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Commercial Law

Ms Phillipa Rum is a wealthy Sydney identity, who carries on the business of a large private art gallery in an affluent beach suburb to the north of Sydney, trading in expensive artworks. In March 2011 Phillipa decides to obtain and place a marble sculpture on her land just outside the front entrance to the gallery building. Phillipa makes known this intention through her numerous contacts in the art world, and by arranging for a notice to be placed on the gallery website. Phillipa requires that the sculpture be a new creation, specifically intended for her gallery.

Sir Maurice Pakeha is a distinguished New Zealand artist and sculptor, who learns of Phillipa s intentions, and Maurice produces sketches in pencil on five sheets of A3 white paper of a proposed sculpture, setting out details of a design and approximate dimensions. Views are shown from above, and from the front, rear and each side. The proposal shows a male figure to be depicted to some extent in both classical and abstract cubist styles, grasping in one hand a tablet of definite size but indeterminate character, (so the tablet could be viewed as an iPad, or even as one of the tablets of Moses), with the tablet resting on one shoulder, which can be viewed as alluding to various works of both Michelangelo and Picasso. Maurice scans the sketches into a pdf file and forwards the file by e-mail to Phillipa in early August 2011.

Phillipa is enchanted by Maurice s proposal, and she arranges to fly to Wellington NZ to meet Maurice. After discussions over a lengthy luncheon at a wine bar, Phillipa and Maurice reach the following agreement, which they record in duplicate on two large paper serviettes and sign, each retaining one copy. Assume the parties intend to be legally bound, and that the agreement is otherwise sufficient to amount to a contract.

(1) Maurice agrees to execute a sculpture in accordance with his design sent to Phillipa on 3 August 2011, two copies of which have been signed by both parties at the same time as this agreement; each party to keep a copy.
(2) Maurice will commence work on the sculpture on or before 2 December 2011, and will complete it by 2 December 2013. Maurice will produce the statue in suitable premises sufficiently accessible by road to trucks and located within 5 kilometres of Phillipa s gallery at [address] these premises to be leased or purchased by Maurice at his own expense. Maurice will obtain and pay for a slab of marble sufficient for the statue and provide his own tools and anything else required to complete the work.
(3) Phillipa agrees to pay Maurice NZ$2,800,000 as follows: $400,000 by cheque immediately, and $400,000 upon his taking up residence at the premises referred to in (2) above. The balance to be paid by bank cheque within two weeks after Phillipa is notified that the statue is completed in accordance with the above, with Phillipa to be given immediate access to inspect the statue to ensure compliance, and Phillipa will immediately remove the statue to her gallery upon paying the balance.
(4) Maurice is to provide monthly reports on his progress on the statue, on the 2nd day of every month starting on the 2 January .
(5) It is estimated that the statue will weigh about 6 tonnes on completion.

The above five clauses comprise the whole of the express agreement between the parties.

Applicability of CCISG: (About 1½ pages) Discuss whether the United Nations Convention on Contracts for the International Sale of Goods (CCISG) applies to the above agreement, including whether CCISG differentiates sales contracts from contracts to provide services. Assume that the place of business of Phillipa is in Sydney, and that for many years beforehand Maurice has lived and worked in Wellington, except for about two months every year. The text of CCISG can be found in the Sale of Goods (Vienna Convention) Act 1986 (NSW). You will need to carefully look at CCISG Chapter I “ Sphere of Application . Provisions concerning when a country is a contracting state are contained in a later chapter of CCISG. Before starting this part review a secondary source, such as chapter 15 in Turner, or the relevant chapter in one of the international sales books in closed reserve in the library. Turner at the end of chapter 15 has a list of various websites with CCISG materials. Your answer is required to take account of relevant international legal sources.

Applicability of SOGA: (About 3 pages) Assuming CCISG does not apply to the agreement between Phillipa and Maurice, and that NSW law is applicable, discuss whether the contract is within s 6(1) of the Sale of Goods Act 1923 (NSW). Hint: See Robinson v Graves in the unit materials volume 1, and other cases in the same part of the materials.

Passing of property: (About 2 pages) Assuming the Sale of Goods Act 1923 does not apply to the agreement between Phillipa and Maurice, discuss when property in the statue will pass. Hint: read Gammasonics 489 para 48 in the unit materials volume 1.

Notes:
i. When confronted with an unfamiliar area of law, why might it be better to start with secondary sources of law rather than primary sources? Why might it be better to start with the most recent known secondary source? Don t forget to consider to a reasonable extent all of the relevant sections in the most promising secondary source from beginning to end before jumping to any conclusions about how you should investigate further.
ii. Some of the matters stated above as facts may be regarded as fanciful and/or possibly contrary to reality, but you are to accept the facts as given.
iii. Requirements for the format of the assignment, including word length, will be issued in a separate document. Severe and diabolical penalties apply if these requirements are not fully observed.

iv. There is no mistake in the last question; it does say assume the 1923 does not apply.

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