Analysis_of_the_Legal_Environment

Assignment 6 Analysis of the legal environment Class EIB1D Group 3 Idsart Wytzes Joost de Graaf Petar Staykov Dylan Engelbertink Table of contents 1. Introduction Page 3 2. Inco Terms Page 4 3.1 Analyzing the conditions of Hansen Transmission Page 5 3.2 General conditions of sale of Hansen Transmissions Page 7 4.1 Analyzing the conditions of Chicago Metallic Page 10 4.2 General conditions of sale of Chicago Metallica Page 12 5. Relevant articles of the CISG Page 13 1. Introduction In this assignment we are going to look at 2 general conditions of sale of two different companies. One of these companies is situated inside of the European Union, and one outside the EU. Our first company is a company situated inside the EU. This company is situated in Belgium and goes by the name of Hansen Transmissions. Hansen Transmissions is a company who is specialized in wind turbines and industrial gearbox designer. The company is known worldwide. Our second company is a company originating outside of the EU. The company is called Chicago Metallic and is situated in Chicago, Illinois in the USA. Chicago Metallic is a company who is specialized in baking products such as frying pans, bread pans, etc. 2. Inco Terms Inco terms stands for International Commerce Terms. The name says it all. It simply is a standard for international trade. The terms make out who (the buyer or the seller) has to pay the various freight, taxes, insurance, etc costs. The Inco terms that are explained below are those originating from the year 2000. There are new Inco terms called Inco terms 2010; these will be introduced in January 2011. There are four groups of Inco terms, these are; Group E, Departure Group F, Main carriage unpaid Group C, Main carriage paid Group D, Arrival |Incoterms | |[pic] | |Order Acceptance | |Whenever used herein, "Seller" shall refer to Chicago Metallic Corporation and "Purchaser" shall refer to the party ordering or| |purchasing products ("Products") from Seller. | | | |Seller’s price list does not constitute an offer to sell Products listed therein, but is simply provided as a convenience to | |prospective Purchasers. | | | |Purchaser’s order to Seller shall constitute an offer to Seller to purchase Products which offer Seller may accept at its sole | |discretion. Acceptance shall be by a writing containing these General Conditions of Sale ("Conditions"). Acceptance of | |Purchaser’s order or any part of it by Seller is expressly made conditional on Purchaser’s assent to these Conditions. | |Purchaser may vary these Conditions only with the written consent of Seller. Acceptance of Products by Purchaser or failure of | |Purchaser to object in writing to these Conditions within ten (10) days following delivery of Products to Purchaser shall | |constitute Purchaser’s assent to these Conditions. | |[pic] | |Shipment and Delivery | |Seller shall deliver Product F.O.B. place of shipment. Risk of loss to Product shall pass to Purchaser upon delivery to carrier| |at such place of shipment. Carrier acts as Purchaser’s agent. Products shall be shipped as soon as practical, or as requested | |by Purchaser after order acceptance by Seller. However, delivery dates shall not be of the essence, but shall be regarded as | |Seller’s best approximation of such delivery dates. | |[pic] | |Prices of Freight Costs | |Unless otherwise indicated, prices shown on Seller’s price list are for less than truckload quantities. The minimum truckload | |quantity is 24,000 pounds. Prices are subject to change without notice and are based on full carton quantities. Prices shall be| |those in effect at time of shipment of Products. | | | |Seller shall grant Purchaser a freight allowance on all orders of 12,000 pounds or more for a single shipment to a single | |destination. The allowance shall be based on the lowest rates currently in effect from actual shipping point to destination | |point or nearest port of export. In no event shall the allowance be greater than the actual freight cost of a specific | |shipment. Purchaser’s request for costlier means of shipment will be honored, but Purchaser shall be liable to Seller for the | |additional freight expense. Purchaser "will-call" orders at Seller’s plant warehouse shall not be entitled to allowance. | | | |All taxes, tariffs, duties or similar charges paid by Seller imposed or levied by any governmental authority in connection with| |the purchase, shipment, import or export of Products purchased or in connection with the procuring of materials used therein | |may at Seller’s sole option be added to the price of Products so affected. Additional shipping charges for Products paid by | |Seller such as destination, storage, labor and redelivery and special or extra expenses for handling air freight, bus or other | |shipments may also, at Seller’s sole option, be added to the price of such Products. | |[pic] | |Payment | |Payment for all Products shall be net cash due and payable in U.S. dollars within thirty (30) days following receipt by | |Purchaser of shipping documents for such Products by check or bank transfer to a bank account to be designated by Seller. If | |accounts are paid within ten (10) days following receipt by Purchaser of the corresponding shipping documents, Purchaser shall | |been entitled to a one percent (1%) discount from the price of Products only. | | | |If, in Seller’s sole opinion, the financial condition of the Purchaser so warrants, Seller may require advance payments or | |satisfactory security. In the event that the Purchaser fails to make such advance payments or furnish such security upon | |Seller’s request, delivery of Products may be suspended without further Seller obligation. | | | |Seller may, at Seller’s sole option, require payment by means of an irrevocable letter of credit opened and confirmed by a bank| |or banks acceptable to Seller and upon terms and conditions acceptable to Seller. | |[pic] | |Limited Warranty | |Seller warrants to Purchaser that Products will substantially conform in quantity and quality to Purchaser’s order, as accepted| |by Seller, provided, however, that (1) Products are inspected by Purchaser upon arrival at place of destination and any and all| |nonconformities are noted on the bill of lading and all other delivery documents and are attested to in writing by carrier’s | |representative (2) Purchaser furnishes Seller with written notice of such non-conformities within fifteen (15) days following | |arrival of non-conforming Products at the place of destination, (3) Purchaser holds non’conforming Products for Seller’s | |inspection (4) non-conformities occurred prior to delivery by Seller of Products