DOMANDE BCL
1) What is an international contract?
Generally, a contract is an agreement between two parties.
For italian legislation, a contract is an agreement among parties which is aimed at
– Setting up
– Regulating
– Establishing
A relationship among them.
But this definition can vary from country to country, this introduces the theme of complexity, which defines
international contracts.
To be defined “international” a contract must have some characteristics:
– The parties must be international (are from different countries)
meaning that if they are people they must have different nationality; whereas it’s more difficult to
define if they are companies. This leads to the first element of complexity in international contract.
– The subject matter of the contract must be international (two Italians who want to build a palace in
another country)
– The place where the contract is entered into (2 Italians have signed a contract in Japan) or where it
has to be performed (two Italians have decided to sign a contract in London)
– The language
– The currency (if a German decides to pay in US dollars)
To conclude:
We can say that there are many features that can make a contract “international” and all this contributes
to create even more complexity.
Problems related to international contracts:
– Issue of jurisdiction: who has to solve the dispute? A judge of one country, a judge of the other
country (of the second party of the contract) on a third judge for example
– Issue of law applicable: which law should be applied to the contract? At this point, conflict of laws
usually happens, meaning the clash between the two legal system of the two parties of the
contract for example (the two legal system claim to be applicable to the same contract).
Generally, parties can freely decide which legal system to apply to the contract. They are free to
choose only if the legal system allows them to do so. Moreover, one can opt out from a specific
legal system with some restriction that aim to protect the local interest (for example they cannot
always choose the legal system they prefer, otherwise everyone would choose a legal system
without taxation for example). When no law is chosen by the parties, we should look at
international agreements between the countries (of the parties).
So, to sum up
A contract is international when it is potentially linked at least at 2 legal systems. The nature of this link has
to be related with the nationality of the parties, the subject matter, currency, language, place of signature
and place of performance. When a contract is international, there are some issue of complexity (issue of
jurisdiction, issue of law applicable (conflict of laws)).
2) Which are International Trade Law’s sources?
Party autonomy, National law (state laws), International conventions, International organization, Trade
usage, General principles, Lex mercatoria
Party autonomy: the freedom of the parties to decide
– Whether to enter into a contract or not
– What kind of contract to enter into
– Determine the contents of the contract
➔ Concept of freedom of contract.
➔ Limitation on competition and non-discriminatory laws
(Default rules: apply in absence of a specific rule applied by the party autonomy
Mandatory rules: binding for public. Even in presence of complete contract still there is a role for legal
system (protection of local interest))
Nowadays party autonomy has 2 roles
– Parties may be willing to provide for complete contracts
– It may be used for standardization of contract
National laws (interaction between the contract and the law)
Obv, the role of the state is to provide rules, administer justice and govern the territory. One important
aspect is the regulatory competition: state compete with each other in providing rules, the most efficient
for operators and for doing business ex. Delaware effect (low taxation: the 92–5% of the companies are
there). It can work as positive competition or as a race to the bottom
Limits of national laws: it’s a territorial law, in case of international contract it can generate conflict of laws.
Private international law: a procedural law applied by national judges in order to solve the conflict of laws.
Procedural law means: law which applies to the procedure of solving disputes. We have to assess who is
competent to do that, it can be a judge or an administrative authority.
International conventions: agreement between two or more countries with the purpose of
– Harmonizing the laws (creating common rules applicable to cross-border transaction ex. VC)
– Enhancing cooperation between states (Double Taxation treaties, Bilateral Investment Treaty)
– Creating complex organization: international organizations
International organizations: organization based on international treaties.
An organization has its own institution and the power to make laws. They work as law maker and law
facilitator ex. UE, UN, WTO
Trade usage: repeated pattern of behavior in time (objective element) so that the parties believe that this
patterns is legal because it has been repeated for so long time (subjective element). The law prevails (soft
laws). In Italy codified by chamber of commerce (other ex. incoterms)
General principles: not real laws. Pacta sunt servanda: agreement promises have to be kept, neminem
ledere: if u cause damage to someone, you’ll pay (recover the party damaged), nemo venire contrafactum
potest: nobody can act against its own behavior
Lex mercatoria: (trade usage, general p. and past cases) self-Regulation of trade activities, independent
from local legislation. It is label in the context of litigation between states and private entities. (arbitration).
