Week 1 - Introduction to Commercial Contracts PDF

Introduction Week 1 LW5303 Commercial Contracts Professor Julien Chaisse School of Law, City University of Hong Kong Brief presentation 9/2/2024 (c) Prof. Chaisse @CityU 2 Outline 1 What is “commercial contracts” about? 2 Intern...

Introduction Week 1 LW5303 Commercial Contracts Professor Julien Chaisse School of Law, City University of Hong Kong Brief presentation 9/2/2024 (c) Prof. Chaisse @CityU 2 Outline 1 What is “commercial contracts” about? 2 International and Domestic Contracts: Main Differences one jurisdication: HK: import and export given tertorries mainly 3 The Basic Legal Issues 4 Course Key Features and Examination 9/2/2024 (c) Prof. Chaisse @CityU 3 Contracts Contracts are one of Whether you’re buying a cell the most common phone, looking for landscaping legal documents in services or starting a business, you’re going to encounter a both our personal and contract. business lives. legislation? Government / counsil / palamount treaties A contract is a legally enforcebility: enforceable agreement if not, then between parties to do comitteement something (or negative to not do something). consequencies 9/2/2024 (c) Prof. Chaisse @CityU 4  Contracts and Contract law reason of oral contract: efficiency, knowing of the person well Parties have to be competent to enter Any legal contract must contain certain into this agreement and they have to elements. have entered into it voluntarily. First, it must contain an offer. The offer is what someone is going to do, such as lease you a tractor, sell you a guitar, paint your house, or simply pay you. These agreements can be oral, but naturally Second, the offer must be accepted. Acceptance means that you agree to their enforceability increases if they are what is offered, without any changes. (If you make changes to the offer, it is written. Questional typically considered a “counter-offer.” which must itself be accepted) intent, need to check the validity Third, it must represent the intent of both parties to enter into a legally binding agreement. In other words, both parties have to be aware that the Too young agreement could be enforced by law. (age) If the agreement is oral, it is still enforceable, psychological but first you have to prove that it existed, Finally, it must contain consideration. “Consideration” means something of instable value, which is usually money, bargained for in exchange for the product or which can sometimes be hard to do. service that is being offered. 9/2/2024 (c) Prof. Chaisse @CityU 5 World of Contracts econmic in nature, sell of oil / petroleum Petroleum contracts …. Commercial contracts Contracts State production sharing contracts agreements Concession 特許權合約A concession agreement contracts is a contract that gives a company the right to operate a specific business within a government's jurisdiction or on another firm's 9/2/2024 (c) Prof. Chaisse @CityU property, subject to particular terms. 6  most frequent What are “commercial contracts”? The “Big 4” what happen is the Purchase and sale agreements are one of the most basic kinds of commercial contracts. good is not available? These contracts document one party’s agreement to buy goods from the other party. Purchase and Sale Agreements In this type of commercial contract, it is important to specify the quantities of goods that are needed, the price to be paid, the delivery dates, what happens if the goods are not available, and what happens if other issues arise. In a services agreement, someone agrees to provide services for someone else. For example, a cleaning service could agree to come in once a week to clean a business’s office. Services Agreements The agreement should specify which services are to be provided and who will provide them. It should account for any insurance requirements, liability for damage caused by the services provider, and more. In some lines of work, the agreement may need a confidentiality or conflict of interest section. Distribution agreements cover how goods will get from the production facility to the ultimate buyers or users. Some companies specialize in distribution, which may include transportation, logistics, and even marketing. Distribution Agreements A good distribution agreement will specify which responsibilities belong to the distributor and which the production company will retain. Production agreements arise when one company needs a specific part or good made, and so it contracts with another company that will produce the part. Production Agreements Like purchase and sale agreements, production agreements should make clear how much of the part is needed and what to do if something goes wrong. 9/2/2024 (c) Prof. Chaisse @CityU 7 Focus on Distribution Agreements Exclusive distribution agreements. They give the distributor the exclusive right to sell the product in the territory covered by the distribution agreement. The supplier will be prevented from selling the goods in the relevant area either on his own account or through agents or other distributors. Sole distribution agreements. Where the distributor will be the only distributor with whom the supplier will deal in a particular territory. The supplier will not be prevented from selling its products in the territory on its own account. In return, the distributor will normally agree to regard the supplier as his sole supplier of the type of goods which are the subject of the agreement. Selective distribution agreements. They limit the number of distributors the supplier will appoint in a particular territory. Non-exclusive distributorship agreements. They give the distributor no exclusive rights to the supplier's products, so the supplier can appoint other distributors in the same territory. 