The International Transaction for the Sale of Goods - Essay Example

The International Transaction for the Sale of Goods Introduction The law of contract encompasses a range of instruments from regulations and conventions internationally to contractual clause models and conditions. Harmonization entails private laws that can be regarded as relatively controversial from the state’s point of view. In international laws, the concepts of unification and coordination of the contract and approximation laws have been put across to identify the boundaries of various notions, as well as to illustrate the difference between them. However, there remains a set of silent consent depending on the premise on harmonization of the contract law. At the harmonization of rules of the contract law, there is the possibility of several specific problems arising, which can be treated separately based on any visible differences about the notion. Therefore, this paper investigates the complexity of the international transaction for the sale of goods in harmonization of the international trade (Whittaker 2011, p. 371). Discussion There has been the conviction that the only real method of harmonization of the rule of contract law is possible only in private law in general. This has been evidenced by works of UNIDROIT that saw the emergence of international conventions. One of the conventions was used in Hague conventions, in 1964, on issues of international contracts for the sale of goods while the other was that in Vienna convention in 1980. Hague adopted a solution that comprised of the annex to uniform international sale law that, upon the ratification, was introduced directly into the domestic law of European countries This was regarded to be superior to the one from Vienna Convention. It was superior because the harmonized rules bound the participating states in a similar manner as that for international obligation. The major drawback today is the question on the international convention being the most appropriate avenue for harmonizing the contract law (Bellantuono 2010, p. 115). In my opinion, the complexity and intensity of the modern international commerce have encouraged several developments and other several ways of harmonization of the private law. The ‘contract out is regarded as the most interesting solution for a resolution introduced within the framework. A state may decline such a resolution. However, if the decline is not done within the time specified, the rules of the resolution may be considered as binding and may influence specific contractual clauses, or specific contracts. The model laws harmonize rules of particular contractual transactions of problems of the contract (fragment doesn’t make sense). The principles facilitate harmonization of general sections of the contract law (Carr, 2004). Though the model laws and principles do not require exclusive legislation framework, their main use is in harmonizing the national laws through issuing new laws Such regulations enable partners transacting commercially to harmonize the different non-mandatory national regulations. The other instruments are used as legal guides in various specific transactions. The contract law relates to two critical areas. The first one is the law of obligations and the second is rules on legal acts. Contract law attempts to explain the harmonization that has been perceived as quite complicated. As a result, achievement of satisfactory harmonization of the contract law without any harmonization of the rules on legal acts is impossible. The nature of the contract is used as the main legal act that the harmonization of the law though complete harmonization in the law remains impossible due to the huge differences in the areas of the law (Ihara 2006, p. 89). The extent of harmonization of various obligation types depends on different factors, but the most important is the ceteris paribus, such as the need of harmonizing specific rules within the private law. As a result, traditional structural solutions for the main legal system are critical (Ihara 2006, p. 90). The civil law system assumes that the law of obligations is based on the Roman law, hence considered as the most crucial in harmonizing the contract law. This approach should be accepted in relation to general contract law within the law of obligations framework. This creates special section of the contract law and allows for the resolution of other additional issues. The positive evaluation of the success of harmonization of contract law is affected by the manner in which the assessments are made. An effective approach should take into consideration the different community members affected by the harmonization. The feedback differs depending on the originators; businessmen, legislators, consumers or other people without connections to internal relations (Ozawa, 2014). In most cases, the harmonization results from compromise, hence regarded as inefficient and overly general. Sometimes, this does not involve real changes in the national interpretation of the existing rules. The harmonization of the contract law will, therefore, facilitate the international commerce if the real effect depends on the scope and methods of harmonization (Grosheide & Katharina, 2004). Basically, the complexity in the harmonization process relates to the fact that no single method applied can be considered as optimal. Instead, there are several factors that indicate the usefulness of the instrument in each case. Some of the factors determining the usefulness of the method include the contract law rules (bad grammar), the economic rationale underpinning the legal rules, relationship of the harmonized rules, scale of harmonization and the goals of the harmonization. Normally, three kinds of rules must be considered in harmonization, and which need special treatment. The non-mandatory rules on non-private character require direct application irrespective of the applicable laws of the contract. The most crucial criterion on origination of harmonization is the economic reasons triggering the creation of the rules that require harmonization. The relationship of the harmonized rules entails the closely related principles