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Law Outlines International Law II Outlines

International Sales Contracting Cisg Outline

Updated International Sales Contracting Cisg Notes

International Law II Outlines

International Law II

Approximately 275 pages

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International Sales Contracting: CISG

  1. What Law Governs the Contract?

    1. Choice of Law Clause

      1. Is it enforceable?

      2. Is it severable from the rest of the contract?

      3. What types of claims does it cover?

      4. What parties does it cover?

      5. PRACTICE TIP: Always include a choice of law clause

    2. No Choice of Law Clause Conflicts of Law Analysis

      1. What type of claim is it?

      2. What are the jurisdiction’s choice of law rules?

        1. Forum applies its own choice of law rules

        2. IF the suit is filed in the U.K. or anywhere else in the E.U., the Rome I Regulation applies

        3. IF the suit is filed in the U.S.:

          1. JURIS SPLIT

            1. UCC (sale of goods)

              1. “appropriate relation” test. See UCC § 1-105(1)

              2. Courts have generally related to general common law notions, especially the “most significant relationship” test from the Second Restatement. See, e.g., Butler v. Ford Motor Co. (CB 70).

            2. Second Restatement

              1. § 6. Choice-of-Law Principles

                1. (1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law. [E.g. U.C.C. in most states re sale of goods]

                2. (2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, and (g) ease in the determination and application of the law to be applied.

              2. § 188. Law Governing in Absence of Effective Choice by the Parties

                1. (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issues, has the most significant relationship to the transaction and the parties under the principles stated in § 6.

                2. (2) In the absence of effective choice of law by the parties, the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place or incorporation and place of business of the parties. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

                3. (3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.

            3. First Restatement

            4. Interest Analysis

            5. Other Methods

      3. What substantive law does the choice of law rules direct to?

        1. (depeçage: different substantive laws might apply to different issues):

      4. Apply the substantive law and determine the outcome

      5. Beware of overriding considerations such as public policy, etc.

      6. BUT Absent a clear choice of law, CISG “governs all contracts between parties with places of business in different nations, so long as both nations are signatories to the Convention.” Filanto, S.p.A. v. Chilewich Int’l Corp. (CB 75).

  2. CISG

    1. Scope of CISG

      1. Art 1: Int’l contract:

        1. K for sale of goods between parties whose places of business are in different states

        2. AND states of places of business must be parties to the convention

        3. OR the choice of law rules determined that the law of a state party applies

      2. Topics covered:

        1. Formation, breach, avoidance, modification, termination, delivery of goods, conformity of goods, remedies, exemptions

      3. Topics NOT covered:

        1. Capacity of the parties

    2. CISG entered into force 1988, over 70 state parties (including the US and all major trading nations).

    3. CISG is a self-executing treaty in the United States.

      1. CISG is binding on all signatory nations

      2. CISG creates a private right of action in federal court under federal law.

        1. As a treaty, the CISG is a source of federal law.

    4. When it applies, it displaces domestic law

      1. But only on the issues it addresses! Domestic law applies to issues not covered by CISG

      2. In the US: CISG displaces UCC for int’l sales contracts

    5. Parties can exclude or modify application of the CISG

      1. BUT “The intent to opt out of the CISG must be set forth in the contract clearly and unequivocally.” Hanwha Corp (CB 75).

        1. “Absent a clear choice of law, ‘the [CISG] governs all contracts between parties with places of business in different nations, so long as both nations are signatories to the Convention.’” Hanwha Corp. (CB 75).

    6. Harmonization limited by domestic courts’ interpretation of the treaty provisions

    7. CISG Provisions:

      1. Article 1

        1. (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States:

          1. (a) when the States are Contracting States; or

          2. (b) when the rules of private international law lead to the application of the law of a Contracting State.

        2. (2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.

        3. (3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.

      2. Article 6

        1. The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions.

          1. CAN CONTRACT OUT OF PROVISIONS

      3. Article 7

        1. (1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

        2. (2) Questions concerning matters...

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