1. In this dispute, which country’s law would apply that of the United States or of Germany?

Answer: The purchaser from Germany ordered pork livers of a specific weight and good quality.
They did not specifically mention the sex of the animal. The shipment had been prepared
according to the instructions of the purchaser i.e. 30,000 lbs. of customary merchantable
quality U.S. pork livers. Thus, the law of United States would be applicable.

2. If the case were tried in U.S. courts, who do you think would win? In German courts? Why?

Answer: The seller belongs to USA while the purchaser belongs to Germany. Both of these
countries have a different law system. The legal system of Germany is based on the civil law.
Civil law is based on rules organized into codes. The legal system of U.S. is based on common
law. Common law is based on traditions, precedents and customs. Therefore, the results of the
dispute would be different in either court.

If the case was tried in U.S. court, then the seller would win. Since the order was prepared
according to the instructions of the buyer. The seller has the upper hand here due to the fact
that there was no demand for sow livers.

In Germany, either one could win the dispute. The seller can win on the same basis that there
was no demand for sow livers. The buyer can win this dispute on the basis that since the order
was placed from Germany, the standards followed there should be maintained.

3. Draw up a brief agreement that would have eliminated the following problems before they
could occur:

a. Whose law applies?

Answer: In order to avoid the dispute, a clause over whose law should be applicable can be
added in the contract. The clause should clearly state that in a situation where disagreement
occurs between the two parties, then which country's law should be applicable on the situation.

b. Whether the case should be tried in U.S. or German courts.

Answer: The agreement should clearly state that if there is any dispute the case should be tried
in U.S. courts since the German purchaser ordered from the U.S. The shipment was prepared to
meet the exacting standards of the American market, while adhering to the purchaser’s
requirement.
c. The difference in opinion as to “customary merchantable quality.”

Answer: Customary merchantable quality means a product which is undamaged and usable and
of sufficient quality, taking into account their description and price. The fact that the German
customer stated that the pork livers should be of customary merchantable quality does not
indicate the sex of the animal. It refers to the condition of the liver. The agreement between
them should contain details about what ‘customary merchantable quality’ stands for (or,
exactly what it means to them) considering both of their different perspective. That would have
eliminated the confusion.

4. Discuss how SRC may be at work in this case.

Answer: Self-reference criterion (SRC) is when decisions are taken on the basis of experiences,
values and knowledge of one’s own culture. Both the American exporter and German customer
should have realized that different countries have different culture or values. There should have
been a detailed discussion regarding the expectations of the German purchaser. While
exporting pork livers to its German customers, the American exporter did not consider the sex
of the pig which is an important factor and determinant of quality in the German market. The
German customer also did not take into account the fact that Americans consume both male
and female pig livers, and thus ordered pork livers for a specific quantity without mentioning
the sex of the animal. So, SRC played a role in both buyers’ and sellers’ side while making the
order and processing it.