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Mid term test IBL Module International Business Law Exercise 1 a Mr Nam, a seller in Vietnam had established its own website to offer for sale various antique products over the internet One of the pro.
Module: International Business Law Exercise a Mr.Nam, a seller in Vietnam had established its own website to offer for sale various antique products over the internet One of the products offered was antique book which normally retailed at USD 288 However, due to an error committed by his employee, the price of the book was altered to USD 88 on the website Mr.Alvin was the owner of a shop in Singapore that sold antiques He came to know of the book’s extraordinarily low price offered by the seller and placed orders through the internet for 200 copies The transaction online took place in the following manner: every time an order was placed by a buyer after filling up the requisite form, which included the furnishing of a valid credit card account, it would be followed by an automated reply from the seller that the transaction was successful b Mr.Nam’s antiques were stolen He placed a notice on an antique magazine saying that he would pay USD 2500 for an exceptional Han dynasty tomb pottery horse antique with authenticity certificate The beautiful horse measures approximately 22 inches in height Mr.Nguyen saw the notice in the magazine and he had a Han dynasty antique Nguyen had tried to make a new proposal in asking the seller whether a tomb pottery camel would Nam placed another advertisement in the newspaper offering a reward for the return stolen antiques and decided that it was better off spending that money on replacing the item Advise Mr.Nam You are required to analyse the scenario from the perspective of the law of contract Apply the rules of offer and acceptance in a given scenario Questions: (i) Explain whether the mode of the online transaction described in the case constitutes a valid contract between the parties Applicable law: Art 14.2 CISG, Art 15.1 CISG, and Art 18.1 CISG In this case, the website has offered for sale various antique products over the internet, including an antique book whose price was altered to USD 88 on the website This is regareded as an invitation to make offers and when it reaches the buyer, it becomes an offer When the buyers fill up the requisite form, it means that they have accepted the offer by conducting actions Consequently, the mode of the online transaction described in the case constitutes a valid contract between the parties (ii) State whether Mr.Nam can successfully defend its case against Alvin Applicable law: Art 126.1 Civil Code 2015 According to Art 126.1 CC, in case a civil transaction was entered into by mistake causing one or both parties fail to obtain their objectives, such as this, the mistaken party has the right to request the Court to declare the civil transaction invalid Therefore, Mr Nam can defend the case by applying Art 126.1 as he was the mistaken party in this case Examine the question of whether Mr.Nam's proposal in case (b) is an offer and could lead to a contract (iii) Applicable law: Art 386 Civil Code 2015, Art 14.2 CISG, and Art 15.1 CISG Art 386 CC stated that the offer to enter into a contract means a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another specific party or the public According to Art 386 CC 2015, Mr Nam’s proposal was clear enough to consider as an offer as it has shown Mr.Nam’s objectives to “pay USD 2500 for an exceptional 22 inches in height Han dynasty tomb pottery horse antique with authenticity certificate” and his intention to enter in the contract However, this proposal was published on an antique magazine and sent to all the readers of the magazine Applying the Art 14.2, the proposal could only be considered as an invitation to offer as it addressed more than one specific persons In addition, if there is a willing seller who accepts Mr Nam’s proposal, then a contract can be concluded according to Art 15.1 CISG (iv) Could the proposal be regarded as an invitation to treat? Applicale law: Art 14.2 CISG, Art 14.1 CISG In the case of Mr Nam, he placed a notice on an antique magazine as an invitation to make offer for one and more specific persons who could pay for a Han dynasty tomb pottery horse antique As a result, the proposal of Mr Nam could be regarded as an invitation to treat In the case of Mr Nguyen, he tried to make a new proposal in asking the seller whether a tomb pottery camel would Mr Nguyen The proposal was not clear as there are no specifications regarding the price to make possible offer with Mr Nam The proposal of Mr Nguyen would then be regarded as an invitation to treat (v) Was a contract made between Mr.Nam and Mr Nguyen? Applicable law: Art 18.1 CISG In this case, Mr Nam made an offer as he placed a notice on an antique magazine saying that he would pay USD 2500 for an exceptional Han dynasty tomb pottery horse antique with authenticity certificate Mr Nguyen rejected this offer since he had tried