MINISTRY OF JUSTICE

HANOI LAW UNIVERSITY

GROUP ASSIGNMENT
INTERNATIONAL TRADE AND BUSINESS LAW
ADVANCED LEGAL ENGLISH 2

Topic: Analyze a CISG case

Group: 06

Class: 4529 – N01

Lecturer: Mr. Ngo Trong Quan

Ha Noi, 2023
 BIÊN BẢN XÁC ĐỊNH MỨC ĐỘ THAM GIA VÀ
KẾT QUẢ THAM GIA LÀM BÀI TẬP NHÓM
- Ngày nộp: 17/4/2023
- Nhóm số: 06 - Lớp: 4529
- Tổng số thành viên của nhóm: 07 người
- Nhóm trưởng: Nguyễn Thị Thu Mỵ (MSSV: 452938)
- Có mặt: 07 người
- Vắng mặt: 0 - Có lý do: - Không lý do:
- Môn học: Tiếng Anh pháp lý nâng cao 2
- Tên bài tập: Bài tập nhóm: Choose a CISG case. Prepare a case analysis of 4-5
pages.
- Quá trình làm bài của nhóm 06 như sau:
 Tìm kiếm thông tin và trao đổi phương hướng
 Phân công nhiệm vụ trả lời câu hỏi
 Tổng hợp nội dung và rà soát
 Tham khảo ý kiến từng thành viên trong nhóm và góp ý chỉnh sửa
 Thực hiện chỉnh sửa bản word
 Lên kế hoạch thực hiện bản trình chiếu
 Phân công thành viên thuyết trình.
 Đánh giá kết quả khách quan và công bằng

Đánh giá/ Đánh giá

Xếp loại của SV của GV
STT Mã SV Họ và tên SV Điểm Điểm
A B C kí tên (số) (chữ)
1 452937 Nguyễn Thùy Nhung X
2 452938 Nguyễn Thị Thu Mỵ X
3 452939 Lê Trần Thảo Ly X
4 452940 Nguyễn Thị Thu Hà X
5 452941 Phan Bảo Ngọc X
6 452942 Đào Thùy Linh X
7 452943 Hoàng Trung Hiếu X
 Hà Nội, ngày 17 tháng 4 năm 2023
NHÓM TRƯỞNG

Nguyễn Thị Thu Mỵ

Đánh giá của giáo viên:

Kết quả điểm bài viết: ............................
- Giáo viên chấm thứ nhất:.……………...
- Giáo viên chấm thứ hai:.……………….

Kết quả điểm thuyết trình:…………….

- Giáo viên cho thuyết trình:…………….

Điểm kết luận cuối cùng:………………

- Giáo viên đánh giá cuối cùng:…………
 TABLE OF CONTENTS
INTRODUCTION ......................................................................................................... 1
DEVELOPMENT .......................................................................................................... 1
1. The facts of the case ............................................................................................ 1
2. Legal issue ............................................................................................................ 1
3. Arguments ............................................................................................................ 2
3.1. Plaintiff’s legal arguments ............................................................................ 2
3.2. Defendant’s legal argument .......................................................................... 2
4. Judgment of the Tribunal ................................................................................... 3
5. Case comment ...................................................................................................... 4
CONCLUSION .............................................................................................................. 5
ANNEX ........................................................................................................................... 6
LIST OF REFERENCES ............................................................................................. 7
 1

INTRODUCTION
International commerce operations are getting more and more common as globalization
progresses. In order to identify new partners, boost income, and maximize profit, an
increasing number of enterprises are engaging in international trade in goods. Yet,
mistakes made during the negotiation process will undoubtedly result in disagreements
and conflicts between the two parties over the legality of the contract. The group will
explain the topic of the contract's legality when the offer is modified in the essay that
follows.

DEVELOPMENT
1. The facts of the case
On 5 June 2000, the Seller (defendant) offered the Buyer (plaintiff) 10,000 metric tons
of rapeseed dregs, for which the standard of quality was set at above 38% of oil protein,
and below 12.5% of moisture content. The price term was US $78 per ton, FOB, Zhang
Jia Gang, China.
On 7 June, the Buyer accepted the Seller's offer and required the Seller to fax the contract
and the terms of the Letter of Credit [L/C] to him. On 9 June, the Seller faxed Sales
Contract No. SF0610 with seal.
The Buyer deleted the language that "A ship with the age of above twenty years is not
accepted" in the original contract, and modified " Carriage paid" to "Carriage shall be
paid according to the charter-party" and authorized Milan Company, Italy to sign and
seal the contract, and to fax it to the Seller.
On 14 June, the Seller faxed to the Hong Kong representative office of the Buyer, stating
that because the Buyer modified the contract unilaterally, the Seller could not confirm
the contract, and would suspend the performance of the contract, and required the Buyer
to suspend issuance of the L/C.
Disputes then arose between the parties concerning the validity and performance of the
contract. They failed to resolve the disputes through conciliation. On 23 July 2001, the
Buyer submitted the application for arbitration to the Arbitration Commission.
2. Legal issue
 Does the modification made by the buyer materially alter the terms of the contract
under article 19 CISG?
 Whether the contract between the two parties is legally enforceable?
 Is the Seller really just an agent, and had no contractual relationship with the
Buyer?
 2