9/2/2024 (c) Prof. Chaisse @CityU 8 What are “commercial contracts”? Others Typically a construction contract. Turnkey contract Under turnkey contract a contractor is employed to plan, design and build a project or an infrastructure and do any other necessary development to make it functional or “ready to use”. All this at an agreed price and by a fixed date. Transfer of Used when a company (Licensor) assigns or licenses to another (Licensee) registered industrial and intellectual property rights (patents, utility models, trademarks, copyright technology etc.). contract a government authority or licence conferring a right or title for a set period, especially the sole right to Also includes technical assistance and know-how. exclude others from making, using, or selling an invention. 9/2/2024 (c) Prof. Chaisse @CityU 9 In a nutshell *predictability With the increasing globalization of Commercial contracts Business/Commerce markets, cross-border are contracts which contracts are focus on commercial is key to many becoming a common economic growth. practice for most matters. traders (as well as for the lawyers assisting them). Contracts are essential to commercial world Contracts are widely used in stability/expansion. commercial law. Common examples include commercial Contracts form the legal contracts for the sale of services and goods foundation for transactions (both wholesale and retail), construction across the world. contracts, contracts of carriage, software licenses, employment contracts, insurance policies, sale or lease of land, and various other uses. 9/2/2024 (c) Prof. Chaisse @CityU 10 Scope of this Course Although commercial contracts are important, But also for lawyers who do not have specific international contracts are still considered to be a difficult and mysterious subject. experience in cross-border transactions. Many lawyers may find it difficult to Especially true for business deal with a number of rather sophisticated issues which normally do people, to whom the basic not arise when dealing with domestic notions of contract law, and matters. particularly those Examples are the choice of the applicable law, the choice of jurisdiction concerning cross-border and/or international arbitration, the use contracts, are unknown. of more “international” drafting techniques, etc. 9/2/2024 (c) Prof. Chaisse @CityU 11 Objective of this course The main purpose of this course is to give a comprehensive view of the principles that govern cross-border contracts. So that you can situate the various issues in their right context and take the most appropriate decisions (whether as lawyer or business man/woman). This course will describe the basic principles of the law of international contracts So that non-specialists (traders or domestic lawyers without expertise in international contract law) can gather a better understanding of the problems they are facing in such a context. 9/2/2024 (c) Prof. Chaisse @CityU 12 Objective of this course In fact, one of the main difficulties Without the knowledge of a number for those who deal with of basic principles of international international contracts, without trade law, it is very difficult to having specific legal expertise in this understand what is going on when field, is the lack of information certain legal issues are raised and, about the rules and principles that consequently, to decide which govern cross-border contracts. actions should be taken. This is particularly true for traders, who can avoid a number of pitfalls if A few examples can be helpful they have learned to understand some major issues in international to support the above view… contract law. 9/2/2024 (c) Prof. Chaisse @CityU 13 Example 1: Reacting to a claim brought before a foreign court Mr Kwok, a HK manufacturer of painted tiles, is notified by a Polish customer of a claim before the courts of Warsaw for defectiveness of the goods and pretended damages suffered by the purchaser. The exporter contacts a lawyer from the buyer’s country who advises him to defend himself before the court in the customer’s country. In the course of the proceedings difficulties arise… The seller knows that the alleged defects are not his responsibility, but language and communication problems make it difficult to prove his case before the court. When the court decides against the seller and awards damages to the purchaser, Mr Kwok discovers that he could have objected to the jurisdiction of the Warsaw court and that he lost that possibility by defending himself before this court without raising the exception. 