to make a new offer in asking Mr Nam whether a tomb pottery camel would Accordingly, Mr Nam remained silent and conducted no actions to be considered acceptance Consequently, there was no contract made between Mr Nam and Mr Nguyen Could Nam withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500? (vi) Applicable law: Art 17 CISG As explained in question (iii), Nam’s proposal is merely an invitation for offers addressed to many specific persons Due to which, he could not make an withdrawal to each and every person who has read the magazine However, he could make an rejection to any potential willing seller according to the Art 17 CISG Exercise A seller in Hanoi and a Buyer in Ho Chi Minh city entered into the sale of yarn; however, the quality of the yarn was poor and did not comply with the description in the contract a The buyer reprocessed the yarn for the cost of X VND b During the time for reprocessing the yarn, the working capacity of the factory was reduced due to shortage of the yarn This led to the loss of profit for Y VND c The buyer was late in delivery the textile fabric to its customer, getting a penalty for Z VND d The buyer was late in paying the wages to its workers They carried out a strike, causing the loss of T VND Questions: Which losses can be recoverable? All the losses cannot be recoverable Applicable Law: ● Art 18.1 CISG: “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance.” The buyer had accepted the yarn supplied by the seller in Hanoi as he reprocessed the yarn, instead of making a claim to the seller in Hanoi that the yarn was not up to specifications written in the contract His behavior is now considered acceptance of conduct, therefore, he could not make a claim and recover the X amount Applicable law: ● Art 302 of Commercial Law 2005: “The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed” ● Art.74 of CISG: “Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach” As for the Y, Z, T amount, these are consequential losses due to the shortage of yarn which is not caused by the sale contract of yarn between the seller and the buyer On the other hand, it was due to the fact that quantity ordered by the buyer did not suffice the quantity needed for the latter production → Therefore, the buyer could not make any claim and recover any losses (i) Explain whether the mode of the online transaction described in the case constitutes a valid contract between the parties • The mode of the online transaction described in the case can not constitutes a valid contract between the parties because according to Article 126 of CC15: Invalidity of civil transactions due to misunderstandings: “If there is a misunderstanding in a civil transaction that make a party or the parties fails to meet the objectives of the transaction establishment, the mistaken party shall have the right to request a court to declare such transaction invalid” (ii) State whether Mr.Nam can successfully defend its case against Alvin • Mr.Nam can defend his case against Mr.Alvin, because according to Article 126 of CC15: "the mistaken party shall have the right to request a court to declare such transaction invalid” • Mr.Nam can revoke the acceptance but he will have to compensate Mr.Alvin for property and moral damage (iii) Examine the question of whether Mr.Nam's proposal in case (b) is an offer and could lead to a contract • Mr.Nam's proposal in case (b) is not an offer, it is an invitation to make an offer and it could not lead to a contract because although it make a clear expression by the offeror of his intention but it not made to another specific party (iv) Could the proposal be regarded as an invitation to treat? • No because a proposal means that a party is willing to offer with legally bound - contract, in this case Mr Nguyen make a counter-offer for Mr Nam as if his camel pottery can be replace the horse pottery that Mr Nam wanted (v) Was a contract made between Mr.Nam and Mr Nguyen? • No because Mr.Nguyen does not accept the whole contents of the offer from Mr.Nam Instead, he gave a counter-offer to Mr.Nam and Mr.Nam silently gave no response, this does not sufficient to constitute an acceptance, so a contract was not made between Mr.Nam and Mr.Nguyen (vi) Could Nam withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500? • Yes because offer can be revoked anytime before acceptance and as and as analyzed in the answer above, • so far there is no acceptance for Mr.Nam's offer, so Nam can withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500 Question A seller in Hanoi and a Buyer in Ho Chi Minh city entered into the sale of yarn; however, the quality of the yarn was poor and did not comply with the description in the contract a The buyer reprocessed the yarn for the cost of X VND b During the time for reprocessing the yarn, the working capacity of the factory was reduced due to shortage of the yarn This led to the loss of profit for Y VND c The buyer was late in delivery the textile fabric to its customer, getting a penalty for Z VND d The buyer