Department of Marketing
Faculty of Business Studies
Jagannath University, Dhaka
A Study On
"When International Buyers and Sellers Disagree"
Supervised By
Sabrin Sultana
Assistant Professor
of
Department of Marketing
Jagannath University, Dhaka
Submitted By
Sunshine Marketers
BBA 10th Batch
Department of Marketing
Jagannath University, Dhaka
Date of Submission: 15th January, 2021.
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SUNSHINE MARKETERS
GROUP LIST
SL NAME ID REMARKS
NO.
01 Ashifur Rahaman B-150204015
02 Nazia Khan (Group Leader) B-150204017
03 Md. Saiful Islam B-150204019
04 Md. Hossain B-150204042
05 Md. Rakibul Islam B-150204043
06 Md. Jainal Abedin B-150204044
07 Md. Shahparan B-150204057
08 Md. Noyan Hossain B-150204058
09 Sahinur Akter B-150204059
10 Md. Ramjan Ali (Shohag) B-150204036
11 Kazi Nusrat Jahan B-150204085
12 Mohammad Raihan B-130204038
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Table of Contents
Chapter:1......................................................................................4
Case summary..............................................................................4
Chapter: 2.....................................................................................5
Solution to the Questions.............................................................5
Chapter: 3.....................................................................................8
Recommendations........................................................................8
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Chapter:1
Case summary
The subject of this case is one that happens quite often in international commerce; while solving
the case our group members believe that when doing deals specially with other countries, we
must specify everything in order to avoid this kind of conflicts.
There are different forms to solve this case, the first that I will mention is using the CISG.
According to article 1 of the CISG, this law is applicable since both countries are member states,
they are selling goods, is not for personal use and there are different states.
According to the CISG, the court that should solve the case, is the one of which the party is
performing the characteristic part of the contract, in this case, the sale of pork liver, the law of
the seller: The US. Law. And then we have to see which U.S. law is applicable, since in the
States there are several laws.
According to the CISG, since the goods are in good state to sell them, they do not lack of quality,
and since this one was not strictly detailed by the German Buyer, this one has to accept the
goods.
Since both countries have different legal systems, U.S. Common Law, and Germany Civil or
Code law, we will have different results.
Then, if we try to solve this case by the U.S. courts, the party that will win the case is the seller,
since the other party did not specify the quality of the goods.
If the jurisdiction of this case were of the German courts, it might win as well the seller since the
buyer did not specify the quality of the goods, even though this party could appeal that since the
goods are for German market should have the German standards.
In order to avoid all the probabilities that problems may arise, it is important to include in the
contract law is applicable and specify the quality of the good, delivery date, price, place of
origin, certificates that must have and all the important facts of the goods.
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Chapter: 2
Solution to the Questions
Question no:1. In this dispute, which country's law would apply, that of the united states
or of Germany?
Answer: Since both countries have different legal systems, U.S. common law and Germany
civil or Code law, we will have different results. Then, if we try to solve this case by the U.S.
courts, the party that will win the case is the seller, since the other party did not specify the
quality of goods.
If the jurisdiction of this case were of the German courts, it might win as well the seller since the
buyer did not specify the quality of the goods, even though this party could appeal that since the
goods are for German market should have the German standards.
In order to avoid all the probabilities that problems may arise, it is important to include in the
contract which law is applicable and specify the quality of the good, delivery date, price, place of
origin, certificates that must have and all the important facts of the goods.
When international commercial disputes must be settled under the laws of one of the countries
concerned, jurisdiction is generally determined in one of the three ways
1. On the basis of jurisdictional clauses include in contracts
2. On the basis where a contract was entered into.
3. On the basis of where the provision of the contract was performed.
Question no:2. If the case were tried in U.S courts, who do you think would win? In
German courts? Why?
Answer: In this dispute since the American exporter was under control, the German law would
apply since the jurisdictional clauses of the contract would be provided by the Germany buyer.
