International Contract Law Summary PDF

**Chapter 1: What is an international contract?** - **Def**: A contract is a voluntary, deliberate, legally binding, and enforceable agreement between two or more parties located in different countries. It must be clear, detailed, and legally applicable. - **Characteristics**:...

**Chapter 1: What is an international contract?** - **Def**: A contract is a voluntary, deliberate, legally binding, and enforceable agreement between two or more parties located in different countries. It must be clear, detailed, and legally applicable. - **Characteristics**: - Often written in multiple languages to ensure mutual understanding. - In case of disputes between two countries, English contracts are often preferred for their neutrality. - **Legal Systems**: - *Common Law*: Based on past court decisions (precedents). - *Civil Law*: Codified and based on written laws enacted by parliament. - **International Commercial Contracts**: A contract made for commercial transactions where each party operates in their professional capacity. **Chapter 2: Applicable law** - **Contractual freedom**: The parties can choose the national law applicable to their contract, allowing them to anticipate potential issues and consequences. - **Choice of law**: - **Explicit**: Directly stated in the contract, ex: *"This contract is governed by the laws of France."* - **Implicit**: Deduced from circumstances (contract language, currency used, arbitration location). - **Other options**: - ***Lex mercatoria*:** rules dev by merchants to gov international commercial transact°. - ***UNIDROIT Principles*:** Neutral and modern rules for international contracts. - **Conflict of laws**: In the absence of a choice, national or international conflict-of-law rules will apply. - **Frequently chosen applicable laws**: - English law or the law of New York State. - **Rome I (European Union):** If no law is chosen, the law of the country most closely linked to the contract applies. - **Mandatory rules**: Certain national laws always apply (ex: tax, antitrust, import/export regulations). **Chapter 3: Negotiation of international contracts** - **Pre-contractual phase**: - Long and complex, involving a series of partial agreements that are not yet legally binding. - **Good faith** is essential: Parties must negotiate sincerely, share essential information, and maintain confidentiality by signing the non-disclosure agreement (NDA) - **Letter of Intent (LOI) (lettre d'intention)**:=\>ex : qd on veut acheter, on demande à ê exclusif et réserver la marchandise pdt un certain tps (vinted) + on peut mettre des condit° (ex : si mon prêt est accorder, j'achète le produit). - Structures negotiations. - Generally non-binding but may include binding clauses (confidentiality, exclusivity). **Chapter 4: Drafting international contracts** - **General requirements**: - Contracts must be clear, coherent, and written. - They become the *"law of the parties,"* governing their relationship entirely. - **Language**: - **Bilingual contracts:** Each party has a version in their language. - **Single-language contracts** (often English): Minimize interpretation conflicts. - **Contract structure**: - - - **Chapter 5: International sales contracts** - **Def:** The seller transfers ownership of goods to the buyer for an agreed price. - **Key elements**: Parties, quantity/quality of goods, price, delivery, payment terms. Offer + acceptance=contract. - **CISG (Vienna Convention)**:=\> governs contracts for the sale of goods between parties whose businesses are located in different countries. It aims to provide a uniform legal framework for international trade to facilitate transactions and reduce disputes. - Uniform rules for international sales but can be excluded in the contract. - Provides predictability for rule interpretation in case of disputes. - **« Last shot » rule=\>**conclude by the latest counteroffer. - Non-mandatory nature Transact° internationals de vente de marchandises sont souvent réalisées en l'absence de contrat écrit. Ex : vendeur fournit un devis/acheteur répond avec un bon de commande. - **Incoterms**: Rules defined by the International Chamber of Commerce to standardize trade conditions. **Chapter 6: Distribution contracts** - **Objective**: A supplier delegates the distribution of their products to a distributor in a specific region. - **Key clauses**: - Accord Business plan, territorial exclusivity, minimum volume commitments. - **Key Obligations**: - Supplier: Ensure efficient and vigorous distribution. - Distributor: Meet minimum sales targets, adhere to exclusivity if applicable. - **E-commerce impact (ent qui fait du e-commerce: a pure player)**: Direct online sales can disrupt the distributor's business plan. - **Clause principale**: comment les marchandises doivent être distribuées/niv d'effort requis du distributeur pour promouvoir la vente des marchandises fournies sur 1 territoire donné. - Additional provisions in a distribution contract: - The support/territory - Intellectual property (trademarks) - Opt° to repurchase the goods that are still in the distribut° inventory at the date of expiry. **Chapter 7: Agency Contracts** - **Def**: A straightforward and widely used tool to organize the distribution of goods in a foreign country. One party (the Principal) appoints another (the Agent) as an independent intermediary to promote international transactions without assuming liability for them. - **Main reasons for appointing an Agent**: - The Principal cannot handle the business in a specific territory. - The Principal is unwilling to invest in the infrastructure required. - **Key differences between an Agent and a Distributor**: - - - - **Agent\'s obligations**: - Promote and