F.O.B. place of shipment, and (5) Purchaser | |does not alter, repair, use or attempt to alter or repair any non-conforming Products. This limited warranty is Seller’s only | |and exclusive express warranty to Purchaser. Seller disclaims any and all implied warranties including without limitation any | |implied warranty of merchantability or fitness for a particular purpose. | | | |Purchaser’s sole and exclusive remedy against Seller shall be the replacement F.O.B. its plant or site, at Seller’s option, of | |any Products which do not conform to Seller’s limited warranty hereunder. No other remedy (including, without limita’tion, | |incidental or consequential damages for lost profits, lost sales, injury to persons or property or any other incidental or | |consequential loss) shall be available to Purchaser. | | | |Purchaser agrees to include in all contracts between Purchaser and subsequent owners or users of Products, and to bring to the | |attention of all Purchaser’s customers of Products, the following warranty disclaimer: Chicago Metallic Corporation disclaims | |any and all warranties expressed or implied, including, without limitation, any implied warranty of merchantability or fitness | |for a particular purpose. Purchaser shall be excluded on behalf of Seller all remedies for damage or injury to Products persons| |or property. In the event that Purchaser fails to comply with the foregoing obligations, Purchaser shall indemnify Seller for | |any liability resulting from such non-compliance and shall otherwise hold Seller harmless. | |[pic] | |Returns | |In order to return any Products to Seller, Purchaser must first obtain prior authorization for products eligible for return, | |and receive a Return Goods Authorization number from Seller’s home office. All authorized returns are subject to a 20% | |restocking charge. Seller will only issue credit for Service Level "0" material received at the designated company facility | |with the Return Goods Authorization appearing on the material, and after being inspected and determined by Seller to be in | |resalable condition. Purchaser is solely responsible for arranging and prepaying for all return freight. Seller will not be | |responsible for any damage in transit on material returned at customer’s request, and will not file freight claims on such | |damaged material. When these terms are met, seller will issue appropriate material credit less the restocking charge. | |[pic] | |Default, Termination and Suspension of Delivery | |Seller reserves the right, among other remedies, either to cancel Purchaser’s order or suspend further deliveries of Products | |thereunder in the event that (1) Purchaser fails to pay for any one shipment of Products when payment for such shipment becomes| |due; (2) Purchaser fails to make any advance payments or satisfactory security demanded by Seller pursuant to paragraph two of | |PAYMENTS section above; or (3) Purchaser fails or refuses to accept any delivery of Products ordered from Seller. | | | |Delivery of Products may be suspended in whole or in part in case of any event beyond Seller’s control, including, but not | |limited to, explosion, fire, shortage of fuel, power or raw materials flood strike lockout, injunction, riot, insurrection, | |war, national emergency, government act, or act of God. | |[pic] | |Miscellaneous | |No failure or delay on the part of Seller in exercising any right, power or privilege hereunder shall operate as a waiver | |thereof or of any other right, power or privilege hereunder nor shall any single or partial exercise of any such right power or| |privilege preclude any other right, power or privilege. The rights or remedies of Seller hereunder are cumulative and not | |exclusive of any rights or remedies which it may otherwise have. | | | |The parties hereto may correct stenographic and clerical errors without liability. | | | |Purchaser may not assign the order without the express written consent of Seller. | | | |All notices to be given hereunder by either party to the other party shall be dispatched by certified or registered mail return| |receipt requested addressed to the last known post office address of such other party. Any such notice shall be deemed received| |within five (5) days following any such dispatch if mailed from within the United States of America and ten (10) days if mailed| |from outside the United States of America. Either party may change its address by notice to the other party. | | | |These Conditions shall be governed by and interpreted in accordance with the laws of the State of Illinois, United States of | |America, and all disputes hereunder that cannot be amicably resolved by the parties thereto must be settled in a court of | |competent jurisdiction within the State of Illinois, United States of America. | | | |The provisions of these Conditions shall be severable one from the other so that should any provision be held legally | |unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in effect. | 5. Relevant articles of the CISG Here we are going to state which articles relate to the different questions we treated earlier. Do these terms belong to private or public law' Article 1.1A (Chapter 1 ‘Sphere of application’) What arrangements have been made on making the contract' What conditions are mentioned or made in the terms of sale and delivery' Articles 14 to 24. (Chapter 2 ‘general provisions’, part 2 ‘formation of the contract’) What arrangements on jurisdiction and applicable law have been made in the terms of sale and delivery' Articles 35 to 44. (Chapter 2 ‘Obligations of the seller’, Section 2 ‘Conformity of the goods and third party claims’) What is said on price and payment by the buyer in the terms of sale & delivery' What is said on delivery by the seller' Delivery: Articles 30 to 44 (Chapter 2 ‘obligations of the seller’, Section 1 ‘Delivery of the goods and handing over of documents’ and section 2 ‘Conformity of the good and third party claims) Payment: Articles 53 to 59 (Chapter 3 ‘Obligations of the buyer’, section 1 ‘Payment of the price) Are there any Inco terms used in the conditions' The Inco terms aren’t adopted in the CISG. It is difficult to implement things as Inco terms in a convention. You would have to change the convention every 10 or so years. So the makers of the convention didn’t implement the Inco terms. Are there any measures mentioned in the conditions in case the buyer does not pay' Articles 61 to 65 (Chapter 3 ‘Obligations of the buyer’, Section 3 ‘Remedies for brach of contract by the buyer’) Are there any sign of ‘the battle of the forms’' The battle of the form is not applicable when both parties use the CISG!