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An analysis of the international commercial contract law(PhD Proposal) Essay Example

  • Category:
    Law
  • Document type:
    Research Proposal
  • Level:
    Undergraduate
  • Page:
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  • Words:
    2122

A research proposal on the development of an international instrument
10

A research proposal on the development of an international instrument, which unify rules used in international commercial contracts.

Table of Contents

1.0 Introduction 2

1.1 Justification 3

1.2 Research Questions 6

1.3 Objective of the research. 6

2.0 Methodology 6

2.1. Project timeline. 10

3.0 Bibliography 11

3.1 Books 11

3.2 Websites 11

1.0 Introduction

Globalization is a reality in the modern world; it has not only made life easier for different people but has also led to increased economic integration between different countries all over the world. This has resulted to increased trade and investment between these nations and hence the need to have international commercial laws that govern how businesses between nations are conducted. International commercial law refers to a body that governs sales transactions that occur on an international level.1 A sale is said to have qualified to be international if there are elements of more than one country that are involved. There has been increased international trade since World War II, and hence the increased need for international commercial. Any form of transaction between countries requires that they enter into a form of agreement. Any form of agreement made between different countries when dealing in a sale transaction is known as an international commercial contract.

International commercial contracts are governed by principles that are set forth to be used whenever there is a transaction between two countries. These principles contain the general rules to be used for international commercial contracts. They are to be applied when parties involved have agreed that the contract between them be governed by them. These principles also provide solutions in cases where it proves impossible to establish relevant rule of the law to be used. Just like in any other transaction, international businesses also face disputes that must be amicably settled in order to maintain good relationship between nations.2 However, there exists a problem in the manner in which issues regarding contracts between countries is resolved. This is why an international instrument, which unifies rules used in international commercial contracts, is important.

1.1 Justification

The idea to come up with an international instrument that unifies international rules is not a new one. In 1980, a group that was established by the Commission on law and Commercial Practices of the International Chamber of Commerce gave a draft guidelines concerning applicable law in international contracts to their national Committees. Unfortunately, the idea has not been pursued any further since that time and hence the need to have one3.

According to AustLII, because of international business transactions between nations, the world has become more interconnected than ever. Internet for example has made it very easy for services and products to be marketed throughout the world, to an extent that has never been experienced before. Internet has also made it possible for individuals and businesspersons in different countries to obtain information easily, and choose from a wide range of goods and services, and with a mouse click enter into a contract without facing national borders restrictions that were experienced before4. This although advantageous in many ways has of late been a source of problem. With increased international business over the internet, the potential for conflicts between involved parties in this area has also been on the rise. For example, what should a buyer do when a seller from a foreign country either deliver a defective product or fails to deliver a product that has been paid for at all? This is a simple scenario of some of the problems that occur in international business contracts. Many different complex cases exist and require experienced law professionals to handle such international commercial disputes5. For this reason, there is an urgent need to a have an international instrument, which will unify rules used in international commercial contracts. The parties involved in international transactions also need to understand some factors that govern the success of such ventures.

In order to achieve commercial success, it is important that the parties involved in any international transaction have a global understanding of commercial international law. In doing so they have to understand different factors that control international business. These factors include the economic dynamics of commerce around the world, political, social and legal realities. Of importance to consider in this discussion are the legal factors affecting the success of international business among them being the understanding of international business contracts. Legal systems in many countries are usually complicated, for this reason most people prefer to stay out of it by settling their disputes out of the court. Many people still breach international business contracts and somehow get away with it. There has always been some sort of clause ambiguity that lets people slip away. When it comes to international business, the complexity of legal issues is usually so big for someone to understand. However, there are certain terms in international business contracts that most international business lawyers agree should be there.6

By understanding these terms issues regarding contracts will be easy because the parties involved will be fully aware of their responsibilities towards each other. One of the terms that should be there any international business contract is the choice of law clause.7 This is one of the most basic terms in any contract. It allows one to choose what country or the administrative law that will govern the contract and any dispute that may arise from it. This is very important in international commercial law. The second term is the choice of forum clause. This clause shows the country where the dispute will be litigated together with the court within that location that will hear the case. The third important term is the arbitration clause. This clause is signed under the convention on the Recognition and Enforcement of Foreign Arbitral Awards. It requires that any judgment that is handed down by arbitrators is enforceable foreign court across borders so long as the parties involved have signed on the treaty. Most developed nations in the world have signed on this convention since it makes the arbitration process efficient in resolving international business disputes.8 These terms if incorporated in the international instrument under discussion in this proposal will help in unifying rules that are used in international commercial contracts.

1.2 Research Questions

  • To what extent will development of international instrument help in settling international commercial disputes?

  • What benefits will the international instrument offer to all countries worldwide

  • What factors will determine the success of the international instrument

  • The major challenges expected in implementation of the international instrument.

