Contract and Adr clause Essay

Submitted By gussygus
Words: 940
Pages: 4

US Programming Company and Global Bank Dispute

Both parties are subject to the CISG. The computer programming company is based in the U.S., made the CISG effective January 1st 1988. The US only filed an Article 95 declaration and in pursuant to the article, the United States will not be bound by subparagraph 1 (b) of article 1 of the CISG. Spain adopted the CISG and it became effective in August 1st 1991.

Yes, the parties can make the CISG part of their contract.Under article 1, the parties can make CISG part of their contract. Article 1 (a) the convention applies to contract of sale of goods between parties whose places of business are in different States: (a) when the States are contracting states.
The parties do not have to incorporate the CISG into their contract. This convention applies automatically if there is a dispute, since both parties are subjected to the CISG. The United States made a reservation under article 95 of the CISG; they are not bound by article 1 part 1 (b). CISG (when the rules of private international law lead to the application of the law of a Contracting State). There fore U.S. courts will apply the CISG as a direct legal rule, only if requirements of article 1 part 1(a) CISG are fulfilled. If these requirements are not fulfilled (in other words if Spain not being a contracting state), the court must determine the applicable law under rules of private international law. If thereby determined applicable law would be a of CISG Contracting state, the U.S. court would nevertheless not apply CISG , since the US made reservation not apply the Convention in this manner.

In view of the fact this contract is a “make or break” opportunity for my company, there are three options I would weigh out in under to resolve such a dispute to preserve our business relationship.
(i) If Global Bank of Madrid numerous change in orders are reasonable, in a reasonable time frame or can be manage by a bigger programming company, I would then offer our software at a discount price in order to make up for late deliveries.
(ii) However, if Global Bank of Madrid numerous changes in orders are unreasonable, I would refer Global bank to Article 65 part 2 of the CISG, supporting that we are not in breach of the agreement. This article states that any specifications and changes of the goods made by the buyer are to be notified to the seller in a reasonable amount of time.
Any dispute whether by mediation, arbitration or litigation will be costly for my business reputation and finances. Trying to resolve this dispute before any of the previous proceedings would be my main goal.
According to the CISG database (2012), An arbitrator can naturally take the approach under the principle of separability, which treats an arbitration agreement as being separate to the main contract even if found in a clause within it. Separability supports the viability of arbitration, allowing an arbitrator to have valid jurisdiction even where the contract itself is void. The idea of separability also would explain one aspect of Article 81 CISG which indicates that avoidance does not affectany provision of the contract for the settlement of disputes. In addition, the CISG being limited to contracts for the sale of goods, does not apply naturally to a separable dispute resolution agreement. An arbitration agreement, if considered discretely, would not fit naturally within the wording of Articles 1-3 CISG. Nevertheless, the CISG has been applied in this way in some instances.

ADR Clause
If a dispute arises from or in connection with this contract, a party to the contract must not commence court or arbitration proceedings relating to the dispute unless that party has participated in mediation.
The parties shall attempt to agree upon the appointment of a mediator, upon receipt, by either of them, of a…