Termination in regards to breach of time and documentary obligations in CIF contracts Comparative study between the English law and United Nations Convention on Contracts for Sale of Goods 1980

Abstract

International sales of commodities, often involve large sums of money and large shipments of goods. The CIF contract has been chosen as subject for my analysis on the ground that it is the contract most commonly used in international commodity sales. Commonly, the original contracting parties are only part of string sales, the tendered documents will have to be passed down the string until they reach the final buyer. Because commodity markets are subject to drastic fluctuations, the contracts that take place in them are likely to be time sensitive in regards to the tendering and passing on of the notices and documents, these time limits must be strictly complied with it. Furthermore, because of the short time within which these documents must be considered and passed on, it is obviously important that the buyer should be able to determine his termination rights immediately after he becomes aware of any non-conformity disclosed in the documents. This important commercial decision whether to refuse the tender of non-conforming documents should not be complicated by asking the buyer to consider what the likely effect of any loss will be.The existence of predictable termination rights allow the buyer and seller to know exactly where they stand when such breach has occurred and will avoid timely and costly litigations. Termination is one of the most practically effective remedies in the context of international documentary sales of commodities. It can be considered as nearly eternal legal problem for the parties in the context of the commodities sales. It has a reappearing tendency on the agenda of sales lawyers, banks and insurance companies. Also, the commodities traders are very much interested in accurate assessment of their negotiating and settlement position. This question will be addressed under two major legal sources, i.e. English law and the United Nations Convention on Contracts for the International Sale of Goods 1980 (hereinafter CISG or the Convention) because of their significance in the international trade law. The debate about what law is best for dealing international commodities and documentary trade often centers on the comparison of the English law and the CISG. The thesis should be therefore considered as an attempt to contribute to this debate further by examining the right of termination within the documentary and commodities trade.