Faculty of Business, Economics & Accounting

Department of Business Studies

HELP Bachelor of Business (Hons)

ASSIGNMENT
University of Finance – Marketing
February 2021 Semester

Subject: LAW305
International Business Law
Subject Lecturer: Mr. R. Paneir Selvam
Telephone: 03-2716 2000
Fax: 03-2093 5311
Email: paneirsr@help.edu.my

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 Assignment Cover Sheet
Student Information
Grade/
(For group assignment, please state names of all members)
Marks
Name ID

VO THI KIM NGAN E1800080

Office
Module/Subject Information
Acknowledg
Module/Subject Code LAW305 ement

Module/Subject Name International Business Law

Lecturer/Tutor/Facilitator MA.Nguyễn Hoàng Phước Hạnh

Due Date May 17, 2021

Assignment Title/Topic Essay

Intake (where applicable) UFM

Word Count 1444

Date/Time
Declaration. I/We have read and understood the Programme Handbook that explains on
plagiarism, and I/we testify that, unless otherwise acknowledged, the work submitted
herein is entirely my/our own.

. I/We declare that no part of this assignment has been written for me/us by any other
person(s) except where such collaboration has been authorized by the lecturer concerned.

. I/We authorize the University to test any work submitted by me/us, using text comparison
software, for instances of plagiarism. I/We understand this will involve the University or its
contractors copying my/our work and storing it on a database to be used in future to test
work submitted by others.
Note:1) The attachment of this statement on any electronically submitted assignments will be
deemed to have the same authority as a signed statement.
2) The Group Leader signs the declaration on behalf of all members.

Main Strengths
Signature: Date: May 17
Mail: nganemm99@gmail.com

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Main Weaknesses

Suggestions for improvement

Student acknowledge feedback/comments

Grader’s signature
Student’s signature:

Date: Date:

Note:

1) A soft and hard copy of the assignment shall be submitted.

2) The signed copy of the assignment cover sheet shall be retained by the marker.
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departments may allow students up to THREE (3) working days after submission of the assignment
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*Use additional sheets if required.

TABLE OF CONTENT

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INTRODUCTION........................................................................5
BODY.............................................................................................5
Definition........................................................................................................................................................5
Case law..........................................................................................................................................................5
The CISG (1980).............................................................................................................................................6
The Contract Act 1950....................................................................................................................................6
The Commercial Law (2005)..........................................................................................................................7
The result of passing risk maybe cause injustice for indivual........................................................................7

CONCLUSION.............................................................................8
REFERENCES..............................................................................9

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 INTRODUCTION
There must be significant risks to international trading. The threat may be: the items may be
stolen, the cargo may ignite or evaporate because of the extreme weather. The customer will have
an opportunity before receiving and finishing the invoice (iContainers, 2020). Here we are called
into question the concept of "risk passing."

The idea of passing risk is one of the most difficult parts of contract law. It is now one of the
most complex legal issues to regulate foreign commerce. But it is evident that the fundamental
question of identifying the exact concept of "risk passing" has not yet been addressed (StuDocu,
2020). The most pressing issue in understanding the context and analysis of the idea of "passing the
risk" is when the risk passes from the seller to the purchaser? The risk of selling products is
between the buyer and the seller are at risk.

BODY
Definition
The transference of risk plays a key role in foreign sales contract law. This is a vital
ingredient of every sales contract between national and foreign parties. However, this criterion
differs in foreign sales contracts due to bulk consignments, multimodal transit, or the lack of a
product. During a transaction, the risk passage is a phase in which the risk of damage is transferred
from the seller to the buyer. Risk transition occurs during the transaction with different
products/items at different products/items. The risk can occur mainly in three areas:

i. When the contract is concluded

ii. Transfer of ownership from the vendor to the purchaser
iii. Transfer of physical property from the vendor to the purchaser (Hoffmann, 1986).

Case law
In Pignataro v Gilroy (1919), The accused sold 140 bags of wheat to the appellant. On the
other hand, the products were defined as uncertain, but not the bags. The defendant was unable to
give them since 15 bags were taken before the date of arrival. The difficulty came about that the
buyer owned or not the 15 sacks of wheat. If the court relied on the argument that "the danger was
transferred with the land," the appellant was involved when the subject matter involved unidentified
goods and there was no proper proof of appropriation by either side, according to the court.
Consequently, at the time of the harm, the appellant did not get the property. Therefore, the seller
faced the entire risk.

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 The CISG (1980)
The UN Convention on International Sales Contracts (CISG) requires a purchaser to pay the
price of the products as if he had purchased the commodities indicated by the sale agreement
although the goods were unintendedly missing or destroyed. The main issue here, irrespective of the
status of the things, is that the buyer gets them and is in the correct position to inspect and treat
them. No party shall be liable for loss or harm if the objects are lost or destroyed. The seller shall
accept the products and pay the premium without any rights or remedies where theft is stolen,
degraded, damaged, or inadequately wrapped. Where a fault occurred involuntarily, the purchaser
may not accuse the seller of failure to fulfill the contractual responsibilities for breach. Hence,
under Article 66, when the risk is transferred to him, the buyer shall pay the price. There is
nevertheless the exception: if the sale creates damage, the seller shall carry responsibility and the
purchaser shall not pay the price. In these situations, the purchaser is free to refuse to accept all or
half the defective products and opt for the contract (Valioti, 2003). Where products are expected to
be dispatched and the buyer is responsible for them, liability shall be shifted to the buyer upon
approval of the products. Where the purchaser acquires custody of the products after the agreed date
of arrival, the responsibility will only be transferable to the purchaser until the products are agreed
to and taken over.

