International Business Law Question

| May 13, 2014

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Question 1:
ClotheCo is the owner of a trademark that it puts on a line of distinctive men’s clothing that it sells in State C. This clothing is distinctive in part because it is the entire same colour: ‘sky blue’. ClotheCo has licensed Dress Co. in State D to use its trademark. The licensing agreement forbids Dress Co. from exporting its products out of State D, and it requires Dress Co. to sell its products only to persons who agree not to export those products from State D for resale. Additionally, Dress Co. is only allowed to use the trademark on clothing that is coloured ‘powder pink’.
Parallel Co. buys the clothing manufactured by Dress Co. in State D and imports it into State C for sale there. ClotheCo has now brought legal action against Parallel Co., claiming that the goods Parallel Co. is importing into State C infringe ClotheCo.’s trademark.
Will ClotheCo succeed? Discuss.
3 marks
Question 2:
Bee Plc in State B sent an offer by mail to Ay Pty Ltd in State A on January 1. On January 10, Ay Pty Ltd mailed back an acceptance. On January 11, Ay Pty Ltd changed its mind and sent a rejection in the mail. On January 20, the rejection was received. On January 22 the acceptance was received. Assume both States (A and B) have ratified the Convention for the International sale of Goods.
Is there a contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG)? Explain.
2 marks
Question 3:
X agreed to ship 10,000 tonnes of fresh oranges from Australia to Y in Japan at a cost of $1 million. Because of exceptionally cold weather, the oranges were damaged while they were being shipped. Because of a shortage of oranges in Japan, Y, nevertheless, accepted the oranges. The value of the oranges obtained by Y under this order is calculated to be $600,000.
What remedies if any isY entitled to under the United Nations Convention on Contracts for the International Sale of Goods (CISG)? Explain.
2 marks
Question 4:
Cider Pty Ltd in Australia agreed to sell 10,000 litres of apple cider to P Company in the Philippines. P Company arranged for a letter of credit with its Bank in Manila. The credit required payment on the presentation of a Bill of Lading and an Inspection Certificate. Cider Pty Ltd produced both the Bill and the Inspection Certificate.
The Manila Bank refuses to pay on the letter of credit because the Inspection Certificate stated that “based on a sample taken from 5 litres, the apple cider is not of the kind ordered”.
The Bank argued that the Certificate on its face did not certify the regularity of the entire order.
Is the Bank correct? Explain.
2 marks
h for delivery in Country X. Y Company was agreeable, but wanted X to deliver the goods to Country Y. After several days of negotiation, X and Y signed a written contract. The written contract incorrectly stated that the widgets were to be delivered in Country X. The contract stated that it would be governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG). It also said that the contract was a full and complete expression of the parties’ agreement.
Later, when X Company insisted that it was only required to deliver the widgets in Country X, Y Company brought legal action demanding a remedy of specific performance requiring Company X to deliver the goods to Country Y. X Company insisted that any agreement it had made in negotiating the terms of the contract was verbal only therefore inadmissible as the contract specifically said that it was a full and complete expression of the parties’ agreement.
The legal action has been referred to your court.
Assuming you do have jurisdiction to hear this legal case, how will you rule? Explain.
2 marks
Question 6:
Weaver Mills Company in Country F contracted to purchase 100,000 boxes of steel tubes from Natural Company in Country G at US$ 6 per box. Natural delivered 70,000 boxes to
Weaver at Weaver’s plant, but it then informed Weaver that it would deliver no more. Several other of Weaver’s suppliers also defaulted, so Weaver was forced to purchase a total of 160,000 boxes of steel tubes in the market a month later at a price of US$ 10 per box. Weaver then sued Natural for the difference between the market price it had paid and the contract price on the 30,000 boxes of steel tubes that Natural had not delivered.
Both Countries F and G are signatories of the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the parties’ contract designated the CISG as the governing law.
Does Natural have to pay the amount Weaver has demanded? Explain.
In your answer ensure you show a calculation of the likely damages payable, if any, by Natural to Weaver.
3 marks
Question 7:
State X, a European Union member state, adopted legislation that required financial service providers (e.g., banks, financial consultants, etc.) to (1) obtain authorization from the state’s government and (2) establish a permanent place of residence within the territory of State X before they could operate in that state. State X contends that these provisions are necessary to protect its financial services sector and to ensure that financial service providers are able to meet their obligations to their customers.
The EU Commission has challenged this legislation, contending it violates the trade in services provisions of the European Community Treaty. Is the Commission correct? Explain.
3 marks
Question 8:
Mountain Beer Inc., a US company, arranged to sell 10,000 six-packs of Fresh Blonde Lager
beer to Thirsty Wombat Pty Ltd., an Australian company for US$ 30,000. Mountain Beer
agreed to ship the beer CIF Sydney.
Mountain Beer then hired Inland Freight, Inc., to package the goods and deliver them to the
carrier, the M/V Barelyafloat, at the port of Seattle.
Inland Freight contacted Oceanic Lines, GmbH, and the German firm that owned the M/V
Barelyafloat, to find out how the six-packs should be delivered and to determine the freight
Oceanic Lines instructed Inland Freight to put the six-packs in standard 6 x 6 x 12 foot
shipping containers. It also told Inland Freight that it charged by the weight, no matter what
the contents of the container might be. Inland Freight, accordingly, secured the six-packs in
two standard shipping containers and then weighed them. The weight, including the tare
weight for the containers, was 27 tons. Inland Freight then drafted the bill of lading,
indicating that the shipping containers each contained ‘12.5 tons of beer in 12 ounce glass
bottles packed in cardboard six-pack packages,’ and delivered the two containers to the ship.
As the containers were being moved around on the deck of the M/V Barelyafloat in Sydney
harbor to ready them for off-loading, the ship’s crew accidentally dropped them over the side.
They were completely lost.
Mountain Beer now sues Oceanic Lines and the M/V Barelyafloat in a US court for the full
amount of its loss. Oceanic Lines and the M/V Barelyafloat have answered the complaint
with the contention that the US Carriage of Goods by Sea Act (COGSA), which makes the
Hague Rules apply in the US, limits their liability to only US$ 500 per container, or, in this
case, to US$ 1,000.
Are Oceanic Lines and the M/V Barelyafloat correct in their legal position? Explain.
3 marks
Question 9:
The laws of different countries and the rules of the different legal systems in the world
mean that it will never be possible to have relatively uniform international laws.
Do you agree with this statement? In no more than 500 words, please provide reasons
in support of your answer and in so doing so consider at least 3 different areas of the
course to provide evidence in support of your conclusion.
5 marks
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