9/2/2024 (c) Prof. Chaisse @CityU 14 Comments on Example 1 It is rather common that a local lawyer — not specialized in international trade law — will not consider raising the question of a possible lack of jurisdiction of his country’s courts. If Mr Kwok had known that under the EU jurisdiction rules (Regulation No. 1215/2012), one must, in principle, claim before the defendant’s courts and that exceptions to this principle are limited, the HK manufacturer could have insisted on this point with the local lawyer, or could have requested the advice of an expert. This example shows how a better understanding of the basic principles of “jurisdiction in the EU” would have given a HK business person (exporter) a chance to avoid a wrong decision. Of course, the businessman will not be in a condition to verify (without the advice of a lawyer) if the jurisdiction of the foreign court can actually be avoided in the specific case, and whether this would be the most appropriate solution. But if he knows that this is a critical issue, he will be aware that the strategy proposed by the local lawyer should be verified by an expert. defendant's count -> HK court, maybe he can win 9/2/2024 (c) Prof. Chaisse @CityU 15 Example 2: Excluding the indemnity due to a foreign agent distribution agreement 賠款 security or protection against a loss or other financial burden A HK principal made clear, before appointing an agent in Germany, that he did not want to pay an indemnity when the contract terminated. The German agent convinced the HK principal to put a clause in the contract stating that German law would govern the relationship At the same time, they agreed in the contract that no compensation would be due in case of termination. ie. the parties signed the contract on the assumption that no goodwill compensation would be due at contract termination. When the case was brought to arbitration, the arbitrator decided that, since German law was applicable, the goodwill compensation was due. requirement in German Why? Because under German law the termination indemnity cannot be excluded contractually. ICC arbitration case No. 8161/95 (ICC International Court of Arbitration Bulletin Vol. 12 No. 1). 9/2/2024 (c) Prof. Chaisse @CityU 16 Comments on Example 2 If the HK principal had been aware that one cannot exclude the application of mandatory rules of the law that governs the contract, he would have been better off In fact, the clause excluding the right to indemnity could only be ineffective invalid, just use legistration HK principal could have looked for a different solution or, if this were impossible, he could have considered the indemnity in the calculation of his costs when negotiating the contract. This second example shows how important it is for those who negotiate cross-border deals to understand the basic principles of the law of commercial contracts. Of course, this knowledge will not be sufficient when looking for an alternative solution, for which the assistance of a specialized lawyer will be required. But here too, the businessman will be in a far better position if he has some general ideas about the possible alternatives such as the choice of another law or a change of the economic balance (for instance by reducing the commission), although he will need to verify this with the assistance of an expert. 9/2/2024 (c) Prof. Chaisse @CityU 17 Takeaways It is essential, especially for the This course deals with the legal aspects lawyer/non-lawyer who negotiates of negotiating and drafting international international contracts, to understand, commercial contracts and related even if only in general terms, the basic matters (such as jurisdiction and legal principles which apply in such a arbitration). context. It does not cover other aspects of the law of international trade, such as the commercial This will allow him/her to avoid clearly wrong relations between states (GATT, WTO, anti- decisions and will help him identify dubious dumping, etc.), rules regarding transport of goods, situations where he will need to seek international financing, foreign investments, etc. additional advice. LW6167E Current Issues in WTO Law 9/2/2024 (c) Prof. Chaisse @CityU 18 Outline 1 What is “commercial contracts” about? 2 International and Domestic Contracts: Main Differences 3 The Basic Legal Issues 4 Course Key Features and Examination 9/2/2024 (c) Prof. Chaisse @CityU 19 Domestic v. International Contracts *may depends on if the court in that country usually is favable; In the case of contracts between Anything else is “international companies from the same country contracts’ (domestic contracts) Common language and country but different rules Rules governing the contract are those E.g. Hong Kong contract law (principles, dispute resolution, enforcement) / PRC (principles, dispute resolution, enforcement) contained in the national law of the parties and Common language but different countries (with former conlony) E.g. English (principles, dispute resolution, enforcement) / US (principles, dispute resolution, enforcement) Courts having jurisdiction in case of a Common language, no former colony dispute will be those of that country. French (principles, dispute resolution, enforcement) / Swiss (principles, dispute resolution, enforcement) 9/2/2024 (c) Prof. Chaisse @CityU 20 International Commercial Contracts Which law will apply to the contract? The domestic law of one of the parties? The law of another country? International conventions? Trade usages? Transnational When the contract rules of law not belonging to Economic is “international”, a domestic legal system? globalization had the situation led to some legal becomes much complications. more complicated. Moreover, in case of a dispute, which court will have jurisdiction? The courts of the seat of the claimant? Or those of the defendant? Or an arbitral tribunal? 