was late in paying the wages to its workers They carried out a strike, causing the loss of T VND Questions: Which losses can be recoverable? According to Article 74 CISG, damage for breach of contract by one party consists of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach Also, Recoverable Loss means any Losses arising out of any single act, omission, event or circumstance (or series of related acts, omissions, events or circumstances) And, if such Losses are incurred, the entire amount of such Losses shall be a Recoverable Loss • According to Article 302 of CL 2005, because the seller is the breaching party, the seller is required to cover this direct loss of goods • Due to a yarn shortage, the factory's operational capacity was curtailed while the yarn was being reprocessed This led to the loss of profit for Y VND => which is indirect loss According to Article 79 CIS, when the buyer made an offer to the seller, the buyer was unable to know the cost of supplying a quality product since the contract would have an impact on the seller's ability to perform • The seller should have been aware of the circumstance or if the buyer had informed the seller that they would resale the textile fabric to another client And, if they were late, they would have had to pay a penalty and the buyer would have had documentation, which would have resulted in a direct loss • The buyer was late in paying the wages to its workers They carried out a strike, causing the loss of T VND => indirect, cannot pay wages does not connect with the contract => Even when law does not mention, we still have to identify and examine the direct or indirect loss with evident proof => Conclusion: can claim X (+Z if buyer can prove), cannot claim Y and T (i) Yes, because the transaction meets the essential requirements to formulate a valid contract: • Capacity of the parties to set up a contract: o Civil legal capacity: The persons in the transaction are established businessmen so they obviously qualify for any civil legal activities • Content of contract: o The requisite form has the necessary information as well as regulations for the transaction to occur • Form of contract o In writing • Principle of complete voluntariness o Mr Alvin accepted the invitation to treat which makes him the offeror and Mr Nam automatically the offeree and accepts the offer (he’s the one who listed the product for sale at that price) (ii) In my opinion, Mr Nam will not be able to defend his case against Mr Alvin because although Article 126 of CC15 states that: Invalidity of civil transactions due to misunderstandings: “If there is a misunderstanding in a civil transaction that makes a party or the parties fail to meet the objectives of the transaction establishment, the mistaken party shall have the right to request a court to declare such transaction invalid.”, Mr Nam’s mistake affects neither party’s ability to carry out their obligations Therefore, it will have no effect on the agreement (iii) Mr Nam’s proposal in case (b) is not an offer as an offer to enter into a contract means a clear expression by the offeror of his or her intention made to another specific party to enter into a contract and to be bound in case of acceptance and in this specific situation, Mr Nam is just naming the price that he’s willing to pay for such item (Article 14 CISG 1980) Article 392 CC 2015 “When an offeree accepts the offer to enter into a contract but specifies conditions or amendments to the offer, the offeree shall be deemed to have made a new offer.” In this case, Mr Nam offers to pay USD 2500 for an exceptional Han dynasty tomb pottery horse antique with authenticity certificate Meanwhile, Nguyen had tried to make a new proposal in asking the seller whether a tomb pottery camel would This means Mr Nguyen doesn’t accept Mr Nam’s offer, he just makes a new offer => Therefore, there is no contract between them (vi) According to Art.389 CC 2015 Modification or withdrawal of offers to enter into contracts An offeror may modify or withdraw an offer to enter into a contract in the following cases: (a) The offeree receives notice of modification or withdrawal of the offer prior to or atthe same time as receipt of the offer; (b) The offeror clearly specified the circumstances in which the offer could bemodified or withdrawn and such circumstances have in fact arisen In this case, Mr.Nam’s offer has reached his offeree - Mr Nguyen => Therefore, it’s impossible for him to withdraw his offer Question In this case, the seller is the breaching party because of delivering not conforming goods (poor-quality goods) According to Art.302 Commercial Law 2005 “1 Damages means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed.” a The action of breaching the contract is the proximate cause of the loss The quality of the yarn is poor and did not comply with the description, which directly leads to the cost of reprocessing => The action of breaching the contract is direct loss and the cost of X VND can be recoverable b The action of breaching the