Question

confirmation is concluded. Payment is to be made by L/C at sight. This offer is subject to our final received the offer: 50 sets of H-type after the contract pany A made an offer to a Japanese company B, saying: Our company can sell you machine at USD 3 50o per set CIF Tokyo. Shipment is to be made within two months at concluded reply as soon as possible. Company B replied to the offer at the time when it our offer has been accepted by our company. But company A didn't reply the iv the company B offer Did the contract ct between Company A and Company B come into force? Why? 2. A Chinese ading company sent a mail to a US trading company on March 1, 2010, offering for com US trading company immediately replied to the Chinese company, saying "we er and the rice should be packed by new packing. Then, the Chinese company ons of rice and emphasizing that the rice should be packed by safe packing. After receiving the e-mail, accepted your offer mpany on March 20 sent a message to the Chinese company, said that because the the relevant regulations of CISG, do you think the court should support whic usinessman visited a Chinese international trading company one morning to discuss t o bepare the goods. During this period, the world's rice prices suddenly fell sharply, the Chinese side are whil According to one? cont not confirmed to the new packing requirements, so the contract was not established e the Chinese side insisted that the cont ract was established purchase of confirm or deny expressed company increasing What do you think Chinese companies should do about it? a certain commodity. After the Chinese side made an oral offer, the French side didr . In the afternoon of the same day, the French businessman visited again a unconditional acceptance of the Chinese side's offer in the morning. At that time, Chine was informed that the international market price of the commodity was showing signs Why?

Answer 1

1) In International Economics, having knowledge of by laws is extremely important for management of a business enterprise in this case, it is important to realize the basics of a contract. The definition of which states that it is an agreement between two or more parties the terms of which are enforceable by law, and offer and acceptance are said to have taken place.

In the case study, the offer to sell has been clearly indicated by Company A in which they propose to sell a specific quantity of a machine at a specific price. I.e. 50 Sets of H Type Machinery at a price of 3500 per set and the time period for the same has clearly been represented.

Further, there is a clear indication that B has accepted the offer. Since this agreement, is legal in nature, has the element of offer and acceptance, it is a valid contract between the two parties and does not require A to reply back.

2) The CISG is known as United Nations Convention on for the International Sales of Goods and serves as an International body that controls disputes among various international companies which may arise in due course of time.

In the case above, the company of United States has said to be defaulted, since the matter is not of packaging but rather of prices. The Chinese counterparts have clearly agreed in writing that they would be packaging the products as per the norms established and agreed with the Company belonging to the United States.

In such conditions wherein the contract is being unilaterally handled by the Company belonging to the United States the CISG is most likely to favor the Chinese counterparts since pricing is the real issue behind noncompliance of the contract and packaging issues are clearly said to be handled.

3) Any contract for it to exist must have a clear element of offer and acceptance. In the case as highlighted, the French man had not agreed to accept the offer made by the Chinese Business owner. As a result of which, the previous arrangement never became a formal obligation for the Chinese counterpart.

In the case of increase in prices, the Chinese Business owners may not be capable of meeting the same promise made earlier and should increase their own prices as well while pitching a fresh contract which the French buyer may choose to accept or decline as per their own interests and budget respectively.

Please feel free to ask your doubts in the comments section if any.