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9.The Law of Contract and the Vienna Sales Convention

'Properly constructed contracts are essential to international trade and risk management'

By: Janice Giang 11691742

Principles continued:

Principle 4: Capacity

Bibliography

  • necessary mental capacity
  • must not be:
  • under 18
  • have a mental impairment
  • under the influence of drugs and/or alcohol

Principle 5: Genuine consent

  • enter contracts with own free will AND with proper understanding of the contract

Vienna Sales Convention

Undue influence

mistake

misrepresentation

Duress

Australian contract law 2013, Carlill v carbolic smoke ball co, viewed 12th August 2015, <http://www.australiancontractlaw.com/cases/carlill.html>.

sourced: CISG TÜRKİYE 2015

What is it?

Carlill v Carbolic Smoke Ball Company [1893]

Principle 6: Legality

  • April 11, 1980
  • convention/treaty that provides uniform law for the international sales of goods
  • United Nations Convention on Contracts for the International sale of goods
  • (CISG)
  • Force: 1st January 1988
  • Legal = enforceable by law

Must not be:

  • prohibited by staute or infringe a rule of public good

' Sales contract between parties whose main place of business are in different CISG contracting states automatically become subject to the treaty'

- Article 1 (1) a

Facts:

Must not:

  • contain illegal acts, promises or objects

CISG TÜRKİYE 2015, Parties, viewed 15th August 2015, <http://cisg.bilgi.edu.tr/taraf-devletler-3>.

Primary role

  • Carbolic Smoke Ball Co advertised their new drug (carbolic smoke ball) as a definite flu cure
  • Flexible, uniform, and fair regime for contracts
  • provides rules - regulate rights of buyers and sellers

UNIFORMITY

  • supportive to domestic law

FREEDOM

Den of eduction 2013, Carlill v Carbolic smoke ball company - contract law cases, youtube, viewed 10th August 2015, <https://www.youtube.com/watch?v=vzHKe76Vyl>.

What the convention contains

  • 101 articles organised into four main parts

Part 1:

Part 3:

  • general provisions
  • rules interpretation
  • buyer and seller obligations, rights and remedies

Part 4:

Part 2:

  • final provisions
  • formation of contracts
  • contract validity not included

Source: Den of Education 2013

  • Mrs Carlill bought the drug, used it, caught the flu and wanted to claim the reward
  • CSB Co refused

CSB Co argument:

Court of Appeal:

"The advert was not to be taken as a legally binding offer, but an invitation to treat"

"Unilateral contract that included an offer (through advertisement) and acceptance (use of smoke ball), thus Mrs Carlill was entitled to the reward"

- Australian contract law 2013

-Australian contract law 2013

Principles of the law of contract

  • Must meet 6 principles = legally binding

Contracts

Offeror

Offeree

  • legally enforceable agreements

Principle 1: Agreement

Principle 3: Intention

  • Meeting of minds
  • Intent or will to enter into legal relations = legal obligations and consequences
  • ability to sue parties or be sued

Offer

Acceptance

domestic or social arrangements

communication from offeree accepting terms

expression of willingness by offeror to contract on specified terms and intend to be bound in contract

no intent = invitation to treat

Principle 2: Consideration

  • exchange of promises
  • equal exchange = legally enforceable
  • Desireable -> laws and treaties to ease communication & assist risk management
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