Spurred on by the recent Fee Trade Agreement, an Australian based importer of electrical and telecommunications goods, Dirt Cheap Pty Ltd, entered negotiations with an Indonesian supplier called Even Cheaper PT. Both agreed that Even Cheaper would sell a $AUD 750,000 worth of telecommunications equipment to Dirt Cheap. The Sales Agreement was validly executed on 15th December 2018. Dirt Cheap expected to mae the same in profit, (approximately $AUD 150,000 of that from reselling recycled mobile phones). The parties agreed on a mixed sale of new and used phones. Goods would arrive into the Port of Melbourne by Monday 20th February, 2019, to allow two weeks for the goods to clear customs, be packaged and distributed across Australia to various retail outlets. Dirt Cheap entered into a eight handling units of new mobile phones and spare parts to be transported from the Port of Tanjung Priok in Jakarta to the Port of Melbourne by 20th February. Seven handling units contained new mobile phones, worth AUD $600,000. The eighth, smaller unit contained various recycled mobile phones, worth AUD $150,000. The value of all items was to the Carrier's attention and was noted on the B/L. At port, unloading the goods per their duty, Even Cheaper described the first seven units as 'new mobile telephone devices' and described the eighth unit as was put into the B/L. The goods Cheaper carriage contract with Safe Ships Co for the transportation of brought 'generic telecommunication spare parts' and this information were then exchanged for a Bill of Lading with Even Nearly a week into the voyage, a packages in the eighth unit began smoking and caught on fire. Upon inspection, the crew were surprised to find the package contained hundreds of intact, new 'Galaxy Note 7' devices, which they knew were recalled for safety issues. Concerned for the safety of the crew, vessel and other cargo, the package doused with a nearby extinguisher by the trained crew. Unfortunately, damage occasioned to nearby cargo: a shipping container containing designer clothes owned by 'Flame Trees', which was immediately was was being carried at its full cargo value of AUD $195,000. Safe Ships immediately veered into the closest port available to dispose the goods. This delayed the arrival of the goods into the Port of Melbourne by 6 days. All goods in the eighth unit were destroyed. The unplanned deviation from course wasted bunkers (fuel) and cost Safe Ships AUD$78,000. The owner of the garments is suing Safe Ships for the damage to their goods, estimated at $195,000. Dirt Cheap is refusing to pay Even Cheaper- they have not attended the bank and exchanged documents as per the contract. The contract between the parties contained the following clauses: Sales and Purchase Agreement between the Parties Clause 2 The SELLER agrees to sell $AUD 600,000 worth of new mobile phone devices, as listed in schedule 2.* Clause 3 The SELLER agrees to sell $AUD 150,000 worth of recycled mobile phone devices, as listed in schedule 2.* Clause 4: The BUYER agrees to purchase $AUD 750,000 worth of new and recycled mobile phones, pursuant to clause 2 and clause 3 Clause 5 Within three days of the goods arriving into Port and clearing customs, the Buyer shall effect payment via their bank, per the 'Payment against Documents' mode, as set out in Schedule 3.* This will be guided per the relevant ICC URC Collections Rules. Clause 6: Quality of Goods The goods shall be of good merchantable quality, in good condition and of agreed description and specification. Clause 7: Delivery of Goods Time is of the essence in this contract. All goods shall be delivered to the Port of Melbourne by no later than Monday 20th February, 2018 Clause 8: Contract of Carriage This contract directly adopts the FCA Incoterm 2010. Clause 10: Choice of Law For issues not dealt with by Incoterms 2010, this agreement is governed by the United Nations Convention on the International Sale of Goods ("CISG"). Clause 29: Dispute Resolution All disputes arising out of or in connection with this Agreement shall be settled in good faith If no agreement can be reached, each party has the right to commence arbitration proceedings conducted under the Rules of the New Zealand International Arbitration Centre ("NZIAC") and in line with international arbitration practice. The seat of arbitration shall be New Zealand *Note that the schedules are not attached It is now June, 2019 and you have been asked to provide advice to Dirt Cheap Pty Ltd. After reviewing this scenario, please address the following questions in short- answer form. > Can Even Cheaper demand that Dirt Cheap pay for the consignment? Why or why not? >Is there a claim for damages against Even Cheaper by Dirt Cheap? If so, what is the liability for, and what is the quantum of damage? Is there a claim for damages against Even Cheaper by Safe Ships? If so, what is the liability for, and what is the quantum of