9/2/2024 (c) Prof. Chaisse @CityU 21 International Commercial Contracts While in domestic trade there is a These and other problems, which do clear legal framework applicable to the not arise (or are less critical) in a contract, in international trade the domestic context, are typical of the rules to be applied will be different issues which must be dealt with in from case to case, according to the cross-border contracts. laws that have a connection to the specific case. Thus, the absence of a uniform and foreseeable legal framework makes the negotiation of international contracts considerably more complicated: when drafting a cross-border contract, a variety of alternatives must be taken into account which need not be considered within a purely domestic framework. 9/2/2024 (c) Prof. Chaisse @CityU 22  highly fragiminted and no uniforminity New York Convention International Commercial Contracts = some kind of uniforminity of commercial contract In recent times cross-border This is why the law of Of course, the problem of transactions have become the international contracts has dealing with these issues is not day-today business for a become more important, both new. growing number of companies. for traders and their lawyers. This is particularly the case in/with European Union (soon with/in ASEAN), International trade has existed for where goods and services circulate freely centuries, and traders have always within a common market while the rules been obliged to deal with them. governing contracts are still contained in domestic laws that differ from country to Especially for HK-based country. lawyers because HK is platform for trade with In the past the problems had to be multiple jurisdictions faced by a relatively small group of HKSAR has FTAs with ASEAN, EFTA, (China, EU, ASEAN…) specialized undertakings involved in Chile, NZ… perhaps soon EU international trade, who had developed specific skills in the field. 9/2/2024 (c) Prof. Chaisse @CityU 23 Outline 1 What is “commercial contracts” about? 2 International and Domestic Contracts: Main Differences 3 The Basic Legal Issues 4 Course Key Features and Examination 9/2/2024 (c) Prof. Chaisse @CityU 24 The Issues of Commercial Contracts “It’s not that I’m so smart, it’s just that I stay with problems longer.” A. Einstein in Princeton, N.J, 1944. The Issues of Commercial Contracts While traders of the same country All of this gives rise to can make reference to the rules of an unsatisfactory their domestic law, known by both situation, which the The two main issues arising with of them (or at least by their respect to cross-border contracts parties try to lawyers), and to a court system for overcome through a are those regarding the applicable resolving possible disputes they are number of devices law and jurisdiction. familiar with, parties from different countries cannot count that characterize the upon a common legal framework. law of international contracts. There is at present no law of cross- border contracts placed above the These arise due to the absence domestic legal systems, to be of an adequate legal applied when a contract is framework for cross-border international, nor is there a transactions. common judicial system for international trade as an alternative to the domestic courts. 9/2/2024 (c) Prof. Chaisse @CityU 26 The Issue of Applicable law In principle, international contracts are governed by the domestic rules (national law) of one of the countries involved. The possibility of applying a-national rules instead of domestic legal systems will be examined later. choose a system of law (practice? contienent?) Normally, the law of one of the two parties. But also other legal systems may come into consideration. i.e. when the contract is to be performed in a third country or where the parties have chosen the law of a third country as the applicable law. usually a more neutral jurisdiction (i.e. singapore, swiss) 9/2/2024 (c) Prof. Chaisse @CityU 27 The Issue of Applicable law Firstly, domestic rules (national law) of one of the countries involved normally reflect a “local” view of the relevant legal issues which does not necessarily correspond with the way the same problem is seen in the context of international commerce. Such rules — normally Secondly, application of a national law — which will almost intended to govern domestic always be the law of the country of one of the parties — tends relations — will often be inappropriate for an to create an unbalanced situation by giving one party the international transaction advantage of applying its own rules. Thirdly, if the parties have not made an express choice of the applicable law in their contract, it may be difficult to foresee which law will actually apply, since the rules that determine which law is the Third party: proper law of the contract rarely provide clear and definite answers. The court 9/2/2024 (c) Prof. Chaisse @CityU 28 Jurisdiction In case of a dispute, the parties must The courts will apply rules of procedure in principle (unless they choose peculiar to their own country, which will Countries that did not international arbitration) have often be surprising to a foreign party; sign New York recourse to the domestic courts of Convention one of the countries involved and, if The judges will all be nationals of the the judgment must be enforced in country of the court, and the only another country, they must obtain its admissible language will be that of this recognition in that country. country. All of this makes litigation And if a party is able to bring the more difficult and onerous. claim before its own courts, it will thereafter need to enforce the Particularly for the party judgment before the courts of the that needs to appear other party’s country, which implies before a foreign court. a double proceeding. 