Transnational Contracts andForeign Investors - Coursework Example

Transnational Contracts Name Institution Date INTRODUCTION It cannot be overlooked that international contract is mostly written by Common Law contractual terms. The contracts are put down to paper in the Common Law legal structure, legal terminologies and English and Common Law of Contracts to be based on Predictability and Certainty principles. Parties of contacts can be seen to have the ability determine extent of viability of risk that are related closely with the transaction and give way that deems appropriate for the subjection of risk and relationships. The contract in the agreement is, therefore, adequate to regulate the transaction amongst the parties doing the transaction that exist between parties. The agreement between parties is not dependent on notions such as fair dealing and good faith. These notions are ones that are seen to be unwanted because they may bring in some elements of uncertainty and discretion, which are not acceptable in commerce and business. On the contrary, the law of contracts to in systems of civilians has the mandate to ensure in the specific case, justice is exercised. TRANSNATIONAL CONTRACTS AND TERMS Contracts are interpreted in the light of certain terms of fair dealing or good faith, reasonableness, thus allowing to avoid the solutions that are unjust that might have a basis of legal interpretation of the contact that is in is in question. Based on contracts that are commercial in nature, the judges are supposed to judge and in these cases and make an application of discretion in restrictive manner1. The above terms apply because the parties are deemed to have the willing and capability attribute to assess and take risks that may be associate with this particular transaction. A party from a system that is civilian may have expectations of a possible interference by laws responsible for governing to correct or outline the best regulation terms of contracts. Negotiated terms are necessary where two parties do an oral contract, negotiations may lead to a contract (Crawford 2006).2 The governing law, therefore, interferes with the contract which governed by a civil law the contractual structure might be free of interference when based on a Common Law Model. An encounter of two expectations that are opposed the laws that governs might create some difficulties in interpretation. These difficulties are overcome by referring to a law source that does not refer to a particular legal system of the nation. The source of international law may be used in a proper way. These sources include convections like (CISG), sources that are non-authoritative for example the transnational Law, which consists of acknowledged principles of trade usages, international trade, and international contract practice. Some sources very useful and often give an overall view about the specific needs of patent of contract and how this parties would be developed of these parties. These aspects are overcome by in previous years by the efforts made in restating international contract. The restatements often contribute to a source of Lex mercatoria terms put in a position that improves the fragmentary character of some sources. Questions often arise about the extent to which the restatements effectively support in clarifying the tension between the Civil Governing Law and the Common Law structure of the contract. Transnational terms have received frequent criticism of the method stems that has deemed difficult in the determination of the terms content with any precise method . Extensive comparative law studies are naturally, the best methods analyzing what the of transnational terms and rules have. It should be however noted that transnational terms not a list a method or procedure. The lex mercatoria which is a very influential article, written by Lord Mustill, has raised a lot of argument and misunderstanding about this subject. Lord Mustill brought forward a list of 20 transnational terms that were encountered in arbitral practice. However, he was in no way intended to defend the lex mercatoria. He did this just to emphasize the advantages of this method by giving the 20 principles, which purposely targeted to contrast with the amount wealth in the legal systems of the municipality with the wealth of legal systems of the municipality. A large number of supporters have shown their satisfaction with a number of principles stated by Mustill. A boost for the view that the terms given were not general and having no activity in practical was provided by the fact that some the terms and principles listed are specific like those terms that exist in interest and damages. It is a misguidance for general principles of law to be presented in a list. These principles are not supposed to be listed but rather given but rather given as a method; this could help in the determination of rules that are applicable to a transnational contract. APPLICATION OF PRINCIPLES IN TRANSNATIONAL RELATIONSHIPS Arbitrators give effect to the agreement they make after the two parties choose the contractual relationship that will exist between them. This is after being governed by the general principles of internal law. The parties will agree to this whether they consider the choice appropriate or not since it is applicable law provision of their agreement, the principles that are common to particular legal systems, the general principles that are under of international law, or the lex mercatoria. Recent legislation on transnational duly recognizes the right of the parties to select the principles of law that would govern their contractual agreement. This agreement is reached by giving a provision for the two parties are expected to apply rules of law by the parties rather than applying the law that is provided by the two parties involved. In England, Jurisdiction is a system has strongly opposed the use of transnational rule in contracts. This was first recognized and provided by the 1996 Arbitration Act. It states in section 46 that “the parties can validly choose transnational rule as their applicable law.” THE SCOPE AND USE OF TRANSNATIONAL STANDARD FORM CONTRACTS Transnational contracts are changing in there scope and functions. These contracts are used to coordinate supply chains and reflect a system whereby exchanges whose arms include safety management and quality are coordinated. Supply chains are mainly made of regional terms, and we do not expect strict legal regulation but social and economic terms (Cafaggi, 2012)3. Many contracts between suppliers and retailers or between different people in the supply chain, the commercial sections of the contract that concern price means of payments, place of delivery, terms of exchange, and quantity tend to be relatively standardized as regulatory provisions take shape. These regulatory provisions often tend to refer to the transnational regimes that are implemented through transnational commercial contracts. The function of transnational contracts is to import, export regulations across nations, sometimes agree with, or replacing the modes of implementing that is defined by