( Young and Mary are trainees at ABC Law Firm. Mary is from the U.S.A and Young is Chinese. )

 

Mary: I have an emergency case on contract. It appeared to be pretty complicated. Can you help me handle it?

Young: If I can.

 

Mary: Sure you can. Listen, Mr. Chen is in the corn business and purchased 10 tons of corn from a dealer known as Mr. Jiang in Shenyang on March 10. he had half of the corn delivered by train to Changsha. Mr. Chen paid RMB 5,000 and promised to pay the balance of RMB 3,000 at the time when he takes the delivery of the rest corn.

Young: What seems to be the problem?

 

Mary: Sic days later, the price of corn rose and Mr. Jiang sold the same corn to Yellowstone Company. Yellowstone made the payment and took delivery immediately.

Young: Did Mr. Jiang refuse to hand over to Mr. Chen the rest of the corn?

 

Mary: Yes. That’s partially where the dispute arose. But that’s not all. Some unexpected thing happened to the corn in delivery as well.

Young: Let’s take one problem at a time, Mary. Tell me about the floating corn later.

 

Mary: All right. Young, what do you advise Mr. Chen to do in his case?

Young: I’m thinking... Mary, does the contract say anything about the title of the contracted corn?

 

Mary: I believe it does. I remember coming across such a clause. Here it is. I recites “Mr. Jiang hereby sells and conveys to Mr. Chen all rights and title of the corn described herein and agrees to take care and custody of said corn until final delivery to Mr. Chen”.

Young: That’s what I’m looking for. In that case, Mr. Chen may either request specific performance from Mr. Jiang or accuse him of tort. What do you think?

 

Mary: I thought Mr. Jiang breached the contract so Mr. Chen may employ any of the remedies offered by the law for breach of contract. But you’re right when you say there exists tort liability as well.

Young: Then let’s look at what happened to the corn in transit.

 

Mary: OK. When the five tons of corn was still in delivery, Mr. Chen sold two tons to Mr. Huang, who deals in corn and other groceries in Changsha. But when the corn finally arrived in Changsha two days later, Mr. Chen found a shortage of 800 kg. The corn was possibly stolen through delivery.

Young: I guess Mr. Chen wants to know whether he has the right to ask Mr. Huang to share the loss?

 

Mary: Yes, you’re 100 percent right. And the answer is?

Young: That depends much on whether Mr. Huang is to bear the risk of loss and whether the contracted two tons of corn have been actually appropriated for the contract.

 

Mary: Uh-uh. In this particular case, the risk passed from Mr. Chen to Mr. Huang the minute the contract was formed. But because the corn sold to Mr. Huang wasn’t clearly set aside for Mr. Huang, Mr. Huang is not responsible for the loss.

 

*Words and Expressions

 

Floating goods                      运输途中的货物

Take custody                                 保管

Appropriate/ set aside              划归

Specific performance           实际履行

remedy                                       救济