Business Law Exam: Party Autonomy, Letter of Intent & Equipment Sale

This assignment delves into several key aspects of international business law. It begins by examining the relevance and limitations of party autonomy in international commercial agreements, focusing on the freedom parties have in drafting contracts, choosing applicable laws, and selecting jurisdi...Read More

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Business Law Assignment

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Question 1
With regard to the assessment of rules applicable in the international commercial agreements, the
relevance of party autonomy is included in the central legislative organ. The parties who deal
with arbitration possess certain standards of freedom as per the agreement. But they also possess
certain limitations. The basic principles of natural justice and equity bind them together. They
can in no means exceed these principles. The arbitration proceedings cannot be conducted in the
way they want to. They have to abide by the model law regarding the judicial and the quasi
judicial authorities. Thus, the relevance of the party autonomy is that, the parties have the powers
of selection in their own hands.
The parties have the freedom of drafting the tailor made contractual agreements to choose the
applicable laws and regulations and selecting the court which possesses the jurisdiction. The
party autonomy thus has the discretion of making customized agreements as per their needs and
the laws must not be in contravention to the agreement. The parties can select the courts under
which they want arbitration to take place.
Question 2
A letter of intent refers to a particular document which deals with one or more agreements
between two or more parties. This document requires the intention of the parties before such
agreement is made final. Such agreements can be regarding mergers or acquisitions, contracts
based on transactions, real estates, joint agreements, contracts regarding properties which include
lease or mortgage. A letter of intent is concise and unambiguous. It contains tables and the
parties are bound with this letter. The letter of intent is given by one party to another before the
signatures are put in the agreement. It has to be negotiated in a very careful manner. The parties
undertaking such agreement must secure both the parties for the perfect transaction.
In the course of negotiation in the international contract, a letter of intent thus implies a letter to
know the real intentions of the parties who live across the world. The implications of the letter of
intent in the international contracts is to permit the parties to pen down the primary conditions in
a quick manner before extending the resources upon specific contracts, making it the ultimate for
the approvals. It also implies that the parties would be negotiating in the manner of a merger or
of a joint venture. The letters of intent also provides security when the deal is cancelled in a

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sudden manner. These letters also undertakes various challenges and resolves them which are
created in the international contracts.
Question 3
Facts of the case:
Company A (Seller) does manufacturing and marketing of medical equipment. Company B
(Buyer) runs a chain of diagnostic centers. Both enter into a sale purchase agreement for the sale
of obstetric ultrasound echography equipment on February 2018. The equipment was shipped
from Hamburg through independent carrier on 15 may 2018 and it reached at Lisbon on June 4.
A representative of buyer examined the equipment before unloading from ship. He noticed that a
part of the packaging was torn. The electronic panel was destroyed. The representative informed
Seller about it and told him that he would not take the delivery. He would also not pay the
leftover amount. The equipment have to be replaced for a new and without damaged one.
Issues Involved:
The issues involved here is whether Buyer is liable to purchase the damaged equipment? What
remedies and rights does the seller possess?
Provisions of law:
According to the law of contract, when a buyer and a seller come into an agreement and before
the goods are delivered to the buyer, the buyer possesses the right to examine and investigate the
products. In case they find flaws, or there arises a breach in the contract due to the delivery of the
goods being different from the ones promised then the buyer possesses the right to refuse the
taking of the delivery. This is because the goods are not in the same form as per their promise. In
such a situation the seller would be liable to replace the goods or provide compensation for the
loss. In this case, the seller could not provide the equipment in the condition promised to the
buyer. Hence the buyer refused and the seller was liable to replace the equipment and provide
compensation to the buyer.
Decision:

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Thus, Seller would have to replace the equipment. After replacing, the buyer would purchase the
same as per their agreement.