contract is not the proximate cause of the loss The loss is directly caused because the working capacity of the factory does not meet the demand of production The breaching contract action is only the indirect loss => The loss of profit at Y VND is not recoverable c The action of breaching the contract is not the proximate cause of the fact that the buyer get a penalty for Z VND Z is the indirect of loss caused by the breach of contract The direct cause is that the buyer does not fulfill his obligation to deliver goods on => Therefore, the loss Z is not recoverable d The action of breaching the contract is not the proximate cause of the fact that The buyer was late in paying the wages to its workers, they carried out a strike, causing the loss of T VND It’s the obligation of the buyer to pay wages to its workers on time => Therefore, the loss T is considered as indirect loss and it is not recoverable a Mr.Nam, a seller in Vietnam, had established his own website to offer for sale various antique products over the internet One of the products offered was antique book which normally retailed at USD 288 However, due to an error committed by his employee, the price of the book was altered to USD 88 on the website Mr.Alvin was the owner of a shop in Singapore that sold antiques He came to know of the book’s extraordinarily low price offered by the seller and placed orders through the internet for 200 copies The transaction online took place in the following manner: every time an order was placed by a buyer after filling up the requisite form, which included the furnishing of a valid credit card account, it would be followed by an automated reply from the seller that the transaction was successful b.Mr.Nam’s antiques were stolen He placed a notice on an antique magazine saying that he would pay USD 2500 for an exceptional Han dynasty tomb pottery horse antique with an authenticity certificate The beautiful horse measures approximately 22 inches in height Mr.Nguyen saw the notice in the magazine and he had a Han dynasty antique Nguyen had tried to make a new proposal by asking the seller whether a tomb pottery camel would Nam placed another advertisement in the newspaper offering a reward for the return of stolen antiques and decided that it was better off spending that money on replacing the item Advise Mr.Nam You are required to analyze the scenario from the perspective of the law of contract Apply the rules of offer and acceptance in a given scenario Questions: (i) Explain whether the mode of the online transaction described in the case constitutes a valid contract between the parties (ii) State whether Mr.Nam can successfully defend its case against Alvin (iii) Examine the question of whether Mr.Nam's proposal in case (b) is an offer and could lead to a contract (iv) Could the proposal be regarded as an invitation to treat? (v) Was a contract made between Mr.Nam and Mr Nguyen? Could Nam withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500? (vi) A seller in Hanoi and a Buyer in Ho Chi Minh city entered into the sale of yarn; however, the quality of the yarn was poor and did not comply with the description in the contract a The buyer reprocessed the yarn for the cost of X VND b During the time for reprocessing the yarn, the working capacity of the factory was reduced due to shortage of the yarn This led to the loss of profit for Y VND c The buyer was late in delivery the textile fabric to its customer, getting a penalty for Z VND d The buyer was late in paying the wages to its workers They carried out a strike, causing the loss of T VND Questions: Which losses can be recoverable? ANSWER (i) Explain whether the mode of the online transaction described in the case constitutes a valid contract between the parties According to Art 14.1 CISG 1980 “A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price” In this case, it can be seen that Mr Nam has made an offer to sell the antique book for a certain price, although this is not an exact price, it is detailed enough to constitute an offer Next, for a contract to be formed, an acceptance from the offeree is required According to the article, Mr Alvin placed orders through the internet for 200 copies, in which “every time an order was placed by a buyer after filling up the requisite form, which included the furnishing of a valid credit card account” Based on Art 18.1 CISG 1980 stated as follows “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance Silence or inactivity does not in itself amount to acceptance.” Mr Alvin's placing order has included furnishing of a valid credit card account sufficient to be recognized as an act of his acceptance according to the Art 18.1 In conclusion, the mode of the online transaction described in the case has constituted a valid contract between the parties (ii) State whether Mr Nam can successfully defend its case against Alvin Mr Nam could not successfully defend the case against Alvin because: As explained above, there can be a valid contract between two parties According to Art 