The legal framework for international business transactions, international sales of goods, bills of lading, letters of credit, technology transfer, and foreign direct investment. Also, the types of disputes arising out of international business transactions, including choice of law, evidentiary matters, international arbitration, and enforcement actions.

Abbreviations: Abbreviations that are generally accepted such “LTD” or “Co” can be used but it is recommended to follow the criteria laid out by the bank.

Certifications and Declarations: If the document is already certified and signed and dated by the issuing party then there is no need of further certification and declaration.

Dates: Date is a crucial part of the letter of credit and must be written with care. Even if the attached documents don’t require you to put date all the attached documents should be dated.

The bank can work around these points to make the letter of credit more authentic:

·         Instead of just referring the seller as seller the bank should name the seller properly by its full name and or company name.

·         The bank can use proper abbreviations to avoid any conflict

·         The bank can exercise care when putting in dates

Question 2

            First, we are going to discuss about the Rotterdam Rules and how they are relevant to this case. “Rotterdam Rules” or formally known as United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by the Sea is a treaty that proposes some rules that are applied internationally and concerns with the legal framework of maritime affreightment and carriage of goods by sea. It lays out the rules and regulations that should be followed by the carriers and cargo-owners. The purpose of the Rotterdam Rules is to amend and update the existing international rules to achieve consistency with the international trade law in relation to maritime carriage and replace Hague Rules and Hamburg Rules. The rules cover the rights and obligations of the shippers, carriers and consignees that are under a contract and the contract is related to the door to door shipping and by sea. Rotterdam rules takes into account the advancement in technologies and modernization in the import and export sector. It provides a balanced support to the contract of shippers and carriers.

            In light of the above information the buyer should take advantage of Rotterdam Rules because the contract relates to the shipment by sea. It also gives leverage to the carrier who is responsible for the damage of goods and gives them extra time in relation to receiving point and shipping point. It also provides the parties in contract relaxation in some rules. It will also extend the time of legal claims to be filed within two years from the day the goods were delivered. The buyer should in light of Rotterdam rules seek recovery and will benefit from it greatly because it will give the carriers leverage and time to pay the damages.

Question 3

            Since both the parties are from two different countries and member of the CISG we are going to discuss their rights and responsibilities in light of CISG. United Nations Convention on Contracts for the International Sale of Goods (CISG) or also knows as Vienna Convention is a multilateral treaty that lays out framework for international trade. The treaty is ratified by 93 countries which are called “Contracting States”. The convention is frequently associated with international trade law and governs the major portion of the world trade. It was developed by United Nations Commission on International Trade Law (UNCITRAL).

CISG does not apply in case of trade of non-commercial goods such as family or household goods, personal care products and other goods for individual use. It also does not apply to auctions, ships, aircraft or intangibles and services. It mainly applies to commercial goods and products only. In the mentioned case the goods are traded for commercial purposes but the seller sells the product to individual customers which is against CISG rules. Also, the seller did not inform the buyer of selling goods. The Coronavirus epidemic has also ceased all trade and commerce activities due to lockdown situation which makes it difficult to send the rolls to buyer. Seller however is in the position to accommodate buyer because of a remote and isolated location free from any lockdown. Seller on the other hand is insisting on delivering 5 percent of the contracted toilet paper rolls which will be used for personal use in the lockdown situation. As mentioned in the CISG rules that it does not apply to personal goods and products so the situation will be in favour of the seller. Seller on the other hand is guilty of selling the products without notifying the buyer which is against CISG rules.

Question 4

(A)  By including no provision in relation to dispute and filing necessary legal action in case of defective products the buyer can bind the seller before US court. Law and government have separate identity in United States. They are both interdependent. The resolution will begin with dispute settlement request between the parties. It will make the buyer’s position stronger in case a defect in the product is discovered.

(B)   By including the forum-selection clause the buyer can restrict the location of the engineering defect. It will ensure that in case of a defect occurs the case will be handled by the district court of that location where the defect occurred. Forum selection clause is a kind of dispute clause which ensures that in case of a dispute between the contracting parties the issue will be resolved in a specific forum.

(C)   Arbitration clause can also work in favour of buyer because it can be chosen as a preferred dispute resolution method. It can be opted out for in case of negotiating contracts, treaties or legal agreements. The arbitration clause can be included after the dispute as well with the parties’ consent.

Question 5

            Laws that give immunity to foreign organization fall under the International Organization Immunities Act. This act will intervene with the case and the case is also bilateral investment related which makes it more complicated. In recent times the countries have faced costly claims in relation to bilateral investment treaties. It is however beneficial for US based investors in another country. Foreign governments don’t distinguish between local and international companies in respect to bilateral investment treaties and the right is known as national treatment. The equal treatment of the foreign company poses an issue for the foreign agriculture government.

Question 6

Letter of Credit

            The letter of credit part of the course of this semester was particularly interesting for me because it helped me in understanding how import and export works. Letter of Credit (LOC) is an important document in international trade. It is a kind of payment method which is essentially useful in cases where buyer and seller do not know each other well and are separate by distance, laws or trading customs. LOC ensures a risk-free environment of trading. It is used to discharge the legal obligations arising out of selling the products to buyer by involving the bank as a mediator. The bank takes the responsibility of ensuring payments by way of pledging securities and receiving documents related to goods authenticity. The goods will be in the control of issuing bank upon presentation of the documents. The bank pays the valued amount of goods to seller when seller provides bank with the documents of goods that represent the value of goods. If they buyer is unable to make the payment the seller will demand payment from its bank. The bank will honor the demand upon realising that the terms and conditions are met. The letter of credit is mostly regulated by International Chamber of Commerce also known as Uniform Customs and Practice for Documentary Credits. The banks require collateral from the purchaser of goods for issuing letter of credit. The bank charges fees for letter of credit which is often certain percentage of the amount covered by letter of credit. The bank when issuing letter of credit assesses the buyers credit risk. The bank promises to pay the seller upon presentation of certain documents. The letter of credit typically requires a bill of lading. Other type of documents might include financial documents, commercial documents, shipping documents, official documents and insurance documents.