Law of International Contracting
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1 KLUWER LAW INTERNATIONAL Law of International Contracting Second Edition Larry A. DiMatteo B.A., B.A., J.D., LL.M., Ph.D. Huber Hurst Professor of Contract Law & Legal Studies University of Florida Warrington College of Business Administration Gainesville, Florida Wolters Kluwer Law & Business AUSTIN BOSTON CHICAGO NEW YORK THE NETHERLANDS
2 TABLE OF CONTENTS Chapter 1: Introduction to International Contracting 1 Chapter 2: Principles of Contract Drafting 11 A Note on International Negotiations 12 Principles of International Contract Law 13 The Bernina Case 16 The Limitations of Language 19 Interpreting Contracts: Fabricating the Reasonable Person 20 Standard Form Contracts 25 How Do Lawyers Begin Drafting a Contract? 28 Model Forms 29 Selecting the Right Form 30 Structure of Agreement 33 Creating a Contract Review Checklist 34 Outsourcing of Legal Work 37 Using Information Technology in Contract Drafting 39 The Problem with Metadata 40 Some General References 42 Chapter 3: Common International Contract Clauses 43 Choice of Law Clause 44 Judicial Abrogation of Choice of Law 44 Excluding Forum or Choice of Law: States' Conflict of Law Rules 48 Dispute Resolution Clauses 49 Arbitration and Mediation Clauses 52 Standard Arbitration Clauses 54 ICC Rules of Optional Conciliation 58 Custom Drafted Arbitration Clauses 59 xiii
3 Law of International Contracting Legality of Arbitration and Forum Selection Clauses 64 Force Majeure Clause 67 Just-In-Time Contracting 73 Handcuffs Clause 74 Termination Clause 75 Liquidated Damages Clause 75 Operative Clauses in Sales Contracts 78 Chapter 4: The Documentary Transaction 85 Key Points in Documentary Collections 87 The Sales Contract and Documentary Transaction 89 List of Export Documents 91 Letters of Credit 103 Confirmed Letter of Credit 105 Illustrative Letter of Credit Transaction 105 Special Letters of Credit 106 Tips for Exporters 106 International Chamber of Commerce and the UCP Exhibit 4.1: Ten Rules You Should (Must) Know Regarding Letters of Credit 112 Dispute Resolution Clause 113 New Standby Letters of Credit Rules 114 Demand Guarantees 115 Export License 117 Exhibit 4.2: Other Relevant Government Agencies 122 Foreign Import Restrictions and Requirements 124 Assessment of Import Duties 125 Barter and Countertrade 130 MCVEY, Countertrade: Commercial Practices, Legal Issues and Policy Dilemmas, 16 Law & Policy Int'l Bus. 1 (1984) 131 Trade Liberalization 138 Chapter 5: National Laws Affecting International Contracts 143 Negotiating an International Contract 143 Pre-Contractual Liability 146 Common Law 147 Exhibit 5.1: Reliance Factors 148
4 Table of Contents Civil Law 148 Informal Writings 151 Convergence and Divergence of National Laws 155 Council of Europe Resolution (78) 3 On Penal Clauses in Civil Law 156 Compare United States Law 157 National Contract Codes and Restatements of Law 159 Russian Civil Code 160 China's Uniform Contracts Law - ~ 166 Standard Terms or General Conditions 169 Principles of European Contract Law 169 Standard Terms Mandated by Law (Civil Code) 172 German Standard Provisions Law 173 Conflict of Law Rules. 178 Exhibit 5.2: Hungarian Conflict of Law Rules 179 Issue Specific Regulations: Marking and Standards 179 Anti-Bribery Laws 181 Chapter 6: International Sales Contract 183 Selecting a Trade Term 184 Model International Sales Contract 186 The Export-Import Contract 186 Menu of Terms for an International Sales Contract 191 Unfair Contract Terms 201 Securing Payment 203 Product Liability 203 Limitation Period 205 UNIDROIT Principles of International Commercial Contracts 207 European Principles of Contract Law 212 Chapter 7: International Sales Law: Convention on Contracts for the International Sale of Goods 221 International Sales Law 221 Choice of Law and Conflict of Laws 222 Seller v. Buyer. ICC Case No, 5713 of Exhibit 7.1: Contracting Parties to the CISG 224
5 Law of International Contracting Larry A. DiMatteo, Resolving International Contract Disputes, American Arbitration Association, Dispute Resolution Journal 75, (Nov. 1998) 225 Choice of Law Under the CISG 226 Sale of Goods Denned 227 The Parol Evidence Rule and the CISG 228 Issues of Contract Law: CISG and Uniform Commercial Code 233 Exhibit 7.2: Selective Comparison of CISG & UCC 234 Exhibit 7.3: List of 65 CISG Rules 235 Mechanics of Formation 238 Firm Offer Rule 241 Battle of Forms 241 Exhibit 7.4: Pro Forma Invoice - Terms and Conditions 242 Contract Interpretation 246 The Importance of the Frigaliment Case 247 Larry A. Di Matteo, The Counterpoise of Contracts: The Reasonable Person Standard and the Subjectivity of Judgment, 48 South Carolina Law Review 293, (1997) 248 Warranty Law 249 Disclaimer of Warranty 251 Buyer's Duty to Inspect, Give Timely and Proper Notice 252 Nachfrist Notice 253 Nachfrist Case Study 254 Seller's Right to Cure 255 Anticipatory Breach and Adequate Assurance 256 Damages. 257 Contractual Excuses 259 The Excuse of Frustration 261 Summary 262 Exhibit 7.5: A Topical Review of the CISG 262 Uniform Commercial Code: Revision of Article 2 265