31.1 CISG 1980, after forming a contract between the parties, the seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contract and this Convention If the seller here, Mr Nam, refuses to deliver the goods with the specified amount (88 USD), then Mr Nam has breached the contract between the two parties Nam's breach of contract is not included in the excuses for breach of contract section, which includes cases where the breaching contract party does not have to accept responsibility: Force majeure, Dirty hand, a third party at fault - In the case of force majeure, failure to deliver goods can be completely remedied by shipping antique book copies to Mr Alvin So it doesn't belong in this case - Next is dirty hand, obviously Mr Alvin does not perform any act that may breach the contract - And finally, A third party is at fault, in this case there is no third party participation In conclusion: Mr Nam can't successfully defend the case (iii) Examine the question of whether Mr.Nam's proposal in case (b) is an offer and could lead to a contract Mr Nam’s first proposal in case (b) is an offer According to Article 14 of CISG 1980: ”A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.” Regarding the proposal made by Mr Nam, we can conclude the information as below: ● Indicate the goods: an exceptional Han dynasty tomb pottery horse antique, approximately 22 inches in height ● Quantity: pottery ● Price: USD of 2500 ● Required documents: authenticity certificate ● The intention to be bound: “would”, the notice on a antique magazine Therefore the first proposal of Mr Nam in this case is an offer and can become a contract Since if there is anyone to contact him for selling the goods, he would be the buyer and they are the seller, then they are accepting his condition and that is when the contract is made (iv) Could the proposal be regarded as an invitation to treat? No, Mr Nam’s first proposal cannot be regarded as an invitation to treat because an invitation to treat means that one party is willing to invite an offer from another party But in this case, as mentioned in (iii), the proposal of Mr.Nam is an offer and could lead to a contract It is an offer so it cannot be regarded as an invitation to treat Mr Nam’s second proposal in case (b) can be regarded as an invitation to treat Even though he might include the detail about the lost antique, his proposal seems no less to be like an advertisement in a magazine, because according to Article 386 (Civil Code 2015), an offer into a civil contract must have “a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another determined party or to the public” The post on newspaper with no clear information about the lost antique could be considered as not enough to be seen as a confirmation of the offeror to be bound by the contract and as stated in Article 14 of CISG 1980, “a proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offer” Another point is that when a person found the lost antique and contacted Mr Nam, he or she would be the one to state an offer, and if Mr Nam would not give him or her the money and take the lost antique, it is not that he is revoking the offer or anything (v) Was a contract made between Mr Nam and Mr Nguyen? Mr Nam's first proposal is stated as offer (1) Mr Nguyen who had a Han dynasty antique had tried to make a new proposal in asking Mr Nam whether a tomb pottery camel would do, so he had terminated Mr Nam first offer by delivering a counter offer, changing the object, making a new offer called offer (2) There was no response from Mr Nam, so there was no acceptance for the offer (2), regarding Article 18.1 of CISG 1980: “Silence or inactivity does not in itself amount to acceptance” Then offer (2) is terminated Nam then placed another advertisement in the newspaper offering a reward for the return of stolen antiques and decided that it was better off spending that money on replacing the item His action had created an invitation to treat “the advertisement in the magazine offering a reward for the return of stolen antiques” So there was no contract between Mr Nam and Mr Nguyen (vi) Could Nam withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500? Considering Nam's proposal as an offer, he can withdraw his offer His proposal did not contain any information about the date and time the offer is over, and according to Article 16.1 of CISG: “Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.” Therefore if there has not been anyone who found the lost antique, Nam can repost another advertisement noticing that he would no longer seek for the antique, and that would terminate his offer to buy the antique According to Article 302 - Commercial Law and Article 74 - CISG: a The quality of the yarn was poor and did not comply with the description in the contract, so the Buyer had to reprocess the yarn, which cost X VND This is direct damage caused by improper performance of the contract of the Seller Therefore, the Seller has responsibility to pay for the loss, X VND is recoverable b During the time for