International Business Law Exam 1

CISG doesn't provide rules for

- Determining a contract's validity, or Whether a party has legal capacity, or - Whether fraud or misrepresentation has occurred. - Also, consideration is not mentioned and is not required under the CISG.

Cross-Border Trade Controls

- Export controls - Sanctions - Tariffs - Non-tariff barriers

Crimes Related to International Business

- Transnational organized crime - ex. illegal drug and firearms, human trafficking - Transnational business crime - ex. bribery corruption, tax evasion, business fraud

Writing Requirement: UCC vs CISG

- UCC requires contracts for the sale of goods $500 to be in writing BUT - CISG does not require contracts be in writing

Challenges of doing business in developing countries

- adverse government policies - rules often lack transparency - sometimes corruption - barriers have softened in recent years

Sales Excluded from the CISG

- consumer goods - auction - Stocks - Vessels, aircraft, ships - Preponderant part for labor or services - Death or personal injury - parties agree to opt out

Forms of investment

- foreign branch - foreign subsidiary - affilate - joint venture - local participation

CISG applies if the transaction

- involves a commercial sale of goods - is between parties whose places of business are in different countries - the places of business are in counries that have ratified the CISG - Place of Business Requirement - Choice of law provisions - negotiate for choice of law to govern contract

Common risks of international business

- payment or Credit Risk - Supplier Risk -Property or Marine Risk - Language and Cultural Barriers - cross-border trade controls - currency risk - political risk

Sources of International Business law

- treaties, conventions, statutes, acts - law merchant - accepted customs and practices of ancient and medieval merchants - UN convention on contracts for the international sale of goods

Factors influencing differences in International Business Law

1) National courts' interpretations and history 2) Differences in national legal systems ex. common-law vs, religious law 3) carrying levels of economic development 4) national attitudes toward economics

Jurisdiction type

1) Territorial 2) Subject matter 3) diversity of citizenship

Factors driving uniformity in international business law

1) accelerating forces of free trade 2) need for nations to cooperate ex. IP 3) Intergovernmental organizations ex. UN 4) International tribunas ex. ICJ 5) Roles of private industry organizations and trade associations

4 categories of licensing and protection of Intellectual property rights

1) patents 2) trademarks 3) copyrights 4) Trade secrets

Application to Contracts under Restatement (Second five factors (conflict of laws)

1) place of contracting 2) place where the contract was negotiated 3) place of contract performance 4) location of the subject matter 5) domicile, residence, nationality, place of incorporation, an place of business of the parties

Conflict of Laws - application to Torts under Restatement (second) factors

1) place where injury occurred 2) place where conduct causing injury occurred 3) domicile, residence, nationality, place of incorporation, and place of business of the parties 4) place where the relationship between the parties is centered

Jurisdiction must be based on one of the following 5 principles

1. Territoriality 2. Nationality 3. Protective Principle 4. Passive Personality 5. Universality

U.S Uniform Commercial Code

1951 - primary body of commercial law for domestic transactions in the U.S - Covers many areas of commercial law, including bank deposits, negotiable instruments and sales of goods

Abstention Doctrines

3 circumstances in which a U.S. court may refuse to exercise jurisdiction - comity, act of state, political question doctrine

Treaties of Friendship, commerce and navigation

Bilateral agreements that provide protection to foreign nationals doing business in a host country - usually allow establishment of foreign branches of subsidiaries, movement of capital and tech, right of travel

Newly industrialized countries

Brazil, Russia, India, China, Saudi Arabia, Thailand, Mexico

Customary International Law

Includes those commonly accepted rules of conduct that, through a consistent and long-standing practice, nations have followed out of a sense of binding obligations

CISG

Incorporates national differences in approach to contract law Ratified in US in 1988 covers 2/3 of all world trade

International Labour Organization

International labor standards for basic worker rights

Requirement for In Personam Jurisdiction

Minimum Contacts - based upon a notion of fairness

Foreign Direct Investment

Ownership and active control of ongoing business concerns including investment in manufacturing, mining, farming and other production facilities in a foreign (host) country - greatest market penetration and greatest risk

Sources of International Law

Statute of the international court of justice - judicial arm of the UN, sets out primary and secondary sources

The CISG governs:

The formation of an international contract and obligations of the parties under the contract.

Obtaining Jurisdiction by Service of Process

U.S courts can only obtain jurisdiction by proper service of process Service of pRocess in international cases is governed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Criminal Matters

The ______ is the primary body for commercial law covering domestic transactions in the US.

