Bags Unlimited is a small producer of handbags in China.

Bags Unlimited is a small producer of handbags in China. Searching on the internet for suppliers of raw materials, the owner Ying Li finds a supplier, Leather and More in Italy offering these materials at a very reasonable price. Ying Li enters into a sales contract on CIF terms. Following CIF terms payment was to be made by a letter of credit. Leather and more shipped the goods on time. The carrier inserted a “said to contain” clause in the Bill of Lading and the buyer‟s bank accepted this document. When the container was delivered, Bags Unlimited found that the quantity was not consistent with the Bill of Lading and further the goods were damaged and not of a suitable quality to be used in the manufacturing of its signature brand of bags. Ying Li files a complaint with Leather and More who refuses to accept any liability. (Hague Visby Rules apply) Task: Explain to all the parties involved their rights and obligations.

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