reprocessing the yarn, the working capacity of the factory was reduced due to shortage of the yarn This led to the loss of profit for Y VND However, this loss is the consequence of inefficient factory working capacity, not the direct impact of non-conforming goods of the Seller Therefore, the Seller is of no obligation to pay for the profit loss, Y VND is NOT recoverable c The buyer was late in delivering the textile fabric to its customer, getting a penalty for Z VND This is the Buyer’s responsibility to deliver goods on time to their customers The penalty is caused by the incompetence of the Buyer, not because of poor quality yarn from the Seller Therefore, the Seller doesn’t have to pay the penalty, Z VND is NOT recoverable d The buyer was late in paying the wages to its workers They carried out a strike, causing the loss of T VND Again, paying for workers is the Buyer’s responsibility This loss is caused by the Buyer themselves, therefore T VND is NOT recoverable Answers Case 1.a: Offeror (party that makes the offer): Mr Nam (the Seller), Vietnam Offeree (party that receives the offer): Mr.Alvin (the Buyer), Singapore → International transaction Product: antique book Right retailed price: USD 288 Wrong retailed price: USD 88 Mode of transaction: Online order with an automated reply from the seller that the transaction was successful (i) Explain whether the mode of the online transaction described in the case constitutes a valid contract between the parties About the formation of a contract CISG 1980 Part II Formation of the contract Article 14 (1) A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offer or to be bound in case of acceptance A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price (2) A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated by the person making the proposal Base on CISG Article 14(2): Mr Nam’s website advertisement is open to one or more specific persons and there was no clear indication, so it can be considered merely as an invitation to make offers → Therefore, there is no formation of a contract in this case In conclusion, the mode of the online transaction described in the case did not constitute a valid contract between the parties However, in regards to the Buyer’s perspective (Mr.Alvin) Base on CISG Article 14(1): The offer of Mr Nam is sufficiently definite because it indicates the goods and makes provision for determining the quantity and the price (here is 88 USD as described in the advertisement on the website) As the transaction online took place in the following manner for the buyer: - filling up the requisite form - including the furnishing of a valid credit card account - an automated reply from the seller was sent to announce that the transaction was successful So to the buyer, the contract was successfully made when he accepted the offer of 88 USD for the antique item and filled in the form of placing an order of 200 copies Mr Alvin already received the announcement for a successful order Therefore, a contract is valid because the buyer’s acceptance of the offer was confirmed by the Seller’s automated reply mail for the transaction (ii) State whether Mr.Nam can successfully defend its case against Alvin Mr Nam can base on CISG Article 14(2) to defend himself case against Alvin or he can base on Civil Code 2015, Article 126: Invalidity of civil transactions due to misunderstandings: “If there is a misunderstanding in a civil transaction that make a party or the parties fails to meet the objectives of the transaction establishment, the mistaken party shall have the right to request a court to declare such transaction invalid” In this case, the Seller party (Mr.Nam) fails to meet the objectives of the transaction establishment (his company can not gain 288 USD for the antique product as he expected) due to the mistake in advertisements caused by the employee → Mr Nam shall have the right to request a court to declare such transaction invalid (iii) Examine the question of whether Mr.Nam's proposal in case (b) is an offer and could lead to a contract Mr.Nam's proposal in case (b): He would pay USD 2500 for an exceptional Han dynasty tomb pottery horse antique with an authenticity certificate Civil Code 2015 Article 386: Offers to enter into civil contract (1) Offer to enter into a contract means a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another determined party or to the public (hereinafter collectively referred to as the offeree) → It can be concluded that Mr.Nam's proposal in case (b) is an offer because Mr Nam - express his intention: buy an exceptional Han dynasty tomb pottery horse antique with an authenticity certificate - bound by such offer: pay USD 2500 for the goods he wants - made to another determined party or to the public: he placed a notice on an antique magazine Therefore, Mr.Nam's proposal is an offer and could lead to a contract if anyone can meet his demand and meet fundamental principles for formation of contract including freedom of contract, voluntary agreement, equality, honesty