Finance:International commercial law

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International Commercial Law is a body of legal rules, conventions, treaties, domestic legislation and commercial customs or usages, that governs international commercial or business transactions.[1] A transaction will qualify to be international if elements of more than one country are involved.[2] Lex mercatoria refers to that part of international commercial law which is unwritten, including customary commercial law; customary rules of evidence and procedure; and general principles of commercial law.[3]

International commercial contracts

International commercial contracts are sale transaction agreements made between parties from different countries.[4]

The methods of entering the foreign market,[5] with choice made balancing costs, control and risk, include:[6]

  1. Export directly.
  2. Use of foreign agent to sell and distribute.[7]
  3. Use of foreign distributor to on-sell to local customers.
  4. Manufacture products in the foreign country by either setting up business or by acquiring a foreign subsidiary.[8]
  5. Licence to a local producer.
  6. Enter into a joint venture with a foreign entity.
  7. Appoint a franchisee in the foreign country.

Incoterms 2010

Main page: Finance:Incoterms

While Incoterms were first published in 1936, it has been revised every 10 years.[9] Incoterms inform sales contract by defining respective obligations, costs, and risks involved in the delivery of goods from seller to buyer. Incoterms 2010, the 8th revision, refers to the newest collection of essential international commercial and trade terms with 11 rules. Incoterm 2010 was effective on and from January 1, 2011. The terms were devised in recognition of non-uniform standard trade usages between various States. When incorporated into a sale contract, the Incoterm code provides a detailed interpretation of rights and obligations between parties.

Any given Incoterm, in most jurisdictions, will not be incorporated into a contract without express or implied reference to it being an Incoterm. They are standardised and published, available for incorporation into international sale contracts at the parties’ discretion. Parties should specifically refer to the Incoterms in the sale contract to indicate incorporation. The International Chamber of Commerce (ICC) is responsible for revising Incoterms periodically to reflect changing practices in international trade.

The Incoterms are classified in 4 different classes:

  • Ex (ExW);
  • Free (FOB, FAS, FCA);
  • Cost (CPT, CIP, CFR, CIF);
  • Delivery (DAP, DAT, DDP).

The 11 terms can also be classified into two different categories depending on its contents:[10]

  • Rules for any modes of transport: ExW, FCA, CPT, CIP, DAT, DAP, DDP;
  • Rules for sea and inland waterway transport: FAS, FOB, CFR, CIF.

See also

References

  1. ↑ Mo, John S.; International Commercial Law (2003) 1.
  2. ↑ Pryles, Jeff Waincymer, and Davis, Martin; International Trade Law (2004) 74.
  3. ↑ Ziegel, Jacob S. and Lerner, Shalom (eds), New Developments in International Commercial and Consumer Law (1998) 5.
  4. ↑ Mo, above n 1, 8.
  5. ↑ Pryles, above n 2, 323.
  6. ↑ Gilligan, Colin and Hird, Marin; International Marketing: Strategy and Management (1986) 99.
  7. ↑ Used where inadequate knowledge of the foreign market.
  8. ↑ Used where adequate knowledge of the foreign market.
  9. ↑ "Incoterm Rules". http://www.iccwbo.org/products-and-services/trade-facilitation/incoterms-2010/the-incoterms-rules/. 
  10. ↑ Mayer, Ray August ; with revisions by Don; Bixby, Michael (2013). International business law : text, cases, and readings (6th ed., international ed.). Harlow [etc.]: Pearson. ISBN 978-0273768616. 

Further reading

  • Carr, Indira; Principles of International Trade Law (2nd ed, 1999)
  • Davies, Iwan; (ed), Issues in International Commercial Law (1st ed, 2005)
  • Fazio, Silvia; The Harmonisation of International Commercial Law (1st ed, 2007)
  • Gilligan, Colin and Hird, Marin; International Marketing: Strategy and Management (1st ed, 1986)
  • Goode Ray et al.; Transnational Commercial Law – International Instruments and Commentary (1st, 2004)
  • Hoyle, Mark S. W.; The Law of International Trade (2nd ed, 1985)
  • Inns of Court School of Law, Law of International Trade in Practice (1st ed, 1998)
  • Huber, Dr Peter; ‘Some Introductory Remarks on the CISG’ (2006), 6, Internationales Handelsrecht 228, 228-238
  • Mo, John S.; International Commercial Law (3rd ed, 2003)
  • Moens, Gabriel and Gillies, Peter; International Trade and Business: Law, Policy and Ethics (2nd ed, 2006)
  • Pryles, Michael; Waincymer, Jeff and Davis, Martin; International Trade Law (2nd ed, 2004)
  • Todd, Paul; Cases and Materials on International Trade Law (1st ed, 2003)
  • van Houtte, Hans ; The Law of International Trade (1st ed, 1995)
  • Ziegel, Jacob S. and Lerner, Shalom (eds), New Developments in International Commercial and Consumer Law (1st ed, 1998)
  • Thorpe, CP. "Commercial Contracts A Practical Guide to Deals Contracts Agreements and Promises" 1st ed 1996

External links



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