The Case of Queensland Blue Steel Ltd and Shanghai Hotel Group

The case of Queensland Blue Steel Ltd and Shanghai Hotel Group

Shanghai Hotel Group a leading constructor of hotel entered into a contract with Queensland Blue steel company for the steel company to supply steel to it. Blue steel company was chosen to supply exterior steel panel that were to be used for attachment of clear glass. The contract between the two companies specified that Queensland Blue steel company was to supply the steel in six types of steel in six batched between 1 July and 1 December. However, a number of delays from both parties to the contract led to delayed payments as well as late delivery of steel with some not conforming to the standards as per the contract. Subsequently, Shanghai Hotel group incurred losses from this occurrence totaling to $ 240, 000.

Applicable law to the above contract

From the scenario depicted above in the case of the contract between Shanghai Hotel Group and Queensland Blue Steel Company, the applicable law is the law contract. A contract ordinarily implies an agreement amongst two or more persons not just a shared belief, but a mutual understanding as to something that is to be done in the time to come by one or both of the parties (Knapp, Crystal & Prince 2003 , p. 15 ). Form the agreement stated in the case, it is evident that the tow companies entered into a contract which binds both parties (Oughton & Davis 2000, p. 1).

The reason as to why the law applies is due to the nature of agreement that transpired between Shanghai Hotel Group and Queensland Blue steel Company concerning the delivery and payment of the steel panels that were to be used by Shanghai Hotel Group in building hotels for its clients. As Crawford, Coleman and Gaines (p. 20 7) confirm, a valid contract is one that both parties to the contract have mutual accent where an offer is made by one party and the offer is accepted by the other. During this contract to supply steel, an offer was made by the Queensland Blue Steel and it was accepted by the Shanghai Hotel Group who agreed to make payments for the delivery. As a result, the law that will be applied to this case will be the law of contract.

There are a number of legal remedies that can be pursued by both parties regarding the contract that they undertook between one another. While Queensland Blue Steel Ltd may have failed to deliver the required steel in time and in the right number and specification, Shanghai Hotel Group also failed to make some payment in time. This led to losses to both parties where Shanghai Hotel Group failed to make prompt payments while the Queensland Blue Steel Ltd failed to deliver the steel panels as expected. Schaffer et al (2009, p. 162) believe that these risk fall under delivery risk and payment risks which breaches contracts.

The most common remedy that can be used to solve cases of breach of contract is through the use damages. Both parties can pursue Un-liquidated damages against in another. These damages will be evaluated by the court as they are planned to recompense the innocent party in a contract for any losses that may result in the breach of a contract (Campbell 2005, p.33). In this case, both parties to the contract will have to prove the damages they have incurred failure of which each one of them will be entitled to a nominal charge. Had Shanghai Hotel Group terminated the contract before the delivery of the last consignment, their move would have being justified.

Breach of contract does not warrant any party to the contract to discharge the contract unless when the breach is serious. In this case, the Shanghai Hotel group did incur a lot of losses as compared to what the Queensland Blue Steel Ltd incurred. As a result a move by Shanghai Hotel Group to cancel the contract would imply that the contract comes to an end and both parties to the contract become freed from any future obligation as detailed in the previous contract. As a result of the termination, Queensland Blue Steel Ltd would no longer be obligated to deliver the remaining number of steel panels as earlier agreed.

This case centers on two firms, a Tasmanian exported of apple cider and a Chinese importer. During one of the contracts to supply the Chinese importer with the apple cider, it was discovered that the consignment did not meet the requirement as stipulated by the contract. It was apparent that the imported apple cider had been destroyed with some were stolen in a warehouse. With the case entailing the shipping of ice cider to china, it is likely that the sales agreement between the two parties had a clause on shipping terms. Schaffer (2005, p. 164) contends that shipping terms has provisions that determine the seller's and buyer's obligations for making the transport arrangements, paying transportation fees, securing insurance on the commodities, paying port charges, as well as accepting the risk that the commodities may be turned a loss or spoiled in transit

Applicable law on this case

From the terms contained in the contract, the most suitable law that is applicable to his case is shipping terms which define whether the contract is a destination contract or if it is a shipment contract which further defines the responsibilities of the parties to the contract.

Singapore arbitration clause

In the case depicted by Marks Apple Isle Cider Ltd and Jiang LeMond, the Singapore arbitration clause binds Jiang LeMond thought it is a Chinese firm. In this instance, Jiang LeMond will have to be part of the arbitration process in Singapore in attempt of resolving the problems of shipping between it and Marks Apple Isle Code Ltd. Li and Reuvid (2005, p. 193) affirm that arbitration has emerged as one of the most important form of resolving conflicts between it and foregoing firms especially in venues such as Singapore and Stockholm.

Liability on stolen goods

With the sales contract not having the clause that addresses the issues of stolen goods, it is much likely that the buyer, Jiang LeMond will take up the losses when the commodities are passed to it from the first carrier to handle the good on transit to China (Schaffer 2009 at p. 177; Bade & Johnson 2010, p. 101). As in all international trade that involve shipping, the buyer will take up all the losses of the good in a ship as well as other charges that are associated with the handling of goods while on transit. These charges must include those incurred as freight duties, arrival charges and consular fees among other expenses incurred by the carrier (Fisher & Fisher 1998, p. 134.))

The case of Insured containers

Buyers of commodities like Jiang LeMond can insure their goods against any potential loss or damage while on transit.