Commercial Transactions and Relations - Essay Example

Business law Law defines sets of rules within a jurisdiction that regulate relationships and interaction between persons in the jurisdiction. Business law is a branch of law that regulates commercial transactions and relations that are created thereof. This paper seeks to answer questions on commercial-based cases. Question 1 Gharar refers to uncertainty or a perilous condition that is illegal under Islamic law. As a result, no damages can be awarded for breach of a contract in which a party took risks.

The law, therefore, limits damages by the extent of the taken risk (Venardos, p. 150). The Islamic doctrine would however not apply under the CISG because the convention overrules the application of regional laws in international transactions (Schaffer, Agusti and Earle, p. 120). Question 2 In this case, Bende made a contract with the Ghanaian government for deliverables at a price of $ 158500. He then subcontracted to Kniffe who was to deliver the goods at $ 95000. Knife however failed to make delivery as the carrier train had derailed.

Kniffe’s claim that the contract had been rendered impracticable is valid because the train wreck was unforeseeable and beyond his control. However, the performance is not excused because the no force majoure clause that was contained in the contract sustains liabilities. The wreck was however unforeseeable (Fox, p. 143). In order to protect himself from this contingency, Kniffe could have negotiated for the inclusion of the force majoure clause that would have excused his liability (Fox, p. 143).

Bende would be entitled to damages of $ 44685. This would include lost profit to which he would be entitled. This is due to the compensatory damages doctrine that provides for a party’s restoration to the position he would have been in had a contract been fulfilled. This includes profitability (Fox, p. 60). If the parties had agreed that Kniff would merely ship the goods then the risk would be shifted from Kniff to either the buyer of Bende, depending on the original contract because the property would have transferred to him (Schaffer, Agusti and Earle, p. 728). Question 3The importer is likely to win the case.

This is because of two factors, the open price term of the contract and the force majoure clause that applies to contracts that have been rendered impossible. Under the open price term, the distributor is bound by the contractual terms that were entered into during contract formation. The force majoure clause also suspends any liability over contractual obligations when activities have been rendered commercially impossible. Adversely unfavorable currency fluctuation, being identified as a factor towards the clause, therefore releases both parties from any liability from the contract.

Consequently, the distributor lacks legal grounds for a claim (Fox, p. 143).