Benefits of Incorporating a Company for International Trade
Discuss about the Transporting Goods To International Buyers And Incoterm.
The data presented in this question, if certain benefits will be available to Tony if he incorporated company for the purpose of trading internationally. And the same time, Tony also wants to know the international and domestic organizations that can provide advice to Tony in this regard. Tony is also looking for ways to minimize risk and expense while he is transporting goods to international buyers and the Incoterm that will be most suitable for him.
It is clear that several benefits are available to the parties when they have incorporated a company for doing their business internationally. While involving international trade by forming a company, a number of benefits are available. The growth that is experienced by business in the form of a company is not possible otherwise. In the same way, the business can increase its profits by exposure to new markets as this advantage is not available to the competitors.
Tony can rely on a number of international trade organizations for seeking advice. These organizations include the World Trade Organization, International Chamber of Commerce (ICC), UN Commission on International Trade Law, World Customs Organization and Organization for Economic Cooperation and Development (OECD). A large number of information is available on their websites. This can be very helpful for the traders. The ICC particularly has supreme authority in making the rules that administer the performance of business taking place internationally. Similarly, the ICC also administers dispute resolution services. These services help the parties in dealing with the problems that may have to face while trading internationally and resolving their disputes.
The law provides several ways to reduce risk and expenses, while goods are being transported to international buyers. One such common method is to use transportation insurance. In this way, cargo insurance is highly recommended before international transportation of goods (Jiménez, 2008). It is worth mentioning that the carriers only have limited liability for the goods being shipped by them through air or sea. Similarly, the owner of the woods is responsible for the goods before the place of delivery to the international buyer. For the purpose of providing common terminology dealing with international shipping of goods and to decrease any misunderstandings, the ICC has introduced a set of terms (Ramberg, 1997). These terms are called ‘Incoterms’. ICC has provided these terms in several languages. In this way, Incoterms can be used by the parties for describing the major terms of the contract that has been formed for shipping of goods overseas.
Organizations that Offer Advice for International Trade
Incoterm EXW: Ex Works appears to be the most suitable Incoterm for Tony in this case. According to this Incoterm, as a seller of goods, the party prepares the goods for transport. In this way, theoretically, the responsibility lies with the sender and as soon as the goods have left the warehouse, storage or factory. Even if the buyer contracts transportation under this term, but the loading of goods at the starting place may require the oversight of the seller. In this way becomes the responsibility of the seller. However, in principle, the responsibility has been placed by this Incoterm of loading the goods on the recipient. But in practice, it becomes vague and generally the seller has to organize the loading in view of logic and ease. Due to this ambiguity, it is very important that it should be defined clearly that which party has the responsibility in case any incident may occur during loading.
Application: in view of the legal position mentioned above, it is clear that there are a number of international and regional organizations that can provide advice to Tony regarding international trade. Similarly, Tony can rely on transportation insurance for the purpose of reducing the risk that is present in the shipping of goods. It is worth mentioning in this context that the liability of the carriers is limited towards the goods. Consequently, generally it is the responsibility of the owner of the goods (Ramberg, 1990). They are the goods have reached the place of delivery to foreign buyer. In view of this situation, it is very significant that the party should use the proper Incoterm. In order to reduce the risk of the seller, it is advisable that Incoterm Ex Works may be used by the parties.
Conclusion:
It becomes clear that a number of benefits will be available to the party that has decided to incorporate a company for trading internationally.
Several international and regional organizations can provide advice to Tony regarding international trade.
In the same way, transportation insurance can be used by Tony for minimizing risk.
Incoterm Ex Works can be used in this case.
Issues: after going through the circumstances present in this question, the issue arises if a valid contract was created between the parties? If Britney has a right to amend the typographical error made by her? Will there be any difference in the outcome if Britney had found the typographical error only after the delivery of MRX8 v2 safe? If under the rules of this convention, when it is considered under the law that the e-mail was sent by Britney and received by FD?
Ways to Minimize Risk and Expense While Transporting Goods to International Buyers
Rule: According to the UNCITRAL model law, in case of electronic contracts, there are two grounds of mistake. Therefore the mistake can be the mistake of the parties or the mistake made by automated system. Therefore, if the mistake was often natural person, it is possible that the mistake may be made in two ways, the mistake in data entry or if it is patently false. The error made in input or in other words, the mistake in data entry takes place when the mistake is made by a buyer. For example, the buyer may enter a digit two times. In this way, in place of one, 11 may be placed in the order (Debattista, 1995). Therefore in this case, although it was the intention of the bar to make a purchase, but an error was made in the data entry, for example, the figure of goods on the nature of goods. A solution has been provided by the convention in case of these mistakes (Radtke, 2011).