6 Table of Contents Chapter 8: General Principles of Service Contracting 269 Sale of Services 269 The Employment Relationship 271 The Independent Contractor Contract 274 Commercial Agency Contracts: The Foreign Sales Representative 275 Logistical Services 283 Carriage of Goods Contracts 284 Exhibit 8.1: International Transport ~ Conventions 284 Law of Freight Forwarding 286 Risk Insurance 287 Transit Insurance 289 Liberalization of Trade in Services 292 Internationalization of Accounting and Taxation 293 Advertising Law 295 Comparative Advertising 296 Professional Standards of International Advertising 298 Exhibit 8.2: ICC International Code of Advertising Practice 299 Chapter 9: Distribution Agreements 301 The Distribution Agreement 301 Framework for Drafting Distribution Agreement 309 General Terms 325 Host Country Restrictions 327 Chapter 10: Intellectual Property Licensing 331 International Conventions 331 National Intellectual Property Law. 334 Protecting Your Product from IPR Infringement 336 Business Method and Software Patents 340 Technology Licensing 342 Licensing in Germany 344 Extraterritorial Application of United States Law 346 The Gray Market 347 Foreign Transfer Restrictions 349 xvu
7 Law of International Contracting European Union Regulations 350 Regulations of the People's Republic of China 352 Due Diligence 353 Important Contractual Provisions 358 Grant Clause and Liability Limitation Clauses 359 Choice of Law Clause 361 Generic Transfer Clauses 361 Exhibit 10.1: Limited Liability & Disclaimer in a Software Sales Contract Software Contracts 374 Foreign Registration and Approval 375 Chapter 11: Joint Venture and Franchise Contracts 377 Due Diligence 378 Denning Joint Venture 380 Selecting the Organizational Entity 381 Key Joint Venture Negotiation Issues 383 Generic Joint Venture Provisions 387 Formation of Joint Ventures 387 Purpose and Scope of Joint Venture 387 Purchase Price 387 Required Capital Contributions and Subsequent Funding 388 Mutual Representations and Warranties 388 Conditions to Closing 388 Covenants 389 Indemnification Provisions 389 Termination 389 Dispute Resolution 389 Transfer of Joint Venture Interests 390 Restrictive Covenants 390 Miscellaneous Issues 390 Exit Strategies for International Joint Ventures 391 Ancillary Agreements and Documentation 395 Foreign Government Regulation 397 People's Republic of China 397 Exhibit 11.1: Approval and Establishment of Joint Venture 398
8 Table of Contents Franchising United States Franchise Law and the Franchise Agreement International Franchising UNIDROIT Guide to International Master Franchising EU Franchise Regulations Franchise Law of China Chapter 12: Electronic Contracting 415 UNCITRAL's Convention on the Use of Electronic Communications in International Contracts 416 EU Data Transfer Agreement 417 National Contract Laws and E-Commerce 422 E-Contracting and Standard Terms 425 Exhibit 12.1: UNCITRAL Model Law for EDI Contracting 425 Electronic Data Interchange 426 Electronic Commerce 427 UNCITRAL Model Law on Electronic Commerce 433 Domain Names and Trademark Infringement 437 Personal Jurisdiction 438 The 'Shrink-wrap' Contract 439 Electronic Documentation 443 The New Electronic Services Industry 444 E-Commerce Ethics 444 Appendix 1: General Sources 447 Appendix 2: United Nations Convention on Contracts for the International Sale of Goods (1980) 451 Appendix 3: United Nations Convention on the Limitation Period in the International Sale of Goods 479 Appendix 4: UNIDROIT Principles of International Commercial Contracts 489 Appendix 5: The Principles of European Contract Law (1998) 521
9 Law of International Contracting Appendix 6: United Nations Convention on the Use of Electronic Communications in International Contracts 559 Appendix 7: Agreement on Trade-Related Aspects of Intellectual Property Rights 573 Index 615 xx
Contents. Gillette, Clayton The UN Convention on Contracts for the International Sale of Goods. digitalisiert durch: IDS Basel Bern
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