International business transactions



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OUTLINE International Business Transactions
Material Validity

  • See Art 8 page 151

  • Scope of the applicable law Art 10

    • Applicable law shall govern

    • In relation to the manner of performance and the steps to be taken in the event of defective performance, regard shall be had to the law of the country in which performance takes place

    • No renvoi Art 15

  • Ordre Public

    • Art 16  application of a rule of law of any country specified by this Convention may be refused only if such application is manifestly incompatible with the public policy (“ordre public”) of the forum



    Difference between US and European approaches to “mandatory rules” displacing choice of law provision

    • Under US approach, there is only one country whose rules could displace, i.e. the §188 state. Europeans make you look at any “country with which the situation has a close connection”

    • European also just says “effect may be given” or “regard shall had”

      • No specific guidance on what factors to look at

    • European also says whatever forum is obligated to do by national legislature, etc, it is allowed to do (Art. 7(2)  Similar to Restatement §6(1)

    • Article 16 – “ordre public”

      • Even if the parties properly chose another law under Art 3 or even if the law of another country clearly applies under Art. 4, Art. 16 allows that law to be refused if such application is manifestly incompatible with the “ordre public” of the forum.

      • Phrase “public policy” sets a less high barrier than “ordre public”

        • Not equivalent.

    • Art 3.3 says parties cannot contract out of domestic mandatory rule for purely domestic transaction by choosing law of random country

    • Restatement gives you formulaic process to determine whether to displace choice of law. Convention gives you greater leeway in displacing choice, but less guidance on actually when to displace




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