Mod 1 Assignment

Task 1
Based on the communications between the Buyers and the Sellers, it appears that a
contract has been formed. Here is an explanation of why there is a contract, outlining
the terms of the contract and the reasons for it:

1. Offer and Acceptance:

On January 2nd, the Sellers sent an email to the Buyers offering 5,000 metric tons of
Ukrainian corn for shipment between January 15th and 31st at a price of US$160 per
metric ton CIF the Buyers' usual destinations. This email constitutes an offer.

On January 3rd, the Buyers responded via email, expressing their agreement to the
offer and requesting a full confirmation note. The Buyers' email constitutes an
acceptance, as it clearly indicates their willingness to be bound by the terms of the
offer, subject to the requested change in payment terms.

2. Confirmation Note:
Later on January 3rd, the Sellers sent a full confirmation note to the Buyers via
email, which matched the terms discussed in the previous communications. The
confirmation note specified the quantity, price, shipment period, and payment terms.
The Sellers' email attaching the confirmation note confirmed their acceptance of the
Buyers' proposed change in payment terms. The confirmation note reflects the terms
agreed upon by the parties and serves as a record of their agreement.

3. Intention to Create Legal Relations:

The emails exchanged between the Buyers and the Sellers demonstrate their
intention to create a legal relationship. Both parties were engaged in negotiating and
finalizing the terms of the contract, indicating their mutual intent to be legally bound
by those terms.

4. Silence and Confirmation Note:

On January 4th, the Buyers acknowledged receipt of the confirmation note and
mentioned that they would provide any comments if necessary. However, their

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silence after receiving the confirmation note does not negate the existence of a
contract. The confirmation note itself, which was sent and signed by the Sellers,
already reflected the agreed-upon terms, and the Buyers' failure to respond does not
invalidate the contract.

5. Signed Contract:
On January 6th, the Sellers drafted and signed a contract in identical terms to the
confirmation note they previously sent. Although they attempted to send a revised
contract due to increased freight rates, the initial signed contract reached the Buyers'
office on the afternoon of January 7th.

6. Binding Contract:
The initial signed contract, sent by the Sellers on January 6th and received by the
Buyers on January 7th, constitutes a binding contract between the parties. The terms
of the contract include the quantity of 5,000 metric tons of Ukrainian corn, a price of
US$160 per metric ton CIF one/two safe Black Sea/Eastern Med. ports, shipment
period of January 15th to 31st, and payment cash against documents.

In summary, a contract exists between the Buyers and the Sellers based on the
offer and acceptance, the exchanged emails, the confirmation note, and the signed
contract. The terms of the contract include the agreed-upon quantity, price, shipment
period, and payment terms. The subsequent attempt by the Sellers to renegotiate
the terms does not invalidate the already formed contract.

Task 2

Based on the information provided, it appears that you, as the shipper, have taken
certain precautions due to rumors of financial difficulties surrounding Igcom, the
buyer. In this case, you have decided not to present the shipping documents until
Igcom's financial situation becomes clearer and have instructed the master of MV
"SEA QUEEN" not to open the vessel's hatches without further instructions.
Additionally, you have informed Igcom that the documents will only be presented and

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the vessel will only be allowed to discharge if Igcom pays before the presentation of
documents or provides a bank guarantee of payment.

Under Gafta 100, which is incorporated into the contract, you may have the right to
take these precautionary measures. Gafta 100, also known as the Gafta General
Contract for FOB and CIF Cargoes, includes provisions that allow the seller to
exercise control over the documents until payment or the provision of a suitable
guarantee.

Clause 8 of Gafta 100 specifically addresses the delivery and payment terms. It
states that the buyer shall pay against documents or in accordance with any other
payment terms agreed upon. Furthermore, Clause 13 allows the seller to retain
control over the shipping documents until payment is made or a satisfactory
guarantee is provided. The seller may exercise this right if they have reasonable
grounds to believe that the buyer may not fulfill their payment obligations.

Given the rumors about Igcom's financial difficulties, it can be argued that you, as the
shipper, have reasonable grounds to be cautious and to request payment or a bank
guarantee before presenting the shipping documents. This is a precautionary
measure to protect your interests in case Igcom is unable to fulfill their payment
obligations.

However, it is important to note that the specifics of the contract and any applicable
laws or regulations should be considered to determine the full extent of your
entitlement to take such actions. Consulting with legal counsel or referring to specific
contract terms and local laws would provide a more accurate assessment of your
rights and obligations in this situation.

Task 3

In order to determine whether the events described entitle you, as the Buyer, to
reject the documents, we need to analyze each factor individually:

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1. Late Berth and Delayed Loading:
The fact that the MV "SEA DOG" only berthed late on 30 September and did not
commence loading until the following morning could potentially lead to a delay in the
shipment. However, it does not directly affect the documents themselves. As long as
the shipping documents, such as the bill of lading and other required documents, are
in order and comply with the terms of the contract, this event alone would not
typically entitle you to reject the documents.

2. Rainwater in Vessel Holds:

The rainwater that entered several of the vessel's holds during the loading process
could potentially damage the cargo. If the goods, specifically the US No. 3 Hard
Amber Durum wheat, have been significantly affected by the rainwater and have
suffered damage or deterioration, it could be a valid reason to reject the documents.
As the Buyer, you have the right to receive the goods in the contracted condition,
and if the damage caused by the rainwater affects the quality or quantity of the
wheat, it may be justifiable to reject the documents.

3. Fire and Heat Damage in Cargo Hold No. 5:

The occurrence of a fire in the MV "SEA DOG's" engine-room, specifically in the area
near the bulkhead dividing the engine-room from cargo hold No. 5, which resulted in
heat damage to the cargo in that hold, is a significant event. The heat damage could
potentially affect the quality and condition of the US No. 3 Hard Amber Durum wheat.
If the heat damage is severe enough to render the cargo unusable or significantly
diminish its value, it could provide a valid reason for rejecting the documents.

In summary, the late berth and delayed loading event alone would not typically
entitle you to reject the documents. However, if the rainwater in the vessel holds or
the heat damage caused by the fire in cargo hold No. 5 has resulted in significant
damage to the US No. 3 Hard Amber Durum wheat, it could justify rejecting the
documents. It is important to review the specific terms of the contract and any
applicable trade rules, such as Gafta 30, to determine the exact rights and remedies
available to you in this situation.

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