International business law cisg incoterms

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Sensitivity: Internal




Module Code


Module Title

Sustainable Development and International Business Law

Assessment Method

Written Report

Assessment Task

World Commerce Operations (WCO) is a multinational company that is incorporated

in USA and has a number of subsidiary companies. As part of the current strategic

business plan of the company, the directors of the company wish to expand

operations into the Pacific Rim by using their factories to produce the products for

sale in the Pacific Rim. WCO would like to enter into a number of international

business transactions:

1. First, WCO wishes to sell 1,000,000 hard-disk drives to a Chinese

manufacturer and a Philippine manufacturer of videogame consoles,

GamesPoint Ltd and NeoTech Ltd respectively. The directors of the

company are not certain whether they should dispatch the goods under CIF,

CIP or FOB terms but they are aware that China, where EnterLight Ltd

operate, can currently deal with euros and dollars. Nonetheless, in the

Philippines, due to a recent government’s change in monetary policy,

NeoTech can only deal with Pesos, the local currency of the Philippines.

i. Advise WCO on the Incoterm you consider most beneficial to

their interests. In addition discuss the applicability of the CISG

to the contracts.

Sensitivity: Internal

2. Furthermore, WCO agreed with an Indian buyer for the dispatch of 3,500

cars under FOB terms. WCO instructed an English freight company,

Portsmouth World Transporters (PWT) to load the goods onto the ships.

While PWT’s employees were loading the ship using cranes, a container

holding some 50 cars fell to the sea and the contents were completely


i. Discuss the issue of liability under the incoterm FOB and

compare how the issue would be dealt with under the CISG?

ii. Which do you consider to be a fairer outcome?

3. WCO entered into another agreement with a Japanese company, Tottori

Restaurants Ltd, for the dispatch of 2,000 tonnes of fish from the port of

Felixstowe, England to the port of Osaka, Japan. The captain of one of

WCO’s ships, the Argo, which was to carry the fish, failed to inspect the

goods on departure from Edinburgh, even though the fish was clearly

smelly, indicating that it was in bad condition. Despite this, the captain

issued a Bill of Lading stating: ‘IN APPARENT GOOD ORDER AND

CONDITION’, even though it was clear that the fish was contaminated.

i. To what extent does the statement on the bill of lading protect

WCO or the captain from liability?

ii. Which articles of the CISG would be applicable to the issues

raised in the scenario?

iii. Tottori Restaurants Ltd used a letter of credit to pay for the

goods. What is the significance of a letter of credit in the

international sale of goods?

4. WCO entered into agreement with a Malaysian company (Robotics Ltd.) for

the purchase of 20,000 electronic components for the construction of robots

to be used in clothing production. Negotiations were face-to-face and the

offer was made orally, while acceptance was made via email. The electronic

components were delivered 3 weeks late, which delayed Robotic Ltd.’s

Sensitivity: Internal

production schedule and led to them not meeting their obligations under a

separate contract. Given the nature of the production process Robotics Ltd.

did not discover serious defects in half of the components until 18 months

after delivery.

i. Would WCO be able to ‘cure’ its failure to meet its obligations or

Robotics Ltd. void the agreement under the CISG?

ii. Imagine there had been no issue with delivery and WCO were

selling the components in Malaysia via an agent under contract,

but for marketing reasons Malaysian clients believed the agent

was the owner of the goods and not WCO. Who would be

responsible for claims made be purchasers of the components?


This assessed task is worth 50% of your overall mark for this module

Learning Outcomes Tested

This task has been designed to assess students’ capacity to solve international

business problems through the practical application of sustainable development

theory and international business law’.

Assessment Criteria

Assessment criteria are descriptive statements designed to identify the specific

properties/characteristics/aspects of your work the marker will consider when

marking/grading it. In other words assessment criteria are designed to answer the

question: ‘What am I being assessed on?’

To complete this assessed task to the requisite standard students will need to:

 Demonstrate an understanding of the relevant legal regulations;

 Demonstrate an ability to apply and resolve the stated legal issues.

 Articulate ideas in a comprehensive and structured format.

Sensitivity: Internal

By completing this assessment, students will be able to evidence competency in

the following areas:

 Commercial Awareness

 Creativity

 Global citizenship

 Enterprise and innovation

Furthermore this assessed task gives students an opportunity to develop and

demonstrate their competency in the following transferrable skills:

 Research

 Problem solving

 Communication and literacy

Further information about graduate competencies/transferable skills can be found

in the ‘Student Assessment Handbook: Coursework’.

Support Arrangements

The point of contact for this Assessment Diane Stephenson. Diane will help

students to understand the requirements of this assessed task by:

 Discussing the assessment criteria with students in class

 Giving students opportunities to practice applying the assessment criteria to

examples of student work

Due Date

The written document is to be uploaded to Derby Moodle by Monday, 10th May


Word Limit

The word limit for this task is 3,000 words. This word limit is an indicative word

limit – your word count must be within 10% of the word limit for this task. Your

word count should include the main body of your work.

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