Business Law

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Table of Contents
Part One......................................................................................................................................2
Part Two.....................................................................................................................................5
References................................................................................................................................10

2BUSINESS LAW
Part One
Issue
The issue of the given case is to advise Garnet of his rights pertaining to the contract
with Greg Universe of the Universe Gems Pty Ltd under the Convention on Contracts for the
International Sale of Goods (CISG).
Rule
1. Signatories of the CISG and any contract between them to be governed by its
rules.
Article 1(a) and Article 1(b) of the CISG states that both parties to the contract must be
signatories of the CISG. While Article 3(2) of CISG directs that a contract between the two
parties who are signatories of the CISG shall be governed by the rules and regulations laid
down under the convention.
2. Elements of a contract under the CISG
Alike common law of contract, CISG also states that an effective offer and an effective
acceptance is the basis of a binding contract along with the intention of the offeror to be
bound when the offeree accepts the offer as stated under Article 14. A consideration is as
important as the other elements as well. In addition it is stated that the parties to the contract
must include their own terms to the contract. Article 35 (1) of CISG list down the
applications for a seller to maintain the quality, quantity, description and packaging of the
goods as agreed upon with the buyer.
3. Incoterm
Incoterms helps to write contract by way of internationally recognised shorthand,
providing clarity to the obligations of the parties to the contract. Incoterms specifically deals

3BUSINESS LAW
with the terms related to delivery, arrival, carrier, et cetera. It does not specify about the
elements of offer acceptance consideration and the intention of the parties as it is mainly
related to transportation of the goods agreed to be exchanged in a contract (Bridge 2017).
4. Remedies
In case of breach of contract under CISG, an aggrieved party may ask for certain
remedies under the convention that may involve a payment of damages, performance of the
obligation of the breaching party e for or to simply avoid the contract and get back to the
position when they had not formed the contract. Article 39 directs the buyer to notify the
seller pertaining to the defect or poor quality of the goods within a reasonable amount of time
(Bridge 2017).
Application
In this case, as both Australia and Romania are signatories to the CISG, therefore the
contract between them shall be governed by the terms and conditions let down under the
CISG provided that the parties have not expressly avoided it.
The elements of a valid contract have been satisfied in this case by way of an effective
offer and effective acceptance along with an exchange of consideration which speaks for the
intention of the parties to form a binding contract. Garnet from Black Diamond limited
approached Greg Universe of Universe gems Pty Ltd for purchasing 500 white Diamonds in
Princess cut of CL 1 standard as per the Australian classifications of gemstones. This offer
was accepted by Greg universe of Universe Gemstones Pty Ltd with a consideration amount
of 1 million US dollars, along with a confirmation email which mentioned that the Diamonds
would take two weeks to arrive Garnet's office and also that the shipment will follow the
Incoterm Rules 2010.