ibt - summer

International Business Transactions Prof. Bagiñska International Transactions: - Time - Burden of risk - Who and when pays - Seller and buyer – may change during the transaction - Parties o Stranger o Practices if they know each other o Communication problem o Not too much protection as professional buyer - Vienna Convention – does not apply to goods for consumption - Currency Sales contract: - Inspection before shipment of goods, possible also after - Shipper – freight forwarder – a specialist in the field to make arrangements for transportation the goods from the factory to the port of shipment - Agents – for sale, for insurance Contract for carriage: - Lease a room on the ship, regular ships like regular airlines, also subcontract made by carrier Letter of credit: - Banks: buyer’s and sellers – conforming the payment (nominated, conformed, obtained) - Unconfirmed and confirmed - Revocable and irrevocable - Transferring a draft, endorsement and then hand the document Documents: Letter of inquiry – sale price, packaging, different forms of shipment, CIF – cost, insurance, freight, FOB – the cheapest

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Page 1: Ibt - Summer

International Business TransactionsProf. Bagiñska

International Transactions:- Time- Burden of risk- Who and when pays- Seller and buyer – may change during the transaction- Parties

o Strangero Practices if they know each othero Communication problemo Not too much protection as professional buyer

- Vienna Convention – does not apply to goods for consumption- Currency

Sales contract:- Inspection before shipment of goods, possible also after- Shipper – freight forwarder – a specialist in the field to make arrangements for

transportation the goods from the factory to the port of shipment- Agents – for sale, for insurance

Contract for carriage:- Lease a room on the ship, regular ships like regular airlines, also subcontract made by carrier

Letter of credit:- Banks: buyer’s and sellers – conforming the payment (nominated, conformed, obtained)- Unconfirmed and confirmed- Revocable and irrevocable- Transferring a draft, endorsement and then hand the document

Documents: Letter of inquiry – sale price, packaging, different forms of shipment, CIF – cost, insurance,

freight, FOB – the cheapest Pro forma invoice – may be used in transaction with the bank 110% insurance – imposed by the insurance company, between insurance and bank Purchase order – picking price Incoterms – date is not, it’s contractual, fulfilled when delivered to the ship

Incoterms - Written customs related to the duties, restatement, written customs, may or may not be incorporated, lex mercatoria – natural law of traders, will govern; implementation depending on country, any mode of transport covered by incoterms

- Water transportation only C & F terms

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- Ex works – ex factory, only E – agent comes to the factory – who pays for loading and packaging, all regulated in incoterms

- Full digits on the seller – D terms

- EDI – electronic data into change, bolero rules

Biddell Brothers v. E. Clemens Horst Company- English law applies, English court resolves the dispute- Lex mercatoria- Delivery- physical possession – taking over – symbolic, arrival of goods, document of title,

ownership (bill of lading, white bill- nonnegotiable, yellow bill- negotiable) – entitling to take possession over the goods

- CISG 58, 2 UCC 3.23

Bill of Lading- Evidences contract of carriage- Represent title of ownership- Receipt of the goods- Shipper = seller, anyone properly endorsed- Contract, the name – it can be assigned, but not the item marketable, not any holder, there

must be a proper sale

Bill of lading

Julia case (pp.83)Seller loaded 500t of rye (Luis de Ridder)

Agent – Belgian Grain (bill of lading)

Superintendent – Van Bree

Buyer – Belgian

c.i.f. – f.o.b. in fact (did not use the document giving the legal title)

paid against the delivery order

liability ends with the delivery, document of title must be delivered

negotiable bill of lading: when letter of credit or transfer during the shipment

in fa

vor o

f sel


E Ex works




F termsC terms

in fa

vor o

f buy

er D terms

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here the document was never delivered, not the bill of lading

buyer has no documents nor goods

delivery, destination contract (like f.o.b.), shipment (like c.i.f.) A4

f.o.b. and c.i.f. – same moment of pass of risk, just the difference that the seller has to organize shipment

delivery order – no value, just like a receipt, not document of title

Problem 2-6

Dividing the shipment into smaller containers, $500 per unit unless a higher value – reimbursement in case of liability

f.o.b. with separate insurances seems more reasonable than c.i.f.