The Contract Act 1950

Under Contract Act 1950, whenever the goods are given by default either to the buyer or to
the seller the goods shall be the risk of any loss that may not have occurred in respect of the Party's
fault, as provided in Article 26. Looking at the case Demby Hamilton & Co Ltd. v Barden (1949)
whereby February 1946 the sellers would supply 30 tons of apple juice but were ordered to keep it
in December 1945. In January and April, they delivered, but then the purchaser would no longer

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accept. The rest of the juice was rotten by November. The failure to deliver was considered to be
delayed by the purchaser.

Both countries are in common, and the customer can only contact the carrier is referred to
by the seller. The seller has responsibility for transporting the items to the purchaser and
communicating with the company in any way necessary. If the seller fails to enter into any
agreements in bad condition with the carrier or the buyer, the buyer may withhold acceptance or
hold the seller accountable for the damage.

In the event of products being shipped by sea, the purchaser shall be notified of such
conditions by the seller and it is vital to insure them; if the seller fails to do so, he shall be
responsible for their safety during the shipping of goods by water.

The Commercial Law (2005)

Articles 57 to 61 of the 2005 Commercial Law of Vietnam provide for the transfer of risks:
copper-concord with the subject of the goods shall be transported, and the risks of loss or damage to
the products shall be passed on to the purchaser at the time when the contract has been reached.
This guideline makes it easy to determine if the risk is shifted to buyers. However, this clause is not
appropriate from a practical point of view. Since risks can occur from time to time, the goods are
not in control of the seller, i.e. when the products have been assigned to the carrier by the seller and
it is likely that the goods will be damaged in advance to sign a contract. Vietnamese trade law in
this respect should relate to the 1980 Vienna Convention, which outlines the current situation Risk
transfer shall be at the time that the items are sent to the carrier that has issued the carriage contract
paperwork. Minus the instance when the contract of sale was signed, Sellers were aware of the loss
or damage to merchandise but were unable to notify the buyer.

The result of passing risk maybe cause injustice for indivual

Economic risk is related to the change in the market value of products. At the end of the
sale, the prices in the currency of the account are determined (or are determinable). The market
price of the items and the exchange rate of the money could then fluctuate. Subsequent market price
variations benefit either the seller (when the price falls intermediately) or the buyer (if a price
increase occurred). The conditions of Articles 66 to 70 in the CISG do not deal with market price
fluctuations or currency fluctuations, thereby causing injustice and suffering on the part of sellers or
buyers sometimes. At the moment of the valid conclusion of the agreement, I would say that the
risk of these events goes by. The identity of the author of a piece of art or an antique work, which I
believe to be part of the authenticity of the commodity, is at most an economic risk that has not

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passed to the purchaser in the circumstances of this case. Moreover, The CISG only explicitly treats
the “passing” of risk. It logically leaves us to put the risk with the seller before it passes, and
subsequently with the buyer after it passes. Before a contract is concluded, all risk including legal,
economic and physical risk, lies with the seller.

CONCLUSION
Three categories addressed the theory of risk passing: contract law (1950), international sale
agreement (CISG) (1980), and commercial law (2005) all of the key tools for contracts and sales
between buyers and sellers. As indicated above, there were three categories of risk passage theory.
The legal tools allow the parties to amend the terms and conditions of the contract if necessary. This
is a favorable sign of external commerce since it encourages the parties to discontinue legal
struggles. The author has determined, after comprehensive analyzes and examinations, that there is
a gap to be addressed in the international sales law. Several other initiatives, such as the UN
Convention on International Selling of Goods (CISG), have been made that has been a major factor
in international sales law as it has been recognized by 76 countries. It is an important element in the
field of international sales law. With these two standardization instruments, international sales
contract parties can provide a legally enforceable and market-effective sales law scheme.

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 REFERENCES

[1]J.C.T. Chuah, Law of International Trade: Cross-Border Commercial Transactions (5th

edition, Sweet&Maxwell,2013) 4-062.

[2] J.C.T. Chuah, Law of International Trade: Cross-Border Commercial Transactions (5th
edition, Sweet&Maxwell,2013) 2-025

[3] Hoffmann, B. V. (1986). Passing of Risk in International Sale of Goods and P

ŠARČEVIC and P VOLKEN (eds), International Sale of Goods: Dubrovnik Lectures, (Oceana
Publications 1986), p. 268.

[4] Valioti, Z. (2003). Passing of Risk in international sale contracts: An examination of the
rules on risk under the United Nations Convention on Contracts for the International Sale of Goods
(Vienna 1980) Retrieved May 16, 2019 from
http://www.cisg.law.pace.edu/cisg/biblio/valioti1.html#84

[5] Pignataro v Gilroy 459 1 KB. (1919). Retrieved 22 October 2020, from
https://www.studentlawnotes.com/pignataro-v-gilroy-1919-1-kb-459

[6] Demby Hamilton & Co. Ltd. v. Barden Sellers J. [1949] [1938] 1 Everyone E. R. 435
(K.B.) at 437 claimed that loss could be properly attributed to failure to deliver the items on the
reasonable time of the purchaser. He also stated that it is the sellers' responsibility to behave
appropriately to prevent losses, e.g. in such cases.

[7] Bridge, M. G. (2007). The International Sale of Goods: Law and Practice. Oxford
University Press

[8] Teacher, Law. (November 2013). Sale of Goods Law in Malaysia. Retrieved from
https://www.lawteacher.net/free-law-essays/commercial-law/sale-of-goods-law-in-malaysia-
commercial-law-essay.php?vref=1

[9] Nguyen Van An (June 14, 2005). VIETNAM COMMERCIAL LAW 2005 - LAW
NO.36/2005/QH11 Retrieved from https://vietnamlawenglish.blogspot.com/2005/06/vietnam-
commercial-law-2005-law.html