Reference no: EM133212219
The following contract is entered into between Stig in Norway and Bond in Nigeria: "1000 tons of 'grade A' dried cod, NOK 1.500.000, CIF Lagos INCOTERMS 1990, as per sample submitted. Payment to be by irrevocable letter of credit confirmed by DnB Oslo opened by October 3rd, 1991 for a period of 2 weeks, and to be made against documents evidenceing the fulfillment of his CIF obligations, and a certificate of inspection stating the cod to be of grade A quality." The letter of credit facility is duly opened and the relevant documents being specified to DnB bank and Stig proceeds to perform his obligations under the contract. Bond in Nigeria hears rumors that the consignment shipped will not be grade A but grade C, and that the certificate of inspection presented will be a forgery and instructs both banks not to pay against it. Stig presents DnB with the following documents: a received for shipment bill of lading for 1000 tons of grade A dried cod in apparent good order and condition; an invoice for the same goods; an insurance policy taken on Institute Cargo Clause C terms; and a certificate of inspection. DnB bank pays particular attention to the certificate of inspection but is unable to find anything wrong with it as it appears to be in order and as described in their mandate (instructions for opening the credit). DnB pays Stig. During the voyage the ship is in a collision and part of her cargo is wet, whilst another portion is deliberately thrown overboard by the crew in order to reduce her weight. When the consignment arrives, it is found to be 200 tons short (i.e. there are only 800 tons) and 100 tons of the consignment are damaged by water, and the consignment is found not to be up to sample and not of grade A quality.
Required: A. Assume that Norwegian law is to apply to the sale of goods transaction. Then answer the following
1. In the situation described in the problem, what international conventions or uniform sets of rules apply or are likely to apply to the sale of goods transaction, their transport, the marine insurance policy, and the letter of credit, and explain why this is the case, and give a brief outline of what these do.
2. Discuss Stig's obligations under the contract he has entered into.
3. Advise Bond as to any rights he may have with respect to the seller, carrier, insurance company, bank and any other relevant parties. Inform him of any further details you may require.
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