Rights and duties of a carrier – contract of carriage1924 Hague Rules, Hague-Visby Rules

The carriers dictates the economic condition of carriage, royalties supported their domestic economies, problems with regulations because t introducing the liability Hague Rules, international; Carriage of Goods by Sea Act (COGSA -1936) federal law; Hamburg Clauses 1977?

Extending liability:

- Negligence – not exercising due diligence- Before strict liability intermediate steps, shifting the burden of proof- In the middle negligence with shifted burden of proof- Burden of proof mostly on the π (art. III & IV – pp.92)- Hague rules says that due diligence is a mandatory provision, may not be excluded (ius

cogens) – seaworthiness, navigation management as well, dispose of the limitation

Norfolk Southern Railway Co. v. Kirby

Facts:Decided by the US Supreme Court

Δ – selling to GM, suppose to go from Sydney Court to Huntsville (AL)

Sea and then train, train derailed

To have one bill of lading - through b/l = minimum 2 modes of transportation

ICC – contract with everyone who is needed for the carriage (spedytor)

Hamburg Sud – the carrier, has the ship CARRIER issued the bill of lading for water trip

Norfolk – hired for railroad trip, claimed that the liability is limited because of Himalaya and Paramount Clauses under COGSA

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Parties put specific clauses into the contract that their relations will include other parties (agents, contractors, subcontractors) - Himalaya Clause – Nortfolk’s liability is limited in the terms of the clause, limitation to $17,000 per package. If not – full liability. Automatically or agency rules – Kirby tried to argue that ICC was agents, and did not ask the rest about the limitation of liability. By the issue of bill of lading, reinforces or make unavailable certain law. ICC agent for a single limited purpose.

Kirby loses – court imposes limitation of liability, if there was the second bill of lading they would be fully liable. Courts tend to apply COGSA when most of the carriage through sea. Tackle to tackle – COGSA applies from loading to unloading.

Fruit of the Loom v. Arawak Caribbean Line Ltd.From Jamaica – cargo is stolen from a truck, Arawak was the carrier, Seaside – subcontractor, 2 bills of lading and then tractor tailor operated. Ocean bill of lading, covers the ocean.

Himalaya Clause - Immunities and liabilities of the person that you uses

Paramount Clause – extends between tackle to tackle – COGSA will apply to everything before and after (custody or responsibility of a carrier)

US COGSA very favorable to the carriers and it also extends for subcontractors. Carmack Amendment – rail – full liability (pp.119).

Steel Coils, Inc. v. M/V Lake MarionIn rem – the value of a property is the highest line of collecting the verdict

Steel Coils, Inc. – importer

Lake Marion, Inc. – owner of the vessel

Western Bulk – subcontractor, voyage charter - carrier

Bay Ocean – the manager, directly contract

Russia -> Riga -> Ventspils -> Camden -> New Jersey -> New Orleans ->Huston

Damage noticed in New Orleans, steel rusty

3 days to notice the damage, 1 year to collect

Judgment – joint and several liability

Burden of proof:- Π must establish prima facie case – cargo loaded in an undamaged condition and discharged

in a damaged condition – just bill of lading is most important document, handwriting, correcting prevails what is printed in the form, may be stamped, making annotations in the interest of the carrier; here also inspection – but the duty of seaworthiness, which is nondelegable

- Δ must prove that exercised due diligence to prevent the damage

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Defenses:- “peril of the sea” – certain risk, not foreseeable- Old crack, ship owner has the burden to demonstrate that the defect was not discoverable- Reasonable fit of the ship, not perfect to be seaworthy- Limitation of $500 per package, tackle to tackle, all the people involved, Himalaya, COGSA - Fundamental breach of contract – then the liability is full- Bay Ocean, manager, contracted with the carrier, in tort – negligence, no contract with Steel

Coal, Inc., duty of care and a breach of that duty, there was the crack – doctrine of constructive knowledge – it was discoverable

- COGSA – applies to and from the USA, also when the bill of lading says COGSA applies

Vimar Seguros y Reaseguros, S.A. v. M/V Sky ReePro tanto – so far, so much; only to the extend

