Incoterms 1990

Thanks for sending me the 2000 Incoterms. Our library was finally able to
locate our copy of the 1990 Incoterms and I have reviewed them.

To answer your question, I don't think the Incoterms will have much of an
effect on our analysis except with respect to the definition of DDP (delivery
duty paid). Section 1.14 of the Contract states that DDP shall have the
meaning as defined in Incoterms 1990 (except as the parties otherwise
specifically provide herein). As best I can tell, Section 1.14 is the only
provision of the Contract that mentions the Incoterms.

The introduction of the Incoterms (paragraph 22) states that "merchants
wishing to use these rules should now specify that their contracts will be
governed by Incoterms 1990" At a minimum, this suggests that the Incoterms
are not automatically incorporated into a given contract. Rather, the
parties should specify in their contracts whether the Incoterms will apply.
In this case, the only reference I can find to Incoterms in the Contract
(unless I am missing something) is Section 1.14 which simply incorporates the
definition of DDP.

Additionally, I believe that the Incoterms DDP provision is good for Enron.
Under the 1990 Incoterms, DDP "means that the seller fulfills his obligation
to deliver when the goods have been made available at the named place in the
country of importation. The seller has to bear the risks and costs,
including duties, taxes and other charges of delivering the goods thereto,
cleared for importation. While the EXW term represents the minimum
obligation for the seller, DDP represents the maximum obligation. The
Incoterms go on to say that the seller has to place the goods at the disposal
of the buyer at the agreed point at the named pace of destination. The
seller must bear all risks of loss of or damage to goods until such time as
they have been delivered (i.e., the goods have been placed at the disposal of
buyer).

Westinghouse will have to argue that the CT-Unit was placed at the disposal
of Enron. This will be difficult since they informed us of the damage before
we ever looked at the CT-Unit. Further, Westinghouse's argument sounds more
like they rely on Incoterm DES rather then DDP. Incoterm DES (Delivered Ex
Ship) means that the seller fulfills his obligation to deliver when the goods
have been made available to the buyer on board the ship uncleared for import
at the named port of destination. I have not seen any reference in the
contract to Incoterm DES yet that is what it sounds like Westinghouse is
arguing.

In short, I think our contract argument as reflected in the memo provides a
sound basis for our contentions and the Incoterms should not be factored in
other than as referenced in the contract itself.

If you would like a more detailed analysis of this issue in memo form please
let me know.

TFAH