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Our attorneys lend a hand to Canadian lumber wholesaler in settling cross-border dispute | LEADELL Deals and Cases
A Canadian lumber company, which had concluded a transaction with a Latvian company, found itself in an intricate cross-border dispute over the receipt of a low-quality product. After involving oneself in resolving the dispute, LEADELL Vītols attorneys discovered that the parties’ liability had not been thoroughly stipulated in the purchase agreement. The knowledgeable team of attorneys found the solution in the United Nations Convention, as a result of which the Latvian company that supplied the low-quality product refunded the money paid in advance to the client.
How did the cross-border dispute between Canadian and Latvian companies arise?
The Canadian company entered into a purchase agreement with a Latvian company for the purchase of lumber. According to the agreement, the Canadian company paid an advance, while the Latvian company undertook to deliver the goods. Unfortunately, the goods supplied by the Latvian company did not meet the expected quality standards. The Latvian company made only a partial repayment of the advance after receiving objections concerning the delivered goods, which did not satisfice the Canadian company.
Why did a short and general purchase agreement cause countless troubles for the buyer?
The troubles were caused due to the fact that the transactioning parties had not agreed on a number of essential terms in their agreement. For example, the liability of the parties, the applicable law, and the dispute settlement procedure had not been agreed upon.
How did LEADELL Vītols resolve the cross-border dispute?
The LEADELL Vītols dispute resolution team, led by attorney-at-law Ilze Jankeviča, found the imperative grounds for recovering the money by applying the United Nations Convention on Contracts for the International Sale of Goods. Consequently, the client had the right to declare the agreement avoided, as well as to recover the total amount of the advance paid.
How to conclude a purchase agreement to avoid a cross-border dispute?
The parties must stipulate the following elements when concluding a purchase agreement:
- precise and clear-cut description of the subject of the purchase,
- payment and delivery procedure,
- liability of the parties,
- the circumstances for terminating the agreement,
- in cross-border transactions, special attention should be paid to prescribing the applicable law and jurisdiction.
What course of action to take when having questions about a purchase agreement?
The most prudent course of action is to depend on a reliable legal assistance provider already from the process of concluding an agreement, as each case must be assessed on an individual basis – accordingly, also the recommendations that should or should not be included in an agreement may differ. Entrust the drafting of purchase agreements to our knowledgeable specialists and be sure to seek assistance even in cases when the stage of drafting a purchase agreement is long behind, but the inevitable dispute is ahead. We are here at your service riga@leadell.com.
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