Subrogates - stepping in sb’s shoes

Facts: Oranges from Morocco to Massachusetts

$1M damages – Bacchus received $733,442.90

Suit against Maritima

Problem: arbitration clause

Carrier is Japanese and imposed arbitration clause pertaining to Japanese law, contract of adhesion

Argument: inconvenience and costs of proceeding in Japan would “lesse[n] … liability”

FAA – Federal Arbitration Act, applicable to maritime issues, incentive to arbitration’

COGSA – SC says no conflict, are not inconsistent

Result: COGSA does not exclude choice of arbitration in a foreign state, premature if lessen the liability

American National Fire Insurance Co. v. Mirasco, Inc.Labeled cartons, some labeled correctly, some not – ship sent to Egypt – 60% IBT, 27% + 11% Mirasco; Mirasco Mic. When the ship arrived – turned back, some of them labeled correct, some wrongly. After the ship stopped, before reached Alexandria. Insurer paid for the freight back. Cargo was not fresh, no market, crisis – goods sold cheaper. There was an embargo – governmentally imposed quantitative restriction – of zero – on the importation of merchandise – cannot rely on that. Clause D – the rejection. Cannot claim that they lost market in Egypt, they was just lost of market value. Pure economic loss, goods are ok, but sold with the loss.

Sue and Labor Clause - mitigating, reducing damages; how were they suppose to do it according to the insurer – segregate the correctly labeled goods – no time, governmental decision.

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Continued Bill of Lading

Rotterdam Rules- Parties can choose place of arbitration, in general requirement of a valid arbitration –

connection for the contract, limited choice

Problem 2-7New Orleans to Italy – across Italy inland and then Mediterranean country

COGSA applies to the first carriage, bill of lading says it applies to the whole shipment – Paramount Clause

(1) Liability $500 per package(2) Delay, bill of lading – if there was negligence in starting the fire then carrier liable, if

accidental – no negligence, covered by insurer, COGSA and b/l covers inland transportation(3) Cargo stolen from the second ship – second b/l – paramount clause – same rules – no liability

of the carrier – act of public enemy, insurer

The Sales Contract- Freedom of contract- Soft law may also apply – Incoterms, Principles of European Contract Law (PECL), Principles of

Commercial Contract (PICC), New EU Restatement that the parties may opt-in- Vienna Convention- Rome I, European Court of Justice has the last word on implementation – preliminary

question and then the answer is binding to the rest of the states- Conflict of Law Rules is a State Law issue

Kristinus v. H. Stern Com. E. Ind. S. A.Facts: Kristinus, a customer buys gems and want to return them in franchisee’s store in NY.

Problem: under Brazilian law oral testimony is valid when does not exceed $10.000


- If Brazilian law applied – no contract so problem of protecting the integrity of Brazilian law- NY’s interest in ensuring that transacting within its borders honor obligations

“the most significant relationship”, factors are in hierarchic order

Rome I - Article III – freedom of choice, IV – applicable law in the absent of choice

Eli Lilly do Brasil, Ltda. V. FedEx, Corp.Facts: Waybill covering the whole voyage, FedEx was suppose to ship to Japan. Waybill limited liability to $20 per kilogram - $28,000. Cargo worth $800.000.

Issue: choice of court/forum and choice of law. Brazilian law seemed to be most likely to enforce. Most connected with transaction – a single contract – service provider residence is US.

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Case law – presumption of default law.

The alternative, when applying Brazilian law was just full liability.

CISGCS – contracting state

Art. 1 International sale

Art. 10 – places of business in different CS

Art. 95 – US opt out 1(b), usually seller’s place then matters; China, Singapore did the same; Czech Republic, Slovakia - ?

pp. 182 – notes

Contract formation: CISG, UCC

Amco Ukrservice & Promprilademco v. American Meter Co.Background: Two Ukrainian corporations brought action against American manufacturer of utility meters, alleging the manufacturer had breached joint venture agreements obligating it to supply them with all the meters they could sell. Manufacturer and corporation moved for summary judgment.

