Seller in Bombay sells 5,000 bales of cotton to Buyer, C & F (Inco-terms 2010) L

Question

Seller in Bombay sells 5,000 bales of cotton to Buyer, C & F (Inco-terms 2010) Liverpool. Seller transports the cotton to the Bombay harbor and to the ship designated by the Buyer, the SS Allthumbs. Due to an error in counting, only 4,987 bales were loaded. The ship’s bill of lading shows a quantity of 5,000 bales. Seller then signs over the bill of lading to Buyer in exchange for payment in full for the cotton. When the Allthumbs arrives in Liverpool, the quantity error is discovered, and Buyer sues the ship for the lost value of the missing bales. Is the ship liable? Would it matter if Seller admitted that the error was not the ship’s fault, but that of Seller?

Explanation / Answer

CISG Article 15(2) states that firm offers may be withdrawn if thewithdrawal reaches the offeree “before or at the same time” as the offer.Here the withdrawal reached the offeree before the offer, since the recorded withdrawal message was delivered to Buyer’s place of business prior to Buyer’s receipt of the offer.Refer Article 24

.2. Under Article 73, Buyer may avoid the entire contract since the three programs are clearly interdependent.Seller will have to take back the programs delivered in January and February (and return the price Buyer paid), and Buyer may refuse delivery of the third (the March) program.

3. No.Under a DES contract, a seller fulfills his obligations by delivering the goods to the port of destination and paying off the ship.The buyer is responsible for clearing the goods through customs

.4. The ship is liable.A bill of lading is conclusive evidence as to the description contained on its face once it has been negotiated to an innocent third party.Even if the recipient of the bill of lading admits to causing the mistake, the information on the bill of lading cannot be challenged.

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