Nova Southeastern University H.

Wayne Huizenga School of Business & Entrepreneurship

Assignment for Course: CSA 6470 International Legal Framework Submitted to: Dr. Stephen Muffler Submitted by: John Chiang Title of Assignment: Case 12-6 Trans Trust sprl v. Danubian Trading Co., Ltd.

Case 12-6.

TRANS TRUST S.P.R.L. v. DANUBIAN TRADING CO., LTD. United Kingdom, England, Court of Appeal, 1952. All England Law Reports, vol. 1952, pt. 1, p,970 (1952) FACTS: In September 1950, a Belgian buyer ordered rolled steel sheets from a British seller. When Belgian buyer placed its order, it wrote the seller that a credit will be opened forthwith. The seller then contracted with a wholesaler (American company) to procure the steel. When the seller

prompted the buyer for the L/C (letter of credit), the buyer responded that it had not arranged for one and would not be doing so. The seller sued for breach of contract. The buyer answered that its order was conditional on obtaining a L/C (letter of credit) and that since it had not done so; it had no contractual obligation to the seller. The trial court found for the seller and awarded it damages in the amount of its lost profits. The buyer appealed.

ISSUES: (1) Was the requirement to get the L/C (letter of credit) a condition precedent to the formation of the contract or a condition of its performance? (2) What is the proper measure of damages?

DECISION: The buyer must pay the seller its lost profits. When a buyer and seller enter into a contract, and the buyer agrees to obtain a L/C (or a seller agrees to obtain a standby L/C), A condition for the

performance of the contract; because the contract already exists, the failure to obtain a credit will be a breach that will entitle the injured party to sue for damages. A condition precedent is one that must be fulfilled before there is a contract. A condition of performance is something a party must do or breach the contract. The damages due for failing to provide a L/C (letter of credit) is the actual lost profits.
Pembeli harus membayar penjual labanya yang hilang. Ketika pembeli dan penjual masuk ke dalam kontrak, dan pembeli setuju untuk mendapatkan L / C (atau penjual setuju untuk mendapatkan standby LC), Sebuah kondisi untuk pelaksanaan kontrak, karena kontrak sudah ada, kegagalan untuk mendapatkan kredit akan menjadi pelanggaran yang akan memberi hak pihak yang dirugikan untuk menuntut ganti rugi. Sebuah kondisi yang disyaratkan adalah salah satu yang harus dipenuhi sebelum ada kontrak. Sebuah kondisi kinerja adalah sesuatu pihak harus melakukannya atau pelanggaran kontrak. Kerusakan karena karena gagal memberikan L / C (letter of credit) adalah keuntungan yang hilang sebenarnya.

RATIONAL: (1) The facts showed that the buyer promised to obtain the L/C (letter of credit) as a condition of performance. (2) The buyers argument that the seller could have resold the steel is inapplicable, since in L/C (letter of credit) transactions the seller often needs the assurance provided by a credit in order to purchase its own materials. If

it does not have that assurance, it cannot go ahead with its performance, and thus would have nothing to resell in the event of a breach. To protect the rights of sellers in such circumstances, the damages must be the lost profits.
RASIONAL: (1) Fakta-fakta menunjukkan bahwa pembeli berjanji untuk memperoleh L / C (letter of credit) sebagai kondisi kinerja. (2) Argumen pembeli bahwa penjual bisa dijual kembali baja tidak dapat diterapkan, karena dalam transaksi L / C (letter of credit) penjual sering membutuhkan jaminan yang diberikan oleh kredit untuk dapat membeli material mereka sendiri. Jika tidak memiliki jaminan itu, tidak dapat melanjutkan dengan kinerjanya, dan karena itu akan memiliki apa-apa untuk dijual kembali jika terjadi pelanggaran. Untuk melindungi hak-hak penjual dalam keadaan seperti itu, kerusakan harus kehilangan keuntungan.

RELEVANCY: Put into very basic terms, a letter of credit is a method of guaranteeing that the shipper gets paid, and the purchaser gets a shipment - or at least, this is what the intent is all about. The reality is not always quite so well defined. The letter of credit is only a good method of providing payment for freight it is not a solid guarantee of receiving full payment, or that what was ordered is what gets shipped. It is regularly the shipper/beneficiary who accepts all bank charges, and costs for conforming the required paperwork to a letter of credits demands. Before entering into a Letter of Credit, the shipper should make themselves aware of the full amount of money their bank can, and may

charge, and add these costs to the purchase price in order to cover themselves against the loss.

Dimasukkan ke dalam hal yang sangat dasar, letter of credit adalah metode yang menjamin bahwa pihak pengirim yang dibayar, dan pembeli mendapat kiriman - atau setidaknya, ini adalah apa tujuannya adalah semua tentang. Kenyataannya tidak selalu begitu baik didefinisikan. Surat kredit hanya metode yang baik untuk menyediakan pembayaran untuk barang - itu bukan jaminan yang solid menerima pembayaran penuh, atau bahwa apa yang diperintahkan adalah apa yang akan dikirimkan. Hal ini secara teratur pengirim / penerima yang menerima semua biaya bank, dan biaya untuk sesuai dokumen yang diperlukan untuk surat kredit tuntutan. Sebelum memasuki Letter of Credit, pengirim harus menjadikan diri mereka menyadari jumlah penuh uang bank mereka bisa, dan mungkin akan mengenakan biaya, dan menambahkan biaya tersebut ke harga pembelian untuk menutupi diri terhadap kerugian.