Holdings: The District Court, Dalzell, J., held that:

1 United Nations Convention on Contracts for the International Sale of Goods (CISG) did not apply to the joint venture agreements;

2 Pennsylvania law, rather than Ukraine law, applied to plaintiffs' claims; and

3 genuine issue of material fact as to whether manufacturer's employee had actual or apparent authority under Pennsylvania law to sign joint venture agreements on manufacturer's behalf precluded summary judgment.

United Nations Convention on Contracts for the International Sale of Goods (CISG) did not apply to joint venture agreements requiring American manufacturer to supply utility meters to Ukrainian corporations; although the CISG may have governed discrete contracts for the sale of goods that the parties had entered pursuant to the joint venture agreements, it did not apply to the agreements themselves. (lack of specify of terms, lack of necessary terms – not valid)

The United States and Ukraine are both signatories to the CISG, which applies to contracts for the sale of goods where the parties have places of business in different nations, the nations are CISG signatories, and the contract does not contain a choice of law provision.

American Meter President Harry Skilton effectively terminated the joint ventures by stopping a shipment of goods that was on its way to Ukraine and by refusing to extend credit to either Prompriladamco or Amco Ukrservice. – finishes, unstable business conditions.

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Problem 3-4 pp.187a) Art. 5b) Art. 2c) Art. 2 (d)d) Art. 2 (f)

*mergers and acquisition is governed by specific laws, mostly domestic

Gap filling – pp. 192– to promote uniformity – art. 7

- good faith in international trade,

- reasonable person standard

- freedom of contract – art. 6

- primacy of contract

- no parol evidence rule – oral evidence if on the side of the contract, does not contradict, restrictions were deleted from CISG in 2003, exclusions art. 11 & 96 – mostly Scandinavian countries

GPL TreatmentFailure to satisfy the writing requirement in UCC – no contract, CISG – contract.

dabo mihi factum – give me the fact I will give you the law, lawyers committed a mistake, professional malpractice (only in Common Law System); in case of not rising the issue

Filanto, S.P.A. v. Chilewich Int’l Corp.For arbitration – severable as two separate contracts

Basing on UCC – whether the contract was formed

- 28 Feb ’89 – contract- 13 March ’90 – M. Agreement- May 7 ’90 – L/C open- August 7 – returning M. Agreemnet- Sep 15, ’90 – 1st deliver- Jan ’91 bought and paid for 60K of boot

Material term – counteroffer UCC§2-207, needs to be accepted – lack of response March-August, but open letter of credits – accepting by conduct. The court should not have applied UCC, all the parties CS under CISG.

- CISG – offer and acceptance – mirror image elimination - acceptances containing immaterial additional or alternate terms can still form a contract

- Whether additional material or nonmaterial modifications (counteroffer if material)- Pro-contract interpretation by UNIDROIT – pp.207

Problem 3-9Pure economic loss if allowed – here

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Negotiations and contract formed

Mirror image, last shot, acceptance never by silence (art. 18), but may be created by the conduct of the parties (art. 18(3)).

In Filanto arbitration clause.

United Technologies International Pratt & Whitney Commercial Engine Business (PW) v. Malev Hungarian Airlines (MHA) pp. 209Facts: PW negotiating engine deals with MHA. Signed letter of intent – duty to act in good faith, as an honest merchant. Δ kind of governmental party.

3-14, 3-15First no contract – no sufficient data, second – shortly and simplified – yes. 55 in fine.

Medical Marketing Int’l, Inc. v. Int’le Medico Scientifica, S.r.l.Facts: Π MMI – market distributor of medical equipment from Louisiana, Δ IMS an Italian supplier. Machines shall comply with administrative procedures of the Food and Drug Administration.

Contract signed, no indications. Machines never crossed the board. They went for mediation and then arbitration. Fundamental breach – art. 49 CISG – substantially deprived of what was entitled to expect.

IMS cited a German Supreme Court case, which held that under CISG Article 35, a seller is generally not obligated to supply goods that conform to public laws and regulations enforced at the buyer's place of business. Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) 129, 75 (1995). In that case, the court held that this general rule carries with it exceptions in three limited circumstances: (1) if the public laws and regulations of the buyer's state are identical to those enforced in the seller's state; (2) if the buyer informed the seller about those regulations; or (3) if due to "special circumstances," such as the existence of a seller's branch office in the buyer's state, the seller knew or should have known about the regulations at issue.

