Summary
Summary International Trade & Transactions BPP LPC 2020 Distinction level notes
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International Trade & Transactions notes from BPP LPC in 2020. Distinction level notes.
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SGS 1 - Conflict of Laws: ROME I (Contract)1. Is the court faced with a conflict of laws?
2. does it relate to a contractual obligation?
3. Is it a civil & commercial matter which is not excluded under Article 1?
4. was the contract concluded on or after 17 December 2009?
If YES to all of the above, them Rome I will apply, as it satisfies both the material and temporal
scope test. If NO to any, then Rome I does not apply.
Article 3: have the parties agreed an express choice or law: by incorporation of a choice of law
clause in the contract? OR clearly demonstrated by the circumstances of the case?
If YES - the contract will be governed by that country’s law, subject to Article 3(3) and (4).
If NO - move on to Article 4 below.
Does the contract relate to one of the cases specified in Article 4(1)(a)-(h)? If YES, then those
rules apply. If NO, move onto Article 4(2). UNLESS any exceptions apply: Article 5: contract of
carriage, Article 6: consumer contract, Article 7: insurance contract, Article 8: individual
employment contract.
Article 4(2): Law of the country where the “characteristic performer” has its habitual residence.
Article 19 specifies habitual residence as the place of central administration for companies, and
the principal place of business for a natural person.
UNLESS the contract is “manifestly more closely connected” with another country under Article
4(3), then that country’s law shall apply.
If the applicable law cannot be determined by 4(1) or (2) then Article 4(4) says that the contract
will be governed by the law of the country with which it is “most closely connected.”
Any applicable law will be subject to:
Article 9 (overriding mandatory provisions)
Article 21 (public policy)
CHOICE OF LAW CLAUSE - incorporating a foreign law clause
- make client aware that a choice of law clause is binding under EU law
- logistical difficulties; travel and expense
- enforceability of the judgment?
- a foreign lawyer would need to be instructed
- every clause should be drafted and negotiated as if it is going to be relied upon as the future is
ultimately unforeseeable and even the closest commercial relationships can sour.
- all issues should be expressly dealt with under the contract, including choice of law.
- where there is a choice of jurisdiction but no choice of law clause, it should be made clear by
way of a paper trail and other indicative behaviour that the law or the jurisdiction is not to be
implied.
- a choice of law should be incorporated as a contract cannot be advised on in the absence of
applicable law (a legal vacuum).
- it may be expensive later to prove and apply the desired choice of law if it was not incorporated
in the contract in the first place.
- if the parties are already in a dispute and considering litigation, it is highly likely they will find it
difficult to agree on a choice of law.
SGS 2 - Commercial Contracts I
- Key statute: Sale of Goods Act 1979 and Unfair Contract Terms Act 1977
- express terms:
• written
• oral
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,- implied terms (statute)
- Conditions - fundamental to the performance of the contract. Breach can result in termination
- Warranties - damages are the only remedy, as they are not regarded as being as important
KEY PROVISIONS
- description of goods
- Delivery of goods
- Title and risk
- Price
- Method of payment
- Condition and quality of goods
GOODS
- existing goods - s. 5(1) SGA seller already has possession of or owns these goods
- future goods - s.5(1) still to be manufactured or acquired by the seller
- specific goods - s.61(1) goods which are identified and agreed on at the time the contract is
formed (definitions)
- unascertained goods - all goods which are not specific goods, of a general description or type
e.g. 100 dining tables. Only become specific when they are in a deliverable state.
SALE BY DESCRIPTION
s.13(1) SGA - implied term that the goods correspond with the description
s.13(1A) SGA - states that s.13(1) is a condition of a contract.
QUALITY AND CONDITION
- SGA implies conditions where the Seller sells good in the course of its business. s.14(2) and
14(3) satisfactory quality and fit for purpose
• s.14(2A) meeting description that a reasonable person would deem to be satisfactory re
description, price etc.
