International Sale of Goods

International sale of goods is the exchange of goods and services between countries. Goods are to be transported from the sellers premises to the buyers premises overseas.

 UN-sponsored convention that establishes uniform-rules for drafting international sales contracts, and sets the legal rights and obligations of the seller and the buyer under such contracts. CISG rules apply automatically to the sales contracts between the countries who have ratified the convention.

United Nations Convention on Contracts for the International Sale of Goods- Vienna Convention

Key stages in a typical transaction of the international sale of goods

1. Negotiations between seller and buyer 2. Making the sales contract between parties 3. Shipment of the goods and carriage of the goods

Problems associated in the international trade transaction

1.An international sale will usually involve a sea transit 2. Customs need to be cleared 3. Import and export licenses need to be obtained. 4. International sales raise conflict of laws problems 5. Financial problems 6. Fluctuations in currency

INCOTERMS or international commerce terms

International Chamber of Commerce (ICC) has introduced quite a number of special trade terms in use for international trade. These terms have simplified the sale of goods abroad. They are in universal use in trade transactions Two extremely useful trade terms, namely: FOB and CIF

FOB ( free on board)

In a FOB contract, the seller has to put the goods on board a ship. The price under an FOB contract includes the cost of the goods and all expenses up to the board the ship. Once The delivery is completed then the property and the risk pass to the buyer.

Stock v Inglis (1884)12 QBD 573

The words free on board would mean that the shipper (seller) was to put the goods on board at his expense; and the goods so put on board would be at the risk of the buyer, whether they were lost or not on the voyage Wimble v Rosenberg (1913) 3 KB 743 The FOB is a contract for the sale of goods where the seller agrees to deliver the goods over the ships rail, and the buyer agrees to convey it overseas.

Types of FOB Contracts Pyrene v Scindia Navigation(1954]

1. (The classic FOB OR classical FOB 2.extended FOB or FOB with additional Services 3.Strict FOB.

Duties of the F.O.B buyer

(a) To nominate the port of shipment, the vessels name and procure the necessary shipping space (b) Nomination of a ship (c) To secure shipping space d) To obtain the necessary import license e) Pay any cost incidental to the shipment f) Pay the seller for the goods in accordance with the contract

Duties of the FOB seller

(1) To ship goods of contract description at the named port of shipment 2) To ship goods on time (3) To obtain Export licenses (4) To deliver the necessary documents

CIF contracts
CIF stands for cost, insurance, freight The letter CIF represents the three contracts involved 1. The cost the sale contract Insurance-the contract of insurance Freight- the contract of carriage.

Shipping documents involved in CIF contract

1.The commercial invoice, 2.A shipped bill of lading 3. policy of insurance during the sea voyage, and 4.Certificate of quality 5.Certificate of inspection 6.Certificate of origin

Duties of the seller under a CIF contract

1.To ship goods according to the contract description 2.To enter into a contract of carriage in order to deliver the goods. 3.To ensure that the goods are properly insured under a contract of insurance 4.To procure and prepare proper shipment documents.

Duties of the buyer in a CIF contract

1.Payment against documents 2. The buyer to name port of destination 3. Buyer to take delivery 4. Import licenses

REMEDIES IN INTERNATIONAL SALES

Buyers remedies under CIF contract (1) Rejection of the goods on arrival if (2) Damages for non-delivery of the goods. 3)Damages could also be claimed for late delivery. 4. the buyer can reject the documents if the seller has not tendered the right documents

Sellers remedies in a CIF contract

(1) Action for the price (2) Damages for non-acceptance (3) Damages for breach of warranty

Carriage of goods
A contract whereby a person or company agrees to carry goods or people from one place to another for a payment is called contract of carriage. carriage of goods can be 1.Carriage by land (including inland waterways), 2.Carriage by sea 3.Carriage by air

Classification of Carriers
(i) common carriers,

(ii) private carriers and (iii) gratuitous carriers.

Bill of Lading
Bill of lading is the official Legal document signed by the captain, agents, or owners of a vessel, furnishing written evidence of the quality and quantity of cargo for the conveyance and delivery of goods sent by sea to a specific destination.

Carriage of goods by sea

A contract for the carriage of goods by sea is called as a contract of affreightment. The word affreightment means the hiring of a vessel or ship. A contract of affreightment may take either of the two forms Charterparty a bill of lading

Conditions Contained in a Contract of Carriage by Sea.

(i) Implied warranty of seaworthiness (ii) Implied warranty of commencement of voyage (iii) Non-deviation of voyage (iv) Shipper not to ship dangerous goods