Abstract
The research paper deals with the risk factor that highlights the core aspects of the transaction process of goods across borders. However, the passing of risks has also been taken into consideration in relation to the IST process that further showcased the positive and negative impact of CISG, Marine Insurance, Incoterms and English Law. Followed by this, the scope, significance, aims, objectives and research questions have been given that further highlights the importance of the chosen theme of discussion. Moreover, research limitations, structure and core problems of the research process have been highlighted. Furthermore, the risks and passing risk in relation to the transaction of goods process at an international level has also been discussed that further showcase the relevance and accuracy of the research process.
Introduction
In order to conduct research work appropriately, it is important to identify the core areas of the study so that the research process can be further carried out in an effective manner. This specific chapter highlights the background of the study along with stating the importance of choosing this particular topic. Moreover, this specific section of the research work has also shed light on the research rationale factors along with showcasing the scope of the research work. Moreover, the aims, objectives and the research question have helped to know the main target of the researcher and what exactly the researcher is trying to achieve. Furthermore, the limitation of the research work and the whole structure of the research process has also been provided in this chapter that showcases the accuracy and a systematic approach of the researcher towards the research process.
Research Background
International sale transaction (IST), which is also known as the international commercial transaction, is all about selling and receiving goods across borders. As per the ideas of Kaarisma (2020), international sale transactions have to go through many risks, which further complement the ideology of passing of risks that further higher up the challenges in relation to the contracts of sale law.
Followed by the main operation involved in the international sale transaction process, the CISG (United Nations Convention on Contracts for the International Sale of Goods) is taken to be the most effective standard. It is because the CISG helps to take care of the procurement process along with the selling of material and services accurately (Pohl-Michalek, 2020). For this reason, the manufactured goods in foreign trade are further being managed inPASSING OF RISK IN AN INTERNATIONAL SALE TRANSACTIO a simpler and economical way. However, the CISG is known for incorporating many legal principles and institutes that result in incompleteness of the operation in relation to the international sale transaction process, which can cause problems in the modern day sale transaction process.
Besides this, in the international sale transaction process, passing of risks takes place as two parties failed to see common terms in international sales oriented contracts. Hence, this leads to the danger and loss of products that further creates challenges to the international sale transaction business process (Karibi-Botoye et al. 2021). However, passing of risks under English Law in relation to international sale transactions showcases transparency and ability to provide freedom to contracts. However, under English Law the international commercial contracts as wella s the shopping prices of goods gets dominated that continues the passes th risks of CISG.
Moreover, the passing of risk in relation to IST under Incoterms seems to be an accurate application of relevant commercial or trade rules that are further used as international sale contracts. It helps to maintain the ethicality of the IST business operation but increases the cost and issues of the carriage process (Adisorn Mongkon, 2017). However, Marine insurance ensures that the transaction process of goods is safely being handled and shipped to the destination. However, passing of risk under Marine insurance may take place if any kind of damage occurred to the cargo or ship or shipment as it will result in losing the goods for which a huge financial crunch can take place. Hence, the passing of risk in international sales transactions takes place between the members, who are involved in the export and import of goods. However, in this case, the legal structure and the sale contract seems to be playing an important role that mainly take space under the CISG, Incoterms, English Law and Marine Insurance.
Aims and Objectives
Aim
The main aim of the research work has focused on the core challenges along with stating positive effects that the international sales transaction process faces due to some legal terms and conditions along with the application of the sale contract. However, passing of risk under English Law, Incoterms, CISG, and Marine insurance has also been put to focus that increase the issues of the IST.
Objectives
- To showcase the impact of passing of risk in IST under English Law, Marine Insurance and Incoterms along with CISG
- To highlight the positive sides of CISG, Incoterms, English Law and Marine insurance
- To evaluate the key areas of the provided instances of the legal case in relation to IST
- To identify the critical factors that includes passing of risk form international perspective to English law that is further continued from CISG and Incoterms
- Research Questions
- What are the laws and cases that fall under the passing of risk under English Law?
- How can the international sales transaction law be defined followed by the passing of
Research Rationale
Passing of risks in the international sale transaction process seems to be playing an important role that mainly showcases the challenges in sale contracts, which took place between the transaction or sale parties. It is all about dealing with the risk in the international sale process along with analysing the passing of risks between the members involved in the transaction of goods across borders. Besides this, passing of risk under sale contracts and legal standards further highlights the rationality of the research work (Oglindă and Olariu, 2018). However, for this reason, the involvement of CISG, English Law, Incoterms and Marine Insurance takes place that highlights both its negative and positive impact of IST process. Therefore, the core rational factors of the research has helped to know the passing of risk that takes place in the international sale transaction process, which is further represented in a comprehensive manner under CISG, English Law, Incoterms and Marine Insurance. Besides this, the rationality of the research paper has also been showcased by involving legal cases like Sterns v Vickers [1923] 1 KB 78, Pignataro v Gilroy [1919] 1KB 459 and many such. For this, the relevance and accuracy of the research paper has also been highlighted that seems to focus on the characteristics of the sales of goods along with the legal international sale oriented contracts between the parties (Yaakub and Leong, 2017). Hence, this research has mainly been conducted in order to know the core features of passing of risks in relation to IST under the legal contract and sale standard of international transaction of goods.
