Metallia Law
Introduction to Law and Corporate Governance
13th January 2012
METALLIA USA/OLYMPIC STEEL PROBLEM PART 2
This problem is the continuation of the business relationship between METALLIA, USA and OLYMPIC STEEL, once the April 14th, 1999 contract for the sale of steel plates had been entered into. The June delivery is about to take place. Payment will be expected.
I) On June 1st, 99, as per the terms of the April 14th contract, METALLIA, USA, is ready to make the first shipment of 5,550 net tons of hot rolled steel sheets to OLYMPIC STEEL, at a price of US $ 1,047,375.
A. What do they say?
The delivery clause states that the June 1999 shipment CIF (Cost, insurance and Freight) duty has been paid and the material has been loaded on the trucks for the port of Sydney. Therefore though Metallia, USA being the seller pays the costs and freight to bring the goods to the port of destination the risk is transferred to Olympic Steel once the goods are loaded on the vessel. For subsequent orders the port of discharge and specifications are yet to be obtained from Olympic Steel.
As to payments, Olympic Steel has to pay Net cash within thirty (30) days from date of discharge of transporting vessel, against presentation of the following documents:
I. Seller’s invoice. II. Seller’s Weight Certificate /Packing List. III. Certified Mill Test Reports. IV. Letter from Karl McKeever confirming material is in accordance with specifications as submitted by Buyer. V. Certificate of Origin (Ukraine Republic).
B. What kind of a sale contract is involved here? Why?
Mettallia being a US based company and Olympic Steel an Australian based company, the sale contact involved is a documentary sale. Ownership will be transferred over to Olympic Steel once the ocean carrier receives the goods. The shipper’s (Mettallia) obligation in this case has the responsibility to hand the goods to carrier at a certain in exchange for the negotiable document of
13th January 2012
METALLIA USA/OLYMPIC STEEL PROBLEM PART 2
This problem is the continuation of the business relationship between METALLIA, USA and OLYMPIC STEEL, once the April 14th, 1999 contract for the sale of steel plates had been entered into. The June delivery is about to take place. Payment will be expected.
I) On June 1st, 99, as per the terms of the April 14th contract, METALLIA, USA, is ready to make the first shipment of 5,550 net tons of hot rolled steel sheets to OLYMPIC STEEL, at a price of US $ 1,047,375.
A. What do they say?
The delivery clause states that the June 1999 shipment CIF (Cost, insurance and Freight) duty has been paid and the material has been loaded on the trucks for the port of Sydney. Therefore though Metallia, USA being the seller pays the costs and freight to bring the goods to the port of destination the risk is transferred to Olympic Steel once the goods are loaded on the vessel. For subsequent orders the port of discharge and specifications are yet to be obtained from Olympic Steel.
As to payments, Olympic Steel has to pay Net cash within thirty (30) days from date of discharge of transporting vessel, against presentation of the following documents:
I. Seller’s invoice. II. Seller’s Weight Certificate /Packing List. III. Certified Mill Test Reports. IV. Letter from Karl McKeever confirming material is in accordance with specifications as submitted by Buyer. V. Certificate of Origin (Ukraine Republic).
B. What kind of a sale contract is involved here? Why?
Mettallia being a US based company and Olympic Steel an Australian based company, the sale contact involved is a documentary sale. Ownership will be transferred over to Olympic Steel once the ocean carrier receives the goods. The shipper’s (Mettallia) obligation in this case has the responsibility to hand the goods to carrier at a certain in exchange for the negotiable document of