CONTRACT FORMALITIES

Contract Formalities



Contract Formalities

International Trade involves a number of inter-related activities. The starting point for any trade transaction is the actual sale and purchase of goods by and from people and organisations in different countries. However, in order to classify the trade as international rather than domestic a further ingredient is essential.

The mere purchase of goods in a country by a foreigner remains a domestic sale and is normally governed entirely by the law of the country where the transaction takes place. International Trade by contrast, involves the transport of goods from one country to another. Thus a second transaction, namely the arrangement for the transport of the goods, is an integral part of the agreement. Arrangements also have to be made for the handling of cargo from domestic land carriers to the international carrier and then on arrival at the port of destination, to domestic land carriers for delivery at final destination. It is likely that storage facilities will be required at a number of stages during this process. The goods will normally be insured against loss or damage during carriage and it is usual for the banking system to finance such transactions. Each of these related activities is discussed in due course, in this book. However, this remainder of this chapter seeks to provide an over view of the issues and terminology involved in English International Trade law. (Godie Bawel 2007 Pp. 15)

This focus of the second part of this book is primarily concerned with the relationship between shipowners and charterers created by the contract of hire of the vessel (the charter party) and their respective liabilities to the owners of goods carried, due to contracts arising out of the contract of carriage and implied by statute and common law by virtue of The Carriage Of Goods by Sea Act 1971, otherwise knows as The Hague Visby Rules, The Carriage Of Goods by Sea Act 1992 and the so called common law Brandt v Liverpool contract. Not all contracts for the carriage of goods by sea involve a charterparty. Shipowners do operate vessels themselves and make contracts of carriage directly with shippers. However, most of the time vessels are operated by charterers who make the contract of carriage with the shipper. It is important therefore to consider the interaction between the contract of carriage and the contract in the charterparty. These two contracts also have to be considered in relation to the contract of carriage evidenced by documents such as the bill of lading. While domestic contracts can take a number of different forms, there is little that cannot be dealt with by the application of the general principles of contract and commercial law. By contrast, the logistics of a world market with buyers and sellers situated in disparate locations of the globe mean that personal contact is rarely possible or even desirable. A system that reassures each party of the bona fides of the other is essential and consequently complicates contractual ...