and good-faith (iv) Could the proposal be regarded as an invitation to treat? According to Article 386 Civil Code 2015: An offer to enter into a contract means a clear expression by the offeror of his or her intention made to another specific party to enter into a contract and to be bound in case of acceptance Therefore, Nam’s proposal is an invitation to treat, not an offer An invitation to treat is only inviting the party to make an offer, not showing a desire to contract on certain terms and to be legally bound by those terms Additionally, Nam’s proposal didn’t show his target to a specific person/party (it’s for anyone who sees his advertisement) (v) Was a contract made between Mr.Nam and Mr Nguyen? There was no contract between Mr.Nam and Mr.Nguyen because Mr Nguyen didn’t accept the offer by Mr.Nam Instead, he made a new proposal to change the item to a tomb pottery camel → a counter-offer (Article 389 Civil Code 2015) Moreover, Nam by then didn’t accept that counter-offer, instead he made a new proposal to reward those who return the stolen antiques (not pay 2500 USD to buy the tomb pottery horse anymore) Could Nam withdraw his offer to buy an exceptional Han dynasty tomb pottery horse antique for USD 2500? (vi) Mr.Nam can withdraw his offer because there was no acceptance from others to sell a tomb pottery horse antique for Nam and his offer didn’t show that it was bidding between him and another party (Article 390 Civil Code 2015: an offer can be withdrawn anytime before the acceptance) Therefore, no contract was made and Nam can freely withdraw his offer Case 2: In loss A, since the seller supplied a poor quality yarn which made the buyer have no choice than to reprocess the yarn so it could be used in production The situation made the buyer lose X VND more, this was a direct damage According to Article 445 of the Civil Code 2015: “Assurance as to quality of objects for sale and purchase A seller must assure the utility value or the characteristics of the object for sale and purchase If, after having purchased an object, a purchaser discovers defects which cause the object to lose its value or diminish its utility value, the purchaser must notify the seller immediately of such defects and has the right to demand the seller repair or replace the defective object with another object, to reduce its price and to compensate for loss and damage, unless otherwise agreed.” Assuming that the buyer already reports to the seller but has no response nor solution, then there will be a recoverable for this situation However, in the case that the buyer reprocesses without having any feedback to the seller, the buyer can not have recoverable Article 445 of the Civil Code 2015 also noted that: “3 A seller shall not be liable for any defect of an object in the following cases: (a) Where the purchaser knew or should have known of the defect at the time of purchase; (b) Where the object was sold at an auction or a second-hand shop; (c) Where the purchaser was at fault in causing the defect.” So in the case that the seller has informed, the buyer already has known that the yarn quality would not be good and both parties agree, then there would also be no recoverable In loss B, during the time for reprocessing the yarn, the working capacity of the factory was reduced due to shortage of the yarn This led to the loss of profit for Y VND This is also considered as a direct damage for the buyer Similar to the case a, if the buyer already reports to the seller but has no response nor solution, then there will be a recoverable for this situation However, in the case that the buyer reprocesses without having any feedback to the seller, the buyer can not have recoverable Loss C and D are both indirect damage The buyer was late in delivering the textile fabric to its customer, getting a penalty for Z VND and the buyer was late in paying the wages to its workers, carried out a strike, causing the loss of T VND are not the direct consequences of the poor quality of the yarn There is no clear and direct information about the legal relationship between the quality of the yarn and the laye delivery of the textile fabric The strike of the employees was caused by the delay in paying the wages, there is also no information that this problem is because of the quality of the yarn, this is nothing but the buyer’s problem In conclusion, there would be no revocable for the buyer in the loss of C and D ... contract can be concluded according to Art 15.1 CISG (iv) Could the proposal be regarded as an invitation to treat? Applicale law: Art 14.2 CISG, Art 14.1 CISG In the case of Mr Nam, he placed a notice... whose places of business are in different States when the States are Contracting States.” Therefore, the source of law for this case will be the CISG According to the Article 11 of the CISG “A contract... This transaction was an international sale of goods Since Vietnam and Singapore are contracting parties of CISG, such convention is considered as the governing law in this international transaction