SETTLEMENT OF DISPUTES

In international trade, the dispute happens between the seller and buyer when one party thinks the other fails to carry out the duty stipulated in the contract.

The main reasons are generalized as follow:

1-  Stipulation of contract is unclear, such as quantity about 500/MT, European main port.

2- Non-performance or incomplete performance of the contract is caused by the seller such as discrepancy in quality, poor packing and delayed delivery.

     3- Non-performance or incomplete performance of the contract is caused by the purchase. For example; the buyer doesn’t open L/C in time or rejects the goods unreasonably.

     4- The carrier is not liable for damage to or shortage in weight of the goods.

5- The insurer is not liable for loss of or damage to the goods.

All disputes between the seller and buyer should be settled amicably through the negotiation. If the settlement cannot be reached through the negotiation, they should submit the case to…………………… for the arbitration.

Claim and Satisfaction:

In the international trade, claim means that one party breaches the contract and causes losses to the other party directly or indirectly. That party suffering the loss may ask for compensation for the loss. Satisfaction means that the party breaking the contract declares he will accept and handle the claim.

There are two ways to determine the nature of breach. One way is based on the trade terms of contract; the other is based on to the consequence of breach.

A-   Based on Trade Terms:

There are two kinds of undertaking entered into in every contract. The more importance of the two is called a condition.

A condition is a clause to attribute the essence of the contract. To breach the condition is to breach the foundation of the contract and leads to an action for fundamental breach of contract.

B- Based on Consequences of Breach of Contract:

If one party breaks the contract and makes the other party unable to get the main profit, this is called {material breach}. In this case, the injured is entitled to cancel the contract and asks for compensation for losses.

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