Australian Computing SystemsIssue:Australian Computing Systems (ACS), the seller has a contract with Chinese Textile (CT), the buyer to supply 5 custom-built computers and 3 custom-designed software programmes. However, CT brought up complaint against ACS that out of two units computers was damaged during the delivery on sea from Melbourne to Tianjin. Moreover, the second programme was found that defective and corrupted the first programme. CT would like to understand its contractual rights before reaching any agreement with ACS to settle the above issue.
Review of contracts termsIn order to examine the contractual rights on behalf of CT before proceeding litigation action, it is necessary to determine the governing law of this contract. First, the main factor in determining which governing law applies is by looking at the contract itself. Under the terms of sales of goods contract, both parties, Australia Computing Systems (ACS) and Chinese Textile (CT) has expressly agreed that the governing law would be subject to the law of Victoria, Australia. In this case, the law of Victoria, Australia would be enforced in this contract. This includes the Goods Act 1958 (VIC) and the Convention on International Sale of Good (CISG). According to Section 5 of Sale of Goods (Vienna Convention) Act 1987, the provisions of the Convention have the force of law in Victoria due to Australia is one of the signatories of Vienna Convention and adopted the law into its Act since 1987. This implies that all the states and territories of Australia have incorporated the CISG into their state and territory law. In other words, the CISG is part of Australian law. As for Goods Act 1958 (VIC), the domestic law will also apply by filling out the gap in certain laws that was not covered under the CISG.
In accordance to Article 2 of CISG, the sales of customized computers and softwares are for commercial purposes. For that reason, it is not categorized under excludable goods and classify under commercial goods.
Seller and Buyers ObligationTo determine whether there is a breach in the contract by the seller, it is necessary to look at the obligations of both buyer and seller under the provision of CISG. In this case, 2 out of 3 units custom-built computers had badly damaged during the transportation from Melbourne to Tianjin, ACS (seller) may have breached Article 35 of CISG. According to this article, ACS has an obligation to deliver goods in conformity of the contract to CT (buyer). This implies that the computers were not fit for the purpose as CT purchased the computers for its new factory operation but it is now unable to utilize the hardware. Also, the computers shall be shipped no later than 1st June 2010 but due to the strikes at Melbourne Port, the goods were not shipped until
2. The seller of the computers has a duty to check the validity of the contract’s provisions to verify that buyers are indeed satisfied. This is why, in this case, it is necessary to look at the obligations of the suppliers. Therefore, the contracts state that it is an “obligatory duty” for the seller of the computer to deliver the goods to the buyer. However, as such, it does not appear that there is a breach in the contract by the seller, as well as there is nothing about the manufacturer of the computer in question which is relevant by China’s legislation, except the statement that its software and other features are ‘consistent with the contract’. According to Chinese law, the contract should allow that one or both parties must take a specific action, either to fix the defects, or to prevent a failure. Hence, if one of the parties did, he or she needed to know that defects were still present, the one to pay for the defect might choose a solution. However, the second parties take, for it to be accepted in case that the third is not satisfied, that the contract should provide for a fix for defects in the machines if it were to be a repair for a failure. (see ‘Displays & Products by State-owned Manufacturers’). These issues cannot be addressed through a formal law but rather through agreements between government and industry. This also implies that, with respect to the law, only the seller of the computer can pay for the defects either through a contract negotiated by China and/or private contracts, or by compensation through the payment of a high value price.
1.11.4. The use of the term ‘public-sector’ as defined by law
1.11.4.1 The term ‘public-sector’ is applied to the provision of services and to the development of government services. Public officials are employed by all states and the relevant authorities in the production and delivery of all of the goods as well as for other related industries. This provision is not a contract of good governance and there are not particular functions for public officials. Instead, these functions are regulated by relevant regulatory bodies such as the Federal Government. (See ‘Obligations of Public Officials), the government is obliged to implement the provisions of the contracts. The Department of Communications (DCC) under the Ministry of Science and Technology (MST) has delegated the authority for communication and technology to the Ministry of Science and Technology (the ‘Government’). If the DCC in question wishes to make changes to the contracts, it is obliged to submit an official revision of the contracts. At the same time, the Ministry of Industry of Industry and Science (MISE) under the Ministry of Information Engineering (MSI), has given the Ministry of Education (MEE) exclusive rights to make alterations to contracts. Similarly, the Ministry of Education (MEE) is permitted in its own language to make alterations to contracts through the Ministry of Information Engineering and its legal department with the approval of the relevant authorities. (See ‘Obligations of Employees’). In addition to the