damage? Spurred on by the recent Fee Trade Agreement, an Australian based importer of electrical and telecommunications goods, Dirt Cheap Pty Ltd, entered negotiations with an Indonesian supplier called Even Cheaper PT. Both agreed that Even Cheaper would sell a $AUD 750,000 worth of telecommunications equipment to Dirt Cheap. The Sales Agreement was validly executed on 15th December 2018. Dirt Cheap expected to mae the same in profit, (approximately $AUD 150,000 of that from reselling recycled mobile phones). The parties agreed on a mixed sale of new and used phones. Goods would arrive into the Port of Melbourne by Monday 20th February, 2019, to allow two weeks for the goods to clear customs, be packaged and distributed across Australia to various retail outlets. Dirt Cheap entered into a eight handling units of new mobile phones and spare parts to be transported from the Port of Tanjung Priok in Jakarta to the Port of Melbourne by 20th February. Seven handling units contained new mobile phones, worth AUD $600,000. The eighth, smaller unit contained various recycled mobile phones, worth AUD $150,000. The value of all items was to the Carrier's attention and was noted on the B/L. At port, unloading the goods per their duty, Even Cheaper described the first seven units as 'new mobile telephone devices' and described the eighth unit as was put into the B/L. The goods Cheaper carriage contract with Safe Ships Co for the transportation of brought 'generic telecommunication spare parts' and this information were then exchanged for a Bill of Lading with Even Nearly a week into the voyage, a packages in the eighth unit began smoking and caught on fire. Upon inspection, the crew were surprised to find the package contained hundreds of intact, new 'Galaxy Note 7' devices, which they knew were recalled for safety issues. Concerned for the safety of the crew, vessel and other cargo, the package doused with a nearby extinguisher by the trained crew. Unfortunately, damage occasioned to nearby cargo: a shipping container containing designer clothes owned by 'Flame Trees', which was immediately was was being carried at its full cargo value of AUD $195,000. Safe Ships immediately veered into the closest port available to dispose the goods. This delayed the arrival of the goods into the Port of Melbourne by 6 days. All goods in the eighth unit were destroyed. The unplanned deviation from course wasted bunkers (fuel) and cost Safe Ships AUD$78,000. The owner of the garments is suing Safe Ships for the damage to their goods, estimated at $195,000. Dirt Cheap is refusing to pay Even Cheaper- they have not attended the bank and exchanged documents as per the contract. The contract between the parties contained the following clauses: Sales and Purchase Agreement between the Parties Clause 2 The SELLER agrees to sell $AUD 600,000 worth of new mobile phone devices, as listed in schedule 2.* Clause 3 The SELLER agrees to sell $AUD 150,000 worth of recycled mobile phone devices, as listed in schedule 2.* Clause 4: The BUYER agrees to purchase $AUD 750,000 worth of new and recycled mobile phones, pursuant to clause 2 and clause 3 Clause 5 Within three days of the goods arriving into Port and clearing customs, the Buyer shall effect payment via their bank, per the 'Payment against Documents' mode, as set out in Schedule 3.* This will be guided per the relevant ICC URC Collections Rules. Clause 6: Quality of Goods The goods shall be of good merchantable quality, in good condition and of agreed description and specification. Clause 7: Delivery of Goods Time is of the essence in this contract. All goods shall be delivered to the Port of Melbourne by no later than Monday 20th February, 2018 Clause 8: Contract of Carriage This contract directly adopts the FCA Incoterm 2010. Clause 10: Choice of Law For issues not dealt with by Incoterms 2010, this agreement is governed by the United Nations Convention on the International Sale of Goods ("CISG"). Clause 29: Dispute Resolution All disputes arising out of or in connection with this Agreement shall be settled in good faith If no agreement can be reached, each party has the right to commence arbitration proceedings conducted under the Rules of the New Zealand International Arbitration Centre ("NZIAC") and in line with international arbitration practice. The seat of arbitration shall be New Zealand *Note that the schedules are not attached It is now June, 2019 and you have been asked to provide advice to Dirt Cheap Pty Ltd. After reviewing this scenario, please address the following questions in short- answer form. > Can Even Cheaper demand that Dirt Cheap pay for the consignment? Why or why not? >Is there a claim for damages against Even Cheaper by Dirt Cheap? If so, what is the liability for, and what is the quantum of damage? Is there a claim for damages against Even Cheaper by Safe Ships? If so, what is the liability for, and what is the quantum of damage