International Business Law
A contract is basically a formalized conformity between either two or further parties with regard to specific issue whereby in this case it would bind the toy company to its business partner to their business agreements (Carr & Stone 2005).
Contents of the contract and implied terms
The contract should contain the following terms and their relevant definitions.
Contract: The contract of sale should present all the important elements in a legal contract.
Parties: A contract of sale is only composed of the buyer and the seller. It should be noted that a sales contract has only two parties.
General property transfer: The contract of sale should show the transfer of the property in goods. It should clearly indicate the rules that pertain the transfer of specific and unascertained property from the seller to the buyer.
Price: In order to transfer goods from the seller to the buyer a price need to be set. The contract should clearly show the amount and time when the price need to be paid.
The following are the obligations to the seller and buyer according to contract of sale of goods, (Marsh & Soulsby 2002).
Obligations of the seller
Part 3, Chapter 2 section one and two of the United Nations Convention on Contracts for the International Sale of Goods (CISG) specifies the main obligations of the parties willing to trade that it is the seller has to deliver the goods in time and the buyer must accept and should pay for these goods as stipulated to the contract of sale of goods. The contract should try to specify the quantity, time, quality, title and place of delivery of the good. The seller should therefore deliver what he expressed in the contract (Carr & Stone 2005).
Obligations of the buyer
The sale of goods law specifies that the buyer is supposed to accept the goods and pay the right amount in good time as stipulated in the contract. The contract fixes the correct amount of the price that the buyer is supposed to pay. According to most of the contracts time of payment is actually on delivery. The buyer breaks the contract if he/she fails to accept the goods. All these must be in line with Part 3, Chapter 3 section one and two of the UN CISG concerning the obligations of the buyer (United Nations convention on contracts for the international sale of goods 2010).
Passing of property and risk
Property transfer between buyer and seller: it must be noted that the basic aim of the contract to pass or transfer goods from the seller to the buyer. The law of sale of goods clearly specifies when the goods should be transferred. The distinction between unascertained and specific goods helps to determine when the ownership passes. Article 60 gives an obligation to the buyer so as to take over their goods and should adhere to the articles in Part 3 part 4 which highlight on passing of risk United Nations convention on contracts for the international sale of goods. (2010)).
Formalities of the contract
The UN sale of good Act specifies that unless certain formalities are obeyed in contract that involves sale of goods then it will not be enforceable. The buyer should accept some of the goods sold and sign a written memorandum so that the contract can be enforceable.
Transfer of title
According to the general rule, when goods are sold by a person who has no ownership on them then the buyer does acquire a good title for them. The rule that no one should give out what he/she does not have protects the true owner of the goods. This rule has exemptions which include: court order cases, mercantile agents, voidable title sale and Estoppels’ title.
Performance of the contract
The seller has the duty to pass the goods in the right time to the buyer. The buyer also should accept and then pay for the goods as stipulated in the contract. If the contract does not specify the place of delivery then the buyer should obtain the good from the sellers business. The seller should also bear the expenses that may occur to put the goods into a state of delivery.
Remedies of the breach of a contract
Breach of contract damages: when the seller fails to deliver goods in time or fails to deliver at all it causes losses to the buyer. Damages due to the breach of the contract are measured directly from the amount of loss that the buyer incurs,( Marsh & Soulsby 2002).
Rights to reject the goods and end the contract: the buyer has the right to end the contract and reject the goods when the breach of implied terms is very serious. These terms are well explained in Article 86 of CISG United Nations convention on contracts for the international sale of goods. (2010)).
Action for the price: when the specified date set in the contract for payment has already passed and the buyer has not remitted his/her price then the seller has the right to sue for the price of the contract as mentioned by Uniform Commercial Code (UCC) part 7 which touches on remedies (Uniform Commercial Code 2004)).
Non-acceptance damages: incase the buyer fails to pay and accept the goods then seller must claim for damages. Loses occur to the seller in event the goods are rejected or the buyer fails to pay the stipulated price in the contract. Damages are therefore measured by the amount of loss the seller faces (Marsh & Soulsby 2002).
Carr, I., & Stone, P. (2005). International trade law (3rd ed.). London: Cavendish Pub..
Marsh, S B, & Soulsby, J, 2002,Business law (2nd. ed.). London: McGraw-Hill.
Uniform Commercial Code. (2004, March 15). LII | LII / Legal Information Institute. Retrieved July 12, 2013, from http://www.law.cornell.edu/ucc/2/
United Nations convention on contracts for the international sale of goods. (2010). New York: United Nations.