Article 14 of the convention has provided that when the party is made an input mistake regarding the automated message system used by the other party and an opportunity was provided by such system to correct the mistake, the party making the mistake has the right to withdraw the part of e-communication in which such mistake was made if:-
Such party had informed the other party regarding the mistake as soon as it came to know regarding it and has also indicated that an error was made in electronic communication; and the party had not received any material benefit of value under the contract.
It is further provided by the law that the provisions of this article shall not affect any rule governing the cost of any error other than the errors that have been mentioned above.
In the present case, Britney had made an input error. Therefore in place of ordering MXR8v2 safe, she ordered MRX8 v2 Safe as she made a typographical error. Under these circumstances, even if the parties have entered into a contract but the party that had made the error has been providing a ride by the law to remove the part of e-communication , where it had made the error regarding the automated system being used by the other party as there was no chance to correct the mistake (Rushton, Croucher and Baker, 2010). Hence, the conclusion arises that Britney or Moscow House are allowed by the law to withdraw this part of the communication where an error was made in mentioning the safe.
The Most Suitable Incoterm for International Shipping
Article 14 of the convention provides that the party who had made a mistake, can withdraw the part of the communication. This right is provided if the automated system did not provide an opportunity to correct the mistake made in data entry. Therefore, according to this article, it is required that the party responsible for the automated system should provide procedures that can detect and correct any errors that may be made by either party in negotiating electronic contracts.
In case Britney would have discovered the error made in the name of the safe after it had received the delivery of MRX8 v2 Safe, the things would have been different. The reason behind this situation is that when any significant advantage or value has received by a party under the contract, such party is not allowed to withdraw that part of the e-communication.
Article 3 of the Convention mentioned that unless otherwise agreed, it is considered that a written communication has been received by the other party when the communication was delivered to the addressee personally, at the place of business or the mailing address of such party. However, regarding electronic communication, Article 10 has provided that the time of receiving electronic communication is a time when such communication became capable of being received by the other party at the electronic address provided by such party (Rhidian, 1981). Therefore, it is presumed under the law that the e-communication has breached the other party in such a case.
Conclusion:
In the present case, the law provides an option to Britney or Moscow House to withdraw the part of e-contract when they had made the mistake in data entry.
According to law, a right is available to amend the typographical error if the party has given a notice regarding it to the other party as soon as the error became known to such party.
In case Britney found the typographical error only after it had received the safe, this remedy would not be available to her.
Britney’s e-mail can be considered to be received by FD on 22 November.
The provisions of UNCITRAL Model Law on electronic signatures apply to all electronic signatures used in commercial activities. For this purpose, various electronic signature technologies used by the parties are treated in the same way. Hence, electronic signatures can be used as reliable and suitable for the reason behind the creation or the communication of data message. In this context, it has been provided by Article 6(3) that electronic signatures have to be considered as viable in the contracts (i) that are used only for the purpose of creating the signature is only linked with the signatory; (ii) the signatory has exclusive control over the signature creation data; (iii) any alteration to the signature can be detected after the signature and (iv) . The signature confirmed to the integrity of information and any change in such information can be discovered before signing.
Application of the Legal Rules to the Case Presented
The UNCITRAL Model Law on Electronic Signatures has imposed certain obligations on the signatories. Hence, it is the obligation of the signatories that they should use due care in order to manage the signature creation data. They should immediately advise any person who is going to rely on such data that it has been compromised. Similarly, the signatories should also make sure that representations that have been made in the supporting signature certificate are correct.