3. Arguments
3.1. Plaintiff’s legal arguments
The Seller sent a fax on June 14th saying that the Seller could not confirm the contract
and would suspend the performance of the contract, and requested the Buyer to suspend
issuance of L/C. On 22 June, the Buyer replied to the Seller in a letter, explaining that
because the price term in the contract was FOB, the modification of the age of the ship
and the payment of freight would not affect the Seller’s performance of the contract.
The Buyer also reminded the Seller that if the Seller failed to perform its obligation of
delivering the goods, it would breach the contract, and also that the Buyer would have
to purchase substitute goods to fulfill its obligation to its other contract.
On June 23, in its reply letter, the Seller stated that due to the nullity of the contract, the
contractual obligations and liabilities should be considered void.
Because the Seller refused to perform the obligation, the Buyer had to buy substitute
goods at a higher price of $98.5/ton from Company XX, Singapore in order to perform
its obligations under the other contract with the Italian customer.
Although the Buyer has modified the contract signed by the parties, such modification
does not affect any of the Seller’s rights. The amendment also does not constitute a
material amendment of the offer as defined in Article 19 of the CISG. Furthermore, the
Seller failed to object to the modification promptly. The Seller was therefore bound by
the Buyer’s modification and the contract was established.
For the above reasons, the Buyer petitioned the Arbitration Tribunal to grant the
following awards:
(i) The Seller shall pay to the Buyer US $150,675.00, the amount of damages Buyer
incurred as a result of having to purchase the substitute goods;
(ii) The Seller shall pay the loss of interest in the amount of US $10,547.25 (at the
annual interest rate of 7%, and with the interest accruing period ending on 9 June 2001);
(iii) The Seller shall pay the arbitration fee and attorneys' fee incurred by the Buyer
for the present case.
3.2. Defendant’s legal argument
Facing the Buyer's charges, the Seller defended that:
In June 2000, the Seller and Yueyang XX Company agreed through negotiation that the
Seller would act as an agent for Yueyang XX Company to export 10,000 tons rapeseeds
dregs. Yueyang XX Company authorized the Seller to sign the contract with the Buyer,
 3

and the Seller was responsible for the arrangement of the goods and the shipment. When
the disputes arose, the Seller did not know the details. Now the Buyer has applied for
arbitration. However, since the Seller was in deficit for more than RMB 10 million and
was on the edge of bankruptcy, the Seller was unable to resolve the disputes. In addition,
the Seller was only an agent, and had no relationship with the Buyer. The Buyer should
contact Yueyang XX Company to resolve the dispute.
4. Judgment of the Tribunal
 The applicable law
CISG applies to the present case because the States where the parties have their places
of business are Contracting States.
 Legal issue 1: Whether a contract was concluded?
The Arbitration Tribunal finds that when accepting the offer, the Buyer made notes on
the contract. However, the Arbitration Tribunal also notes the price term in the contract
was FOB. According to Incoterms 2000, under FOB, the Buyer is responsible for
shipment at its own expenses, and thus as far as the Seller is concerned, the age of the
ship and the payment of the freight were irrelevant issues. The Buyer's modifications of
the clauses regarding the age of the ship and payment of the freight did not "materially
modify the offer" as defined in Article 19 of the CISG. Moreover, the Seller failed to
object to this modification within a timely manner. It was not until 14 June 2000 that
the Seller indicated that it would not confirm the contract. Based on the above facts and
in accordance with the relevant law, the Arbitration Tribunal holds that Contract No.
SF0610 was validly concluded between the Buyer and the Seller, and that the parties are
obligated to perform according to the contract.
 Legal issue 2: The agency defense of the Seller
The Seller claimed it was only an agent, and had no relationship with the Buyer, and
therefore that the Buyer should contact Yueyang XX Company directly to solve the
dispute. The Arbitration Tribunal holds that the parties to Contract No. SF0610 were the
Buyer and the Seller, and not Yueyang XX Company. In addition, the Seller did not
submit any evidence to prove that it had ever disclosed Yueyang XX Company to the
Buyer. Thus, the Arbitration Tribunal holds that Seller, who signed Contract No.
SF0610 under its own name, was a party to the contract and of the present case, and
shall be bound by the contract. The legal relationship between the Seller and Yueyang
XX Company was a different one, which does not fall within the scope of this hearing;
the Arbitration Tribunal will not rule on this issue.
 4