UCC

treaty

a binding agreement between two or more nations; treaties are bilateral or multilateral

convention

a legally binding multilateral treaty of matters of common concern. Ex: prisoners of war, lost baggage reimbursement

Effects of illegality of CISG

agreements that violate the laws of a nation are void and enforceable

Universality

anyone, anywhere for universally heinous crime

UN convention Against Corruption

asks countries to do things like criminalize bribery and establish corporate criminal liability

Law of Sales

body of law which governs contracts for the present or future sale of goods

differences between modern civil law and common law countries

civil law judges do not create binding precedent civil law judges take a more inquisitorial role in criminal cases

Choice of Law Clauses

clauses in which parties stipulate the country or jurisdiction whose law will apply in interpreting the contract or enforcing its terms in some cases a court may not enforce where enforcement would be unreasonable and unjust or invalid for fraud and overreaching

nationality

comply with law of country of nationality no matter where in the world

patent

conferring right or title for set period. Ex: microwave oven invention

International Licensing Agreements

contracts by which the holder of intellectual property will grant certain rights in that property to another party in return for consideration

Private international law

deals with the rights and responsibilities of private individuals or corporations operating in an international environment. Ex: family law, adoptions, wills and estates, business transactions

Secondary sources

decisions of international courts and tribunals, scholarly writing of respected jurists and legal scholars

Islamic Sharia law

derived from the Koran ( the main religious book of islamic religion) and the sunna (written record of teachings and action of the prophet mohammad)

Forum Non Conveniens

discretionary power of a court to hear a case

Differences between domestic and international law

domestic - dictated by legislative body, courts, executive branch to enforce law International - rules countries agree to follow, no global authority for enforcement, no international sheriffs or marshals (but can sanction or even war)

Reservation

exception to a treaty

Copyrights

exclusive right to print, publish, perform, film. Ex: your textbook

Confiscation

expropriation without payment or compensation

Diversity of citizenship Jurisdiction

federal courts have jurisdiction over matters between citizens of different states

multinational corporations

firms with significant foreign investments, assets, or operations move technology, factories, and capital with most favorable economic conditions

ratification

formal expression of a nations consent

Arbitration

formalized process to settle the dispute between parties. binding award that can be enforced by courts of law in different countries - faster than court system and less expensive that court system

International Organizations and IP

foster cooperation and resolve disputes EX: World Intellectual Property Organization

Venue

geographical location of a court of competent jurisdiction

Public international law

governs the conduct of nations with other nations or in their relationship with individuals; norms regarded as binding on all members of the international community. ex: resolving boundary disputes or how nations treat foreign citizens

Primary Sources

international treaties and conventions, international custom, general principles of law recognized by civilized nations

subject matter jurisdiction

jurisdiction over certain types of cases like torts or contracts

Territoriality

jurisdiction within territory

Which laws did U.S. laws original derive from

law merchant and english sales law

Intellectual Property Rights

legal rights which result from intellectual activity in the industrial, scientific, literary, and artistic fields

The U.S. Alien Tort Statute

limits International Customary Law _ enacted in 1789, gives federal courts jurisdiction over civil actions for damages brought by non-U.s. citizens for injuries occurring overseas. Used now for human rights cases brought against U.S. multinational companies

protocol

modifies or adds to a treaty of convention

signatories

nations adopting treaty

Certificate of origin

one of the most important legal documents used, Certifies and attests to the country of origin of goods being shipped

Protective Principle

over noncitizen abroad to protect national security, government functions

Passive Personality

over noncitizen outside of territory when crime committed against own citizen

Franchising positives and negatives

positives: franchisee provides capital investment, entrepreneurial commitment, on-site management Negatives: filling of extensive disclosure statements, restrictions on $ able to remove from country, restrictions on importing supplies

Territorial Jurisdiction

power of a court to hear and decide a case is said to be a competent court

UN

ratified in 1945 193 member states from around the world

Conflict of Laws

refers to rules by which courts determine which jurisdiction's law applies to a particular case - absent a choice of law clause, generally the court will apply the law of the state, country or jurisdiction that has the closest relationship to the transaction

International court of justice

seat in the hague- is the principal judicial organ of the UN - 15 judges - cases brought by nations against other nations - no individuals - jurisdiction is voluntary - judgement is public - no appeal

Trade secrets

secret device or technique. Ex: COCA-COLA

self executing and non self executing treaties

self executing - A treaty that creates rights automatically, enforceable in the courts of that country, without further legislative action. non-self executing - A treaty that creates rights but require additional legislative act before being enforced in courts

Least Developed Countries

sub-Saharan Afric, Haiti, Bangladesh, Cambodia, Afghanistan

trademark

symbol, word, or words. Ex: Just Do It

Sovereign Immunity

the coterie stating tat the courts of one country cannot hear cases brought against the govern,my of another country and that courts cannot involve themselves in the internal affairs of another country

Trade

the import or export of goods and services across national borders

jus gentium

the law of nations - the body of rules that has been accepted as such by the international community

Unification of Sales Law

the process of making national laws more uniform - the U.N. thru UNCITRAL led to the adoption of CISG - became the basis for widely accepted body of international sales law adopted by more than 80 nations

Sovereignty

the supreme and absolute power that governs an independent state or nation

expropriation

the taking by a government of privately owned assets with some compensation

Sales contract

the uniform method of conducting commercial transactions - set out parties rights and duties - terms and conditions - quantity and price - choice of law and forum

Infringement

the violation of IP rights of another - often referred to as piracy or counterfeiting

The Convention on Contracts for the International Sale of Goods (CISG) generally applies:

to contracts for the international sale of goods (excluding consumer goods)

What are the three methods pf international business

trade, Licensing of Intellectual Property, and Foreign Direct Investment

Mediation

voluntary, non-binding, conciliation process Intervention in a process or dispute which helps two parties amicably reach a solution.