Instructions

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INSTRUCTIONS
This assignment must be completed by the student INDIVIDUALLY, without assistance!
If a PLAGIATE is detected, a score of 0 (ZERO) is given!
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The Buyer, a pharmaceutical manufacturer from Uzbekistan, negotiated with the Seller from 
Poland for the supply of holographic security tape to be attached to the packaging of medical 
products in order to protect its products against counterfeiting. In particular, the Buyer repeatedly 
provided samples of the holographic tape then in use in its production to the Seller prior to the 
conclusion of the Contract, who stated that it could supply products of such quality.
The parties then entered into a Contract which contained the following terms and conditions:
Contract amount
The total amount of the Contract is EUR 60,000.00 for 6000 metres of holographic security tape, 
1 metre of goods is EUR 10.
Supply of goods
CIP Tashkent (Icoterms 2020).
Delivery of goods under this Contract will be carried out in batches in the following order:
- delivery of the first batch of Goods shall be made within 13 weeks from the date of 
placing the order by the Buyer;
- delivery of the next batch of Goods shall be carried out within 4-7 weeks from the date 
of placing the order by the Buyer.
Warranty period
6 months from the date of delivery of the goods.
Reclamation
Any complaint about the received goods, in case of their non-compliance with the Specification 
(Appendix No. 1) to this Contract shall be sent by e-mail, and the receipt of the complaint shall be 
confirmed by the Seller also by e-mail.
The content and justification of the complaint must be confirmed by an expert report or a report 
drawn up with the participation of a representative of a neutral competent organisation.
The Buyer shall not reject any goods, or cancel or attempt to cancel the Contract or any part 
thereof for undetermined fault, until the Seller has had an opportunity to inspect the goods and 
has failed to remove or replace the goods, within a reasonable period of time from receipt of 
written notice of the occurrence of such an event.
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During the warranty period, the Seller undertakes at its own expense to replace the defective 
goods within 4-7 weeks from the date of acceptance of the Buyer's justified complaint at CIP 
Tashkent (Incoterms 2010).
***
The Buyer ordered the first batch of 2,000 metres of goods. When the Buyer received the first 
batch of goods, it discovered, without special instruments, that the holographic tape lacked lustre 
(iridescent shimmering of colours). The Purchaser submitted a sample of the tape from the first 
batch to its laboratory, where a laboratory analysis was carried out, which confirmed that the tape 
sample was matt and without lustre, but conformed in other technical parameters to Appendix 
No. 1 of the Contract (Specification).
The Buyer immediately informed the Seller of the results of laboratory analyses and requested to 
suspend the production of the remaining part of the goods. The Seller, in its turn, did not 
recognise this as a complaint in accordance with the Contract and demanded payment for the 
delivered batch of goods in the amount of EUR 20,000.
The Seller insisted on payment for the delivered goods, while the Buyer claimed that the goods 
were non-conforming and should be replaced in accordance with the Contract. Then, after a 
certain period of time had elapsed, the Seller indicated its intention to submit the dispute to 
arbitration. The Buyer offered to pay the Seller for the first batch of goods delivered and to 
terminate the Contract. In response, the Seller stated that the Contract could not be terminated as 
there was no termination clause at all, and further stated that it had already produced the 
remaining part of the goods (4,000 metres) and demanded payment for the remainder of the 
Contract.
The Buyer paid EUR 20,000 to the Seller for the first delivery and refused to pay the remaining 
amount of EUR 40,000 on the grounds that it (the Buyer) had informed the Seller to suspend 
production of the remainder of the goods and that it had not placed any orders for the remainder 
of the goods in accordance with the terms of the Contract.
The Seller subsequently submitted the dispute to arbitration, claiming from the Buyer the 
remainder of the amount (EUR 40,000) as lost profits plus 2% per annum from the date of 
termination of the Contract.
The Buyer also counterclaimed against the Seller in the amount of EUR 40,000 for production 
downtime and inability to sell its products plus 14% at the refinancing rate of the Central Bank of 
the Republic of Uzbekistan from the date of termination of the Contract.
Give a legal assessment of the current situation.
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