1.3 Objective of the research.

  • Determine the problems encountered by the current international commercial law contracts

  • To come up with an international instrument that can help in solving the current international commercial law process

  • Determine the usefulness of an international instrument in an effort to unify international rules

2.0 Methodology

In the context of international commercial law, it is inevitable that organization, countries, and private parties consider having a dispute resolution mechanism to solve the disputes that may arise from contractual relationship. Davies argues that the success of any international commercial contract process is because of its effectiveness, confidential nature and above all its neutrality. The parties involved in a contract normally decide the justice mechanism to be employed in their contract.9

Currently, many problems occur in international business contracts. Some of these problems occur when either or both the parties involved fail to honor their part of the deal. When this happens, the process of solving the dispute may take a very long time before justice is achieved.10 This is because some of the cases presented are so unpredictable because none of the parties involved has chosen the law applicable in their commercial contract. It is for this reason that the idea of an international instrument that will harmonize such cases is long overdue. To solve such a problem the international instrument under proposal will contain guidelines and some universal rules to be applied in such a scenario. To do this a lot of background research need to be conducted with respect to some of the common problems faced by parties involved in international transactions. After gathering this information, law experts from different parts of the world should come up with set rules to be used whenever a dispute arises. These rules should be almost universal in that they can be applied in any situation involving international commercial contract.

With such an instrument that will harmonize international commercial laws, most countries all over the world will be able to engage in businesses freely.11 Many business opportunities exist but due to the complexity of the existing commercial contract laws, most businesspersons are afraid to engage in such transactions. This instrument will be designed in a way that it will be easy to comprehend with most of the legal jargons existing in current commercial laws well explained. Additionally, it will cater for most of the issues that are likely to occur in when parties enter into an agreement; this means that the parties will just need to go through the rules provided in the international instrument and select the one that will suit their needs. This will not only foster good commercial relationship between nations but also help developing nations in achieving their goals by taking care of some of the barriers they face in international trade.

According to Fazio, the success of such an instrument will be dependent on so many factors. One of the major factors is the cooperation between members state that will agree to adopt it12. This is very important because the rules that will be contained in this international instrument will come from the present rules governing international business between these nations. What this instrument will do is to create harmony in some of the clauses that are likely to result to a dispute when to parties enter into a contract. This means that legal experts from different stakeholders have to be involved to come up with the best rules to serve the member states. Another factor that will determine the success of such an instrument is the availability of funds, this project will definitely require a lot of funding so that the relevant structures can be well-researched and put in place.13

As mentioned earlier, to come up with an international instrument that unifies international commercial law is not an easy task. Research has proved that to harmonize some laws especially in some areas where transactional law and regulatory laws are intertwined is not an easy task. However, the international instrument will be concerned with unifying those rules that are in constant conflict with each other. The availability of funds is also another

2.1. Project timeline.

ACTIVITIES/MONTHS

Feasibility study

Preparation of the initial draft

Intergovernmental negotiation stage

Final draft preparation

Project presentation

3.0 Bibliography

3.1 Books

Bonell, Joachim, An international restatement of contract law: the UNIDROIT principles of

international commercial contracts (BRILL, 3rd ed, 2005)

Davies, Iwan, Issues in international commercial law (Ashgate Publishing, Ltd., 2005)

Elcin, Mert, The Applicable Law to International Commercial Contracts and the Status of Lex

Mercatoria With a Special Emphasis on Choice of Law Rules in the European Community (Universal-Publishers, 2010)

Fazio, Silvia, The harmonization of international commercial law (Kluwer Law International,

3.2 Websites

AustLII, International Trade and Business Law Review (22 September 2011)

<http://www.austlii.edu.au/au/journals/IntTBLawRw/2004/5.html>

HCCH, Feasibility Study on the Choice of Law in International Contracts, (21 September 2011)

<http://www.hcch.net/upload/wop/genaff_pd22c2007e.pdf>

LegalMatch, International Contract Drafting: A Complex Headache (21 September 2011)

<http://lawblog.legalmatch.com/2010/05/10/international-contract-drafting-a-complex-headache>

UNIDROIT, Principles of International Commercial Contracts, 1994 (22 September 2011)

<http://www.jus.uio.no/lm/unidroit.contract.principles.1994/doc.html>

1
Davies, Iwan, Issues in international commercial law (Ashgate Publishing, Ltd., 2005)

2
Joachim, Bonell, An international restatement of contract law: the UNIDROIT principles of

international commercial contracts (BRILL, 3rd ed, 2005)114

3
HCCH, Feasibility Study on the Choice of Law in International Contracts, (21 September 2011)

<http://www.hcch.net/upload/wop/genaff_pd22c2007e.pdf>

4
AustLII, International Trade and Business Law Review (22 September 2011)

<http://www.austlii.edu.au/au/journals/IntTBLawRw/2004/5.html>

5
UNIDROIT, Principles of International Commercial Contracts, 1994 (22 September 2011)

<http://www.jus.uio.no/lm/unidroit.contract.principles.1994/doc.html

6
LegalMatch, International Contract Drafting: A Complex Headache (21 September 2011)

<http://lawblog.legalmatch.com/2010/05/10/international-contract-drafting-a-complex-headache>

7
Iwan, Davies, Issues in international commercial law (Ashgate Publishing, Ltd., 2005) 39

8
Iwan, Davies, Issues in international commercial law (Ashgate Publishing, Ltd., 2005) 39

9
Iwan, Davies, Issues in international commercial law (Ashgate Publishing, Ltd., 2005) 58

10
Mert, Elcin, The Applicable Law to International Commercial Contracts and the Status of Lex

Mercatoria With a Special Emphasis on Choice of Law Rules in the European Community (Universal-Publishers, 2010) 77

11
UNIDROIT, Principles of International Commercial Contracts, 1994 (22 September 2011)

<http://www.jus.uio.no/lm/unidroit.contract.principles.1994/doc.html>

12
Silvia, Fazio, The harmonization of international commercial law (Kluwer Law International,

2007) 109

13
Silvia, Fazio, The harmonization of international commercial law (Kluwer Law International,

2007) 117