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1、1 The Final Review Question types: Section I: True or False. (Mark T for True, F for False in the blank provided) (20 %) SectionH Give brief answers to the following questions. (30 %) Section III: Read the Case carefully and answer the following questions. (20%) Section IV: Read the Case carefully a

2、nd answer the following questions. (30%) Content: 1. The establishment of the contract: a valid contract is an agreement that contains all of the essential elements of a contract which are: (1) it is an agreement between the parties entered into by their mutual assent; The mutual agreement is reache

3、d through the bargaining process, between offferor and offeree until the offeree accepted the offer. In other words, acontract isn t formed until the offer is accepted by the offeree. (2) the parties must have legal capacity ; (3) the contract must not be for illegal purposes or to carry on an activ

4、ity that is illegal or contrary to public policy. The above tell us that which essential elements are contained by a valid contract. Offer: an offer is a statement by one party of a willingness to enter into a contract on stated terms, provided that these terms are, in turn, accepted by the party or

5、 parties to whom the offer is addressed. An offer takes effect when it reaches the offeree CISG: A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of accept

6、ance. Requirement of Offer: under the CISG an offer must be sufficiently definite and indicates the intention of the offeror to be bound. (1) the contract law of most nations hold that an offer must be addressed to one or more specific persons ; (2)A proposal is sufficiently definite if it indicates

7、 the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.(3) an offer becomes valid when it arrives at the offeree. This tells us that an offer must has the conditions. An invitation to offer or invitation to treat is simply an expression of willingn

8、ess to enter into negotiations which, it is hoped, will lead to the conclusion of a contract at a later date. The distinction between offer and invitation to offer is the intention; that is, did the maker of the statement intend to be bound by an acceptance of his terms without further negotiation o

9、r did he only intend his statement to be part of the continuing 2 negotiation process. Under CISG rules, an advertisement is presumed to be an invitation unless the contrary is clearly indicted by the person making the proposal. In an auction sale, when the auctioneer invites the bids from the publi

10、c, is it deemed as an offer made to the prospective buyers? or an invitation to offer? The Binding of an Offer: As a general rule, an offer is binding the offeror and not binding on the offeree. CISG states: (1) until a contract is concluded an offer may be revoked if the revocation reaches offeree

11、before he has dispatched an acceptance;(2) however, an offer canbt e revoked: (a) if it indicates, whether by stating a fixed time for acceptanceor otherwise, that it is irrevocable or (b) if it was reasonable for offeree to rely on the offer as being irrevocable and the offeree has acted in relianc

12、e on the offer. It is not correct that the offer shall be cancel before the offeree to accept without exception under the CISG. The above told us that what circumstances an offer may be revoked under the CIS.G. An ofer, even if it is irrevocable, may be withdrawn(撤回)if the withdrawal reaches the off

13、eree before or at the same time as the offer. 要約被撤回 ; What circumstances an offer may be withdrawn under CISG? The above answered the question. An offer did not take effect becauseits withdrawal notice already reached the offeree before its offer reach offeree, which withdrew effectively its offer.

14、So the agree of the other party is not the acceptance. There is no contractual relationship between the parties. Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. 要約被撤銷 The acceptance is the offeree s manifestation of

15、the intention to be bound to the terms of the offer. Under the CISG, an acceptance may take the form of a statement or any other conduct by the offeree that indicates the offeree s intention to be bound to the contract. 1) The acceptance must be made by offeree to offeror. 2) An acceptance must be m

16、ade within the period of validity; 3) The acceptancemust be unconditional and absolute, with same contents as the offer; A purported acceptance which does not accept all the terms and conditions proposed by the offeror but which in fact introduces new terms is not an acceptance but a counter-offer,

17、which is then treated as new offer. The effect of the counter-offer is to kill off the original offer so that it cannot subsequently be accepted by the offeree. Under the CISG, an acceptancecontaining new terms that do not materially alter the terms of the offer becomes a part of the contract , unle

18、ss the offeror promptly objects to the change. However, an acceptancethat contains additional or different terms that do materially alter the terms of the offer would constitute a rejection of the offer and a counteroffer. No contract would arise at all unless the offer in return accepts all of the

19、terms of counteroffer. 3 Under CISG an acceptance of the counteroffer may arise by assent or by performance. Sales excluded from CISG: 1) Consumer goods sold for personal, family or household use. 2) Goods bought at auction. 3 ) Stocks, securities, negotiable instruments or money. )4 Ships, vessels,

20、 or aircraft. 5) Electricity. 6) Assembly contracts for the supply of goods to be manufactured or produced wherein the buyer provides a substantial part of the materials necessary for such manufacture or production.7) Con tracts that are in prep on dera nt 主要的)part of the supply of labor or other se

21、rvices. 8) Liability of the seller for death or personal injury caused by the goods. )9 Contracts where the parties specifically agree to opt out of the convention or here they chose to be bound by some other law. 2. breach and remedies Whatsmeaning of anticipatory repudiation or anticipatory breach

22、? One type of breach of contract occurs when the promisor indicates before the time for his performance that he is unwilling or unable to carry out the contract. This is called actual breach, is that correct? A party may declare the contract avoided: if the failure by the other party to perform any

23、of his obligations under the contract and this Convention amounts to a fundamental breach of contract. What are the consequences of material breach under the CISG? The party who is injured by a material breach has the right to withhold his own performance. He is discharged from further obligations u

24、nder the contract and may cancel it. He also has the right to sue for damages for total breach of contract. What is the difference between the remedies for material breach of contract and nonmaterial breach? The party who is injured by a material breach has the right to withhold his own performance.

