Deck 5: Internatonal Contracts

Question 1

What are the differences between the "choice of law" and "choice of forum" clauses? How are they related?

Answer 1

The variation between choice of law and choice of forum is that choice of law is the contractually mandated form of domestic law that would be employed in the event a dispute arises. Generally, the choice of law is selected by the exporter, however the courts of the importing country could have jurisdiction over a contract depending on the laws concerning its agents and distributors. Alternatively, choice of forum or venue entails the location of the court that will handle the dispute, utilizing the aforementioned choice of law that was contractually agreed upon by both parties.
The relationship choice of law and choice of forum share is that the choice of law often dictates the choice of forum. This occurrence is due to the fact that connecting the two is advantageous in utilizing a court that possesses experience in navigating the laws presiding over the contract, thus appropriate jurisprudence could be utilized in managing the dispute between the parties.

Question 2

What two possible forms of termination are there? How differently will they be handled by a court of law?

Answer 2

Termination can occur as the following two types: just cause or convenience. In a court, just cause termination can be more easily discerned because of an egregious breach of contract, due to one of the parties not adhering to the mandates within the contract. Termination for convenience can occur on various grounds that are not related to performance. Courts tend to handle termination by convenience very stringently and distributors are often favored as agents would be in order to grant them the similar gains that agents receive as decreed in country's laws.
Termination can take place either by issuing a pre-termination notice or by issuing termination compensation. Pre-termination varies in time frame, and is either prolonged or immediate depending on the discretion of exporters and their associated agents or distributors. On the other hand, termination compensation is meant to foster goodwill between exporters and their agents or distributors. Agents and distributors are compensated with the projected income that they would have received during the duration of the contract.

Question 3

What are the differences between mediation and arbitration? How different are they from a proceeding in a court of law?

Answer 3

Mediation and arbitration vary from each other in that mediation is informal and aimed at reaching the middle ground between disputing parties that are still interested in engaging in business endeavors together. Mediation tends to be nonbinding and is ideal for settling disputes that stem from misunderstandings. Alternatively, arbitration is more expedient and formal and is meant to settle larger disputes without litigation, privately. Arbitration is deemed to be fair and proficient and maintains a high degree of expertise in navigating cases dealing with international business.
In regards to courts, mediation and arbitration are favorable alternatives. Mediation can enable the concerns of various parities to be incorporated into strategies for compromise better than courts can. Mediation can be conducted over extended periods of time and does not risk damaging the business partnerships of the parties involved as courts could. Additionally, arbitration is inexpensive and can help disputing parties reach favorable compromises without the winners versus losers situation that courts promote. A court of law would focus on choice of law and upholding the domestic law statutes. However, mediation and arbitration focus on the disputes among the parties and the unique issues regarding their disputes from the vantage point of international business.

Question 4

What are the general provisions of the United Nations Convention on Contracts for the International Sale of Goods?

Question 5

What are the issues brought about by the concept of "labor law" in an international distribution agreement?

Question 6

Describe three of the elements generally found in an agency or distributorship agreement.