Problems statement
Passing of risk can be distinguished between business to consumer and business to contracts that can further result in the damage and loss of goods that can further affect the international sale transaction process. Taking the ideas of Rietveld et al. (2019) into consideration, the passing of risks also has its negative and positive effect that further seems to complement the core aspects of Sales of Good contract. The main area of concern of the research study is all about dealing with the challenges that the international sale transaction faces that further highlights the passing of risks concept. However, the passing of risks gets affected more followed by the negative impact of various sales contract and legal transaction standards, which further involved the members of the IST processes.
Scope of the research
The main scope of the research has helped to know the possible risk factors in the international sale transaction process. Besides this, challenges of the sale contract and legal transaction standard in relation to the IST process have showcased both the negative and positive impact of passing risks, concepts or features to it in an accurate way. This study has highlighted the significance of CISG, English Law, Marine Insurance, Incoterm in relation to international sale transactions that share a harmonised relationship and create issues to the sale transaction process across borders (Hayward et al. 2018). Moreover, the description has helped to know the importance of maintaining sales contracts and legal standards followed by the IST process so that the passing of risks can be controlled in an effective way. Therefore, the description and possible scope of the research work that has been provided can give relevant solutions to the members involved in the international sales transaction process (Meral, 2018). Hence, for this, the management of goods can be done well that can lower the rate of its damage and loss, which can further showcase the passing of risk factors in a more effective way.
Significance of the research
The passing of risks in an international sale transaction process under English Law, CISG, Incoterms and Marine Insurance has highlighted the importance of sales contracts and international transaction of goods-based legal standards. However, both positive and negative aspects of the sale contract and passing of risks have showcased the importance of conducting such research study that involved essential detail regarding international sales transaction of goods. Besides this, the real case examples in relation to the theme of discussion has helped to know the importance and relevance of conducting the study, which seems to provide information regarding the passing of risks in international trading business. Moreover, the harmonised approach of the legal sale standard and contract has helped to provide ideas regarding the UN convention on Contracts of International Sale of Goods as well as the ULIS and UNCITRAL. Therefore, the significance of the research study is all about shedding light on the importance of managing international goods in an accurate way so that the passing of risk can be taken care of in an accurate way.
Research limitation
The research has provided relevant information regarding the sales transaction process and its passing of risks concept under CISG, English Law, Incoterms and Marine Insurance. Hence, the challenges of the IST process have been highlighted that seems to evaluate the positive factors of sales contracts and the IST-based legal standards. However, for conducting the research work, it has been found that the researcher has carried out the research process by focusing on both primary and secondary data (Theofanidis and Fountouki, 2018). It is to gather an ample amount of information in relation to the chosen theme of discussion. Besides this, relevant case laws have been collected that have showcased the accuracy of international sales transaction-based legal standards and contracts. However the research has failed to choose accurate research techniques followed by which the quality of the research work degraded. Besides this, due to having time and budget limitations, the researcher could not get the scope to search more on international transactions of goods, Hence, for that reason, the researcher failed to discuss more on CISG, English Law, Marine Insurance and Incoterms in relation to passing of risk followed by ITS process.
Structure of the dissertation
Chapter Summary
From the above discussion, it can be summed up by saying that the background and importance of the research paper has showcased the relevance of the chosen theme of discussion. However, both the positive and negative impacts of the international sale of goods under the English Law, Incoterms, CISG, Marine Insurance have also been discussed that further showcased the importance of legal sale contracts. Moreover, the significance of the study along with the research aims and objectives with relevant questions has highlighted the need and systematic approach of the research work. The problem statement and the dissertation structure have showcased the accuracy of the research process followed by the researcher that can help to enhance the quality of the research work based on the chosen topic of discussion. Besides this, the scope and rational factor of the research work has showcased the relevance of the research process that can further help to conduct the research work in a systematic way.
Chapter 1: Passing of risks
Definition of risk in relation to international sale transactions
Risks in international sale transactions are all about facing mismanagement of goods and services that can result in damaging and loss of the product. Taking the ideas of Malacka (2018) into consideration, it can be said that risks in international transactions of goods across borders are high in relation to its members and involvement of legal rules and regulations. However, the shipping industry and its international trading process is taken to be safe and efficient as it includes millions of people, who manage the selling of goods across borders. Shipping industry includes both buying and selling of goods and services that further highlights the risks that seem to involve members of the sales transaction process across borders (Georgiado, 2021). However, passing of risk can also be related with the sale contract and legal standards of IST especially for its maintenance or else negative impact can ruin the whole process of sale transaction at an international level.