25、 He is discharged from further obligations under the contract and may cancel it. He also has the right to sue for damages for total breach of contract. By contrast, the non-breaching party may sue for only those damages caused by the particular breach. In addition, he does not have the right to canc

26、el the contract, although a nonmaterial breach can give him the right to suspend his performance until the breach is remedied. Once the breach is remedied, the non-breaching party must go ahead and render his performance, minus any damages caused by the breach. As long as the seller fails to perform

27、 the contract within the prescribed time limit without exempt cause, the buyer can announceto cancel the contract. Is that correct? The CISG provide, if the seller is not fulfill his obligations within the time stipulated in the contract and does not constitute a fundamental breach of contract, the

28、buyer can give the seller a reasonable additional time to continue his performance under the contract, and cant take conflicts with the remedies such as terminate the contract during this period of time. 4 Specific performance: an order of specific performance is an order of the court which requires

29、 the party in breach to perform his primary obligations under the contract. In common law countries, specific performance are seldomadopted by the court and are subject to the following conditions: specific performance is generally unavailable where it would cause severe hardship to the defendant, w

30、here the contract is unfair to the defendant, where the conduct of the claimant demonstrates that he does not deserve the remedy, where the claimant has sought to take advantage of a mistake by the defendant, where the performance is impossible, where the contract is one of personal services, such a

31、s contract of employment So, is it correct that specific performance will be granted by most of the courts in case of contract breach in common law countries as it helps remedy the plaintiff from unfaithful conducts? Performance of contracts under CISG: Seller s obliga:tidoenliver the goods, it may

32、be actual or constructive; hand over any documents relating to them and ensure that the goods conform with the contract. The above tell us that what obligations a seller is required under the CISG. Place for delivery: under the CISG, if the seller is not bound to deliver the goods at any other parti

33、cular place, his obligation to deliver consists: (1) the first carrier s place oiffthbeuscinoenstrsact involves the carriage of goods or (2) the place where the parties knew the goods were located or were to be manufactured or produced. ( the time of the parties knew the place was when the conclusio

34、n of the contract); (3) in other case -n placing the goods at the buyer s disposal at the place where the seller had his place of business at the time of the conclusion of the contract Implied warranties under CISG: The seller must deliver goods that(1) are fit for the purposes for which goods of th

35、e same description would ordinarily be used; (2) are fit for any particular purpose expressly or impliedly make known to the seller at the time of the conclusion of the contract. So, it is correct that the seller must deliver goods that are fit for the purposes for which goods of the same descriptio

36、n would ordinarily be used. The seller must deliver goods which are free fromany right or claim of a third party based on industrial property or other intellectual property, of which under the law of the state where the goods will be resold or otherwise used, if it was contemplated by the parties at

37、 the time of the conclusion of the contract that the goods would be resold or otherwise used in that state; or (b) in any other case, under the law of the state where the buyer has his of business. the obligation of the seller doesnot extendto cases where: (a) at the time of the conclusion of the co

38、ntract the buyer knew or could not have been unaware of the right or claim; or (b) the right or claim results from the seller cosmpliance with technical 5 drawings, designs, formulas or other such specifications furnished by the buyer; the above tell us that is not correct about the obligation of se

39、ller that must deliver goods which are free from any right or claim of a third party based on industrial property or other intellectual property under CISG does not discharge in any case. unless the buyer agreed to take the goods subject to that right or claim. The passing of the risk: Passage of ri

40、sk is defined as the shifting of responsibility for loss or damage from the seller to the buyer When a contract requires the seller to deliver the goods to a carrier for shipment and does not require the seller to deliver them to a particular place, the risk passes then the goods are handed over to

41、the first carrier. According to the CISG provisions, If the contract has no provision on bearing the loss of goods, and involved transportation of the goods, then the risk transfer from seller to buyer when the delivery of the first carrier for delivering buyer in according with the contract. Someti

42、mes goods are sold after they are already aboard a carrier. In such a case, the risk passes to the buyer at the time the contract is concluded. The risk of loss of the goods which be sold in transit transfer to buyer when the contract is concluded in any case under CISG. Is that correct? The goods a

43、re sold after they are already aboard a carrier. In such a case, the general rule is that the risk passes to the buyer at the time the contract is concluded. if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and di

44、d not disclose this to the buyer, the loss or damage is at the risk of the seller. The risk does not pass to the buyer until the goods are clearly identified to the contract. At this time, the risk of loss of goods shall be borne by whom? Partnership and corporation: The general partners have joint

45、and several liability for the debts of the partnership. The limited partners have limited liability, meaning they are only liable on debts incurred by the firm to the extent of their registered investment. A partner need not to be responsible for the debts of the partnership When the partner withdraws from the partnership. Which is correct? In ch

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