International business transactions



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OUTLINE International Business Transactions
Scope of Applicability -- Art. 1

  • Rules of Convention apply to contractual obligations in any situation involving a choice between the laws of different countries, except for issues listed in Art 1.2

    • Capacity, Family law issues, Negotiable instruments, Arbitration agreements, Corporate law (creation, internal org, corporate/legal capacity, liquidation, personal liability of officers/shareholders), Agent/principal, Trusts, Evidence and procedure

  • Applied whether or not it is the law of a Contracting state

  • Most closely connect formula  Article 4

    • if there is no chosen law, law of country most closely connected governs

      • if severable part of contract has closer connection to another country, may use that country

    • Presumption that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has … his habitual residence … or its central administration.”

      • or country in which the principle place of business is situated

      • or where under the terms of the k the performance is to be effected through another place of business, the country in which that other place of business is situated.

      • Article 4.2 is seller friendly presumption

    • If subject matter of k is a right in immovable property or a right to use immovable property, then most-closely-connected-presumption is where immovable property is located

    • See Art. 4.4 for contracts for the carriage of goods page. 146

    • If characteristic performance cannot be determined, disregard Art. 4.2

    • If it appears from the circumstances as a whole that the k is more closely connected with another country, disregard presumptions

  • Mandatory Rules

    • Art 7 says effect may be given to the mandatory rules of the law of another country with which the situation has a close connection

      • Nothing shall restrict application of mandatory rules of the forum


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