International Commercial Law Practical Questions. Law Case Study

Theoretical questions
1. International commercial contracts are usually drafted in English, tend to be very detailed, and attempt to fully regulate the underlying business relationship of the parties. They often contain several standardized ("boilerplate") clauses, which are used in a wide variety of business situations.
a. Briefly present one boilerplate clause. When would you consider using this clause in your international commercial contract – and why? (10%)
b. Will this clause always produce the same effects when used in international commercial contracts? Why? (10%)
2. Which interests do Common law-based systems seek to advance by favoring literal contract interpretation and restraining the judge’s access to pre-contractual dealings? (10%)
Practical questions
Rolf Lawreen (RL) is an internationally renowned high fashion company, manufacturing clothes catering to the luxury market segment. RL has a principal place of business in Paris, France.
Zork (ZK) is a Swedish retailer of luxury clothes. ZK does not manufacture any clothes, but their unmatched customer service skills – and attention to detail and presentation in their stores – allow them to resell luxury brands with a 10% average profit margin.
ZK has been regularly ordering clothes from RL since 2015. The orders would vary greatly each year. To help them pick the clothes most likely to fetch a high re-sale value, RL offered free services of a “fashion consultant”, who would come up with a proposed set of goods to offer for the next season. ZK could modify the list as they saw fit before placing an order.
In January 2020, RL sent out a marketing email to all of their business customers. The email contained a silhouette image of one shoe and contained the following text:
Rolf Lawreen is proudly introducing <<<< The Left(y) Shoe <<<<
Walk like never before!
Limited series – only 100 shoes worldwide! Shipping fall 2020
In February 2020, ZK’s sales team visited RL’s fashion consultant. The consultant showed a single Lefty Shoe to them, and explained how “only our most valued business partners will get a chance to purchase this rare collector’s item – people would kill to wear this shoe!”. The price tag on the model shoe stated “50.000 EUR – per 2x – sold only in pairs”. The consultant
suggested coupling the purchase with “our highest-end polo shirt models, ‘Hawk’ shirts”, priced at 5.000 EUR per shirt.
ZK’s team traveled back to Sweden and suggested to the CEO that they place an order for a single pair of Lefty Shoes, as well as 10 Hawk shirts. As the CEO wanted one pair of The Lefty Shoes for own private use – it was all that the fashion world was talking about – CEO modified the order as to include two pairs of The Lefty Shoe and 10 Hawk shirts, for a total of 150.000 EUR.
RL sent a draft contract to ZK for review, using their standard business terms. The contract stipulated that “the goods shall be handed over to the carrier (DHL) in Paris, France, on May 10th, 2020, and shall be shipped to Stockholm, Sweden”. Under the “Goods to be shipped” heading, the contract stipulated “2x2 Lefty Shoe; 10x1 Hawk Shirt”. There were no clauses on passage of risk, applicable law or dispute resolution. ZK counter-signed the contract with no objections.
The goods were handed over to DHL for shipping on May 10th, according to the plan. The goods were loaded aboard RMS Sinkhole, which, despite repeated warnings from the costal authorities, proceeded to set sail on particularly stormy seas. RL had no involvement in the shipping process, as is usual in the commercial practice.
Predictably enough, RMS Sinkhole encountered a nearly catastrophic storm. To save the ship, the captain ordered offloading of cargo. Among other goods, five Hawk shirts were thrown into the sea.
The rest of the goods arrived safely in Stockholm. ZK’s CEO opened up the long-awaited box with The Lefty Shoe, only to find out it contained – two left shoes. Bewildered, the CEO opened the other box, which also contained two shoes meant to be worn on the left foot.
ZK’s CEO quickly reached out to RP’s customer service, and the following exchange took place:
ZK:> Hi! We recently received two pairs of The Lefty Shoe, but our delivery only contains left shoes :) This sounds very funny, but we obviously expected to receive two pairs of shoes (L/R – left and right).
RL:> Hello! The Lefty Shoe is a collector’s model, and as the name implies, is only manufactured to fit the left foot.
ZK:> Is this a joke? A pair of shoes clearly means left and right! Why would we buy a shoe that nobody can wear? Your ad even mentions walking, as did your consultant! You need to send us replacements immediately!
RL:> Once again, with all due respect, this is a rare item. We will certainly not be sending any replacements.
The next day, CEO heard that only half of the promised Hawk shirts had arrived. “If we get half the shoes and half the shirts, guess who is getting only half the money!”, stated CEO, and instructed half of the payment to be withheld.
1. Does CISG apply to the contract between RL and ZK? Why? (15%)
2. Under CISG, would a court be likely to instruct ZK to nevertheless pay for the 5 Hawk
shirts which were destroyed at the sea? Why? (15%)
3. Under CISG, could ZK claim that the delivered shoes were non-conforming goods?
(20%)
4. Assume, alternatively, that the contract stipulated “a pair of shoes includes left and
right shoe” and that the delivered shoes were clearly non-conforming. Following the
statements from RL’s customer service, can ZK avoid (terminate) the agreement? (20%)