INTB 3355 CH 7

When contract disputes arise b/w parties from 2 or more countries, which country's law is applicable?

UN convention on International sale of goods solves such problems.

established uniform legal rules to govern the formation of international sales contracts and the rights and obligations of the buyer and seller. applies automatically to all contracts for the sale of goods between traders from different countries that have ratified this. this automatic application will take place unless the parties to the contract expressly exclude or opt out of this.

UN convention on international sale of goods. CISG

facilitating payments made solely to expedite non-discretionary official actions

grease

In a contract specifies which law will govern in the event of a dispute. Ex: if there's a US seller and an australian buyer the parties may agree that the australian law would govern any dispute.

Choice of law clause

2 forms of litigation:

Choice of law clause and choice of forum clause

universal trade terminology developed by the international chamber of commerce

incoterms

International dispute settlement comes in the form of: (4)

litigation, performance of contracts, united nations solutions, arbitration

Where litigation in international disputes should occur is:

often complex, so contracts should choose choice-of-law clause and choice of forum clause.

agreements between countries which may be bilateral (b/w 2 countries only) or multilateral (involving more than 2 countries); also called conventions, covenants, compacts, or protocols.

treaties

Sources of law in international business: (2)

treaties and customary international laws

T/F: The US should outlaw the use of "grease" by US companies abroad.

true

Possible solutions with problems with performance contracts: (3)

(1) UN convention on international sale of goods. (2) private solutions such as arbitration, an alternative to litigation. (3) Incoterms, the international chamber of commerce's universal trade technology.

Uncertainties of FCPA: (6)

(1) does not outlaw grease, (2) no clear distinction b/w legal grease payments and illegal bribes, (3) doubts concerning the accounting standards the FCPA requires for compliance, (4) facilitating payments for routine government actions such as visa insurance, import approvals, and the processing of government papers are permissible under the FCPA. (5) critics believe the FCPA would harm american companies competitiveness abroad because it would demand of american companies a higher standard behavior than was common in the competitive environment, (6) Justice department may prosecute grease payments to attack corruption in the US.

Major problems with performance of contracts: (4)

(1) getting the other side to perform obligations. (2) no worldwide court has the power to enforce decrees. (3) UN international court of justice relies on voluntary compliance. (4) international contracts are complicated to enforce.

People and businesses may prefer arbitration for several reasons: (4)

(1) they may be suspicious of foreign courts. (2) arbitration is generally faster than law courts, where cases are usually backlogged. (3) arbitration procedures are usually more informal than court procedures. (4) arbitration may be confidential, avoiding the perhaps unwelcome publicity accompanying an open court case.

in a contract specifies where the dispute will be settled. Ex: parties in the preceding example may agree to have dispute decided in california state courts in Los angeles county, CA.

Choice of forum clause

Allows for non US nationals to file lawsuits in US courts for alleged violations of international law.

Alien tort statute

In the 1960's Chevron (Texaco) drilled for crude oil in Ecuador and massively pouted the land causing huge environmental harm and physical harm to thousands of villagers. Chevron drilled for crude oil in Ecuador for almost 30 years and the total oil spilled into the environment is a mere 2% of what BP spilled in the gulf. But this would be the most massive environmental lawsuit and crime in history so Chevron has denied responsibility tooth and nail. Chevron argues that they partnered up with PetroEcuador and when they left the country is was Petroecuador's job to clean up the oil. But the reality is that in Chevron's partnership with PE, Chevron was considered the "operator" and under US law (which Chevron must obey even in Ecuador) the operator can be held responsible for environmental damages. Chevron has run from responsibility in this case by insisting in the US that the case needed to be held in Ecuador but when Ecuador found them responsible for 9.5 Billion in damages, Chevron sold all their assets in that country and paid nothing. Chevron lobbied in the US and got the suite to be declared frivolous and racketeering. So Ecuador was forced to seek payments in Canada. As of most recent Oct. 2015 a Request for Summary Judgement was filed in Canada and the plaintiffs await a reply.

Ecuador vs chevron

country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside its borders

Extraterritoriality

US law against making payments to foreign government officials for special treatment. Unlawful to bribe foreign government officials to obtain or retain business.

Foreign Corrupt Practices Act (FCPA)

Who can create and uphold international laws treaties?

International organizations such as the United Nations and the International Court of Justice, a branch of the UN.

T/F: 1 of the major problems usually involved in cross-border litigation is the question of which jurisdiction's law should apply and where the litigation should occur.

True

T/F: international law comes from several sources, the most important of which are bilateral and multilateral treaties between nations.

True

a dispute resolution mechanism that is an alternative to litigation. Its usually quicker, less expensive, and more private than litigation, and its usually binding on all parties. Its a process, agreed to by parties to a dispute in lieu of going to court, by which a neutral person or body makes a binding decision.

arbitration

A contract clause to establishing where a dispute will be settled is known as:

choice of forum clause

source of international law which consists of international rules derived from customs and usage over centuries. Ex: there is prohibition against genocide.

customary international law