INTERNATIONAL SALES LAW - seminar 2004ISL

Contractual Risk Management in Transnational Sales Transactions

ISL: objectives, functions and structure

Management of information on ISL

Management of risk of contractual disputes

Management of risk of contract breach

Management of risk of loss of or damage to the goods

Management of risk of changed circumstances

Case study

Case studies

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ISL: objectives, functions and structureObjectives

ISL

GOAL:

Learn to create good sales contractsby managing the risks involved with the transaction

HOW?

1) Know the objective and the risks for the transaction

2) Know the law, its default norms and its limits

3) Know the possibilities and limits of contracting

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ISL: objectives, functions and structureTransnational sales transactions

ISL

TST

Transport C

Finance CSales C

Insurance C

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ISL: objectives, functions and structureTransnational sales contracts

ISL

Transport C

Finance CSales C

Insurance C

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ISL: objectives, functions and structureSome risks connected to a transnational sales contract

ISL

Risk of damage to or loss of the goods

Risk of changing circumstances

Risk of contractual disputes

Risk of delayed performance

Risk of non-performance

Risk of non-conforming

performance

Sales C

Information risk

Negotiation risk

Risk of product liability

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ISL: objectives, functions and structure

InternationalSales

Contract

CONTRACT LAW SALES LAWCONTRACTING

Legal framework for international sales contracts

Taxlaw

Competition

law

Productliability law

Intellectualproperty law

Transportlaw

Customslaw

Insurancelaw

Propertylaw

Etc. Etc.

Private inter-national law

Procedurallaw

Securities & execution law

ISL

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ISL: objectives, functions and structure

CONTRACTING SALES LAW

Inter-Nordic sales transactions

InternationalSales

Contract

CONTRACT LAW

Sales law framework for Nordic sales contractsISL

2)

ISLANDIC law: 01.06.2001-12.03.2003 CISG

1)

DEN-FIN-NOR-SWE law:

National Sale of Goods Acts

12.03.2003 -Nordic solution

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International sales transactions

InternationalSales

Contract

ISL: objectives, functions and structure

SALES LAWCONTRACT LAWCONTRACTING

Inter-Nordic sales transactions

Sales law framework for international sales contractsISL

CISG?

National sales law?PESL?

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InternationalSales

Contract

ISL: objectives, functions and structure

SALES LAWCONTRACT LAWCONTRACTING

Contract law framework for international sales contractsISL

A-national lex contractus?

lex mercatoria?

National

lex contractus?

PECL ?UPICC ?

CENTRAL TLDB ?

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InternationalSales

Contract

ISL: objectives, functions and structure

SALES LAWCONTRACT LAWCONTRACTING

Contracting framework for international sales contractsISL

Standard contract clauses

Standardcontract terms

Contracting standards

Tailored contract terms

For example:

- ICC Uniform Customs and Practice for Documentary Credits (UCP 500)

- ICC Rules of Arbitration

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For example:

- ICC Force Majeure and Hardship Clauses

- Incoterms 2000

- The Institute Cargo Clauses

For example:

- The ICC Model InternationalSale Contract

- ORGALIME S 2000

- NL 01 E

ISL: objectives, functions and structureStructure of international sales contracts

ISL

STANDARD CONTRACTUAL

NORMS

TYPES OF LEGAL NORMS REGULATING THE CONTRACT

INDIVIDUALCONTRACTUAL

NORMS

DEFAULT LEGAL NORMS

MANDATORY LEGAL NORMS

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ISL: objectives, functions and structureStructure of international sales contracts

ISL

STANDARD CONTRACTUAL

NORMS

TYPES OF LEGAL NORMS REGULATING THE CONTRACT

INDIVIDUALCONTRACTUAL

NORMS

DEFAULT

LEGALNORMS

MANDATORY LEGAL NORMS

Designated default legal norms

Optionaldefault legal norms

(legal orders)(contractual

default legal norms)

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ISL: objectives, functions and structure

Standard contract clauses

International trade usage

Established usages and/or practices

between the parties

Standardcontract

terms

Tailoredcontract terms

Interpretation guidelines of the

contract standards

Law of the contract

LEXMERCATORIA

CISG

PECL, UPICC &CENTRAL TLDB

ORDRE PUBLIC

Contractingstandards

?

Structure of international sales contractsISL

STANDARD CONTRACT NORMS

MANDATORY LEGAL NORMS,

and INDIVIDUAL CONTRACT NORMS:

DEFAULT LEGAL NORMS,I

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LEGAL ORDER

LEGAL RULES

LEGAL NORMS

LEGAL STANDARDS

- ”reasonableness”- ”foreseeable”

CISG Art. 26:”A declaration of avoidance of the contract is effective only if made by notice to

the other party”

CLOSED RULES

OPEN RULES

UPICC Art. 7.4.4:”The non-performing party is liable only for harm which it foresaw or could reasonably

have foreseen at the time of the conclusion of the contract as being likely to result from its

non-performance”

ISL: objectives, functions and structureStructure of legal normsystems

ISL

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LEGAL ORDER

LEGAL RULES

LEGAL NORMS

LEGAL STANDARDS

LEADINGGENERAL

PRINCIPLES

OTHERGENERAL

PRINCIPLES

ISL: objectives, functions and structure

CLOSED RULES

OPEN RULES

CENTRAL TLDB nr. 60:

”The aggrieved party is entitled to damages for loss caused by the other

party’s non-performance of its contractual obligations”

Structure of legal normsystems

LEGAL PRINCIPLESPECL 1998 Art. 1:106 (2):

”These Principles should be interpreted and developed in

accordance with their purposes. In particular, regard should be had to

the need to promote good faith and fair dealing, certainty in

contractual relationships and uniformity of application”

ISL

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Go to section

II Management of information on ISL