Art. 35 CISG

BP Oil Int’l, Ltd. v. Empresa Estatal Petroleos de EcuadorCIF (CRF) agreement.

BP – supplier, (Shell to supply)


Saybolt – responsible for checking the quality before shipment

Gum content went too high after arrival in Ecuador.

Art. 9(2) Incoterms – parties behaved as there was no Incoterms. Court – well known in international trade, even if the parties did not say anything. Balance and burden of duties. Parallel regulation in CISG is excluded by application of Incoterms.

Was there a knowledge that the cargo contained a hidden defect.

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BP sues Saybolt for negligent inspection.

Art. 39 – reasonable time

Treibacher Industrie v. Allegheny TechnologiesΠ Treibacher – Austrian TaC provider Δ TDY – US buyer

Contracting for 7 years, supply, withdraw then differed payment and invoice (tax issue); TDY found a better deal, wants to rely on the term consignment to prove there is no sale so no binding contract. Court said that the usage prevail , intended to mean something by consignment – proved by prior deals. Venire contra factum proprium – abusing the right, conduct contradict the words. Frustration of contract – only in common law system, similar to breach in civil law system.

Consignmenet – komis, tax issue

Tsakiroglou & Co. Ltd v. Noblee Thorl G.m.b.H pp. 225The case concerned a sale of groundnuts, c.i.f., from Port Sudan to Hamburg. The parties envisaged shipping through the Suez Canal, but the canal was closed after the contract was concluded.

The contract was not frustrated as the ship could go round via the Cape of Good Hope (there being no implied term that carriage was to be via Suez). The greater cost of the freight, borne by the c.i.f. seller, was not so great as to render this a fundamentally different adventure.

Frustration of a c.i.f. contract will be very rare, and clearly the parties have made provision for the loss of the goods. If the contract specifies a particular ship which sinks prior to loading, that might frustrate the contract, and the contract would also presumably be frustrated if performance became impossible, for example where the only available route was blocked.

Frustration is also possible under s. 7 of the Sale of Goods Act 1979, but this will rarely apply to a c.i.f. contract, since the contract would have to be for the sale of specific goods, and the loss would have to be before shipment (although risk sometimes passes after shipment this would be unlikely to occur in the absence of a breach by the seller, in which case there would be no frustration).

Article 75 CISGIf the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction as well as any further damages recoverable under article 74.

! Precedent case. English law. The freight is a burden of the seller. No conditions for frustration – when not parish very quickly and the contract which would not specify the way, also calculation that there would be no significant difference in price.

Solving 3-17 pp. 225, write draft – force majeure clause in favor of the seller.

Letter of CreditSeller – beneficiary, buyer – applicant, issuing bank – confirming bank, advising bank, nominated bank – paying bank

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Payment against the documents

Properly endorsed (any negotiable document – signed and addressed to the bank)

Problem 4-2 a) No obligationb) Draft nature – negotiable document, may be sell to anyone; payment may be refused if the

documents do not comply

Problem 4-3They must

Problem 4-4The seller is the drawer, drawee bank or the applicant of the buyer – beneficiary is the payee of that obligation

Problem 4-5(2) yes, reimbursement risk

(3) as long as it’s not a nominated bank, it can refuse

(4) never really obligated

Urquahart Lindsay and Company, Ltd. v. Eastern Bank, Ltd. Bills of exchange same as drafts.

MauriceSale against document, L/C is only about documents. Quality has nothing to do with the documents. But there is a description of the goods.

The bank must do whatever the buyer wants, freedom of contract

J.H. Rayner and Company, Ltd. v. Hambro’s Bank, Ltd.FOB contract, Atkinson – called a witness

The seller goes to the local bank, free to choose the conditions under which there is a L/C.

Hanil Bank v. PT Bank Negra IndonesiaStrict compliance – no discrepancies, 5 banking days to decide whether bank, art. 16(c) UCP the bank must write a notice and show all the discrepancies, on the last day must reveal whether accept.