9/2/2024 (c) Prof. Chaisse @CityU 29 The (many further) Issues of Commercial Contracts Standard Clauses: Requirement of Written Form for Using and agreeing on standard Partial Nullity: Modifications: contractual clauses for common Clauses ensure that if one part of the Many contracts require any issues such as roles, payment, contract is deemed invalid, the rest modifications to be in writing to be delivery, and termination is remains effective. valid. necessary for clarity and consistency. Penalty/Liquidated Damages: Confidentiality: Non-Waiver Clauses: Clauses stipulate a pre-determined Ensuring confidentiality agreements These clauses state that a party's sum payable upon breach of are in place to protect sensitive failure to enforce any contract term contract, serving either to pre- information exchanged during does not constitute a waiver of their estimate damages or to enforce negotiations and contract execution right to enforce it later. performance. Force Majeure: 不可抗⼒ Hardship: Clauses Excluding Liability for These clauses relieve a party from This concept addresses situations Consequential Damages: performing its contractual where performance becomes These clauses limit liability for obligations when unexpected events excessively onerous due to indirect losses such as lost profits or beyond their control prevent unforeseen events, substantially business opportunities performance. altering the contract's equilibrium. not the same 9/2/2024 (c) Prof. Chaisse @CityU 30 Lessons 1/2 The above problems would not exist if there Although businesspeople at times were a special legal system for wrongly assume that such a supra- international contracts with uniform rules national legal system exists (because automatically applicable to all cross- border contracts and supra-national courts they cannot believe that such a logical having jurisdiction over cross-border solution has not yet been put in disputes and whose judgments would be place!), this is unfortunately not the effective all over the world. case. 9/2/2024 (c) Prof. Chaisse @CityU 31 Lessons 2/2 As the course will explain, some In any case, these efforts are not important attempts have been sufficient! made to overcome these problems. For example (1) by creating uniform laws on The fact remains that the present legal certain international contracts, framework, based on a variety of diverging domestic systems of law, does not offer an adequate environment for international contracts (2) by facilitating the recognition and enforcement of foreign judgments and Consequently present legal framework obliges traders (and their legal advisors) to look for solutions that can nevertheless provide a (3) especially by favouring in various ways reasonable degree of certainty and international arbitration. predictability. 9/2/2024 (c) Prof. Chaisse @CityU 32 Outline 1 What is “commercial contracts” about? 2 International and Domestic Contracts: Main Differences 3 The Basic Legal Issues 4 Course Key Features and Examination 9/2/2024 (c) Prof. Chaisse @CityU 33 Students’ Assessment 9/2/2024 (c) Prof. Chaisse @CityU 34 Students’ Assessment 9/2/2024 (c) Prof. Chaisse @CityU 35 Course structure Part 1: Part 2: Part 3: The Foundations of Resolution of Commercial Drafting and Negotiating Commercial Contract Contract Dispute Commercial Contracts Week 2: The Contractual Week 6: The Methods of Week 10: Negotiation of an Context Solving Disputes International Contract Week 3: The Applicable Law Week 7: Practice Quiz + Week 11: Drafting the Issue Reading Week Contract Week 4: The Applicable Law Week 8: Litigation before Week 12: Concluding the Principles Ordinary (National) Courts Contract Week 5: Choosing the Week 9: International Week 13: The Future of Applicable Law: Arbitration (with James Practical Options International Contracts Losari) 9/2/2024 (c) Prof. Chaisse @CityU 36 Examples In preparing this course, I have tried to make it as easy as possible to approach the rather complex issues that arise in the context of international contracts. One of the most useful means of clarifying complicated issues is to start with a practical illustration. Examples based on situations that currently arise in international trade make it possible, on the one hand, to show the real importance of the legal issues being considered, and on the other to better understand them. Examples are easier to read and to remember if they refer to a specific situation. Slides with Examples are always combined with Slides Lessons/Comments The reference to specific countries can also be important where the solution of the problem depends on the legal situation existing in these countries. For instance, it may be relevant that both countries have ratified an international convention that is to be applied in a particular case, or that one of the countries has special rules that have consequences in that case. Of course, there are several examples where one of the parties is not behaving correctly, a situation rather common in international (and domestic) trade. These are cases where a dispute will arise and where the legal issues will become more important. Don’t stigmatize any country! 