Introduction to Business Law Master - Essay Example

Conducting business beyond the boundaries and borders of one's home country is common practice, nowadays. Globalization has not only made international business less complicated but has imposed a set of principles which actively encourage the practice, among which one may mention the removal of all artificial barriers to trade. Despite the ease by which a business firm from the West, for example, may merge with another from the East and undertake investments in the South, however, international business is as bound and regulated by law just as is business conducted within the boundaries of the home country.

Therefore, to avoid problems, it is necessary that international corporations, or business forms which intend to expand internationally, have an understanding of the sources of international law and the function of the relevant international organizations. International law, according to the Cambridge professor of international relations and law, Malcolm Shaw (2003), is derived from four sources. These sources are international conventions and treaties, customary law and commonly accepted practices, conventional law as defined and implemented by nation-states and judicial interpretations and decisions, as would establish a rule of precedent (pp. 44-46). As Shaw (2003) further explains, international law can basically be understood as comparable to national laws but implemented over the international community, as opposed to the national one (p. 48). Identifying the sources of international law is the first step towards understanding how the mentioned can influence international business.

As regards the first source, which is international or bilateral treaties and conventions, it has a direct impact on international business if the treaties in question are relevant to trade and investment. For example, some nations have laws which specify the areas of investment and business which foreigners can engage in. Often, these countries, of which example we may mention China, have bilateral and international trade treaties with other nations that specifically outline the areas in which foreigners may not invest in.

Generally, speaking and as Takeshi Shinobu (1987) continues to explain, treaties limiting areas of investment are rare but the point here is that these treaties, insofar as they have the status of binding law, must be respected and adhered to by foreign investors (p.444). Consequently, understanding this particular source of international law and its relevant contents is essential prior to making a specific international business investment decision.As for the second source of international law, which is customary law and general practices, it is also highly relevant to the practice of international business.

As articulated by Shaw (2003) this particular source of law holds that common practices which are generally and predominantly accepted as such by most countries, take the status of law (p. 50). As pertains to international business, this is a very reassuring set of laws since they hold that commonly accepted business practices will be respected and upheld by the courts in most countries.The third source of international law, which is conventional law, is equally relevant. It basically maintains respect for the national laws of nations, thereby emphasizing the concept of state sovereignty (Shaw, 2003, pp. 48-50). In essence, this means that a business form that is operating in a particular state must conduct itself within the boundaries of the host country's national laws.

The fourth source effectively states that incases of dispute which go before an international or even a national court, the parties may take precedents into consideration. For example, should a foreign investor enter one of the industries in China that China itself has declared that foreigners may not engage in, one may be quite sure that the dispute will be settled in favor of China. However, if in a similarly and previous case, it is discovered that China's claim had been rejected because of the presence of other treaties which may be interpreted to nullify this one, then the rue of precedent will apply.

In other words, the fourth source of international law is extremely relevant to international corporations and investors.While understanding the sources of international law is important, it is also equally important to understand the role of the primary international organizations. The first of these, the United Nations, may not initially appear relevant to the issue insofar as it is popularly understood as a world government, as explicated by Chamovitz (2002). However, when we take into consideration that the United Nations is the founding block of international economic treaties and trade agreements, not to mention the fact that it is the basis of the enforcement and the legitimization of international law, its relevance becomes clear (pp. 48-49). As pertains to the second of the international organizations, the International Court of Justice, its relevance to international business practices cannot be overestimated.

As articulated by Chamovitz (2002), the function of the ICJ is to settle disputes between international parties, including economic and business ones, in case of disagreement (p. 49-50). In other words, in those cases where multinational and transnational corporations enter into disagreement with their host countries, the ICJ functions to settle the dispute according to the operative sources of international law.Lastly, the World Trade Organization, or WTO, is greatly pertinent to international businessmen and multinational or transnational corporations since it provides the framework for globalization.

In other words, not only does it articulate the laws and regulations that guide globalization but it seeks to enforce them. In fact, in explaining the function of this particular organization, Chamovitz (2002) explains that without the WTO, conducting international business would have been significantly more difficult (pp. 30-31). Therefore, insofar as international corporations are concerning, understanding WTO rules is essential as doing so can open new investment areas for them.In the final analysis, conducting international business transactions is usually a profitable venture.

However, prior to actually doing so, it is necessary that the corporations of firms in question seek to attain a better comprehension of the laws and organizations which influence and regulate this particular form of economic activity.BibliographyChamovitz, Steve. (2002). Triangulating the world trade organization. The American Journal of International Law. 96(1), pp. 28-55.Shaw, Malcolm. (2003). International law. Cambridge: Cambridge UP.Shinobu, Takashi. (1987). China's bilateral treaties, 1973-82: A quantitative study.

" International Studies Quarterly. 31(4), pp. 439-456.