3) Talk about Brussel Convention
BC took place in 1968 between 10 States(?) of EU, dealing with issue of jurisdiction, that means who is in
charge to solve an international dispute? (2 reasons of uncertainty: the judge, according to him the solution
of the dispute may vary. The solution may also vary from country to country.) It is important because it is a
successful example of how the matter of jurisdiction can be ruled and harmonized by international
conventions. In particular, BC concerns 1. jurisdiction 2. enforcement of judgment in civil and commercial
matters.
Preamble: bc has been negotiated between States who were already parties to the treaty that established
Eu economic community. 2 objectives: decision to cooperate in the field of recognition and enforcement of
judgement; cooperation in the field of justice (judicial cooperation). What matters? Civil and commercial
(field of private law)
Art1. Convention shall apply in civil and commercial matter. NOT apply to: legal capacity of person rights in
property arising out of a wedding relationship (usually civil matter), bankruptcy, liquidation of insolvent
companies, arbitration (super impo)
Art2. Defendants domiciled (defendant is one who appears in front of the court vs claimant who start the
legal action). Persons domiciled in a state, whatever the nationality, can always be sued in that state. no
added complexity (the same thing that happens in domestic litigation)
Art5. The opposite of art2. Can happen only in certain situation. A person domiciled in a contracting state
may be sued in another state in matters relating individual contract of employment (place of employee’s
job), tort, quasi-delict (place where happened). Generally, a party can be sued in front of the courts of the
state where its contract was to be performed: place of performance (I am italian and I have to supply goods
to Germany, I can be sued also in Germany). Tort: liability for damage after an unlawful event. Jurisdiction
is recognized in front of the court of the place where the harmful event occurred.
Art17. Prorogation of jurisdiction (recognition of the principle of freedom of choice). International
contracts often contain a clause which contains a selection of court competent to decide the case. Hague
convention important in this field.
Art18. Someone sued is called to appear in front of the court of the foreign state. If he appears is deemed
to have accepted jurisdiction.
Art26. Automatic recognition of judgment (a judgment given in a state shall be recognized in other state
without any special procedure)
Art27. A judgment shall not be recognized if it’s contrary to the public order of the state in which
recognition is sough(richiesto). Public order has to do with the fundamental principles of a given legal
system, that characterized this legal system at the point that have been translated into laws. Ex. Protection
of competition
• Brussel regulation 2012 (protection of consumer) Art17. A business will be always submitted to
jurisdiction of the state where it does business with consumer. Art18. The business party may
always be sued in his country where it actually did business with the consumer; consumer may
always bring an action against the business in his own country.
• Protocol 1971 (annex, addendum which deals with specific matters which are not covered in the
convention/ deals with interpretation) Art1. Ultimate grade of jurisdiction in international matter:
European Court of Justice (to respect the principle of appeal). Art2. A given rule has to be
interpreted in a given way. This interpretation by coj is binding.
Krombach coj recognizes the right of a fair process.
4) Which is the convention that deals with contractual obligations? Talk about that.
What are the mandatory rules and which are the ones(?) in Rome convention? Talk about RC.
Rome convention on the law applicable to contractual obligations
Rome convention 1980 (issue of law applicable). Second instrument of harmonizing rules in term of private
international law (BC was the first). The problem to solve: which law to apply to the contract.
((Nb reminder: Private international law: a procedural law applied to solve the conflict of laws in this case)
Preamble: goal→ they are wishing to establish uniform rules concern law applicable to contractual obl.
Art1. Scope of the convention: Where it applies and limitation. It applies in any situation involving a choice
between laws of different countries. It doesn’t apply in family matters of wills, succession, status and legal
capacity. Moreover, it does not deal with the law of the companies, it only deals with private law in terms
of contract
Art2. Application of law of non-contracting states. Universal character: The convention shall be applied
whether or not it is the law of a contracting state. RC has a universal character, which doesn’t always
happen in other conventions
Art3.freedom of choice: A contract shall be governed by the law chosen by the parties. There are 2 cases:
expressed (if the parties insert in the text the choice of law) or implied choice (the law can be
demonstrated by the terms of the contract or the circumstances). (when the parties are subjected to
different legislation: depecage).
When? The choice of law can occur at the time of the conclusion of the contract, at any time after the
