Overview
1)The buyer, a retailer of wine in China, ordered 76 bottles of fine wine from a French wine merchant in August 2018. The contract price was £100,000 and the contract stipulated FOB Marseille (Incoterms 2010). Delivery occurred on 4th of December 2018. On 9th of September 2019, the buyer sent a notice titled ‘cancelation of contract’, stating that the products did not conform to the order as regards both quantity and quality. The bottles of wine had to be stored by the buyer for a period of 8 months before the wine would mature and could be sold for consumption. Opening the bottles before the 8-month period would have significantly reduced the value of the wine. Fifteen days later, the buyer brought a claim in a Chinese court against the seller with a view to recover damages. Evidence was produced in court which showed that the value of the wine it received was £90,000. Moreover, had the conforming wine been delivered it would have been worth £120,000. The buyer could have purchased substitute goods from another supplier for £105,000 at any time.
A)Provided the contract is silent as to choice of law, will the court refer to the jurisdiction’s conflict of law rules to ascertain which law governs the dispute?
B)What defences may the seller rely on in the current circumstances? In your opinion, will they be successful?
C)Provided no defences apply, what amount of damages may the buyer recover under the circumstances?
D)Given that the seller makes large and regular sales (including delivery obligations) to China, what advantages does the incorporation of FOB provide in this scenario?