international regimes. Transnational contracts have become vehicles for implementing the transnational regulation, leading to the formation of new contractual architectures by combining some logics. Regulatory provisions differ from the logic of commercial exchange both in objectives and from terms of focus. They differ in the following ways; regulatory provisions focus majorly on the process while commercial exchange focuses on majorly on products. Regulatory provisions encompass some transactions that are linked while the commercial exchange is often limited to transactions of individuals. Regulatory provisions make the effort in restoring compliance with the regulatory process to pursue the regulatory objectives and counter violations in future whereas commercial exchange aims it redressing the breach victims. Transnational commercial contracts are in the rapid increase of becoming a relevant source of changing international law into the requirements for parties (Cafaggi, 2012)4. Regulatory regimes may include rules concerning safety. These regimes may have some clauses that may require the suppliers to have the respect of the minimum wage laws, freedom of association, collective bargaining, and protection and child labor. The regulatory regimes may also have the inclusion of commitments to the standards of the environment, which range from carbon footprint regimes to discouraging use of ozone-depleting substances. One dimension of a much broader phenomenon of increasing interaction amongst certification, transnational regulation, and transnational contracting is by Incorporation by reference. Certification plays a big role in the implementation of obligations of a contract of regulatory nature, hence affecting breach of standards and performance. Certification may include the provision of a commercial contract. It may be referred to as a separate certification contract. The working connection between certification and sale contract binds the participants to the chain even when certification is not incorporated into the relevant contract. Even though this article concentrates on an inclusion of regulatory regimes, its research findings and deductions also apply to contractual architectures and translational public architecture. This article focuses on the implications for reacting and monitoring to breaches of regulatory provisions when resulting from breaches of many contacts and regulatory terms. In the area of food safety, for example, a farmer must comply with a standard that concerns pesticides whose level is defined in the code of conduct. Violations of this constitute both an infringement of the code and a breach of contract. The farmer will face subjection to sanctions for breach of contract or breach of warranty. This may include replacement or payment of the damages or reducing the price. The farmer may also get warnings, fine and temporary or permanent dismissal from the regulatory regime with consequences of reputation. The commitment of suppliers to complying with social standards that are related to children, labor conditions, and gender have become part of the commercial contract and the contract of employment , the code of conduct and certification that attests that fair labor conditions have complied. Another example is the one that relates to commerce done electronically. Traders use the electronic platform where they subscribe through agreements to policies that differ and is often included in the codes of conduct that concern copyright and privacy. Parties are bound by obligations that arise from the sale contracts and those related to the regulatory policies of trading areas that concern data protection and privacy. If a seller sells counterfeit goods, breaches contract, and breaches some contract codes subscribed in the agreement, concerning the compliance with trademark principles and copyright. The concern of environmental rules is that the supplier goes against the process of standards that are enacted to protect standards of the environment. The seller breaches the contract with the buyer also concerning the environment protection for the regime to be committed. As an agreement, the certification is signed as a requirement for the transaction. The above examples only give illustrations of wider ranges of situations where violations have at the same breach of the sale contract, violation of the guidelines or code, certification of the contract, causing sequential or simultaneous remedial systems. These regimes co-exist and tend to interact much in a much wider extent than legislation and contract scholarship has so far accounted. A different hypothesis is distinguished depending on whether the violations translate to breaches by different parties or whether the entities commit all the violations. This infers the outcome for the design of the transnational commercial contracts. INVESTOR-STATE CONTRACTS AND INTERNATIONAL LAW A new rule that emerges in international law about investment gives emphasizes and prioritizes the stability of foreign investors. This imposes liability on national governments that are hosts of the investors. This rules advocate for the general application of measures. This scenario applies when the measures applied cause a change in the legal platform, which is on no way aligned with the commitments or undertakings made by the investor previously. It is difficult to overstate the impact that of this new rule. It is indeed due to the types of commitments and general undertakings that that tribunals deem to be protected by law and still the extent of liability of this rule are very wide. The new rule of primacy to stability and the question rose of whether this rule is a principle or fact, issues given and that have forgotten analysis of international law as international literature. This makes this section a field of study that is focused on. The concern of how this new and potent rule compare with the domestic law in international laws that governs circumstances with facts, is a major question that has recent arisen. This part of the paper examines the posed concern making a comparison between the governments’ ability to make interference on the with the commitments and through the changes to the legal framework and the scope of the commitments that are enforceable in the international investment law conflicts that regard the ability of government commitments to be enforced to foreign investors. This section of the article seeks to uncover a significant gap between the U.S. domestic law principles and the international law cases. In the U.S case, the stability that international tribunals that invest claim to be part of the international law is widely perceived to be as a myth. According to international law, tribunals have been deemed to cover a large field about enforceable commitments and undertakings posing a liability in government measures in interfering with these obligations. The U.S. courts tend to adopt much different approaches to the deed in different branches of the government by applying some principles, taking both narrow views and the types of interferences that can occur due to commitments that my