International Commercial Law - Goodwill Wine Limited - Math Problem Example

Issue The issue is whether Goodwill Wine Limited has the rights and obligations over the decision made by Wanda on cancellation of their contract. Rule Under the United Nations convention, articles 1 to 5, 7, 9, 10, 11, 14, 16, 18, 25, 31-36, 38, 39, 40, 43, and 53 to 65 and international commercial law apply to this case. Analysis Under the CISG, articles 1 to 5 talks about its application. Goodwill operates in Australia while Wanda operates in china, thus given that the two companies are contracting states and are involved in sale of goods then they apply to this law. Wanda who is the buyer in this case doesn’t buy the goods for personal, household or family use thus; they apply to the article 2 of the CISG. The contract between the two companies involves a contract of sale where the product involved is wine and the buyers’ and sellers’ rights and obligations apply to the law. This means that the rights and obligations of Goodwill will apply to article 4 of this law. Thus, this convention applies to the case and the two companies are supposed to make their decisions based on the guidelines in the CISG law (CISG 1980). Wanda made its own decision to cancel the contract between them without considering the decisions of Goodwill. In addition, Wanda has decided to ask for return any payment made to Goodwill with pending delivery. This shows that wand is making personal decision without considering the other party’s decision which shows lack of uniformity in this law. Also, they way Wanda is making personal decisions in such an international trade, is not observing good faith. Thus, according to article 7 of this law there is no uniformity and observance of good faith in the contract between the two parties. Wanda and Goodwill entered into an agreement and they came up together and established practices in conduction of business between themselves. Although Goodwill had been experiencing delays in supply of wine to the buyer at the specified time, they are bound to work together in making any decision as they established their practices not as individuals but as parties. This means the idea of Wanda to cancel the contract was not based on the two party’s agreement. Thus, the Wanda failed to observe article 9 of this law. Given that there have been various conditions of non-uniformity, it could not be clear that the sale of contract especially the dates for supplying of goods as stated by Wanda are agreed by the two parties. This may be the reason Goodwill is finding difficulties in meeting these dates, thus, because the contract of sale should not always be included in writing, Goodwill may have not be comfortable with the set dates. This shows that Goodwill may have provided a different later date of transportation according to the challenges in the business. Thus, based on article 11, some of agreements in the contract of sale may not have been written but communicated and agreed through other means especially on delay of goods (CISG 1980). In the formation of the contract of sale, Goodwill introduced an offer which is a variety of wines to Wanda and Wanda accepted. Also, their contract also involved the price and quantity of the goods to be offered to the buyer. Thus, as they agreed in provision of goods, then they should have come together and agree on the termination of the contract or any party withdrawal. In their contract, the two parties had stated fixed times for supplying of various products of wines to the buyer. This means that the contract of sale between Goodwill and Wanda is irrevocable since they had stated the fixed time under the contract for acceptance. Also, Wanda agreed the offer from Goodwill for buying the different varieties of wine. Thus by agreeing the offer from Goodwill, this means there was acceptance and any move made by any party from that time involves agreement by both parties including the reasons in case of withdrawal due to lack of satisfaction. Thus, Wanda was required to give light to Goodwill in case of any dissatisfaction. This means that there was no compliance to the section on formation of contract in CISG law (CISG 1980). According to the case, Wanda had experienced some delays from receiving of the goods from Goodwill as per their agreement. This may have led to the decision of Wanda terminate the contract on the grounds of the breach of this contract. But although Wanda may have been foreseeing such kind of expectation, Goodwill on the other hand could not be foreseeing the result or the possibility of being late as the delay on transportation of goods to the buyer was caused by natural factors. This means that it was not possible for Goodwill to foresee a natural factor that is the strong storm which destroyed their infrastructure in Adelaide in Goodwill’s warehouse. Thus, according to article 25 in sale of goods, goodwill may have not breached the contract since the circumstances that led to delay in transportation as per the contract was due to destruction of warehouse due to storm which is a natural factor and it is not foreseeable (CISG 1980). The obligations of Goodwill was to deliver goods to the port of Hong Kong which shows that he was bound to deliver goods in one place only. This means that he was not under the obligations specified under article 30 of the CISG. Goodwill was supposed to deliver the first shipment on or about January 10 2011. This does not mean that the company was supposed to deliver goods exactly on 10 January as ‘about’ would be taken to mean a few days before or after 10th January. This means that, by delivering goods on 14th January, it can be said to be about 10th January. This can be seen as delivering of goods with reasonable time after the after the contract conclusion. The second shipment was to be delivered exactly on January 20, 2011 but Goodwill failed to deliver these goods due to natural circumstances. Thus a storming of their warehouses is a natural condition which was not planned by anyone. This means that although Goodwill was supposed to deliver goods within a fixed date, circumstances as natural as storm may have provided an option to deliver goods on another date since they cannot be controlled by human. This may show that, Goodwill acted according to the article 33 of the CISG law. The goods delivered by Goodwill may be in good condition in terms of quality, quantity and description during the packaging. It can be argued that, the transportation of goods by goodwill to the specified port was done according to article 35, and Goodwill could state that, the destruction of some goods may have occurred after the goods were out of Goodwill’s hand. This may be practical as in the process of buyer’s transportation of goods to the retailing destination, the said breaking of the two rows of Shiraz may have occurred in the hands of the buyer in transportation of goods from within the specified port to buyer’s stores. Goodwill may also argue that, lack of conformity of these goods existed when the risk was already passed to Wanda. Through this argument, Goodwill will have acted according to article 35and 36 of the CIGS law (CISG 1980). Wanda can declare avoidance of the contract in case of non-deliver if the Goodwill fails to deliver the goods under the added period of the time that was fixed in the contract. From this case, Wanda decided to cancel Goodwill contract as it suspected that Goodwill may fail to deliver the goods. Wanda assumptions that Goodwill may not deliver the goods is against the contract as in addition to the failure to deliver the goods at the fixed date, Wanda was supposed to give an additional period without making the decision to cancel the delivery. Wanda’s decision was against article 49 of the Vienna convention. After the payment of the price of the third shipment, Wanda was supposed to wait for the fixed date of delivery according to the contract instead of deciding to cancel the contract before the agreed delivery period. This shows that Wanda’s decision to cancel the contact before the delivery period was against the contract. Thus, Wanda was against article 54 of the Vienna convention (Vienna convention, SA 1986). By cancelling the delivery of the last shipment before the fixed time of delivery Wanda is seen as failing to perform its obligations according to the contract. To Goodwill, this may inconvenience its plans for delivery thus it may undergo some losses or damages experienced in preparation for transportation of goods. This means that under article 61, Goodwill may claim damages incurred in the course of cancellation (CISG 1980). From the international law perspective, Goodwill and Wanda are performing their transactions internationally since there are more than two countries involved. This means that the since they require to have a common law which will govern the sales transactions internationally. This will enable them to conduct fair transactions based on their agreements. Thus, in order to perform their transactions fairly, the two parties require having agreements through application of international commercial contracts. Thus decision made by any party must be according to the international commercial law. This means that the decision by Wanda to cancel their agreements was made by one party only and can be regarded to be against the international commercial law (Mo 2009). Conclusion Under the international commercial law, CISG, and sale of goods Act 1986, SA, as Wanda wants to terminate the contract, Goodwill Wine limited has the rights and obligations over the decision made by Wanda. References Mo, J. 2009, International commercial law, 4th ed., LexisNexis, Butterworths, Chatswood NSW Sale of Goods (Vienna Convention) Act 1986, South Australia United Nations Convention on Contracts for the International Sale of Goods (1980) [CISG] Read More