International Business Law

Ipca International week (2013)

Cávado and Ave Univeristy

Gloria Esteban de la Rosa

Framework of International Business Activity

The Word Trade Organization (WTO) and its impact on

international contracts

WTO

The WTO does not define or specify trade outcomes

It does not seek to manage trade flows

WTO

Its primary functions are:

- to be a focal point for the negotiation of binding agreements to reduce trade barriers and agree on disciplines for policies affecting international trade; and

- to provide a mechanism through which WTO Members can enforce these negotiated commitments

WTO

administers the trade agreement negotiated by its Members, in particular:

- General Agreement on Tariffs and Trade (GATT)

- General Agreement on Trade In Services (GATS)

- General Agreement on Trade-related Intellectual Property Rights (TRIPS)

Seven dimension of the WTO (for understanding its operation and function)

1. Single undertaking2. Tariffs are the only

permissible form of protection

3. Non-discrimination4. Reciprocity5. Enforcement of

obligations6. Transparency7. Safety valves

Non discrimination Principle:

- MFN: Most favored Nation

- NT: National Treatement

WTO

MFN:

- The most favored Rule requires that a product made in one Member country be treated no less favorably than a “like” (very similar) product that originates in any other country

NT:

- National tratement requires that foreign produts –one they have satisfied whatever border measures are applied- be treated no less favorably than like or directly competitive domestic products

European Union

What do we know about “the Market”?

The Market is not only a place from a geografical point of view

In Law the Market is a legal notion

Why??

Because it sens (in law) depends on the regulation given by a specific rule

This is the raison why we can speak about the common market in the case of the European Market

EUROPEAN MARKET

When the EEC was created (1957), the foundational Treaty recognised the idea of a “economic place” where different kind of freedoms should be granted

Freedon to lend services

Free circulation of goods

Free circulation of capitals

Freedom of establishment

EUROPEAN MARKET

Non discrimination Principle

Mutual Recognition Principle

Protection of the functioning of the market

How it is possible to protect the conditions of functioning of the common market??

European Competition Law

Workable competition

Competition is suitable for avoiding the economic recession

But, it is also necessary to savegard the fairness

European Competition Law(divided into two parts)

Anti-trust Law

General Market conditions: Vertical and Horizontal Agreements

Unfair competition Law

Operator’s Practices in the market

Unfair contracts terms

Exemple: distribution contracts

"The distributor can deliver their commodities outside the territory defined in this contract, except when the supplier has kept previously a specific area (to himself) or the supplier has atteined that bound to another seller until de present contract expires.

Neither will the reseller sell their commodities to the supplier's clients with whom they have a bond with, nor to the clients assigned in exclusivity to another reseller until the present contract expires"

Unfaire Contract Terms in European Law

An attempt to re-establish bargaining power between the parties by compensatory mechanisms:

- imposing warranties- prohibiting exemptions clauses

International Contracting: General

Aspects

International Business Law

International Contracting

ROME Convention 1980 on the law applicable to contractual obligations

REGULATION ROME I (17 december 2009)

General Aspects

IT IS NECESSARY THAT YOU HAVE ONE CONTRACT, BECAUSE THE REGULATION IS ONLY APPLICABLE IF YOU HAVE ALREADY THE CONTRACT

General Aspects

IN SITUATIONS INVOLVING A CONFLICT OF LAWS (art. 1)

Regulation 593/2008 of the European Parliament and of the Council of 17 June 2008, on the law applicable to contractual obligations

(Rome I Regulation)

FREEDOM OF CHOICE PRINCIPLE (art. 3)

One Contract should be governed by the law chosen by the parties

Rome I Regulation

APPLICABLE LAW IN THE ABSENCE OF CHOICE (art. 4)

A contract for the sale of goods Provision of services Contract relating to a right in rem in

immovable property Franchise Contract etc.

Rome I Regulation

Autonomy of the “choice of law Contract” from the Principal Contract (art. 12)

What does it mean?

Rome I Regulation

Mandatory norms

Overriding mandatory provisions (art. 9)

Mandatory norms of an internal significance and mandatory norms on an international scale

UNO CONVENTION ON CONTRACTS

FOR THE INTERNATIONAL SALE

OF GOODS (CISG) 1980

When is it applicable the CISG?

Art. 1: “1. This Convention applies to contacts of sale of goods between parties whose places of business are in different States:

a) when the States are Contracting States, or b) when the rules of private international law lead on

the application of the law of a contracting State;

When is it applicable the CISG?

2. The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealing between, or from information disclosed by, the parties at any time before or at the conclusion of the contract”.

Content of the CISG Convention

Art. 4: “This Convention governs only the formation of the contract of sale and the rights and obligation of the seller and the buyer arising from such a contract.

In particular, except as otherwise expressly provided in this Convention, it is not concerned with:

a) the validity of the contract or of any of its provisions or any usage;

b) the effect which the contract may have on the property in the goods sold”.

TERMS AND CONDITIONS IN THE

CONTRACTS

Sale of Goods ContactsUnited Nations Convention on Contracts for

the international Sale of Goods 1980 –CISG-

When you write a Sale of Goods Contract, you should take into account that:

You should specifie which are he duties of both parties, in relation with the execution of the contract

How do you know which are these duties?

First of all, you should look in the CISG. Why?

Becaue it is a Convention on Uniforme Law and..

It is probably applicable to your Contract

Sale of Goods Contract

Freedom of contract Principle. Doy you understand the meaning of this principle?

Privity of contact principle. Principle that could be defined by the contact binding force for the parties

The Doctrine of the implied terms and the

interpretation of Contracts

Implied Terms Expressed Terms

International Contracts of Transportation/

Carriage

Contracts of Carriage

Carriage by Sea

Carriage by Rail

Carriage by Road

Carriage by Air

Carriage of goods by Sea

Bill of Lading

Carriage of Goods by Sea

The goods should be shipped to the buyer, but this duty may fall either on the Seller or the Buyer, depending on the type of contract we are dealing with

Carriage of Goods by Sea

The Shipper is the person who arranges for goods to be shipped

The Carrier is the party agreeing to carry the shipper’s goods

Bill of Lading

Port of loading/departure/shipment

Port of destination/discharge

Bill of Lading (as a document of title) It has de effect of a document of title if it is made

clear on its face that it is negotiable. It must be an “order bill” (as against a “straight bill”).

This means that the named consignee could transfer or assign the bill of lading on to any third party simply by delivery or indorsement.