International Trade Law

Seminar No. 4 – Defects in the Goods – Concept, Classification. Complaint Process. Fundamental Breach of Contract. Regulation in the CISG. Course of Arbitration Proceedings.

Objectives of the third seminar:

At this seminar, you will:

  • review (or finish) the subject matter of the third seminar;
  • learn what a defect in the goods is, what the classification of defects is and how the different classifications of defects affect the complaint process and the choice of remedies;
  • be able to explain and determine the moment of passing of risk (according to INCOTERMS and CISG);
  • know how, by whom and when the goods should be inspected and whether this is the buyer's obligation;
  • distinguish between the complaint process for patent and latent defects;
  • characterize the legal defects complaint process;
  • get acquainted with the remedies available to the buyer even if they fail to give notice to the seller in due time;
  • learn what a fundamental breach of contract is;
  • be able to choose the appropriate remedy that can be asserted by the buyer or the seller in different circumstances;
  • learn about the course of arbitration proceedings, in particular according to the national rules of the Act on Arbitration and Enforcement of Arbitral Awards.
Before the seminar:
  • read carefully the relevant articles of the CISG, especially Arts. 35–52, 61–73;
  • learn to work with INCOTERMS 2020 and INCOTERMS 2010 rules (please, find them attached in the syllabus of the third seminar);
  • get acquainted with the provisions of sections 14–30 of the Act on Arbitration and Enforcement of Arbitral Awards;
  • read the assigned chapters of the textbook;
  • when getting ready, one of the PMO Casts covering the topic of this seminar may be of help for you;
  • prepare solutions to the assigned model cases (see below);
  • provided there are tasks that have not been covered, have the assignment for the third seminar with you;
  • provided it is uploaded, go through the presentation prepared by your lecturer;
  • have the below-listed legal acts with you.
Presentation

Link to the presentation will be uploaded.

Assignment

Below you can find the assignment of model cases we will work with at the seminar. Please, study the facts of the cases thoroughly and prepare your solution.

Czech Arbitration Act
International Trade Law 4

Compulsory Readings
  • Rozehnalová, N., Valdhans, J., Kyselovská, T. Právo mezinárodního obchodu. Včetně problematiky mezinárodního rozhodčího řízení. Praha: Wolters Kluwer, 2021.
    • Chapter XI Section 5 – Conformity of the goods – pp. 242–255
    • Chapter XXIII – Law applicable in international arbitration proceedings – pp. 469–490
Legal Acts
Questions

Before the seminar, you should  be able to answer the following questions:

  • What is a defect in the goods?
  • What is the classification of defects for the purposes of the complaint process?
  • When are the goods defective under the CISG?
  • State the elements of a proper complaint process for defects under the CISG.
  • State the elements of a proper complaint process for legal defects under the CISG.
  • What is the significance of the distinction between fundamental and non-fundamental breach of contract?
  • When is a breach of contract fundamental?
  • What are the remedies for breach of contract under the CISG?


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