 Damages incurred in connection with the purchase of substitute goods

According to the evidence provided by the Buyer and article 75 of CISG, the Arbitration
Tribunal found the Buyer had bought 7,350 tons of substitute goods. Thus, the
Arbitration Tribunal supported the Buyer's claim that the Seller shall pay for the
damages the Buyer incurred by purchasing substitute goods; and the calculation formula
shall be:
(US $98.50/ton - US $78.00/ton) * 7,350 metric tons = US $150,675.00.
 Interest
According to the article 78 of CISG, the Buyer is entitled to loss of interest from the
Seller. However, the Arbitration Tribunal finds the annual interest rate claimed by the
Buyer was too high, and the interest period was too long, while the evidence does not
support all of the Buyer's claims for the amount of interest. The Arbitration Tribunal
holds that it is reasonable for the Seller to pay the interest at the annual rate of 3%, for
the period starting from June 2000 and ending on the date this Arbitration Tribunal
grants its award.
 Attorneys' fee
The Arbitration Tribunal does not support Buyer's claim for the attorneys' fee, because
the Buyer did not submit relevant evidence to support this claim.
 The arbitration fee
The Arbitration Tribunal holds that the Seller shall pay 90% of the arbitration fee, and
the Buyer shall pay the remaining10%.
5. Case comment
This case has become one of the typical cases of CISG in the framework of dispute
settlement at the China International Economic and Commercial Arbitration
Commission (CIETAC) regarding the elements constituting the acceptance of minor
modifications to the contract (in the case of FOB sales) when the offeror's objection is
not made immediately. In our opinion, the argument of the dispute settlement body has
resolved the controversy related to the determination of the validity of the contract
signed by the two parties under Article 19 of the CISG, as well as the clarification of the
compensating principle. That is the dispute in the interpretation of legal terminology
within the WTO framework for the "materially modify" term in article 19 CISG and the
condition that one party is entitled to claim compensation for the failure of the other
party to perform its contractual obligations. More specifically, it is the right of the
aggrieved party when they have to make a replacement transaction and claim the
 5

difference between the contract price and the replacement sale price, thereby
determining the exact interest rate for seller. Judging by the application of the CISG,
CIETAC has made many arguments to explain the content of the CISG provision in the
specific context of the case. The interpretation of CISG regulations by CIETAC has
contributed to increased flexibility in applying CISG regulations in practice.
The CIETAC ruling has contributed to a variety of CISG precedents. In addition, the
practice of resolving disputes related to CISG at CIETAC in this case is also a valuable
experience that helps to adjudicate disputes in upcoming similar cases on international
commercial contracts.

CONCLUSION
Through the analysis of the above case, the terms of the offer, the amendment of the
offer as well as the acceptance of the offer have been clarified in practice. Also, a clear
explanation of the notion of compensation for contract breaches by one side would help
future courts decide similar cases involving international business agreements.
 6

ANNEX
CISG - United Nations Convention on Contracts for the International Sale of
Goods (Vienna, 1980)
1. Article 19
"(1) A reply to an offer which purports to be an acceptance but contains
additions, limitations or other modifications is a rejection of the offer and
constitutes a counter-offer.
"(2) However, a reply to an offer which purports to be an acceptance but
contains additional or different terms which do not materially alter the terms of
the offer constitutes an acceptance, unless the offeror, without undue delay,
objects orally to the discrepancy or dispatches a notice to that effect. If it does
not so object, the terms of the contract are the terms of the offer with the
modifications contained in the acceptance.
"(3) Additional or different terms relating, among other things, to the price,
payment, quality and quantity of the goods, place and time of delivery, extent of
one party's liability to the other or the settlement of disputes are considered to
alter the terms of the offer materially."
2. Article 75
"If the contract is avoided and if, in a reasonable manner and within a
reasonable time after avoidance, the buyer has bought goods in replacement or
the seller has resold the goods, the party claiming damages may recover the
difference between the contract price and the price in the substitute transaction
as well as any further damages recoverable under article 74."
3. Article 78
"If a party fails to pay the price or any other sum that is in arrears, the other
party is entitled to interest on it, without prejudice to any claim for damages
recoverable under article 74."
 7

LIST OF REFERENCES
1. CISG case 1114. Available at: https://www.unilex.info/cisg/case/1114
2. Selected Compilation of Awards of CIETAC: 1995-2002, Law Press, page. 585-
592.
3. United Nations Convention on Contracts for the International Sale of Goods.
Available at: https://uncitral.un.org/sites/uncitral.un.org/files/media-
documents/uncitral/en/19-09951_e_ebook.pdf
4. 2016 UNCITRAL Digest of case law on Art.19 CISG
Available at: https://cisg-
online.org/media/TY8Z0IH0/2016_UNCITRAL_CISG_Digest_Article_19.pdf
5. 2016 UNCITRAL Digest of case law on Art.75 CISG
Available at: https://cisg-
online.org/media/O3F85T5L/2016_UNCITRAL_CISG_Digest_Article_75.pdf
6. Calculation of damages under CISG articles 75 and 76
Available at: https://www.trans-lex.org/500158/_/cisg-advisory-council-opinion-
no-8:-calculation-of-damages-under-cisg-articles-75-and-76/
7. 2016 UNCITRAL Digest of case law on Art.78 CISG
Available at: https://cisg-
online.org/media/6K222W03/2016_UNCITRAL_CISG_Digest_Article_78.pdf
8. Vo, S. M. (2014). In the formation of contracts under the CISG, how does Article
19 solve the battle of forms issue?. Journal of International Economics and
Management, (62), 17-25. Retrieved from
https://jiem.ftu.edu.vn/index.php/jiem/article/view/97