Contract Law in Construction Management

INTERNATIONAL BUSINESS TRANSACTION AND THE LAW 1
Contract Law in Construction management
by (name)
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Tutor
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INTERNATIONAL BUSINESS TRANSACTION AND THE LAW 2
Facts/Issues
James operates a furniture store in Sydney offering collectibles and antiques for sale. He
emails Mr. Iwento, who is a Kamarian on his interest to purchase wooden elephants. Iwento
offers James 100 elephants at $1000 each. James replies to Iwento telling him that he would
accept the statues at $1000 each but only on Delivery Duty Paid (DDP) terms and not Free On
Board (FOB). He further writes to him that he will pay a deposit of 40%, and later pay 60%
when he receives the statues. Iwento does not communicate to James, but three weeks later
James receives a call from the customs boarder In Australia telling him that his consignment has
arrived. The officer at the boarder also advises him that he should pay an import duty of $1500
for the statue and that the statues will not be available for another week. The statues will not be
available as they have t be checked for insects as there is no record of treatment before leaving
Kamaria. The officer further advised James that several of the statues appear damaged due to
lack of sufficient packaging.
In this scenario, the issue is whether a contract exists between Iwento and James and what are the
terms of the contract. Also, the other issue is whether James can claim any damages against
Iwento for any breaches of the contractual terms. The other issue is which incoterm applies to the
contract, whether Delivered on Duty or Free of Board
Rule
Cartwright (2014) asserts that for a contract to be valid there has to be offer and acceptance.
When one party makes a statement which is clear, and can be accepted by the other party to
agree, it amounts to a valid offer. Offer shows the willingness of a party to enter a contract.
According to Dimmateo 2009, p.236)acceptance in a contract can either be communicated or

INTERNATIONAL BUSINESS TRANSACTION AND THE LAW 3
construed by the performance and thus amount to a bilateral contract. In the case above the
contract is also governed by United Nations Convention for the International Sale of goods CISG
incoterms which apply to Australia, because it is a signatory. The scenario does not state whether
Kamaria is a signatory, but James makes an offer made under the CISG, hence acceptance will
also be construed under CISG.CISG applies to contracts where the contracting parties are
members of different states. Hence the CISG can apply to the agreement made by James and
Iwento. Under the CISG, incoterms, on the formation of a contract provides in Article 19 (1) that
a reply to an offer which contains additions or modification becomes a counter offer. If the terms
do not materially alter the terms of the contract, then it will amount to acceptance but with little
modifications on offer Cross & Miller (2011).
Article 23 provides that when an offer becomes effective according to the CISG, the contract
becomes conclusive.18 (1) includes both conduct and statement by offeree as indicating
acceptance, silence does not mean acceptance under this provision. 18 (3) provides that
performing an act like dispatching goods or payment amounts to acceptance. CISG under article
32 requires that goods are properly packaged, which is in a way to preserve and protect the goods
as stipulated in article 2 Burnett &Bath (2009).
Rule on FOB And DDP Incoterms
.
Hinkelman, Denegri, Kang, Goheen, Freitas, Wooley, Shippey, Auerbach, Waring,
Clark, & Curry, (2010) shows that Under DDP incoterms, the seller is required to ensure the
goods are delivered to the buyer has paid all the duties, taxes, and any other expenses incurred