act of dishonesty and malice and should be highly discouraged. Fitness for normal use In this area, the quality of goods I deeply concerned as whether they meet their specification and their fitness for personal use as the use of quality goods of the same brand. However in most cases, many products are usually used for purposes in which they are not intended and so the fitness is not paramount. Assessing the fitness of delivered goods should be done thoroughly to ensures that the received goods are fit for use on the purposes that they were intended to serve (Spindler & Börner, 2002). It is clear that the national measures that implement this directive do not only need to rely on the incorporation of the provisions of these directives formally to express general legal contexts and the specific legislations which depend on the context of the directive. Adequate conformity for the intended purpose provided that it guarantees the full and comprehensive application of this directive in a sufficient, precise and a clear manner in order to create the rights of individuals. Based on this criterion it is still in argument that in general circumstances most goods do not meet the fitness specification in regards to the intended purpose of the delivered goods. In this given scenario, it is proved otherwise that the goods delivered to Batiatus are of fitness to normal usage for they are old and not new as ordered by Batiatus. It is a good example of sellers who are not compliant with the specification they make on advertisements and the invoice they invoice overseas buyers. This is a wrongful act and the seller bears responsibility and liability over the quality of the delivered goods. The quality and performance which are normal in goods of the same type This refers to whether the delivered goods meet the performance and quality which is normal to the goods of the same brand of which the customer can comfortably accept without any further delays and complications. To be precise, this a more heated issues as to whether the delivered goods meet and show the quality of performance which is absolutely normal to the performance of normal goods of the same type, as is stipulated in the code of conformity. Consequently, if the delivered goods to not meet or show the performance or the quality which is normal to that of goods of the same type, then this automatically means that the goods are completely not of satisfactory quality and do not meet the performance and quality. It is still not clears as to whether a reasonable person can be able to make a correct judgment between normal quality, performance and satisfactory quality (Miller & Jentz, 2010). A reasonable buyer may regard goods delivered as of satisfactory performance even if they don’t quite match to those in the specified market. This is what is regarded on to as satisfactory which may not be necessary ascertained by consumers to the extreme extents of the fundamental rights and relies on national policies and acts. This law helps in maintaining the quality performance among items which are shipped to consumers at a later date. Reasonable expectations are the expectations that a customer expects as the lower limit on the performance of the delivered goods. It is purely true that in this scenario, Batiatus was delivered in goods that did not meet the performance requirements and quality of normal goods of the same type. This was a wrongful and malicious act and the seller should bear responsibility over the delivered goods according to the contract of sale. The Passing of Risk The moment of passing risks in or under a contract of sale is of great importance to the parties involved in a transaction to that of a carriage contract. This is because in most cases, this determines who will suffer the liabilities should be there a damage or loss of goods. On the other hand, the title of goods is only of importance to the carrier when in cases whereby either the shipper or the consignee fails to cater for the freight charges (Sanson, & Dawson, 2002). Risk is mainly described as being bearded by the person who usually bears the liability or loss in cases where goods are damaged or lost. It is more precise that, being at risk means also that one of the involved party is discharged from performing its obligations, meanwhile the rest party remaining in bond to perform its obligations. A good example is an instance whereby goods get lost before delivery to the buyer, where in some cases the seller can be discharged to supply other equivalent goods while the buyer does not pay for the replaced goods where the buyer is not liable to risk. In our scenario the goods shows that Batiatus has also some risks that he bears for not insuring the goods on transit. This should have been done to ascertain Batiatus that he will only receive goods of high quality as stipulated on the specifications on the advertisement and on the order paper and the invoice. Sale of Goods Act Not unless the parties have been engaged on a contrary idea, the risk passes with the title of the goods under the stipulated act. Unless otherwise, the goods mostly remain to be at the sellers risk until they are received and certified by the buyer (Khosrowpour, 2001). Consequently, when they are transferred to the buyer, the risk shift from the seller to the buyer, whether the deliver has not been made or has been