International sale of goods

International sale of goods
Write a reasoned answer to the following problem and submit your answer on-line. The pages should be numbered consecutively and you should use double-line spacing. Footnotes do not contribute to the word limit. Therefore you should not put any explanatory material in the footnotes: they should be used for referencing only. You must familiarise yourself with the University regulations on late submissions, word limits and cheating. You must self-certify the number of words used.

The Problem

Arthur, a trader in London, entered into three contracts on the 15th January 2014. Each of them was expressed to be subject to English law.

(1) First, he agreed to sell to Bernadette in Amsterdam 7,000 tonnes of Peninsula long-grained rice c.i.f. Rotterdam, February 2014 shipment from Singapore. Payment was to be in full against tender of shipping documents. The rice was loaded aboard Claude’s vessel Jeanne d’Arc in Singapore on 1st February 2014. The vessel’s captain issued Arthur’s agent in Singapore with a bill of lading for the rice.
(2) Second, he agreed to sell to David in Paris 5,000 tonnes of Jamaican unrefined brown sugar c.i.f. Le Havre, February 2014 shipment from Kingston, Jamaica. Payment was to be in full against tender of shipping documents. The sugar was loaded aboard Edward’s vessel Stars and Stripes on 1st March 2014. The vessel’s captain issued Heinz’s agent in Kingston, Jamaica with a bill of lading that stated, amongst other things:

(a) 5,000 tonnes of Jamaican unrefined brown sugar loaded aboard the Stars and Stripes on 28th February 2014 in apparent good order and condition;
(b) Freight at the rate of $100 per 1,000 tonnes payable on discharge;
(c) The carrier has liberty to tranship the goods for any reason and if the other vessel is neither owned nor chartered by the carrier he is thereafter under no liability whatsoever in relation to the goods.

In the margin of the bill of lading the captain had written: “After shipment some of the sugar was damaged by water when the crew had to put out a fire using water hoses.”

(3) Third, he agreed to sell to Frank in London 4,000 barrels of Gulf crude oil c.i.f. Fawley Refinery, Hampshire, February 2014 shipment from New Orleans. Payment was to be by letter of credit subject to the U.C.P. 600, 2007 revision, to be confirmed by a bank in London. The oil was duly loaded aboard Wayne’s tanker the Stars and Stripes on 15th February 2014. The vessel’s captain issued Arthur’s agent with a set of three bills of lading each of which stated, amongst other things:

(a) 4,000 barrels of crude oil loaded aboard the Stars and Stripes in New Orleans on the 15th February 2014 in apparent goods order and condition;
(b) All terms and conditions (including named discharge port/s) of the Wayne-Homer charter party dated 4th June 2013 are hereby incorporated;
(c) One of a set of three original bills.

On the 25th February 2014 Frank instructed Barkers Bank in London to open a credit in favour of Arthur. The bank wrote to Arthur on the 26th February 2014 notifying him that they were opening an irrevocable credit in his favour and that they would pay him the contract price for 4,000 barrels of Gulf crude oil if he tendered “a bill of lading, insurance certificate and invoice” within 15 days of the bill of lading date. They also informed him that the credit was subject to the U.C.P. 600, 2007 revision.
When the Jeanne d’Arc arrives in Rotterdam it is discovered that all the rice has been damaged by sea water which leaked into the vessel through a rusted joint in the vessel’s hull. Advise Bernadette.

On the 10th March 2014 Arthur’s agent in Paris tenders to David:

(1) The bill of lading for the sugar;
(2) A certificate of marine insurance; and
(3) An invoice for the full sale price of the sugar.

The market price for brown sugar has fallen by a half since mid-January. Advise David.

On 3rd March 2014 Arthur delivered to Barkers Bank the following documents:

(1) One bill of lading for the oil;
(2) A copy of the Wayne-Homer charter party dated 4th June 2013;
(3) A certificate of insurance;
(4) An invoice for “4,000 barrels of crude oil.”
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