BFA603 Understanding on Purchase contract Law Assessment Task 4 Answer
Purchase contract Law
This report reveals the key understanding of the purchase agreement contract and its related terms which helps the party to the contract to understand and performance of the duties. However, a valid purchase agreement is based on several terms which are described in this report.
ICC Incoterms 2010
ICC Incoterms 2010 had been incorporated in this contract. According to these terms, the Chocoholics Anonymous of China (CAC), of 456 Kuai Le Road, Beijing, PRC (buyer) is responsible for the carriage and insurance of goods, once goods are delivered alongside the ship. It is because as per the rules of ICC Incoterms 2010 it is given that Fee Alongside Ship, Free On Board, Cost and Freight, Cost, Insurance and Freight are all risks transfer to the buyer once goods had been delivered alongside the ship. These are certain risks is evolved while in the transportation of goods and therefore it becomes necessary that who will bear the cost and therefore it works as a contract between the seller and buyer.
The law of Beijing Municipality and the People's Republic of China is applied in this contract. In the laws of China, there is no systemic civil law jurisdiction as of Germany. It follows all the administrative rules and regulations. The international trade norms have been made in which the tariff duty has been highly reduced and various steps had been taken to prevent the buyer from the frauds of international trade.
The International Rules for Uniform Interpretation of Commercial Terms shall be applied to the contract. These are the laws that have been used for cross border transactions. There is often conflicts arise in the domestic contracts for a number of reasons. The laws had been made by various independent experts from all over the word major legal systems and from the geographical political areas of the World. It has the approval of the Unification of Private Law (UNIDROIT).
UN convention on sale of Goods
It is the treaty for the uniform international sales law and it has been signed by the 91 states that include the USA and China. It allowed the exporters to avoid the choice of law issues. However, in this contract, there is a choice of law but in this contract, the seller is of the USA and the buyer is of China and therefore it can be said that this treaty has been applied on contract. It is the most successful and legislative document.
Clause 5 of the contract has been safeguarding the buyer. If any defective goods been delivered to the buyer than it will not be deemed as delivered. In the case of Wallis v. Pratt, 1910 2 K.B.1012 the court ruled that if any obligation not performed by the seller for the buyer than it will be deemed as the failure on the part of the seller. The seller will be liable and not the buyer. Therefore it supports clause 5 of the contract that protects the buyer (Chaney, 2018).
The interest of the buyer has been protected in this contract in clause 6, 7 and 8. These rights have been provided under the World Trade Organization where both USA and China are members. These protection has been given in these clauses so that buyer cannot be cheated from the seller (Neary, 2016).
In my thinking, the buyer has drafted this contract because the jurisdiction of China has been provided in the contract for any disputes and also most of the terms are in favor of Buyer. The contract clearly shows that all the terms have been made in favor of Buyer of the goods. In the contract, the rights have been given under clause 5,6, 7 and 8 where the buyer will not be responsible if there are defective goods been delivered and the seller have to deliver the goods according to the strict norms that show that mostly clauses are advising the seller and preventing the buyer. The law has also been applied to China and the dispute been resolved according to the nation of the buyer it shows that this contract favors the buyer (Jones, & Kierzkowski, 2018).
Dispute Resolution place
The dispute resolution is a very challenging process for the dispute of trade between two nations and therefore the one place is necessary for solving the disputes between the countries. The World Trade Organization is the most active and prominent institute for resolving the International disputes as both countries are the members of the World Trade Organization. These disputes are in accordance with the international trade laws will be resolved. The disputes resolved by the domestic laws are mostly criticized and therefore through the World Trade Organization the disputes can be resolved easily (Vernon, 2017).
After assessing all the details and case study of this purchase agreement contract, it could be inferred that parties to the contract are based on the several terms which need to be compiled by both parties who are entering into the purchase agreement. The enforcement of the purchase agreement is based on these terms only.