Case 1One Chinese company exported a contract of Grade B Peanuts to a foreign country importer. When the seller was working on the delivery of the goods, he found that the Grade B Peanuts were out of stock. Without prior consent of the buyer, the seller delivered the Grade A Peanuts instead of Grade B Peanuts and stated on the invoice “Grade A Peanuts, price is the same”, while the buyer refused the consignment.Question:In this situation, does the buyer hold the repudiation rights? Why?Answer：The buyer has the right to refuse to pay. This is because both sides confirmed the Grade B Peanuts when signing the contract, which holds a legal effect. If the seller gets the buyer’s consent, he can change the peanuts grade. So the buyer has the power to refuse to pay.Case 2One Chinese company exported a contract of agricultural products to a German company. The contract stipulates that moisture not exceeds 15%, impurity not more than 3%. Before the deal closing, the seller sent the buyer the samples and after the contracting the seller immediately faxed the buyer that the consignment was similar to the sample. After the shipment arrived at Germany the buyer had the goods inspected. Later, the buyer showed the inspection certificate, saying that the quality of the goods was inferior to the samples’, and then he put forward a claim for compensation of ￡6 000, finally the Chinese company paid the compensation.Question:Please analyze the case.Answer：The transaction belongs to the sample trading. In international trade, in order to avoid the situation that the seller’s delivery quality is inconsistent with the requirement of the buyer, which leads to the buyer’s claim, the seller may ask the buyer for a sample in advance and the seller shall provide a tailored sample according to the sample from the buyer for confirmation; this is called “confirming sample”. When the sample is confirmed by the buyer, all the quality of the goods must be the same as the sample’s. In the contract, it’s beneficial for the seller to issue the quarantine inspection and quarantine certificates.Case 3A China’s export company made a transaction of apples with a foreign company. It’s stipulated “second-class apple”in the quality terms on the contract of sales and letter of credit. However, they found the second-class apple had been all sold out when they began to arrange the shipment. As a result, the company switched to the delivery of “first-class apples”, and the invoice stated that: “the price of the first-class apples is the same as that of the second-class”. Finally, the importer refused to accept and to pay due to the inconsistency with the quality contract terms. Question:What do you think of this case?Answer：Under normal circumstances, the practice of substituting the superior goods for the inferior ones will be quite acceptable. However, if the market price of the goods is nose-diving or some otherabnormal things happen, the importer sometimes will avail of the opportunity to refuse the goods or claim with the excuse of quality inconsistency with the contract. Therefore, the quality provisions of the contract formation and performance are a loaded matter of great significance.Case 4An export company in China entered into a transaction with a Russian company, stating: soybean net weight of 100 kilograms per bag, 1 000 bags , a total of 100 metric tons. However, after the goods arrived in Russia, the customs discovered the soybean net weight of 94 kilograms per bag, 1 000 bags, a total of 94 tons. At that time, the market price was falling. So by the reason of the discrepancies between the document and the cargo, the Russian company asked for 5% price reduction, otherwise he would reject the goods.Question:Are Russian side’s requests reasonable? What measures should the Chinese exporter take for remedy?Answer：Russian side’s request is reasonable. (1) When there is no more or less clause, delivery should be strictly in accordance with the contract. (2) Under the letter of credit, a 5% expansion for quantity of goods is allowed while the amount of value can’t exceed the amount stipulated in the L/C. However, the proportion of our stretching is more than 5%. Therefore, the Chinese exporter has breached the contract.As for the buyer’s requests for price reductions, the seller may consult with clients to conclude the transaction with international market prices so as to reduce losses.Case 5A foreign trade company exported 1 000 sets of typewriters. The L/C stipulated that partial shipment was prohibited. But nonetheless, when the consignments were gathering at the port for shipment, the seller found that 45 sets of goods got problem in packing and quality. Since it was an emergency and in order to assure of the quality, the exporter believed that according to the Uniform Customs and Practice for Documentary credits, even if it doesn’t allow the partial shipment, there is a more-or-less clause by 5%. Eventually, the seller loaded 955 sets virtually whereas the goods were rejected by the negotiating bank.Question:Please explain the reasons.Answer：According to UCP600, unless the quantity of credit is specified in L/C, even if the partial shipments are not allowed, the quantity of goods allowed 5% more or less in quantity in condition that the total amount paid does not exceed the amount of credit conditions. However, this clause can not apply to situation when the quantity is provided by counting the number of packing units. In this case, typewriter is counted by set, belonging to the exceptions of the above clause. 