Article 5.2(b), New York Convention states that the court may decline to recognize or implement foreign arbitration award if the award is contrary to the public policy of host nation. But the New York convention has not defined the term “public policy”. Consequently, a conflict institution is present in the courts of contracting countries. In the same way, as a contracting country, China also does not provide the perfect legal explanation of the meaning of the term public policy. However, a suggestion can be taken from the reported cases. At the same time is worth mentioning that the major difference is present between the language of New York convention and the language used in applicable Chinese legislation. Hence, the convention has use the term public policy, while Chinese law uses “public interest” (Ramberg, 1999). The debate has been seen for discussing the difference present between these two terms (McLaughlin, 1988). But for the purpose of convenience and clarity, the term public policy can be considered as the same as public interest (Amelia and Wolfgang, 2008). In few of the need for clarity regarding the scope of public policy and its openness to legal explanation, Chinese courts have declined to use the term public policy as a ground for refusing the recognition and enforcement of a foreign arbitration award (Richardson, 1997). Hence, if any of the judicial ground is present to refuse the implementation and acknowledgment of foreign arbitration award, the court will not consider the application of public policy.
It is available to refer the dispute to ICC, if the parties have stated that ICC standard clauses will apply in the arbitration or dispute religion clause of the contract concluded between the parties. The standard clause is available in many languages. Therefore, it is not combusted at the party looking for arbitration under ICC should be a member of ICC or that it should have any affiliation with it. But it is necessary that the parties should have agreed for arbitration by the ICC. These parties include a Corporation, an individual, an international organization or a State.
Conclusion
Even if arbitration and mediation and negotiation have the same objective as the methods of resolving disputes, some differences are present between these methods. The main difference that can be seen in arbitration and mediation is that the arbitrator hears the evidence provided by the parties and then makes a decision (Abel, 1982). In this way, arbitration can be described as somewhat similar to court proceedings. In case of a trial, the parties also produce evidence, however. The process adopted in case of arbitration is generally less formal. As compared to it, in mediation and negotiation, there is a process of negotiations. This process is carried on by the parties with the help of a neutral third party (Abramson, 2004). Hence, in the process of mediation and negotiation, the parties cannot arrive at the solution if all the parties have not agreed to it.
In case of the process of litigation, the courts decide a particular issue. But in the process of arbitration, the parties to dispute agreed that they will take the help of a neutral third party in their efforts to resolve the dispute. Therefore, under the process of arbitration, the number of arbitrators can be one or more (Douglas, 2001). The arbitrators hear the arguments provided by the parties to dispute and then arrive at a decision. It is worth mentioning that the process of arbitration is private and informal (Nadja, 2008). On the other hand, litigation is a formal process and takes place in public
The process of litigation is public process. However, arbitration takes place privately. Similarly limited process of evidence is available in case of arbitration. However in litigation, the legal rules of evidence apply. In arbitration, the parties have the freedom of selecting the arbitrator. But this choice is not available in litigation as the judge is not decided by the parties. In this way, arbitration is an informal process, but litigation can be described as a formal process.
References
Abel, R., 1982 , ‘The Contradictions of Informal Justice’ in Richard Abel (ed), The Politics of Informal Justice, Vol 1
Abramson, H., 2004, Mediation Representation: Advocating in a Problem-solving Process, National Institute for Trial Advocacy
Douglas S, A., 2001 Alternative Dispute Resolution Programs in Law School Curriculum-What’s Next? Report for the ABA Section of Dispute Resolution
Jiménez, G., 2008, Guide to Export-Import Basics – Vital Knowledge for Trading Internationally, Paris, ICC Publication no 685
McLaughlin, J.T., 1988, Enforcement of Arbitral Awards Under the New York Convention: Practice in U.S. Courts, 477 PLI/COMM 275
Nadja, A., 2008, ‘The Mediation Meta-Model: Understanding Practice’ 25 Conflict Resolution Quarterly 97
Radtke, C. M. 2011, “The new Incoterms 2010 rules of the International Chamber of Commerce”, ICC Masterclasses 3
Ramberg, J. 1990, ICC Guide to Incoterms 2000, Paris, ICC Publication no 588
Ramberg, J. 1997, International Commercial Transactions, Paris, ICC Publication no 588 – Kluwer Law International – Norstedts Juridik, 93
Ramberg, J., 1999, ICC Guide to Incoterms 2000, Paris, ICC Publication no 588,
Rhidian D. T., 1981, International Commercial Arbitration Agreements and the Enforcement of Foreign Arbitral Awards – A Commentary on the Arbitration Act 1975, 1 L.M.C.L.Q. 17, 18
Richardson, J. W. 1997, The Merchants Guide 1998 Edition, Rotterdam, P&O Nedlloyd, 11
Rushton, A., Croucher P. and Baker, P. 2010, The handbook of logistics & distribution management, London, Kogan Page, 331
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