Conceptual Questions

Incoterms are a set of rules which define the responsibilities of sellers and buyers for the
delivery of goods under sales contracts.
They are published by International Chamber of Commerce (ICC) and are widely used in
commercial transactions. They are uniform trade terms which serve to define the
responsibilities of buyers and sellers in a given transaction.
The standard uniform meaning allows businesses across jurisdictions to fully understand
each other
Meaty Problem Question

Incoterm

If the contract was specified as EXW Incoterms 2010 who bears the loss associated with the putrid
Ox Kidneys and is Meaty Bits obliged to pay?

EXW Incoterms 2010 Risk transfers to the seller at Buyers location on pick up of goods
from the dispatch dock. The buyer has responsibility for insurance from the time of pick up.
Therefore Buyer (Meaty Bits) would bear the loss of under the EXW term.

If the contract was specified as FAS Incoterms 2010 who bears the loss associated with the putrid Ox
Kidneys and is Meaty Bits obliged to pay?
FAS Incoterms 2010 Free alongside ship Seller bears the risk until the goods are lifted from
the dock and loaded aboard the vessel. The seller has responsibility for acquiring insurance
to that point. As the goods are damaged prior to delivery at the dock, Wang Chung (Seller)
would bear the loss and.
Buyer would not be obliged to pay under FAS term
What about if contract specified as FOB Incoterm?
Free On Board : seller delivers the goods by placing them on board at the main point of
shipment and bears all the risk up until the point of loading. Similar to Q2 Wang Chung
would be the loss and the Buyer would not be obliged to pay under FOB terms.

What if the contract is silent on when risk passes?

Attempt to apply CISG
1) Are Wang Chung and Meaty Bits in countries that are member states to Vienna convention?
Yes
2) Does contract exclude the Vienna Convention / CISG from being applied? No
3) Does article 2 exclude the contract from being applied? No
4) the risk transfers at the time the buyer accepts the goods.
From the facts Wang Chung is not able to pass risk to Meaty Bits and Wang Chung is
responsible for risk and loss.
What is the proper law to settle the contract dispute?
We do not need to determine the proper law as we know the Vienna Convention applies
because both parties state
the terms of the Vienna Convention which determine the relevant principles of law for most
issues likely to give rise to dispute.