to the pre-existing set of rules based on national tradition linked to the general principles of national legal order (Grosheide & Katharina 2004, p. 80). This questions whether the harmonized regulations established are according to the social expectations. The harmonization can be considered on both regional and international dimension. This determines the decision to succeed with the creation of the rules in the framework of the contract law. On a globalized scale, the hard-law harmonization instruments may be used in singling out the international convention and resolutions within the universal international scope. At the regional level, the determination of the regulations and directives is worth mentioning. Given the experiences, the international conventions have not been effective enough in harmonizing the contract law. They only harmonize the mandatory rules (Grundmann 2011, p. 490). The regulations and directives within the framework of European Community system of law can be considered as the most efficient instrument for the harmonization of contract law at the regional level. The application is, however, limited by inefficient general legislative competence for the European community. Currently, the European community is reviewing the model that will necessitate the harmonization of the private law. The most realistic solution among the options reviewed seemed to be the establishment of common code of the contract law. Nevertheless, the code issued for the regulation only secured a small chance. In addition, this would be characterized by numerous flaws for harmonization through international convention (Grundmann 2011, p. 492). In principle, the detriment must be interpreted to encompass the contractual expectations of the compliant. Such expectations normally stray from the central ground of the financial loss. For instance, Henry Ford had stipulated that the wooden boxes of a certain shape were to be used for packaging by his suppliers. Unknown to the suppliers, Ford wished to re-use the preformed wood as body of his T car models. Therefore, the expectation of Ford in such a case cannot be termed as expectation entitled to him by the law of contract. The suppliers never thought that the wood would have been used for that purpose, but in reality, this was a factual expectation. Suppose the suppliers knew the intention, the fact remains that that was a legal expectation taken into account under article 25 though there should be some reluctance in identifying any fundamental breach (Niglia 2003, p. 56). Among the harmonization instruments used by the European community include the directives for a particular value. These were addressed to all the member states as their implementation was especially valuable in the implementation of a private law and law of contract. Therefore, it would be necessary when the mechanism of the international convention combines with the essence of the directive to facilitate the introduction of convention binding the contracting states while giving a chance to domestic agencies develop competence. Though the experience with implementation of the directives by European Community member states has never been positive, the harmonization process has always demonstrated the value that can be used in reinforcing practical effects of the international conventions. The comparison of the legal rule construction originating from the implementation of the directive with the ones introduced based on the international conventions revealed that the former were highly specific and have a higher chance of being applied effectively (Bridge 2010, p. 911). The soft-law instruments seem to offer best methods of harmonizing the contract law. Most states have been compelled to improve their law of contract through elimination of barriers to the international trade. This has seen the increased use of the model laws by UNCITRAL, UNIDROIT and other international agencies. Nevertheless, there has been a natural limit for the creation of the model laws. There has been too many and differing initiatives aiming at the general section of the contract law. Where there are specific contracts, not all legal institutions play a significant role or generalize the contract law. This has been problematic among much international commerce that is best suited for regulation using the hard-law instruments. Such institutions of the law make use of the uniform practices or customs based on specific and natural conditions as well as use of various standards and forms (Calus, 2003). Among the major instruments of harmonization effects, two different types of the guide are used. These include the legal guides and those without qualification. Such guides aim at assisting the parties towards the international commercial transactions that pave the way through the legal solutions that are offered by different domestic laws in accordance to their signature and the contract performance. In such cases, success of the indirect harmonization of the contract laws depend on the uniform solutions, particularly regarding non-mandatory rule of law that differs considerably in different legal systems (Bellantuono, 2010). The difference between the non-qualified and legal guides is largely dependent on the proportion of the legal against the economic contents. The legal guide, normally UNCITRAL achievement, adopts the differences existing in the legal system as the initial point for an alternative solution considered by one party in a given commercial contract. As a result, the consequences of the differences between such legal systems as initial points can be easily avoided. The non-qualified guides play a major role in the Economic Commission of Europe by acting as the basis for the economic assessment of contractual elements for a given transaction. In such a context, the legal factors can be addressed as a mode of singling out the contractual clauses rather than for elimination of the consequences resulting from the differences within the domestic laws. Such clauses have crucial significance from a legal perspective. Such guides have, however, limited and indirect harmonizing effect for the non-mandatory rules within the