For instance, in the case of Pignataro v Gilroy [1919] 1KB 459, the risk in relation to the transaction of goods took place when the buyer failed to collect the goods for which it was stolen after one month. Hence, in this case the risk is faced by the buyers because as per the criteria the goods (rice) was delivered (Kaarisma, 2020). Hence, followed by the core aspects and comments of the UN Convention of CISG, the risks of loss and damage of a product totally depends on the buyers. It is because when the goods are being passed and delivered to the buyer, then the first carrier is responsible and not the holder or the person who has handed the goods to the buyer. However, like this the risk in the international sales transaction process is being passed down that further affects the sale contract and its legal standard along with the expectation of the members involved in the IST process. Besides this, due to the having the Incoterms rules and regulation in relation to the sales of goods across borders, the seller of the goods seemed to face risks. It is because before the delivery to the end user, the damage of the goods can also take place for which the buyer is not responsible.
Therefore, the sales contract and standards of Incoterms and CISG differ from each other that further raise the risks in the transaction of goods across borders (DiMatteo, 2021). Besides this, risks can also take place of lack of communication between the members involved within the shipping industry. This can further lead to the ill maintenance of Marine Insurance and making disturbance to the ethical approach of English Law. Hence, the risk of the shipping industry and the issue of the goods transaction process across borders cannot be mitigated as it seems to pass from source to another that further differs in features compared to national and international transaction of sales process.
Evaluating the passing of risks decipher from a risks
Passing of risk in nothing but showcasing the involvement of sale contracts and legal standards that are maintained for transaction of goods across borders so that both positive and negative impacts can be highlighted. In the passing of risk, it has been found that damage takes place to the goods that further results in the loosing of it before its delivery to the end user. As identified by Pejović (2020), passing of risks helps to lower down the possibility of risks that can help to mitigate the issues that take place often to the international transaction of sales. Hence, implementing relevant sales contracts can help to pass down the risks to the legal bodies, which can further be handled in an accurate way that will provide relevant solutions to the issue of international transaction of goods. All these sale contract processes under CISG, English Law, Incoterms and Marine Insurance can help to pass down the risk to a lower level and can also give rise to more complex risk (Hidy and Diener. 2019). Therefore, it is beneficial to take care of each and every factor that is involved in the passing of the risk process so that it can be solved by taking effective steps in reaction to the shipping industry. The definition of risk is different from the passing of risk as risks in the transaction of goods can take place when the truncation product or goods is not handled in an accurate way. However, on the other hand, the passing of risks is all about dealing with the risk that seems to pass down from one person to another that further lowers the effectiveness of the risks. Passing of risk is the transfer of goods across borders, which is taken to be a legal component that takes place between the parties, who are involved with the sales transaction process both at a national and international level. Besides this, in the sale transaction process of goods across borders, it has been found that both the buyers and sellers are both responsible in relation to the damage, loss and misplacement of product. Thus, it showcases the passing of risks from manufacture to seller and then to buyer (De Caria, 2017). For this reason, when the risk is transferred from manufacturer to seller, somehow the risk level gets decreased by the manufacturer, whereas the risk level of the seller gets lowered down when it’s transferred to the buyers.
Hence, like this the passing of risk in relation to the IST process takes place those further highlights the positive and negative impact of the international trading members and the sales contracts and legal standards involved in it. However, both the buyers and the sellers are involved in the passing of risk processes that further give rise to conflicting situations and create complexities to the whole process of international transaction of goods (Meral, 2018). Hence, it can be said that passing of risk plays an important role that further complements the international transaction process followed by the sales contracts and transaction of goods oriented standards. However, the passing of risk at international transactions of goods differ compared to the national transaction of goods due to having differentiation in sales contracts and legal standards of the shipping industry.
Reference List
De Caria, R., (2017). A digital revolution in international trade? The international legal framework for blockchain technologies, virtual currencies and smart contracts: challenges and opportunities. In Modernizing international trade law to support innovation and sustainable development. UNCITRAL 50th anniversary congress (pp. 105-117). United Nations.
DiMatteo, L.A., (2021). International business law and the legal environment: a transactional approach. Routledge.
Georgiado, K., (2021). The Transformation of the UN Convention on Contracts for the International Sale of Goods (CISG) into the UK Legal Order: Two Legislative Models. University of Derby (United Kingdom).
Hayward, B., Zeller, B. and Andersen, C.B., (2018). The CISG and the United Kingdom—Exploring Coherency and Private International Law. International & Comparative Law Quarterly, 67(3), pp.607-641.
Hidy, K.M. and Diener, K.W., (2019). Damages under CISG: Attorneys’ Fees and Other Losses in International Commercial Law. J. Transnat’l L. & Pol’y, 29, p.1.
Karibi-Botoye, N., Enwukwe, N.E. and Timothy, B.B., (2021). The Passing of Risk in the International Sale of Goods: An Appraisal of the United Nations Convention on Contracts for the International Sale of Goods (CISG). Journal of Law and Policy, 1(2).
Pejović, Č., (2020). Transport Documents in Carriage of Goods by Sea: International Law and Practice. Informa Law from Routledge.
Pohl-Michalek, M., (2020). Various Perspectives Regarding the Effects of the United Nations Convention on Contracts for the International Sale of Goods. In Forum Prawnicze (p. 40).
Theofanidis, D. and Fountouki, A., (2018). Limitations and delimitations in the research process. Perioperative nursing, 7(3), pp.155-163.
Yaakub, S. and Leong, Y.S., (2017). Factors influencing the choice in Incoterms among Malaysian manufacturers.
