BUS706 International Business Law and Ethics
Task 2: Problem Solving Assignment
DUE: Midnight, Friday 17th May
Total Marks: 40 marks (40% of overall assessment)
Word Limit: 2000 words maximum
Submission: Electronically on Blackboard under the Assessment tab.
Key Information:
Ensure you follow the IRAC structure when you are addressing each legal element.
Issue
· What is the legal issue you are considering in this element?
Rules
· What are the relevant legal rules and principles used to determine whether this element or defence is satisfied?
· Ensure you cite the relevant legislation or international instrument.
Application
· In this section we apply the legal rules to the factual scenario we are considering.
· How do the rules apply in this scenario? Why are the legal rules satisfied/not satisfied?
Conclusion
· Based on the legal rules and their application to this scenario, what is the outcome of this scenario?
It is not enough simply to detail a legal rule or to merely apply the law to the scenario – you must do both of these things. This is how you demonstrate your knowledge of the law and your capacity to apply it.
Merely reproducing the facts produced in the assignment problem will not attract marks. While you are required to draw upon the facts of the scenario to apply the law to these circumstances, lengthy repetition of the facts will detract from rather than increase the quality of your piece.
Dot-points responses are unacceptable. Your response should be in full sentences and contain proper and accurate spelling, grammar and sentencing. There is study support available from USC if you need assistance with proofreading or writing your answer.
Cite all sources used in writing this assignment. This includes referencing the relevant sources of law, any books, journals, websites or any other resource used. You must use the Harvard referencing style – see the Harvard Referencing Guide for more information.
This is an individual assignment. DO NOT work with classmates to answer these questions. Your responses are checked for plagiarism at submission, including any similarities to the assignments submitted by fellow students. If you require more information on plagiarism or collusion, please visit the USC Academic Integrity webpage and the Academic Integrity Policy. Academic Misconduct is taken seriously and will be punished.
BUS706 International Business Law and Ethics
ATMC Assignment Question
Part One
Black Diamond Ltd (‘Black Diamond’) is an elite jewellery shop located in Brisbane, Queensland, Australia, that sells a range of high-quality jewellery. Black Diamond has a reputation for beautiful, one-of-a-kind designs for rings, necklaces and ea
ings that allows them to charge high prices for their merchandise. Following a slump in business after the Global Financial Crisis, Black Diamond try to draw customers back in by selling their rings at half of their ordinary price for a six-month period between 1 January 2020 – 30 June 2020.
In order to prepare for this sale period, Black Diamond begin to purchase high quantities of precious gemstones so they can begin transforming them into unique jewellery worthy of the Black Diamond name. Garnet Martinez, Black Diamond’s Managing Director, is put in charge of purchasing gemstones on the instruction that she only buy the finest quality available. Garnet gets in contact with Greg Universe of Universe Gems Pty Ltd to discuss:
From: Garnet Martinez ( XXXXXXXXXX)
To: Greg Universe ( XXXXXXXXXX)
Subject: Gemstone Purchase - Inquiry
Date: 1 May 2019
Dear Mr Universe,
I represent Black Diamond, a jewellery store in Australia. I am seeking to purchase a number of high quality gemstones that meet the CL-1 standard of the Australian Classifications of Gemstones.
I am looking to purchase 500 white diamonds, princess cut. Can you please confirm you have these gemstones available that meet the CL-1 standard and advise of a price?
I would need these delivered to Brisbane by 1 June 2019.
Sincerely,
Garnet Martinez
Managing Director, Black Diamond
Greg responds to Garnet a few days later.
From: Greg Universe ( XXXXXXXXXX)
To: Garnet Martinez ( XXXXXXXXXX)
Subject: RE: Gemstone Purchase - Inquiry
Date: 4 May 2019
Hi Garnet,
Yes, we have some CL-1 standard princess cut white diamonds, available for immediate purchase!
We will require the full purchase amount of 1 million dollars (USD) up front, our bank details can be found on our website.
As we are based in Romania, the diamonds will take 2 weeks to a
ive but will get there before 1 June 2019. They will be shipped as per the Incoterm Rules 2010.
How does that sound?
Greg
Garnet was pleased with Greg’s response, 1 million dollars (USD) for the type of diamonds she asked for was a very good price. Assured that Greg’s gemstones met the CL-1 standards that all Black Diamond jewellery uses, Garnet immediately transfers the full 1 million dollars (USD) to Universe Gems.
On May 20, Garnet gets an email from one of the employees of Black Diamond who received and inspected the shipment they were sent by Universe Gems. The employee, Rose, was dismayed to find that the diamonds they were sent were not diamonds at all, but actually, cubic zirconias. Cubic zirconias are a cheap alternative to diamonds that are often used in costume jewellery. While they look like diamonds, any jewellery expert would be able to tell that the diamonds were cubic zirconias and not real diamonds. Distraught, Garnet contacts Greg via phone to ask for her money back. Greg dismisses Garnet’s concern, saying ‘if you don’t tell the customers, they won’t know! It’ll be fine!’