UCP – the terms must be incorporated

The Fraud Exception

Mid-America Tire, Inc. v. PTZ Trading Ltd.Parties:

- American: Chappell/Jenkins/Hine

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- European: Corby/PTZ, Evans, Sievers, Doumerc, Barclays

Facts: These appeals arise out of an action brought in the Clermont County Court of Common Pleas to enjoin payment under a letter of credit (“LC”) on the basis of fraud in the underlying transaction. The underlying transaction involved extensive overseas negotiations toward an agreement to import blemished Michelin tires for sale in the United States. A blemished or “blem” tire is one that is cosmetically but not operationally affected by a surface imperfection.

The gravamen of the fraud claim is that the overseas seller's agents made certain false promises and representations concerning the sale of more lucrative summer tires in order to induce the American buyers to purchase and open an LC securing the purchase of less lucrative mud and snow tires, many of which could not legally be imported or sold in the United States. The buyers claim that they discovered the fraud after the LC was issued and instructed the seller not to ship the tires, but the seller went ahead with shipment anyway**623 and presented its invoice and shipping documents for payment under the supporting LC. The buyers then instituted this action pursuant to R.C. 1305.08(B), alleging that honoring the LC in this case would facilitate and consummate the seller's fraud.

Fraud – then reversed on appeal, in UCP nothing about refuse to pay

Covering law, application of state law – UCC Ohio, eventually not Ohio

§5-109 UCC

Fraud can be considered as fraud in underlined transaction, beneficiary party must commit a fraud to be applicable

4. Material fraud committed by the beneficiary in either the letter of credit transaction or the underlying transaction is sufficient to warrant injunctive relief under R.C. 1305.08(B).

5. “Material fraud” under R.C. 1305.08(B) means fraud that has so vitiated the entire transaction that the legitimate purposes of the independence of the issuer's obligation can no longer be served.

At the moment non consequential damages, just the material damage.

Parties divided1st category always has to honor LC, (2nd not) – issurer: nominated person in good faith and documents comply; advising bank does not have to. Advising bank – no value, no loss. Drafts may be negotiated by third parties. Holder in due course – good faith.

Standby and commercial LCCLC – beneficiary is the buyer connected with the sale, seller is the issurer; UCP applies – independence

Payment against the documents – pro forma declaration – may be sent electronically

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AMERICAN BELL INTERNATIONAL, INC., Plaintiff, v. The ISLAMIC REPUBLIC OF IRAN, Bank Iranshahr and Manufacturers Hanover Trust Company, Defendants.American corporation sought a preliminary injunction barring an American bank from making any payment under a letter of credit to the Islamic Republic of Iran or to an Iranian bank. The District Court, MacMahon, J., held that the company was not entitled to an injunction barring payment of the letter of credit, by which the American company guaranteed the return of a down payment to the Government of Iran pursuant to a consulting services contract, in that the company failed to show that it lacked an adequate remedy at law, if the American bank failed to honor the letter of credit it might lose property in Iran far in excess of that risked by the American company, the demand for payment of the letter of credit conformed to the terms of the letter and, though there was a possibility that the Government of Iran would not honor the contract, there was no showing of fraud.

Standby - Trust reimburse the Bank, which pays in the name of Iran

They started performance and then was the revolution.

HARRIS CORPORATION, Plaintiff-Appellee, v. NATIONAL IRANIAN RADIO AND TELEVISION and Bank Melli Iran, Defendants-Appellants.American manufacturer brought suit against Iranian defendants, seeking to enjoin payment and receipt of payment on guarantee and receipt of payment on letter of credit, and also seeking a judgment declaring the contract underlying guarantee and letter of credit to have been terminated by force majeure as a result of the Iranian revolution and the subsequent crisis precipitated by the seizure of hostages at the United States Embassy by Iranian militants. The United States District Court for the Middle District of Florida, at Orlando, John A. Reed, Jr., J., granted preliminary injunctive relief, and defendants appealed. The Court of Appeals, James C. Hill, Circuit Judge, held, inter alia, that the District Court properly granted preliminary injunctive relief, enjoining payment and receipt of payment on guarantee and receipt of payment on letter of credit, since there was a substantial likelihood of plaintiff prevailing on the merits, since there was a substantial threat that plaintiff would suffer irreparable injury if the injunction was not granted, since the balance of harm weighed heavily in plaintiff's favor, and since grant of injunctive relief would not be contrary to the public interest in maintaining the market integrity and commercial utility of guarantee letters of credit.