5% more or less in quantity is not allowed. Therefore, the bank refused to negotiate the document because of discrepancies found by reviewing the L/C and other documents.Case 6An ore exporting contract specified the terms as follows: “25 000 M / T 3% more or less atseller’s option.”When the seller prepared to take delivery, the international market prices of ore went upward.Question:(1) How much are you going to deliver as a seller? Why?(2) Standing in the position of the buyer, what should be paid attention to during negotiation of the terms of the contract?Answer：The seller may load less cargo than stipulated, because international market price of the goods raised sharply, which subject the seller to a loss if delivering the cargo more than stipulated. More delivery means more losses. According to the present conditions, the seller can deliver only 22 750 tons of cargo.As a buyer, in order to avoid the seller’s taking advantage of the changes in market prices for additional profits, it would stipulate in the contract: the price of more or less part of the cargo loaded may comply with the market prices in time of shipment or comply with the contract price.Case 7One Chinese export company exported some goods to Canada, valued at $800 000. The contract stated that it should be packed in plastic bags, marks with English and French on each item. But the Chinese company used other packaging instead in the actual delivery, and still used only English marks. The foreign merchant, in order to adapt to the requirements of the local market and sales, hired people to change the packing and shipping marks. Then he asked for claim against the Chinese company. The Chinese company recognized something wrong, so compensated the customer.Question:Try to analyse the case.Answer：At present, many countries made regulations about packaging and labeling for commodities sold in the market and the imported goods must conform to the regulations, or else they will be prohibited for import or sale in the market. Label is a sign which is attached on the goods or packaging referring to the country, manufacturer, name of goods, goods components, quality characteristics, use method, etc. In making the sales package label, we should pay attention to the relevant state regulations for the administration of the label. Some developed countries often avail of these regulations as means of import restrictions which should cause enough attention. For example, in the European Union, there has a series of merchandise; basic content is commodity itself or packaging must with correct tags that can be fully read, and understandable. From this perspective, the seller failed to strictly, according to contract, perform prescribed packing conditions which shall be deemed to be the obligation to a breach of contract. Our company has two faults, one is changing packaging materials, although the quality of goods itself is not affected; the another fault is that the mark is not stipulated according to the contract, due to the products’belonging to the French area, the filling is often in French. Anyhow, in order to successfully export, we must understand and adapt to the special requirements of different state regulations, in order to reduce unnecessary troubleCase 8British Moore Company with the condition of CIF, bought from LanTuo company 300 cases of canned fruit in Australia. The contract with a provision reads: “Packed in carton, 30 tins in each carton.”It was found that 150 cases that the seller delivered were 30 tins in each carton, the rest were 24 tins per box. The buyer refused the goods while the seller argued that 30 tins per box is not an important part of the contract, and with the quality, no matter it was 30 or 24 tins per box, it was correspond to the contract’s quality requirement, therefore, the buyer should accept. Question:Please analyse the case.Answer：The law in some countries divides the sale into two categories, sale by sample and sale by illustration. The latter includes a very wide scope, not only involves goods quality issues, also including quantity, even in the contract on shipment, packaging and goods with the statement. According to the British business law, all the “explanation”items are the elements of the contract. If they are violated, the buyer is entitled to the rejection of the goods and may lodge a claim. In this case, the British law believes that packaging belongs to “explanation”part that is vital and since the seller made a breach of contract, the buyer had reasons to refuse all the goods, and also could accept the part fulfilling that are with the provisions and rejecting the rest and claim for damages.。
