This book deals with the law and practice of international sale of goods contracts before English courts and arbitrators. It assumes that English law is the applicable law of the contract. The reported cases are almost invariably about contracts concluded on standard forms selecting English law as the applicable law. For that reason, questions of choice of law receive only a passing mention. The reader is referred to standard texts dealing with the conflict of laws.
A prominent feature of English law in its application to international sales is that the reported cases almost always arise out of commodity sales transactions, no part of whose performance occurs in England and which usually concern parties who have no visible connection with England. The quantities involved have in recent decades increased to a great extent as the traffic in commodities across the North Atlantic has become concentrated more and more in ever larger bulk carriers, designed to take advantage of the economies of doing business in this way. A small number of north European ports, where large bulks are broken for further destinations, are large enough to deal with these carriers. The effect of these developments on the law has been felt principally in two areas. First, the practice of bulk shipments delayed the passing of property to individual end buyers so that it took place after payment was made. This meant that end buyers might not be able to sue the carrier for breach of the contract of carriage pursuant to the Bills of Lading Act 1855. It also meant, by subverting the security that normally comes with cash on delivery transactions, that end buyers were at risk of the insolvency of their sellers (or even of sellers further up the sales string). The statutory responses to these difficulties were, respectively, the Carriage of Goods by Sea Act 1992 and the Sale of Goods (Amendment) Act 1995. Secondly, a large number of the most recent cases have thrown up problems arising out of the intersection of a voyage charter party contract, whether entered into by the FOB buyer or the CIF seller, with the contract of sale of goods. Sale and charter party contracts have become increasingly intertwined.
Until recent years, the contracts litigated were mostly for the sale of dry commodities, principally wheat, sugar, soya beans, and edible oils, destined largely for the animal feed industry. A striking feature of these contracts is the provenance of the standard forms of trade associations consisting of members with varied interests. More recently, standard form oil contracts have acquired greater prominence. These, promulgated by individual major oil companies, have not yet acquired the benefit of the long experience that has fed the dry commodities trading forms. The practicalities of the oil trade have already revealed demonstrable differences between the characteristics of dry contracts and oil, or wet, contracts.
The common lawyer’s inveterate belief that contract is an atomistic, bilateral relationship is particularly misconceived in the field of international sales. String trading is a commonplace feature of commodities contracts. This has implications for the relationship of the various parties in the string to each other. It also highlights the role played by intermediate parties in the string who have no material interest in the destination of the goods and who deal with them in much the same way as traders and investors deal with abstract (p. viii) commodities embodied in financial derivatives on the futures markets. This phenomenon weighs heavily on the application of well-known contract principles to disputes. The preoccupation of this book with the financial backdrop to physical, or forward delivery, transactions is, together with the attention it pays to the use of standard forms, its defining characteristic. The law of international sale is a law of construction played out through an informed, contextual reading of myriad cases. Principle is almost always negotiable.
In this book, I have not repeated at length general rules and principles of the law of sale that are more naturally located in general texts on the subject, such as my own book, The Sale of Goods (Clarendon, Oxford 1997). For example, the implied terms are sketched quite lightly in Chapter 1 of the present work. They rarely feature in the reported cases on international sales. Again, the discussion of passing of property and risk in Chapter 10 is angled to the particular character of commodity sales. Because the focus of this book is on commodity sales, there is no extended treatment of Incoterms 1990, which sometimes appear in oil (but not dry) contracts, where they play no significant role. They nevertheless receive frequent mention. Although it is unlikely that the United Nations Convention on the International Sale of Goods 1980 (the CISG) will play a major role in commodities contracts, in the (one hopes) likely event that the United Kingdom takes steps to join the 50 or 60 other countries that have already adopted it, it is nevertheless bound to be significant in non-commodity international sales involving English parties. Accordingly, the CISG is the subject of an extensive treatment in Chapters 2 and 3, the former dwelling on its general principles and the latter on those of its features most striking to an English lawyer.
This book was developed during the teaching of a masters course on International Sale of Goods at the University of Nottingham. I am grateful for the advice and assistance of my Nottingham colleagues Howard Bennett on letters of credit and James Fawcett on choice of law issues. For permission to use their standard forms in the appendix, I should like to thank the Grain and Feed Trade Association (GAFTA) and the Federation of Oils, Seeds and Fats Associations (FOSFA). I am particularly grateful to Norton Rose for generously allowing me the time to bring this book to its final form. Finally, I am indebted to Chris Rycroft, Nigel Sleight, and Rob Dickinson at Oxford University Press for their assistance, encouragement, and attention.