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Discuss the contract issues under international law...?

The Melbourne company Gadgco Ltd sold novelty games and devices. In December 2009 Gadgco’s managing director emailed an enquiry to the UK company Rippa plc about some very popular items, asking for a price and any special terms. Rippa’s reply set out the following terms: • There was a discount of 8% for orders over $500,000 • Shipment would be DEQ Melbourne within 30 days of receipt of a firm order and establishment of a letter of credit. A price list was attached which said on the bottom in small print: ‘Our General Conditions of Sale are on our website’. Gadgco Ltd faxed a firm purchase order on 10 January 2010 together with a copy of its General Conditions of Purchase, stated to be: ‘part of our purchase order.’ These conditions included an arbitration clause’ (ie disputes were to go to arbitration), and named the Australian Centre for International Commercial Arbitration in Melbourne. Rippa plc faxed shipping dates and its invoice the same day. On the bottom was (again) the small print statement: ‘Our General Conditions of Sale are available at our website’ All the items were shipped within 30 days and duly delivered without any problems in February 2010. Gadgco Ltd advertised them to retailers, and had already entered some contracts when it received a letter arrived from UK Government solicitors stating that the items were the subject of unpaid export duties and sales should cease immediately. Gadgco Ltd notified Rippa plc of this, and stated that it was therefore avoiding the contract with Rippa. In reply, Rippa plc stated that it had obtained legal advice that export duty was not payable, and it was disputing the UK government claim, and there was no basis for avoiding the contract. Gadgco re-iterated that it was avoiding the contract, and claimed the total amount it had paid under the letter of credit plus losses suffered on cancelling contracts with retailers. If the account was not paid within 30 days, the matter would be submitted to arbitration. The items meanwhile were available to Rippa in its warehouse. In reply Rippa Ltd refused to pay the account or to arrange for return of the goods and claimed that the arbitration clause was not part of the contract. It did however concede that Victorian law was the relevant law. Discuss the contract issues under international law.

Public Comments

1. Discuss reasons why any of us should do your homework for you...
2. The one that pays the shipping handles the export fees.