BigMi is a company dealing in the manufacture and sale of smartphones, with its place of incorporation, Singapore

Assignment Details:

BigMi is a company dealing in the manufacture and sale of smartphones, with its place of incorporation, headquarters and manufacturing facilities in Beijing, The People’s Republic of China (PRC).

It has a branch, with a legal representative, in New York, United States. Through its legal representative, the branch is permitted to enter into contracts. However, all debts and liabilities of the branch still lies with the parent company, as the branch is not considered a separate legal entity from the parent company. This would mean that creditors of the branch may still sue the parent company.

BigMi’s branch in New York recently entered into a contract to buy smartphone components from a seller based in California, United States. Under the contract, the branch is responsible for the payment, although delivery shall be made to BigMi’s manufacturing facilities in Beijing, PRC.

The contract also provided that the buyer shall obtain a letter of credit as soon as the seller has chartered a ship to transport the components. The seller duly chartered the ship. However, BigMi’s legal representative at its branch in New York decided that it wished to cancel the order as it had found a cheaper source of components. Hence, it did not arrange for the letter of credit to be issued.

The seller decided that BigMi, in refusing to issue the letter of credit, had breached the contract. To solve its cashflow problems, the seller then quickly sold the components to a third party – however, this was at below the market price, given the urgent sale. It also had to re-charter the ship at a loss.

1.  What is the importance of the United Nations Convention on International Sales of Goods (UNCISG) to international trade, given its stated objectives? ?(5 marks) ?
2. Identify and discuss one (1) possible issue in terms of interpreting and applying the United Nations Convention on International Sales of Goods (UNCISG) to the contract ?above, given that it was BigMi’s New York branch that had entered into the contract with a seller based in California.

In your analysis, provide two (2) possible interpretations of the facts given above. You should also cite the relevant provision(s) of UNCISG to support your analysis.
Conclude whether the UNCISG would apply to the above contract.