Does the CCISG Apply between GSC and MMA - Essay Example

FACT on the CASE GSC is incorporated in Australia and carrying business in NSW to supply computer systems, printers, scanners, and other peripherals. Most products supplied by GSC are bought off the shelf from manufacturers of standardized computer suppliers and from manufacturers of computer equipment for biotechnology.GSC occasionally arranges for some part of the hardware be made by its staff or sub- contract to independent contractors who make customized products for its clients. Software needed are also obtained from standard software manufacturers or prepared internally by GSC staff or sub contracted where their clients demand a custom made product. In November 2008 GSC contracted with duly authorized representatives of Waritikipakeha Gene Technologies Ltd (‘WGT’), a New Zealand company, for the supply of a small computer system to WGT. The contract specified the hardware required, all of which was standard. The contract provided for GSC to install the system in working order in WGT’s premises in Auckland by 1 May 2009. The contract also provided further software was to be supplied by GSC on 1 September 2009, installed by GSC via the internet. To obtain the core part of the hardware GSC contracted with Muna Microsystems Australia Ltd (‘MMA’), an Australian incorporated company, for the supply to GSC of a Muna Microsystems type 3A server. However, MMA supplied a type 3, which has a more powerful processing core (about 30% faster), but which has a much slower and less sophisticated RAM configuration. However, the type 3 supplied to GSC had a light green front, although this could be easily replaced with the correct front in about twenty minutes. GSC arranged to have all the hardware and other resources needed taken to NZ by its staff in early April 2009, who successfully implemented the system by 1 May, meeting all the requirements stated in the contract. GSC then prepared the additional software required by late August. It was then discovered on 2 September 2009 that the server supplied by GCS to WGT was really a type 3, despite having the external appearance of a type 3A because of the colour of the front. Does the United Nations Conventions on Contract law apply between WGT and GSC? The CISG is sometimes referred to as the Vienna Convention. Unless excluded by the express terms of a contract, the CISG is deemed to be incorporated into (and supplant) any otherwise applicable domestic law(s) with respect to a transaction in goods between parties from different Contracting States. The CISG has been described as having ‘the greatest influence on the law of worldwide trans-border commerce’ Since Australia is a signatory of this Vienna convention and the fact of the case elaborate that both GSC and WGT are in different countries the convention will apply unless the to companies have agreed on which domestic law to apply in their contract. The contract is silent meaning the convention law will apply. The contract was also one for sale of goods and not for sale of service. Does the CCISG apply between GSC and MMA? (‘MMA’), an Australian incorporated contracted with Giant Stoat Computers Ltd (‘GSC’), an Australian incorporated company carrying on business in New South Wales, The CCISG law applies with respect to a transaction in goods between parties from different Contracting States. GSC and MMA are both Australia incorporated companies there for the most appropriate law to apply is The Sale of Goods Act 1923. Was the Contract between WGT and GSC for sale of Goods or for services and does s.6(1) apply. It’s a contract for sale of goods where the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration called the price. A contract for the sale of service is one involving skill and labour as well as the transfer the transfer of property in goods, such as painting a of a portrat by an artist. Where the goods and labour are mixed the test to decide if it a contract of sale or contract for skill and labour is to look at the its substance.(does the principal part of that which the parties are dealing with is the chattel which will come into existence when such skill as may be necessary to produce it has been applied) The distinction is important because the sale of goods Act and the Vienna Convention will only apply in contract for sale of goods and not those for sale of services. The contract between WGT and GSC is one of sale of goods meaning that s.6 (1) will apply. Is the between GSC and MMA within s6 (1)? Contract with s 6(1) are contracts for the sale of goods. GSC and MMA contracted with MMA to supply on its behalf to WGT for the supply to GSC of a Muna Microsystems type 3A server. S 6 (1) will therefore apply. Assuming that CCISG applies to the contract between WGT and GSC is GSC liable to WGT in respect to conformity of the goods and whether WGT was entitled to avoid the contract. Consumer goods must be in conformity with the contract of sale. Goods are in conformity with the contract if, at the moment of delivery to the consumer: they comply with the description given by the seller and possess the qualities of the product which the seller has held out to the consumer as a sample or model; they are fit for the purposes for which goods of the same type are normally used; they are fit for any particular purpose for which the consumer requires them and which was made known to the seller at the time of conclusion of the contract, and accepted by the seller; their quality and performance are satisfactory, given the nature of the goods and taking into account the public statements made about them by the seller, the producer or his representative. If the goods are not in conformity with the public statements made by the producer or their representative, the seller will not be liable if they show that : they did not know and could not reasonably know the statement in question; they corrected the statement at the time of sale; the decision to buy the goods could not have been influenced by the statement. Any lack of conformity resulting from incorrect installation of the consumer goods is deemed to be equivalent to lack of conformity of the goods if installation forms part of the contract of sale of the goods and the goods were installed by the seller or under their responsibility. This applies equally if the product, intended to be installed by the consumer, is installed by the consumer and the incorrect installation is due to a shortcoming in the installation instructions. WGT is entitled to avoid the contract because WSC supplied type 3 instead of type 3A and type 3 failed as per the benchmark. The Liability of MMA under the SOGA MMA was contract to supply for the supply to GSC of a Muna Microsystems type 3A server. However, MMA supplied a type 3, which has a more powerful processing core (about 30% faster), but which has a much slower and less sophisticated RAM configuration, even though the nominal amount of RAM and its general appearance inside the computer is the same. The contract for the server consisted of a (hardcopy) short letter from MMA to GSC offering to supply a ‘type 3A server, described as per catalogue, including standard high performance RAM configuration’ at a specified price, which was accepted by a reply sent by post. MMA is liable under the SOGA for failure to deliver the good contracted as per description. Is MMA in breach of the terms implied under ss 18 and 19 (2) of the Act? S 18 where there is a contract of sale by description, there is an implied condition that the goods correspond with the description. (Grant v Australian knitting mills 1936). Section 19(2) is confined to the sale of goods by description. Goods are bought by description when the buyer buys on the basis of a description of the goods by the seller. That the goods be of Merchantable Quality, MMA was under a contract of sale of goods by description since they consented to this through a letter accepted by post. Under ss 18 and 19 (2) MMA is in breach and GSC is entitled to sue for damages and price. MMA has not Breached S 19 (1) because the section provides that there is no implied warranty or condition as to the quality of fitness for any particular purpose of goods supplies under a contract of sale except .Where the buyer make known to seller the specific purpose for which the goods are required or where goods are bought by description from a seller who deals in goods of the description or annexed by usage of trade. Under section 19(1) MMA may not be liable because the buyer did not specify the needed product and also the 3 supplied by MMA are of merchantable quality. References Business Law (Paperback) Peter Gillies› Visit Amazon's Peter Gillies Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central ISBN-10: 1862875146 ISBN-13: 978-1862875142 * Australian Corporations Legislation 2010 edition (LexisNexis Butterworths) Business law - Google Books Result Peter Gillies - 2004 - Business & Economics - 987 pages http://www.austlii.edu.au/au/legis/nsw/consol_act/soga1923128/ • Ciro and Symes Corporations Law in principle, Thomson Reuters 8th ed (2009) 2. Legislation: 3 volumes KN250 A938.B1 * Principles and Practice: 3 volumes KN250 A938.Bp * Practice: 1 volume KN250 A938.Bp * ASIC Releases: 1 volume KN250 A938. Ba Fundamentals of Business Law 2009 6th Ed McGraw-Hill Internet sites www.lipton-herzberg.com: http://www.austlii.edu.au • http://cclsr.law.unimelb.edu.au • Read More