contract law (Anderson 2002, p. 56). The law of contracts can be considered critical in achieving worldwide success in sales transactions. However, its global reach can be misleading due to its generalization of code governing the international sales of goods. For instance, In Re Moore and Co. and Landaier and Co. (1922) KB CA, Charles Rickards v. Oppenheim ER CA and Bowes. v. Shand (1877) HL cases, it is clear that CISG may not be applicable to all the transactions in international sales. Bowes. v. Shand (1877) HL: For the facts; rice was to be delivered in certain months, but it was loaded too early. In such a case, B wants to reject due to breach of the delivery obligation. When specified by the party, time of delivery remains a condition, and courts interpret this strictly. Equally, it is a breach when goods are delivered too early or too low. However, when the goods were delivered on time but loaded in the ship while too early before the specified months, breach of delivery obligation results, which is a condition and the receiving party, has the right of rejecting the goods (Anderson 2002, p. 78). Charles Rickards v. Oppenheim ER CA (1950, waiver by estoppels): The delivery time is presumed to remain a condition within the mercantile Ks. Based this, the consumer parties may stipulate that time of delivery remains critical. Due to the existence of earlier waivers, B should not grant waivers in future. However, the waiver can be terminated and B may impose essence of the obligation; waiver by estoppels. It is possible to waive importance of timing then reimpose the importance later, while ensuring enough time of notice to S (Bridge 2010, p. 913). In Re Moore & Co. and Landaier & Co. (1922) KB CA: Breach of the canned fruit contract; though the amount was correct goods were to be packed by specified number of cans in a case. Many goods were packed with the wrong number of cans in a case. The cans in each case acted as a quantitative obligation as agreed by the parties. As a result, the court did not have the power to ask why the parties involved decided to pack the cans in such a way. However, failure to this is regarded as the breach of condition in relation to quantity, and receiving party has the right of rejecting the product. Generally, quantitative issues still not set by SGA may be interpreted as conditions (Bellantuono 2010, p. 115). The three cases illustrate that CISG may not be literally applicable to all the international transactions in sales, and may not deal directly with issues that result from the connections with the transactions. Ultimately, this implies that it cannot be fully depended on in international importation and exportation of goods. Currently, harmonization of the contract law calls for the consideration of the complete law of obligation, and the main emphasis should aim at harmonizing the law of contract and considering the non-contractual obligations. Some issues must be considered in harmonization of the contractual obligations. The most important is liability of parties for fairness in negotiation of the contract as well as on the relationship between the non-contractual and contractual liability for the damages (Niglia 2003, p. 55). Another thing that makes the harmonization difficult is the refusal to perform. The physical character of the breach measures the effect of delivery by the seller to the buyer of defective goods. This is perceived as breach of obligations as imposed by article 35. This presents a yardstick against which the performance of the seller is evaluated. However, article 72 deals with a seller who fails to deliver the goods or delivers wrong goods. The provision never provides the composition of a fundamental breach and does not state the repercussions for failing to perform on the accepted date (Niglia 2003, p. 57). In conclusion, the regulation of the international contracts has, up to now, prevailed in harmonizing the contract of law. Therefore, the domestic contracts ought to be considered carefully to determine the existing approach that runs to counter the principle of equality in courts, and as a result of increased internationalization, the separation of the international and domestic contracts may be quite challenging. Complexity in the process of harmonization is related to the argument that there is no a certain method, which can be said to be effective. There are multiple factors that affect the extent to which an instrument used in harmonization is useful. Harmonization has been complicated to achieve because there are several factors, which can be regarded as barriers to the harmonization process. These factors have an impact on the harmonization process and they hinder the achievement of common standards. References List Anderson, R. (2002). International Exporting Agreements. New York, Lexis Nexis. Bellantuono, G. (2010). The Limits of Contract Law in the Regulatory State. European Review of Contract Law 6(2), pp. 115-42. Bridge, M. (2010). Avoidance For Fundamental Breach Of Contract Under The Un Convention On The International Sale of Goods. The International and Comparative Law Quarterly 59(4), pp. 911-40. Calus, A. (2003). Modernization and harmonization of Contract law: Focus on Selected Issues.[Online] Accessed 22 March 2014. Available at: http://www.sendspace.com/file/qui05s Carr, I. (2004). International Trade Law. London and New York, Routledge. DiMatteo, L. (2010). International Contracting: Law and Practice. London, Routledge. Grundmann, S. (2011). The Future of Contract Law. European Review of Contract Law 7(4), pp. 490-527. Grosheide, F., & Katharina, B. (2004). International Contract Law: Articles on Various Aspects of Transnational Contract Law. Antwerpen, Intersentia. Ihara, H. (2006). International Contract Law. Okayama-shi, Daigaku Kyōiku Shuppan. Niglia, L. (2003). The Transformation of Contract in Europe. The Hague: Kluwer Law International. Ozawa, Y. (2014). International Trade. [online]. Accessed 22 March 2014. Available at: http://www.sendspace.com/file/j76jz1 Whittaker, S. (2011). The Optional Instrument of European Contract Law and Freedom of Contract. European Review of Contract Law 7(3), pp. 371-98. Read More