1) We-Assemble, a well-known manufacturer of high-end processors used in mobile phones located in China, concluded a contract for the sale of 10,000 processors with MobliesRus (a manufacturer of mobile phones based in France). The contract stipulates FOB Shanghai (Incoterms 2010) and that delivery must be made on the 3rd of July 2019. During negotiations, MobilesRus had told We-Assemble that it had a very lucrative contract for the sale of mobile phones with a particular company which could only be fulfilled if the processors were delivered on time. MobilesRus however did not mention the exact amount of profit it was going to make from the contract, which was £30,000. We-assemble was unable to produce the goods on time and as a result was only able to make delivery on the 5th of July. On delivery MobilesRus discovered that the goods did not conform to their description under the contract and had a market value of £8000. a) Does the CISG apply? Note: you may assume that under the conflict of law rules of China, the contract is governed by the domestic law of China. b) Assuming that the CISG applies and that MobilesRus paid £10,000 to We-assemble for the processors, how much can the buyer recover in damages or reduce the price by? You may assume that the market value of conforming goods would be £12,000. c) What requirements must be fulfilled for MobilesRus to be able to avoid the contract under the CISG? d) Given that We-Assemble makes large and regular sales (including delivery obligations) to the UK, what advantages does the incorporation of FOB provide in this scenario?
1) We-Assemble, a well-known manufacturer of high-end processors used in mobile phones located in China, concluded a contract for the sale of 10,000 processors with MobliesRus (a manufacturer of mobile phones based in France). The contract stipulates FOB Shanghai (Incoterms 2010) and that delivery must be made on the 3rd of July 2019. During negotiations, MobilesRus had told We-Assemble that it had a very lucrative contract for the sale of mobile phones with a particular company which could only be fulfilled if the processors were delivered on time. MobilesRus however did not mention the exact amount of profit it was going to make from the contract, which was £30,000. We-assemble was unable to produce the goods on time and as a result was only able to make delivery on the 5th of July. On delivery MobilesRus discovered that the goods did not conform to their description under the contract and had a market value of £8000. a) Does the CISG apply? Note: you may assume that under the conflict of law rules of China, the contract is governed by the domestic law of China. b) Assuming that the CISG applies and that MobilesRus paid £10,000 to We-assemble for the processors, how much can the buyer recover in damages or reduce the price by? You may assume that the market value of conforming goods would be £12,000. c) What requirements must be fulfilled for MobilesRus to be able to avoid the contract under the CISG? d) Given that We-Assemble makes large and regular sales (including delivery obligations) to the UK, what advantages does the incorporation of FOB provide in this scenario?
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Transcribed Image Text:1) We-Assemble, a well-known manufacturer of high-end processors used in mobile phones located in
China, concluded a contract for the sale of 10,000 processors with MobliesRus (a manufacturer of
mobile phones based in France). The contract stipulates FOB Shanghai (Incoterms 2010) and that
delivery must be made on the 3rd of July 2019.
During negotiations, MobilesRus had told We-Assemble that it had a very lucrative contract for the
sale of mobile phones with a particular company which could only be fulfilled if the processors were
delivered on time. MobilesRus however did not mention the exact amount of profit it was going to
make from the contract, which was £30,000.
We-assemble was unable to produce the goods on time and as a result was only able to make
delivery on the 5th of July. On delivery MobilesRus discovered that the goods did not conform to their
description under the contract and had a market value of £8000.
a) Does the CISG apply? Note: you may assume that under the conflict of law rules of China, the
contract is governed by the domestic law of China.
b) Assuming that the CISG applies and that MobilesRus paid £10,000 to We-assemble for the
processors, how much can the buyer recover in damages or reduce the price by? You may
assume that the market value of conforming goods would be £12,000.
c) What requirements must be fulfilled for MobilesRus to be able to avoid the contract under the
CISG?
d) Given that We-Assemble makes large and regular sales (including delivery obligations) to the UK,
what advantages does the incorporation of FOB provide in this scenario?
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