made. This means that when delivery has been delayed the fault can be liable to either the buyer or the seller, this translate that the risk is in the party, a good example is the free on board (FOB) method. Cost, Insurance and Freight This is a shipping mode that means that the seller of the goods delivers them through the shipment port. The seller must pay for the freight charges to transport the goods to the destination port, but the risk that may occur to loss or damage of the goods is transferred to the buyer. However this in this method, the seller has also to pay for the insurance against the risks of the buyer on the loss or damage of the goods during freight and carriage. Consequently the seller looks up for insurance to pay for the premiums on a minimum cover. In our scenario, Batiatus did not go for this method and therefore did not pay for the insurance and hence the goods were sent on a standard service which does not carry insured goods. If it was early noted, Batiatus would have been advised to use this method whereby the seller would have insured the goods and paid for a good freight carriage that would deliver them to Batiatus FOB This is a transaction modality that states that goods are sold on free on board basis which means that the buyer has extra liability on the goods when it comes to shipping cost and insurance. In this case the buyer must take responsibility of the good from the seller and organize for the freight for a safe delivery. The buyer insures the goods and makes arrangements for their transport. In our scenario we can see that it is very clear that Batiatus did not organize for insurance to his goods and this shows that he was completely liable to the risk that would have occurred to the goods in transit. As a matter of fact the seller might have taken advantage of this incident and supplied Batiatus with the goods that he did not make an order and that did not meet to his requirements. Remedies In this scenario, Batiatus has the right to claim for the loss and damages of his goods, however, it is equally important to note that one should retain the pre-existing short term right to rejects. In some cases, there will be immediate receptions of goods that the buyer may not have confidence with (Burnett & Bath, 2009 p.42). This may arise from serious physical defects on the goods that may make the buyer lose confidence on them. I our scenario I would advise Batiatus to call for remedies on his goods which did not comply with the conformity, he should demand for compensation through the following ways. Repair and replacement In this case, Batiatus has all the rights to claim for replacement of deformed goods, however in this case law is very clear on the right to replacement under the new law. In the scenario of Batiatus, through the legal process the seller should carry responsibility in doing the repair of the damaged goods and replace the missing items (Bradgate & White, 2007). On the other hand, it is quite hard to tell who is responsible of the lost goods since Batiatus did not sign the delivery note. It becomes hard for replacement since the goods were not insured, and this require legal intervention of the seller and Batiatus to come into a consensus on the best solution. Price reduction and rescission As is in the replacement, Batiatus is allowed to negotiate on a price reduction on the damaged goods and those of low quality (Bidgoli, 2004 p. 32). This means that if the delivered goods do not go for a convenience period without efficiency, the he can call for rescission from the seller of the goods and have the price reduced and a refund may be considered. Price reduction is basically bases on the relative damages incurred on the damaged goods and as stipulated in the contract of sale which assist the buyer to the possibility of obtaining a price reduction. Guarantees In this situation whereby Batiatus was delivered low quality goods, I would also advise him to organize with the seller and negotiate for a guarantee on the performance of the delivered goods (Baughen, 2004 p. 673). In this case, the guarantee will work if the seller does not replace the lost goods and hence the both parties would agree on a guarantee on the performance of the delivered goods under which would lead to replacement of goods, reduction in price or a rescission. Conclusion In conclusion, it is clear that private customers lack the requisite knowledge and bargaining strong in negotiating an appropriate and a quality standard good which they buy. This is not to mean that they don’t have expectations that are reasonable relation to the quality but the experience is what is paramount in this market (Drobnig & Alpa, 2004, p. 432). The expectations are based on numerous factors such as fitness for use and quality standards. It is clear that in our scenario, Mr. Batiatus did not have much experience such as goods needs to be insured and when being delivered the consignee should be present and sign on the quantity and quality of goods. This is important for purposes of dealing with risk if the goods happen to get lost or damaged. Bibliography Bar, C. v., Drobnig, U., & Alpa, G. 2004. The interaction of contract law and tort and property law in Europe: a comparative study. München: Sellier. Baughen, S. 2004. Shipping law (3rd ed.). London: Cavendish. 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