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Accurate application of international treaties

Promote honesty and trustworthiness of market subjects

Between July 2011 and July 2012, Parkland and Ward formed eight orders for lawn mowers, and the first seven orders were fulfilled. Parkland paid the advance payment agreed in the eighth order to Ward on September 7, 2012. Ward refused to deliver the goods and returned the advance payment to Parkland on January 9, 2013. From July 3, 2012 to October 3, 2012, Parkland and Ward negotiated another order for lawn mowers. On July 3, 2012, Ward sent an email to Parkland specifying the product model and unit price. On July 24, 2012, Parkland sent an email to Ward stating the quantity and price of mowers, and said that this was only a forecast, and there was no need to ship before receiving the order confirmation letter. Parkland sued and claimed that Ward refused to supply goods in violation of the contract, which caused it to be unable to fulfill the order and occupied the advance payment for seven months, and requested Ward to compensate for the corresponding losses.

[Judgment result]
Zhenjiang Intermediate People’s Court held that, first, Ward entered into an international goods sales contract under the eighth order and accepted the advance payment, but Ward refused to perform the supply obligation, which constituted a breach of contract. According to the provisions of the United Nations Convention on the International Sale of Goods, it should compensate for the loss of interest during the period of occupying the advance payment, as well as the loss of profits available to Parkland. According to the sales unit price of Parkland Company, the profit loss of Parkland Company is determined by subtracting the purchase costs such as order price, freight and tariff. Second, there was no new sales contract for lawn mowers between Parkland and Ward after July 24, 2012. The e-mail sent by Ward to Parkland only contains the model and price of the mower, but does not contain the quantity. It does not meet the “very certain” requirements specified in the United Nations Convention on Contracts for the International Sale of Goods, and does not constitute a “price offer”. The email replied by Parkland also indicates that it is not bound by the content of the email, so the email does not constitute “acceptance” under the United Nations Convention on Contracts for the International Sale of Goods. There is no new sales contract between Parkland and Ward, and Parkland’s claim that Ward should compensate for the losses under the contract cannot be established.

[Typical significance]
In this case, the People’s Court correctly applied the provisions of the United Nations Convention on Contracts for the International Sale of Goods, handled the rights and obligations of the parties in the two contracts differently, and equally protected the legitimate rights and interests of both Chinese and foreign parties. If the enterprise is willing to enter into a contract for the international sale of goods, it should make a clear and specific expression in accordance with the provisions of the United Nations Convention on Contracts for the International Sale of Goods, otherwise it may lead to the failure of the contract for the international sale of goods, and it cannot claim the other party’s breach of contract. After the establishment of an international contract for the sale of goods, the parties should fully perform the contract according to the agreement. If one party constitutes a breach of contract, it should not only compensate the other party for the actual losses suffered, but also include the benefits that can be obtained after the contract is fully performed, and the previous profits of the observant party can be used as the basis for determining the amount.



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