Business Law: Case Study Analysis of Black Diamond and Universe Gems

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Business law

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
PART 2............................................................................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Business law is one of the essential aspects that can help an organisation to deal with their day to
day obligations that are affecting their growth and profitability at the same time. This project
report is entirely based on the case study of Black Diamond and Universe Gems Company in
relation to the CISG rules and regulation (Vagts and et.al., 2015). Apart from this, essential ways
through which they can resolve their issues has also being discussed in this report.
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PART 1
ISSUES
According to the mentioned case study, it has been found that Blanc Diamond Ltd is best known
for the selling of wide range of high-quality jewellery. At the time of global financial crisis, they
are able to sell their products at half of the prices for six-month duration. In relation to develop
an effective sales period, Black Diamond Company has started to buy high quantities of precious
gemstone so that they can transform them into a valuable worthy. This will create maximum
impacts on the overall business operation of the company (Schwartz and et.al., 2013). They have
decided to sign a contract with Greg universe of the other gems Pvt ltd in order to purchase the
gemstones.
Rule
1. The purpose of the CISG is to deliver a modern and fair regime for contract for international
sales of goods. Hence, the CISG used to contribute significantly to introduce certainty in
commercial exchange and reduction in the transaction costs. Yes, the convention on contract
between Black Diamond and Universe gems has specific right to govern international sales of
goods. The outcome of legislation tends to offers a valuable beginning of the 20th century. This
act governs certain contract for international sales of product among private businesses. It does
not exclude the sales to consumer and sales of services as well as selling of some other types of
products. It used to apply that contract for sales among parties that places of business in various
contracting state. For example, validity of contract and effect of contract on property in good
sold tends to fall outside the convention scope. It has also allowed proper freedom of form
related to the contract; the company can ask for a declaration needed in written form to confirm
the contract.
2. According to the mentioned case scenario, it has been seen that both the party’s black diamond
and universe gems have not entered into the contract. They only confirm their order by writing
letter to one another for just asking about the total requirement of the gems and cost for each
purchase of gemstones. The international sale of good contract is a treaty that has been related
with the global sales norms. It has been ratified by 91 states that are accountable for a valuable
proportion of world trade organisation. It is one of the most crucial international law that tends to
provide maximum safety to their sales and purchase of product between two parties. The CISG
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allow the entire exporter to deal with choice of legal law issues that offers substantive rules on
which contracting parties and third person relies (Park, 2012). According to the article 1(1)(b) of
CISG that allow the application related to CISG cases in relation to the specific rules of private
companies. It is essential for the companies to sign a written form of contract in relation to sales
of goods under article 11, 12 and 96. An offer is an act of legal rules that has been complies with
applicable national regulation which is associated with CISG.
3. In accordance with the overall issues that has been faced by Black Diamond in relation to their
financial crises. They have decided to purchase gemstone from universe gems in 1million dollar
for 500 gems. It has been found that officially they have not come into any contract as they have
only offered to the universe gems and in return it was accepted by the come. Thus, there is not
any contract developed between both the parties. Knowing all the facts or legal regulation under
CISG norms and also followed the CL-1 standard that all black diamond uses. But on May 20
Garnet tend to gets an email from one of the staffs of Black Diamond that receive and analyse
the shipment they were sent by Universe gems. Actually, there are cheap alternative to diamond
as they have not made any contract regarding such kind of issues. Thus, they would not
successfully incorporate as an interim into a proposed contract. According to the revocation of
offers is regulated under article 16 of CISG. It would be revocable in case it would reach the
offer before the acceptance is dispatched to the other parties.
4. After analysing the issues that has been arises between the Black Diamond and universe gems,
it has been essential to take essential action toward the other companies which has cheat by
providing wrong products (Posner, 2014). It has been seen that according to the UN convention
on contract related to the international sales of goods which has played an increasingly valuable
role in global trade. There has been right to termination, specific performance and reduction in
the prices which were decided with the contract. It would also be deal with certain argument
which is having uncertainty that is inherent to the fundamental concept of economic inefficiency
of a particular performance. There are certain necessities of various remedies under the COSG
framework those are considered as unfamiliar to the English Lawyers. These are basically termed
as default rules that are associated with the transaction made between two parties.
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Application
It is essential for the Black Diamond Company to make use of breach of contract act is
applicable. The reason behind this is that universe gems has not provide the right products to the
Black diamond as it was asked by the client while offering the request for 500 gems. It is a legal
cause of action and has type of civil wrong aspects that has binding agreement for exchange
which is not being honoured by one of more than one parties in which the contract has been
made with preference to the terms and condition (Frank and Bix, 2017).
Case Example:
Harvey v Facey [1893] AC 552 Privy Council
According to this particular case, it has been found that Harvey used to send a telegram to Facey
stating that matter for selling Bumper hall pens. Then Facey also replied with the same that it
would cost around €900. Both of them have agreed on the matter.
Held: The Privy Council has analysed that there was not any contract has been made among both
of them. There was no any evidence of an intention that telegram send by Facey was to be an
offer.