PART ONE: ASSIGNMENT QUESTIONS
Considering the operation of international sales law, advise Garnet:
1. Does the Convention on Contracts for the International Sale of Goods (‘CISG’) govern the agreement between Black Diamond and Universe Gems? Why/Why not? (4 Marks)
2. Have Black Diamond and Universe Gems entered into a contract? Outline the required elements of a contract under the CISG. (5 Marks)
3. Have Black Diamond and Universe Gems successfully incorporated an Incoterm into the proposed contract? Why/Why Not? (2 Mark)
4. What remedy would be most appropriate in this circumstance? Explain your answer with reference to the CISG. (4 Marks)
Part Two
After the failure of their contract with Universe Gems, Black Diamond asks Garnet to once more purchase gems for the use in their sale period. This time, they tell her not to wo
y about finding gems that meet the CL-1 standard as they are running short on time and need to start on production of the rings as soon as possible. Additionally, Black Diamond has received some bulk orders for jewellery featuring gemstones other than diamonds. Black Diamond also requests that Garnet orders these stones at the same time.
Garnet gets in contact with Crystale, a gem company based in Belarus with a world-famous reputation for quality gemstones. Garnet and a representative make a contract over the phone and agree to the following terms:
Black Diamond will purchase from Crystale:
· 500 White Diamonds, Princess Cut
· 100 Amethysts
· 100 Pearls
Crystale promises to send one sample of each stone to Black Diamond by the 1 July 2019 so that Black Diamond can see the quality they will be receiving. Black Diamond agrees to pay 2 million dollars (USD) for the merchandise, half upon approval of the samples and half upon delivery. Crystale and Black Diamond also agree that the gemstones will be transported by boat, CFR (Port of Brisbane) as per the Incoterm Rules 2010. The full delivery is to be made by 1 August 2019.
Garnet receives the sample gemstones a few weeks later, each one is flawless and exactly the quality, type and cut she requested. Garnet contacts Crystale, requesting shipment of the gemstones and deposits the first half of the money, 1 million dollars (USD), into their bank account. Although the main office of the company is located in Belarus, Crystale has a warehouse located in Melbourne, Australia. The gemstones are shipped from Melbourne to the Port of Brisbane via boat.
On 20 July 2019, Rose, an employee at Black Diamond receives a message that there is merchandise available for pickup at the Port of Brisbane. Rose completely forgets about the message and never organises a pickup. The merchandise is left for two nights at the Port of Brisbane. On the night of the 22 July 2019, the Port of Brisbane is
oken into and all 100 Pearls from the shipment are stolen by ro
ers. The staff of the Port of Brisbane call Black Diamond on the 23 July 2019, inform them what happened and insist they collect their merchandise the same day.
Upon receiving the merchandise at the Black Diamond warehouse, Garnet inspects the shipment and discovers that the 500 diamonds are all varying colours and cuts, although all are high quality diamonds, they do not match the sample Garnet was sent. Furthermore, 10 of the amethysts were lost at sea and 30 of the 100 amethysts a
ived damaged due to the poor packaging of the stones by Crystale.
Garnet contacts Crystale on 23 July 2019 and claims they are in
each of their contract, refusing to pay the second payment of 1 million dollars (USD) to complete the contract.
PART TWO: ASSIGNMENT QUESTIONS
Considering the operation of international sales law, advise Garnet:
5. Does the Convention on Contracts for the International Sale of Goods (‘CISG’) govern the agreement between Black Diamond and Crystale? Why/Why not? (5 Marks)
6. What is ‘CFR? How does ‘CFR’ apply to this agreement? Is Crystale liable for the ro
ery of the 100 Pearls at the Port of Brisbane? Explain your answer. (5 Marks)
7. Under the ‘CFR’ term, did Crystale need to provide insurance for the merchandise? (1 Mark)
8. Garnet has accused Crystale of
eaching their contract. Consider each of the following issues and determine whether Crystale has
eached their obligation?
(a) The diamonds that do not match the sample Crystale provided (3 Marks)
(b) The damaged amethysts due to poor packaging (4 Marks)
(c) The amethysts lost at sea (2 Marks)
9. What remedy would be most appropriate to solve the
eaches in Question 8 (a)-(c)? Explain your answer to each issue with reference to the CISG. (5 Marks)
END OF ASSIGNMENT
BUS706 International Business Law and Ethics
Task 2: Ru
ic
Assessment
criteria
Outstanding (HD)
Very Good (D)
Good (Credit)
Satisfactory
(Pass)
Unsatisfactory
(Fail)
1. Knowledge and Understanding in describing legal rules and principles
Complex and critical discussion of legal principles and tests; all relevant legal authorities identified; effective use of materials; comprehensive identification and discussion of issues.
Critical and accurate discussion of legal principles and tests; co
ect legal authorities identified; appropriate use of materials; good identification and discussion of issues.
Some critical explanation and discussion of legal principles and tests; most legal authorities identified; good use of materials; majority of relevant issues identified and discussed.
Little critical examination of legal principles and tests; limited noting of legal authorities; some use of materials; some misunderstanding of issues or materials.
Limited explanation of legal principles and tests; legal authorities not identified; relevant materials overlooked or misunderstood;