The U.S courts would more than likely side with the German company. Both of these countries
have a different law system. The legal system of Germany is based on the civil law, whereas the
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legal system of USA is based on common law. Due to this variance the result of the dispute
would be different if tried in either country.
If the case was tried in USA, then the seller would win. The basis for this can be the fact that the
seller adheres to all the specifications mentioned in the contract by the buyer. There was no
explicit demand for male pork livers alone, thus the seller party has the upper hand. Also, if sow
liver was not needed, then clear mention of this fact on account of the buyer should have been
present.
In Germany, either of the two parties can win the dispute. The seller can win on the same basis
as mentioned above, however the buyer can win this dispute on the basis that since the order was
placed from Germany for their local market, thus the standards followed in the local market
should have been adhered to.
Question no: 3. Draw up a brief agreement that would have eliminated the following
problems before they could occur:
a. Whose law applies.
b. Whether the case should be tried in U.S. or German courts.
c. The difference in opinion as to “customary merchantable quality.”
Answer: There is a brief agreement that would have eliminated the above problems before they
could occur:
A. Whose law applies.
The most clear-cut decision can be made when the contracts or legal documents supporting a
business transaction include a jurisdictional clause. A clause similar to the following establishes
jurisdiction in the event of disagreements:
“That the parties hereby agree that the agreement is made in Ohio, USA, and that any question
regarding this agreement shall be governed by the law of the state of Ohio, USA.”
B. Whether the case should be tried in U.S. or German courts.
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The courts of United States will have exclusive jurisdiction to adjudicate any dispute arising
under or in connection with this Agreement
C. The difference in opinion as to “customary merchantable quality.”
'Merchantable' is a word that has fallen into disuse. It encompasses functional fitness.
Satisfactory has a wider definition with a broader spectrum of qualities.
A good clause would be:
Supplier warrants the material furnished hereunder:
(a) to be free from defects in title, labor, material, or workmanship,
(b) to conform to applicable specifications, drawings, samples or other description given,
(c) to be suitable for the purpose intended,
(d) to be of merchantable quality and further warrants that material of Supplier’s design will be
free from defects in designs.
Then to go into detail of what it expects “Merchantable Quality” would consist of.
Question no :4. Discuss how SRC may be at work in this case.
Answer: The SRC is an unconscious reference to one’s own cultural values, experiences, and
knowledge as a basis for decisions. There are two country that involved in international business.
The American exported the product to the German customer who has different characteristic
from American customers. The exporter thought that the German customer will eat same
product as American customers. As a result, they sent the product based on American demand.
The exporter may take decision based on self-reference criterion (SRC). SRC helps the seller to
know culture, value and beliefs of the buyers. It also helps the exporter to separate and
differentiate between seller and buyer country. By SRC the American exporter may identify the
culture, value and beliefs of the German customer. Then they may take the decision that would
help to fulfill the demand of German customer. So, SRC may give better output in international
business in the case. Both the American Business and German should have realized that there
may be differences in delicacies from country to country and proper discussion should be made
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as to the expectations. Ethnocentrism is the notion that people in one’s own company, culture, or
country know best how to do things. The American Business now knows next time to give an
exact description of what is being sold.
Chapter: 3
Recommendations
Gender plays an important role in doing business internationally. Terms of trade always being in
crucial position in exportation of goods and services. The case of pork livers shipped from US to
Germany is definitely a good lesson for all marketers. In the case study, The Germany purchaser
wanted to charge the price through the objection of pork livers of their customary merchantable
quality. But the American didn’t agree to cut the price down. That's why disputes arise. When
things go wrong in a commercial transaction such as the buyer refuses to pay, the product is
inferior in quality identified and in order to minimize these disputes between parties, disputes
can be solved through several strategies such as- (a) Conciliation (b) Arbitration (c) litigation by
following these crucial strategies the buyer located in Germany with the exporter located in USA
can resolute their disputes necessary in order to smooth their business functionality
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