Conclusion
From the above case analysis, it has been concluded that both the parties need to sign contract
before making any deal. Further, CISG rules and regulation must be following accordingly so
that chances of mistakes can be avoided in near future regarding the international sales of goods.
The overall case scenario is avoided because of not having proper contract. There was no such
evidence that can help the parties to deal with any kind of unethical situation.
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PART 2
5. There is not such convention on contract for international sale of goods has been governing
the agreement among the black diamond a crystal. Because has a warehouse situation in
Melbourne and the gemstones are going to shipped from the port of Brisbane through using a
boat. But on the 22, July 2019 the shipment was stolen by the robbers. Hence, in the absence of
the contract they cannot claim for any compensation from the other companies as per the CISG
rules and regulations. It has been applied that contract for sales of products among parties can be
placed of business are in various states. The rules of private international law tend to be relation
with the application of contracting state (Bently and Sherman, 2014). There are certain essential
matters which are associated in this kind of situation because it has been applied by the virtue of
parties. It has been found that there is certain obligation that are related with the sellers which
consists of delivering products in conformity with the total quantity mentioned in the contract as
well as related to the transfer of property in goods.
6. CFR is known as code of federal regulation which is related to the codification of the common
and permanent norms and law that are published by the federal register by its executive
department. It is also known as annual edition codification of common policies that are made by
the concern agencies and government. Cost and other freight charged is a legal aspect that is
mentioned in the agreement among buyer and the seller of international business. The rule is
applicable to products that are transported through using sea route. Under this the seller is also
liable to provide documentation which is essential to pick up the product from the transporter
mode. No, crystal is not liable for the robbery of 100 pearls at the port of Brisbane. The reason
behind this is that it was totally rose fault because it is clear incident of negligence which has
shown by rose.
7. Cost, insurance and any other charges is a determine as an expense which are paid by the
seller to in order to cover the cost and insurance against the possibility of any loss or damage to
the orders. In case of crystale, it was essential to provide insurance for the products which was
going to be shipped to Black diamond. Because, it is considered as unethical incident that can
affect the both parties’ losses. In case the insurance has been made to the merchandise the
chances of getting recovery amount is more (Biondi and Zambon, 2013). Again, it was the fault
of seller that he must be ensures that their products are safe and secure before exporting to the
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parties. Crystale has been delivering the goods on terms and condition of half payment the risk of
losses to the products has passes when the goods are on the get on the vessel.
8.
(a): According to the given case scenario, it has been seen that crystale breach the contract as she
was not able to provide the right products as discussed with the universe gems. All the diamond
is different from that the real one.
(b): It can be said that the damage to the products has been done because of not packing the
products with proper material. Again, this could be the breach terms because it is the
responsibility of Crystale to make sure that every product which is going to be send to Black
Diamond must be safely reached (Bernaz, 2016).
(c): The amethysts lost have been lost in the sea as because the merchandise was kept for 2 days
at the port of Brisbane. This would not been check before selling it to the ship. This happens to
be clear case of negligence which has been shown from the crystale side.
9. In accordance to meet the specific requirement of the subject matter that has been faced by
black diamond Company with the universe gems. There is certain remedy which has to be taken
into account in case of wrong products sale. The seller (Crystale) need to either re-transport the
products with the respective insurance cover so that in case of any damage the party could claim
of compensation in near future time.
In relation to the amethysts lost at sea which was seen with the case of robbery to the gems? The
CISG used to provide cover benefits in case of any loss of damage occurs because of some
unethical measure. It would safeguard the interest of the buyer so that their product would
remain safe and secure till it has not reach with them in proper manner (Nica, 2013).
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CONCLUSION
From the above project report, it has been concluded that business law is one of the key aspects
that can help both parties to secure their products or other aspects in well organise manner.
Further, this analysis could also see that essential role of CISG in case of any damage of
unethical practices done with the products. Overall evaluation is benefits for the companies to
resolve their future losses which are going to affect their operations in near future time.
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REFERENCES
Books and Journals:
 Bently, L. and Sherman, B., 2014. Intellectual property law. Oxford University Press,
USA.
 Bernaz, N., 2016. Business and human rights: history, law and policy-bridging the
accountability gap. Routledge.
 Biondi, Y. and Zambon, S. eds., 2013. Accounting and business economics: Insights from
national traditions. Routledge.
 Frank, J. and Bix, B.H., 2017. Law and the modern mind. Routledge.
 Nica, E., 2013. Social Responsibility, Corporate Welfare, and Business
Ethics. Psychosociological Issues in Human Resource Management. 1(1). pp.9-14.
 Park, W.W., 2012. Arbitration of international business disputes: studies in law and
practice. OUP Oxford.
 Posner, R.A., 2014. Economic analysis of law. Wolters kluwer law & business.
 Schwartz, R.L., and et.al., 2013. Health law: cases, materials and problems. West
Academic Publishing.
 Vagts, D.F., and et.al., 2015. Transnational business problems. West Academic.
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