Underlying transaction contract – force majeure clause with the duty of regard care.

Force majeur terminated the obligation –

In suit brought by American manufacturer against Iranian defendants, seeking to enjoin payment and receipt of payment on guarantee and receipt of payment on letter of credit, and also seeking a judgment declaring the contract underlying the guarantee and letter of credit to have been terminated by force majeure, service of process on defendants was sufficient under the circumstances; plaintiff's failure to follow precisely those steps in the Foreign Sovereign Immunities Act designed to insure that actual service be made could not override the fact that notice was actually received.

Four prerequisites for issuance of a preliminary injunction are a substantial likelihood that plaintiff will prevail on the merits, a substantial threat that plaintiff will suffer irreparable injury if the

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injunction is not granted, the threatened injury to plaintiff outweighs the threatened harm to defendant, and the public interest will not be disserved by granting the injunction.

Embargo invalids the whole transaction.

Agency and distributorshipTermination for causes

Termination with or without cause – proper time

Dispute resolutionPlace of jurisdiction - choice of forum, choice of law

Enforcement of jurisdiction - NY Convention – EC level – Brussels I convention 44/201

Jurisdiction – parties or particular place, right to hear the case

Personal jurisdiction – minimum contact with particular jurisdiction and subject matter

Long arm statutes – how far the personal jurisdiction goes

In Civil countries – basis of jurisdiction in codes

Advantages of arbitration – costs, less strict, confidentiality, choice of arbitrator

Mitsubishi Motors Corp. v. Soler Chryseler-Plymouth, Inc.

pp. 628

Polytek Engeneering Co., Ltd. v. Jacobson CompaniesPolytek trying to get contract in China

M/S Bremen v. Zapata Off-Shore Co.Freely negotiated private international agreement, unaffected by fraud, undue influence or overweening bargaining power should be given full effect.

In the course of its voyage, it was to traverse the waters of many jurisdictions.

It cannot be doubted for a moment that the parties sought to provide for a neutral forum for the resolution of any disputes arising during the tow. Manifestly much uncertainty and possibly great inconvenience to both parties could arise if a suit could be maintained in any jurisdiction in which an accident might occur or if jurisdiction were left to any place where the Bremen or Unterweser might happen to be found.

Problem 8-6 pp. 655Mandatory – exclusive

Documents are produced when the goods are loaded

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Performed at the airport, the carrier – Montreal convention – may

Terrorist attack – force majeure, but technically forceable, in the control to prevent the consequences

When claims against the carrier

Risk by the buyer from the moment of loading

Case 2

CISG governs the contract

Still CISG as a part of French law

CISG does not require written form

Contract by conduct Art. 18

Selection in invoice – failed attempt, it’s not a part of the contract

Agreed on no choice of forum

Subsydiary – there is a valid jurisdiction

Question 2 - 3 containers, insurance issue, nonresponsibility clause

Contract of carriage

Both COGSA 1303 and Hague-Wigsby apply art. 3.28

Negligence – honest mistake, trained, lack of due diligence, no defense – liability

Different liability cogsa $500; hague - $666 US adopted without this limitation, can never go lover but can contract for higher liability; to change – must have been written in the face of the bill of lading

2 – fraud – carrier cannot check, sealed; in case of abusing the right may not be used, clean hands

3 – 100 packages, unless the shrimps are cheaper

Question 3

Payment against the documents UCP – Article 14 (e)

Bank must ask the seller

Question 3 - Exam

USS – every bank has to pay under the letter of credit, Los Angeles Branch – as advising and conforming bank, choice of law

Suspicion of a fraud is not enough, substantial evidence of fraud

Wrongful dishonored issue

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Question 4

Seller fulfilled the contract, FOB

Duty to fulfill the delivery of goods – seller delivers to the point of package

The buyer in case of FOB

Beneficiary is India