Your superiors have decided to move forward with the contract based upon your suggestions. They had their lawyers draft up a solid contract that includes a binding arbitration clause and that will be governed by the CISG. The contract was signed by both parties and trade has begun. Six months into the contract, your boss calls you into his office and explains the following situation: It appears that there has been a misunderstanding about a key element of our contract. We agreed to purchase fabrics from the other party that we would use to manufacture suits, which would be exported to Brazil for our local retailers to distribute. The first shipment arrived shortly after our order was placed and our receivers signed the acknowledgement forms as soon as the boxes arrived at our warehouse. The boxes sat in storage for two weeks and only then did our employees open them to begin the production process. Upon opening the boxes, we realized that the fabric was completely ruined—eaten through by vermin. We are uncertain as to whether this happened in shipment or while in storage at our warehouse. In any event, the fabric is now useless to us. The value of the shipment was approximately US$650,000. What can we do? Given that you have planned for just such a circumstance, prepare a final memorandum outlining the potential remedies under the CISG or other agreements (consider the Agreement on Textiles, for instance) that you can suggest to your boss. What approach would be most advisable given the interest in maintaining positive relations with your supplier, who signed a 10-year agreement with your company and who has been very responsive to your requests and demands? Prepare a comprehensive memorandum that includes enough legal support and analysis to justify your next steps. Students must footnote the law etc. that they will cite to support their recommendations