negotiate sales strictly within the guidelines set by the Principal. - Inform the Principal about market conditions. - **Principal\'s obligations**: - Provide the Agent with necessary product information, catalogues, pricing, and updates. - Compensate the Agent for successful transactions. - **Types of Agency**: - **Exclusive Agency**: The Agent is the only party authorized to operate in a territory. - **Non-Exclusive Agency**: The Principal may appoint multiple agents or deal directly with customers. - **Important clauses**: - Confidentiality, non-competition, and commission rates. - Termination terms and post-termination commissions. **Chapter 8: Franchise Contracts** - **Def**: Allows the franchisor to provide its brand, operational model, and support to a franchisee, who runs a distribution business in exchange for fees. - **Purpose**: - Expand the franchisor's business while maintaining brand consistency. - Build a network of independently owned but brand-compliant businesses. - **Key obligations**: - **Franchisor**: - Provide brand access, training, and ongoing support. - Monitor and maintain brand standards. - **Franchisee**: - Follow the franchisor\'s operational model. - Maintain stock levels and brand reputation. - **Duration and flexibility**: - Typically long-term (10--20 years). - Allows for adjustments to evolving brand or market needs. - **Differences with Distribution Agreements**: - Franchisees use the franchisor\'s trademarks and business model, while Distributors operate under their own name. - Franchisees pay fees (entry and royalties); Distributors only pay for purchased goods. **Chapter 9: Joint Ventures (JV)** - **Def**: A Joint Venture Agreement is a contract where two or more parties pool resources to achieve a specific business objective. - **Types of JVs**: 1. **Contractual JV**: - No new legal entity is created. - Parties remain independent, sharing resources and responsibilities for the project. 2. **Incorporated JV**: - A new legal entity (usually a company) is established for the project. - May involve shareholding agreements. - **Key principles**: 1. **Personality (Intuitu Personae)**: Trust between parties is critical, and personal characteristics are essential to the agreement. 2. **Consensus**: Requires Unanimous agreement for major decisions. - **Common challenges**: 1. Decision deadlocks can occur when parties fail to reach agreements. 2. Deadlock resolution clauses may include deciding votes, third-party arbitration, or withdrawal options. - **Use cases**: 1. Contractual JVs are common in temporary projects like construction or energy sectors. 2. Incorporated JVs are used for more substantial, ongoing collaborations. **Chapter 10: Jurisdiction** - **Key Concern**: Determining which court will have the authority to resolve disputes arising from or related to international contracts. - **Default Rule**: If no jurisdiction clause is specified, the habitual residence or domicile of the defendant is typically used to determine jurisdiction, as it ensures fairness and respects the defendant's rights of defense. - **International Cooperation**: Efforts to harmonize cross-border judicial cooperation have been led by initiatives like: - **The Hague Conference on Private International Law (HCCH)**, which has had limited reach. - **The European Union\'s regulations**, which are more effective regionally. - **Jurisdiction Clauses**: - **Exclusive Jurisdiction**: Only the specified courts can hear the disputes, ex: *"The courts of the Netherlands shall have exclusive jurisdiction."* - **Non-Exclusive Jurisdiction**: Allows parties to bring disputes to specified courts or others, ex: *"This agreement is subject to the non-exclusive jurisdiction of the courts of England and Wales."* - **Asymmetric Clauses**: Grant jurisdictional choice to one party only, adding flexibility but also uncertainty. - **EU Regulation (No. 1215/2012)**: - **Principle:** The court of the defendant\'s domicile has jurisdiction unless exceptions apply. - **Special Jurisdiction**: - **For sales contracts:** Jurisdiction lies where goods were delivered or were supposed to be delivered. - **For services contracts:** Jurisdiction lies where services were provided or should have been provided. - **Recognition and Enforcement of Judgments**: - A judgment in one Member State is automatically recognized and enforceable in other Member States without special procedures. **Chapter 11: International Arbitration and ADR** - **ADR (Alternative Dispute Resolution)**: - Includes mediation, conciliation, and neutral evaluation. - Distinct from arbitration, which is more formal and closer to judicial processes. - **Arbitration**: - A private system chosen by parties to resolve disputes through a neutral arbitrator. - The arbitrator issues an award (monetary or non-monetary), which is typically final and binding. - **Types of Arbitration**: - **Ad Hoc Arbitration**: - Parties set their own rules for proceedings. - Maximum flexibility but requires cooperation. - **Institutional Arbitration**: - Parties submit to the rules of an arbitral institution (ex: ICC, LCIA). - Provides tested procedures and administrative support. - **Key Conventions**: - **New York Convention (1958)**: Ensures enforcement of arbitration agreements and foreign arbitral awards in 157 countries. - **Washington Convention (1965)**: Focuses on investment disputes between foreign investors and States. - **Advantages of Arbitration**: - - - - - - - **Disadvantages of Arbitration**: - - - - - **Arbitration Clauses**: - Should specify the number of arbitrators, language, venue, and applicable law. - Must meet requirements set by international conventions, such as being in written form and addressing resolvable disputes.