Sensitivity: Internal Sustainable Development And International Busin ✓ Solved

Sensitivity: Internal Sustainable Development And International Busin

World Commerce Operations (WCO) is a multinational company wishing to expand operations into the Pacific Rim by selling products to a Chinese manufacturer and a Philippine manufacturer of videogame consoles. WCO seeks advice on the best Incoterm for their transactions, specifically concerning the sale of hard-disk drives. Moreover, they require a discussion on the applicability of the CISG to their contracts.

WCO has also agreed to dispatch cars under FOB terms, where issues of liability arise from a shipping incident resulting in the loss of some cars. The report will analyze liability under the FOB term and compare it with the CISG's approach.

In additional scenarios, WCO has contracted to send fish to Japan, exploring liability implications associated with a Bill of Lading, and they have agreements for electronic components that were delivered late. The position of WCO regarding their obligations under the CISG will be evaluated along with the impact of marketing strategies on liability for claims from purchasers. This comprehensive report aims to elucidate the legal considerations relevant to WCO’s operations in the context of international business law and sustainable development.

Paper For Above Instructions

Introduction

World Commerce Operations (WCO) is looking to expand its operations into the Pacific Rim, with the aim of selling hard-disk drives to GamesPoint Ltd. in China and NeoTech Ltd. in the Philippines. This report will analyze the most beneficial Incoterms for these sales, considering the differences in currency acceptance and the applicability of the United Nations Convention on Contracts for the International Sale of Goods (CISG). Additionally, the report will delve into various scenarios related to the shipment of cars to an Indian buyer, the dispatch of fish to a Japanese company, and the supply of electronic components to a Malaysian firm, which will help in evaluating the implications of international business laws on their operations.

Analysis of Incoterms and CISG Applicability

For the sale of hard-disk drives to the Chinese and Philippine manufacturers, the choice between Cost, Insurance, and Freight (CIF), Carriage and Insurance Paid to (CIP), and Free on Board (FOB) can significantly impact costs and risk management. In this scenario, the FOB terms would be beneficial for WCO when dealing with Chinese companies, as they can export the goods under stable regulations dealing with euros and dollars. However, for transactions with the Philippines, where NeoTech Ltd. can only deal in Pesos due to recent governmental monetary policy changes, it may be advisable to use CIF or CIP terms to ensure that insurance and freight costs are pre-arranged. Furthermore, the CISG applies to contracts of sale of goods between parties whose places of business are in different states that are contracting states to the CISG (CISG Article 1). It is crucial WCO understands the implications and regulations outlined in the CISG as they engage in these international transactions.

Liability Under FOB and Comparison with CISG

In the unfortunate incident involving the loss of 50 cars during shipment under FOB terms, liability issues arise primarily governed by the agreed Incoterms. Under FOB, the risk transfers to the buyer once the goods are loaded onto the ship. Therefore, WCO retains liability only until the loading is completed. Following this, the Indian buyer assumes the risk, which would be significant in any potential claims for loss during transit. When assessing liability under the CISG, the approach differs slightly; Section 5 discusses that the seller’s obligation is to deliver the goods in accordance with the contract. Given that WCO was not in control of the loading process at the moment of the loss, the CISG might provide more flexibility in resolving questions related to the carriage-related loss of the shipment. The fairness of outcomes could depend on whether WCO and the buyer had taken all reasonable precautions. If negligence can be demonstrated on either side, it may elucidate a fair apportioning of liability.

Bill of Lading and Liability Issues

Switching to the transaction with Tottori Restaurants Ltd, regarding the shipment of fish, WCO's captain made a critical error by issuing a Bill of Lading that stated the goods were in 'apparent good order and condition' despite clear signs of contamination. The legal implications of this misrepresentation could expose WCO significantly to liability claims post-delivery. The relevant articles of the CISG that may address these issues are Articles 35-39 which pertain to the quality of the goods and the buyer's right to reject non-conforming goods. This deception may also affect the terms of the letter of credit used by Tottori, underscoring the importance of honest and accurate communication in international trade.

Consequences of Delayed Delivery of Electronic Components

In the case of the delayed shipment of electronic components to Robotics Ltd, the condition regarding ‘cure’ under the CISG should be evaluated. Articles 48 to 50 contain provisions regarding a seller's right to remedy a non-performance, granting WCO a chance to rectify its late objection to meet obligations. However, under the circumstances, should Robotics Ltd. choose to void the agreement due to the significant delays impacting their production schedule, they may have the legal backing to do so under the provisions of the CISG regarding the expectation of timely delivery. Furthermore, with WCO selling through an agent, the location of liability is crucial and may shift depending on how ownership and risk were perceived by the final purchasers in Malaysia, which speaks to the complexities of agency law as it relates to international transactions.

Conclusion

In summary, as WCO seeks to expand into international markets, the intricacies of international business law must be carefully navigated to safeguard its interests. The choice of Incoterms can greatly affect risk and cost during shipments, and understanding how the CISG applies will aid WCO in fostering compliance and minimizing liabilities. The various scenarios highlighted illustrate the need for diligent attention to detail in documentation and clarity in agreement terms, which underpin successful operations in the global market.

References

  • United Nations Convention on Contracts for the International Sale of Goods, 1980.

  • International Chamber of Commerce. (2020). Incoterms 2020.

  • Honnold, J. O. (1999). Uniform Law for International Sales under the 1980 United Nations Convention.

  • Ziegler, A. (2017). International Sales Law: A Guide to the CISG.

  • Schwenzer, I. (2016). Commentary on the UN Convention on the International Sale of Goods.

  • Bridge, M. (2013). The International Sale of Goods. A Commentary on the UN Convention on the International Sale of Goods 1980.

  • Friedman, L. M. (2005). A History of American Law.

  • Contract Law: Text, Cases, and Materials, by Emily Finch and Stefan Fafinski.

  • Enderlein, F., & Maskow, D. (1992). International Sales Law: United Nations Convention on Contracts for the International Sale of Goods.

  • Beck, T., & Dellinger, C. (2018). International Commercial Transactions.