• s.14(2B) quality includes state of goods, including appearance
• s.14(2C) any prior inspection where malfunctions are brought to buyer’s attention before
contract, means s.14(2A) and (2B) cannot be relied upon.
• s.14(6) - the above terms are all conditions.
BREACH OF A CONDITION
- in the case of a breach of condition 2the buyer can:
1. reject, terminate and claim damages s.51 SGA
2. reject, hold to contract + damages
3. accept goods + damages (treating the breach as a breach of warranty) s.53 SGA
- bear in mind s.35 - has the claimant accepted the goods?
DELIVERY
s.28 payment and delivery are concurrent conditions
s.29 (2) and (3) if no stipulated delivery place, it will be the seller’s premises, and within a
reasonable time where no time period stipulated. The parties should try and include express terms
for both, as these fallback provisions are very uncertain.
s.10(2) - time is usually made of the essence
Force Majeure clause!!
TITLE
- critical where buyer goes into liquidation
- s.17(1) title passes when the parties intend and s.17(2) consider intention through; terms of
contract, conduct of parties and circumstances of the case.
- s.18 outlines other rules for ascertaining intention of the parties
- s.20 risk passes with title, unless otherwise agreed. i.e. seller continues to have the risk until
title passes. When the property’s title transfers to the buyer, so does the risk, irrespective of
delivery. These are two separate concepts; seller will want risk to pass to buyer swap but title
passing as late as possible.
- Retention of title clause (Romalpa/ROT).
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, • To protect the seller, making sure they are reserving legal title of the goods until payment and
all obligations are performed.
• Seller should reserve right of entry to Buyer’s premises to recover goods e.g. upon non-
payment.
• Seller should label goods and require Buyer to keep goods separate and insured.
To be effective, a ROT clause should reserve legal title to the goods and not merely equitable/
beneficial title.
Difficulties can arise concerning the enforcement of the ROT clause if the contract is for the sale
of goods to become stock for the buyer to then resell to third parties.
Difficulties can arise concerning the enforcement of the ROT clause if the goods forming the basis
of the contract are 'mixed' with other goods owned by the buyer
Ideally the buyer should be required to insure the goods against loss or damage until title has
passed. If insurance is effected by the buyer with regards to the goods, the seller's interest should
be noted on the policy.
PRICE AND PAYMENT
- fixed or determinable, if not agreed, it will be a reasonable price s.8(2)
- s.28 - payment on delivery
- various methods; letters of credit, bills of exchange etc.
FITNESS FOR PURPOSE
- s.14(3)
- particular purposes made known to the seller by the buyer either expressly or impliedly e.g
with particular specifications.
- in the absence of a particular purpose, the normal purposes for which such goods would be
used.
- buyer expected to have some knowledge of the purpose or use, but ultimately each case is
assessed on its own facts.
- so 14(3) would not apply where a seller expressly states he had no knowledge of the product
market, or where the buyer has more knowledge than the seller.
- but WOULD apply where the buyer provides a specification and asks the seller to source an
appropriate product for his needs.
EXCLUSION OF LIABILITY
- exclusion or limitation of liability clauses
- same effect from words which effectively limit the rights and remedies or obligations to perform
- s.2 UCTA - not lawful to exclude/restrict liability for own negligence causing death/personal
injury AT ALL s.2(1)
- all other loss or damage unless it satisfies the reasonableness test under s.11 and Schedule 2.
Liquidated Damages Clause. A contractual provision requiring a party in breach to pay a pre-
determined amount to the other party as compensation for the breaching party's failure to
perform a specific task or comply with a particular duty or obligation.
A time bar clause provides that if the contractor fails to serve the requisite notice within the
specified period it will, in theory, become time barred from claiming any extension of time or
additional payment.
SGS 3 - E-Commerce Regulations
E-commerce will relate to the following concerns a client may have:
• online security
• data protection
• avoiding online fraud and authentication of customers
• stock level control - contractual point for placing orders online that can be fulfilled
• spam/cookies control
• liability
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