Slide thuyết trình TACN2 Topic: Timing of the defects liability period

• When is the time of liability for starting ?• When the buyer find the defects, how long time is the buyer notify the exporter?. • If the exporter fails to make good the defect, how lon

Timing of the Defects Liability Period

Group: Nguyễn Thị Oanh

Nguyễn Duy Linh

Mai Quý Thiên

Bạn Lào Bạn Lào

• When is the time of liability for starting ?

• When the buyer find the defects, how long time is the buyer notify the exporter?

• How long time is the exporter has to correct the defect?

• If the exporter fails to make good the defect, how long time is the buyer can begin a legal action?

1 The Problem

• First is starting point of defects liability period while the seller want early date and start timing of the Defects Liability, the buyer wants a much later date, perhaps a successful acceptance test.

• Second is INTERRUPTION OF THE DEFECTS LIABILITY PERIOD

2a.The Defects liability period

• Forexample:

• To be fair we have the following typical terms:

The Defects Liability Period shall be extended by a period equal to the period during which the Goods cannot be used by reason of any defect, but not so as to extend the Defects Liability Period for more than twenty-four months from the date of first delivery of the Goods repaired or replaced under this provision

2a.The Defects liability period

• Less wide accepted is clause that buyer’s often try to slip into a contract – replacement parts trigger a new warranty period:

Any Supplies funished by way of replacement under warrantly shall be subject to provisions of this Clause to the same extent as Supplies initially accepted by the Contractor for full further period of warranty.

The danger here is that the provision creates a so-called “eternal warranty” –

an endlessly renewed liability for defects:

2a.The Defects liability period

Exporters normally reject the clause altogether, if rejection is impossible, they can and should break the chain warranty with cut-off clause:

Any parts replaced under this warranty shall be subject to the provisions of this clause for a fll further period of warranty; however, the total warranty period shall in no case exceed three years.

2a.The Defects liability period

2b The Notification period

• the buyer must notify the exporter if a defect occurs

In practice, most of contracts do not put precise time limit on the Notification Period.

A typical wording:

Notice of Defects

The buyer shall notify the Seller of defects without undue delay.

• In case, a problem arises, the judge sets a fair period for undue delay

Example: The UCC says:

What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action.

Any action is taken “seasonably” when it is taken at or within the time agreed or, if no time is agreed, at or within a reasonable time.

2c Rectification Period

• The Rectification period is like to a guarantee period and the Seller usually has the obligation, and indeed the right, to remedy defects appearing within this time.

• Making Good of Defects:

The Seller shall making good of the defect or damage as soon as practicable and at his own cost.

The making goof of defects without undue delay or within a reasonable time is a fair and normal contract requirement.

• The options for curing Defects:

Repair.

Allow the buyer to repair at exporter’s cost.

Replace(part or whole item).

Reduce the price.

Return the goods and refund the price.

2d The Legal Action period

• If the exporter has failed to repair under warranty and the buyer must start a legal action, how much time does the buyer have to begin proceedings?

• This "legal action period" differs under applicable laws.

In Germany, For example, the BGB defines a legal action period equal to and concurrent with the defects liability period This is harsh

• In another common Continental law pattern, the legal action period begins when the buyer notifies the exporter of the defect The legal action period is then the same length as the defects liability period This is fairer.

2d The Legal Action period

• In the United States: the UCC sets up a four-year legal action period; the parties to a contract may shorten this period

(minimally to I year), but they may not lengthen it.

• In England the normal period is six years from the date of the cause of action.

The variations are many: within one country, the legal action period varies from one type of contract to another or even from one type of duty to another.

• In practice, contracts rarely regulate the legal action period, leaving the matter to the applicable law If you foresee a problem, take legal advice.

2d The Legal Action period

1 The defects liability provision states the length of the defects liability period and its starting point.

2 It regulates the period during which the buyer must notify the exporter about defects.

3 It regulates the amount of time the exporter has to cure defects.

4 It seldom regulates the legal action period, the applicable law normally fixed the legal action period.

3 SUMMARY

ANSWER: D Four

• The Defect Liability Period

• The Notification Period

• The Rectification Period

• The Legal Action Period

Practice

ANSWER: C Five

• Repair

• Allow the buyer to repair at exporter’s cost

• Replace(part or whole item)

• Reduce the price

• Return the goods and refund the price

Practice

Translate to Vietnamese

• In the event of a defect coming to light and being notified to the Seller, the Seller shall, at his discretion and without undue dalay, repair or replace the defective item at his own risk and cost

Practice

Trường hợp sai sót được tìm thấy và thông báo đến người bán, người bán phải ngay lập tức lựa chọn phương án sửa chữa hoặc thay thế hàng hóa sai sót, chịu mọi rủi ro và chi phí.

Practice

• The Defects Liability Period shall be extended by a period equal to the period during which the Goods cannot be used by reason of any defect, but not so as to extend the Defects Liability Period for more than twenty-four months from the date of first delivery of the Goods repaired or replaced under this.

Practice

• Thời hạn trách nhiệm pháp lý về sai sót sẽ được gia hạn thêm một khoảng thời gian bằng với thời gian mà hàng hóa không thể sử dụng do những sai sót đó gây ra, nhưng không gia hạn quá 24 tháng kể từ ngày giao hàng đầu tiên của số hàng hóa được sửa chữa hay thay thế theo Điều khoản này.

Practice

Translate to English

• Nếu một bên gây ra thiệt hại cho bên kia, bên chịu thiệt hại có quyền được bồi thường tất cả các chi phí cho thiệt hại từ bên gây ra thiệt hại Các chi phí thiệt hại được bồi thường bao gồm các thiệt hại trực tiếp, vốn là những thiệt hại là kết quả trực tiếp từ những gì đã xảy ra, chẳng hạn như chi phí y tế hay thiệt hại tài sản, và các thiệt hại gián tiếp Thiệt hại gián tiếp là những thiệt hại không trực tiếp gây ra bởi bên kia nhưng bên bị thiệt hại vẫn phải chịu.

Practice

• If one party to this contract causes damages to the other party, the injured party has the right to recover the cost of the damages from the party causing the injury Damage costs that could be recovered include direct damages, which are damages that are a direct result of what happened, like medical costs or property damage, and indirect damages

Indirect damages are those that are not directly caused by the other party but that are incurred because the party was injured

Practice