Order Description
Part 1 :
Identify all the elements of a contract in detail and indicate where you find each one in scenario given
Part2:
A. Explain both sides arguments
B. determine what type of remedies that each party might seek
C. Then explain which party you agree and why ?
Professors: Marc Cohen and Christian Chamorro-Courtland
Course: BUS 668
PrintCo Contract Fact Pattern
1. Based on the fact pattern below, identify the facts that establish each of the six
elements; if any are missing, identify which ones.
PrintCo is a German company established in Frankfurt that manufactures industrial
printing presses. They have been in negotiations with Worldnews, an American
newspaper publisher in New York, to sell them 15 new printing presses. A
representative from PrintCo travels to New York to negotiate a deal with the CEO of
Worldnews on January 1, 2013. At the meeting Printco offers to sell 15 printing presses
at a price of One Hundred Thousand Dollars ($100,000) per unit. The parties agree to
use the UN Convention for Contracts for the International Sale of Goods (CISG).
Worldnews agrees to a final price of One Million Five Hundred Thousand Dollars
($1,500,000), but insists that the contract should include a clause stating that the forum
for any dispute arising during the contract should be arbitrated using New York law.
Furthermore, Printco has guaranteed that it will deliver the presses by February 1, 2013.
The parties have included a “CIF clause” in the contract. Since Printco has never done
business with Worldnews, they requested that Worldnews pay by using a letter of credit.
2. Assume the facts below occurred after the signing of the contract.
a. Printco’s suppliers go on strike on January 5
th
. Due to this disruption, Printco
has to outsource and obtain the raw materials for manufacturing the printing
presses from another supplier. Printco’s costs have increased by 20%. In
order to please its shareholders, Printco attempts to pass this additional cost
on to all of its customers. A representative from Printco calls the CEO of
Worldnews and says that they will not be able to deliver the printing presses
unless Worldnews pays an additional 20%. The CEO of Worldnews is furious;
however, he is under a lot of pressure to get the new presses installed on
time and a lot of time will be wasted if he attempts to find a new supplier of
printing presses. The CEO, although hesitant, accepts to pay the new price of
One Million Eight Hundred Thousand Dollars ($1,800,000).
b. Printco places the 15 presses on a ship at the port and receives the Bill of
Lading. They send the Bill of Lading, the insurance certificate and all the other
relevant documents to Worldnews’ bank (the issuing bank), which has issued
a letter of credit. However, upon reviewing the documents, the bank notices
that there is a spelling mistake: Printco’s name is spelt incorrectly on the
Insurance certificate. Consequently, the bank refuses to pay Printco.
c. There is a delay in the shipment, and Printco notifies Worldnews that the
printing presses will not arrive in New York until February 5
th
. When the goods
finally arrive, one of the machines is badly damaged from the boat journey.
Explain both sides’ arguments, and then determine who is right and what type of
remedies either party might seek? In giving your answer, explain the advantages and
disadvantages of using the CISG and using letters of credit for international sales
transactions. Furthermore, mention where the parties can resolve their dispute and what
the advantages and disadvantages of their options are.
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