9/2/2024 (c) Prof. Chaisse @CityU 37  Textbooks Companions 9/2/2024 (c) Prof. Chaisse @CityU 38 Case-law (caution note) http://www.cisg.law.pace.edu/ http://www.uncitral.org/clout/index.jspx http://www.unilex.info/ Albert H. Kritzer CISG Database (the Case Law on UNCITRAL Texts UNILEX on CISG & Unidroit “Pace CISG Database”) http://www.uncitral.org/clout/index.jspx (CLOUT): Principles : Largest collection of CISG case law, with http://www.uncitral.org/clout/index.jspx over 3000 decisions and awards, many Official case law system created by Database of case law on CISG and with full-text translated into English, and UNCITRAL to facilitate uniform the Unidroit Principles. a variety of other resources. interpretation. http://www.unilex.info/ http://www.cisg.law.pace.edu/ http://www.uncitral.org/clout/index.jspx http://www.trans-lex.org/ https://uncitral.un.org/ http://www.cisg.law.pace.edu/ Trans-Lex Principles : CISG Digest : National case law databases: http://www.trans-lex.org/ https://uncitral.un.org/ Resources aimed to codify the lex In light of the large number of CISG- Number of databases focusing on CISG mercatoria and supporting its related cases, UNCITRAL has created the jurisprudence in a single jurisdiction identification of lex mercatoria UNCITRAL Digest of Case Law on the have been established, the Pace CISG principles with arbitral awards, court United Nations Convention on Contracts Database provides links to many of decisions, academic commentary, and for the International Sale of Goods (the these databases. more. “CISG Digest”), which provides article- http://www.cisg.law.pace.edu/ http://www.trans-lex.org/ by-article synopses of CISG case law. https://uncitral.un.org/ 9/2/2024 (c) Prof. Chaisse @CityU 39 Readings Each week : You are candidates for LLM / JD Lecture PPT + your You must read a lot notes 1 textbook chapter Research by yourself 2 additional articles (c) Prof. Chaisse @CityU 9/2/2024 40 Readings I’d advise you to always start with PPT (after class read your own notes) How to organize your Take a different perspective/explanation on same topic > textbook / readings? companions Delve into the topic details by reading Article 1 and, then, Article 2 9/2/2024 (c) Prof. Chaisse @CityU 41  Examination 9/2/2024 (c) Prof. Chaisse @CityU 42 Continuous assessment “A person who never made a mistake never tried anything new.” Albert Einstein (1879–1955). Past Exam examples The People’s Republic of China (PRC) Arbitration Law stipulates that arbitral award is final and binding. What if in an arbitration agreement the parties agreed to arbitration and further agreed that after an arbitral award is rendered either party may sue for the same dispute in litigation? The Court of Pudong New District, Shanghai held that, in such arbitration agreement such “post-arbitration litigation” clause is invalid, however this would not prejudice the validity of the arbitration clause therein. On 4 May 2015, a French company BY.O and a PRC company Yushang Group Ltd. (“Yushang”) signed a Merger & Acquisitions Financial Advisory Service Agreement (“Agreement”). Article 6.2 of the Agreement is the dispute resolution clause, which provides: “6.2 Any dispute or controversy arising from or related to this Agreement… shall be first resolved through arbitration in Singapore International Arbitration Centre (“SIAC”). If the parties fail to reach a consensus on the arbitration’s result, either party may submit the dispute to a commercial court at Party A’s domicile which is with competent jurisdiction for settlement of the dispute by litigation”. (Party A is referred to Yushang, the PRC company.) (Emphasis added) 1. What are the reasons that led Court of Pudong New District, Shanghai to decide that the arbitration agreement part is valid? 2. Domestic legal frameworks have, at least overwhelmingly if not universally, been built on the idea that arbitration is a binding process. There are grounds for setting aside an award or resisting its enforcement. How does this affect your understanding of the Court of Pudong New District, Shanghai decision? 3. Do you think the parties should be bound to awards they did not intend to be bound by? 4. What argument can be made to argue that the consent to litigation should be overridden? 9/2/2024 (c) Prof. Chaisse @CityU 44 Past Exam examples Please explain which rules govern an international commercial contract in each of the following alternative situations: 1. the parties have agreed that the contract is subject to a specific national law, 2. the parties have agreed that the contract is subject to both Lex Mercatoria and UNIDROIT Principles, 3. the parties have agreed that the contract is subject to the Lex Mercatoria (only), 4. and the parties have not agreed on anything in respect of the governing law. 9/2/2024 (c) Prof. Chaisse @CityU 45 Past Exam examples Discuss TWO of the following statements: a) A ‘mere’ increase in costs will never operate to frustrate a contract. b) It is never possible to revoke a unilateral offer once the offeree has begun performance of the stipulated act. c) Damages for breach of contract are always assessed by reference to the ‘cost of cure’ rather than any ‘diminution in value’ caused by the breach of contract. d) Specific performance is not available when damages would be an adequate remedy. 9/2/2024 (c) Prof. Chaisse @CityU 46 Keep in touch Group or individual meetings on appointment by email (only) Faculty webpage https://www.cityu.edu.hk/slw/about -school/our-people/professor- chaisse-julien Title: LinkedIn - Description: image of LinkedIn icon Title: Twitter - Description: image of Twitter icon 9/2/2024 (c) Prof. Chaisse @CityU 47