come due to liabilities of government and commitments that can be enforced (Levontin 1968)5. Several conflicting ideologies may come up from incidences where the government may breach a contract and fail to go through the means that are probable through the party contracting. It can either be state owned or controlled by any entity that does not give payments, For example, that available traditional contracting party. The dispute raised, at times, might not be an example of a traditional contract breach. This dispute may involve situations where the government, with powers that come with it, to impact the terminated or contract interfered with. This process of making this happen can be done by executive decrees being issued through modification of performance by the government as required by the contract. A detailed measurement of general application by the government may also give and this will give a negative effect on the performance of the contract or the profits accrued from it. A measurement of the how the method have negative impacts on the performance of the contract between a state and an investor because when this happens a dispute occurs for ids is to carry the burden of loss. The answer to the dispute usually is usually a burden to the government because it ability to implement the contract is questioned. Legal systems that are domestic have played a big role in determination of the answer to the question on the disputes that arise from contacts between the state and its investors. It is outlined that in domestic courts, these cases apply can be solved by application of the administrative law, the constitutional law or the domestic contract (Levontin, 1968). Issues of that arise due to the stability of guarantees of the contract are seen through the watchful eyes of the contracts between state and investors and the commitments that can be enforced. This give a broad definition to give an inclusion of any particular legal law that are between an investor and hi host state. The agreements include the licenses, purchase of permits, leases, concessions and services. The phenomenon of the contracts between investors and states are old. Various studies and observations have shown that practice of governments in making contracts with foreign private as well as entities that are domestic for a number of reasons is rising. This situation is often driven by the availability of fund and good technology by governments that are working hard to fulfill the needs of the private firms that want make expansions and the needs of the citizens their country. The contract is not restricted to certain rule because the parties may decide to develop their own contractual relationship by governed by the principles of law. The parties to transnational contracts may have their own way to come up with the contractual agreement. More importantly, solution to dispute that comes up the principles and term of international law. This law may prove their legibility in the proving their adaptability to the international business community. To ensure those international solutions for dispute and disagreements are found, a combination of the arbitration clause and general principles of law in transnational agreement or the choosing general terms is very vital. However, the debate that is kept alive by a writers, often raise concern about the level of ability to use general principles of law to resolve international disputes. Critics in this field tend to make lex mercatoria like an incomplete set of contradictory and vague rules, which are not suitable for use in the transnational commercial relationships. International Business Lawyer in May 1999 employed difficulties with the terminology further cloud the situation. To give a clarification to this transnational rules and general principles of international law are preferred here to lex mercatona .This rules and principles give an implication that disputes of the business community can get solutions from any legal system. The general concept of lex mercatoria gives a suggestion of the principles of international community and transnational norms. A reflection of the terms, general principles international rules show that this rules are in the national legal systems. This gives the government ability to rule the international relation by of rules and by use of specific terms from different legal systems rather than a single jurisdiction. In wider bodies of law, a number of solutions to conflicts are easily found. Here, general principles that suit the needs of international community are found. Those who concur this solutions are mostly find out that the validity source of the legal orders. It is also clear the sum of all states willing to take part in contracts and are in the tendency to accept they ideologies of different parties and their stand in legal order allow the parties to apply general principles of international law (Levontin, 1968)6. Lex mercatoria is usually associated with controversies that are attributed to the heated debate of whether the laws in all states that intend to make enforcement the international contract or the law of arbitral seat awards the applicable. A recent study briefly discussed the content or method of general principles of international law and they have given international examination of their application to international commercial relations by the two parties that are involved in the contractual agreements before they address the grounds on which the transnational rules method is often criticized and the problems that may arise. It is inductive that the dividing line between two distinct philosophies of international commercial arbitration and the prevalent misconceptions as to what transnational rules are. Transnational rules always apply in all contracts that involved across nations. CONCLUSION The reactions surrounding the general terms entail academic debate over how they can be applied with transnational rules. Manifestation on a person’s attitude to trans-national contractual terms is a philosophy of international arbitration. Sometimes, though, it is beyond doubt that transnational contractual terms are a transnational act of agreement. The disputing parties and Lex Mercatoria, counsel of many nationalities, parties, and hearings in different locations are deemed to resolve to rules that are not bound to only one national law system. This is because arbitrators do not many forums like judges. The arbitral tribunals apply rules of international origin. Contractual terms are less acceptable by the parties that prefer an arbitral tribunal. Parties that believe in the source of validity of an international reward for their legal system are likely to enforce transnational laws. Contractual terms cannot be used to as a means of determination of rules but also it deems as a very important step in the process of identifying true transnational legal that uses legal systems of law that are led legally by contractual terms of the international law and the transnational arbitrary award. Reference Top of Form Smismans S (ed), Civil Society and Legitimate European Governance (Edward Elgar 2005) Top of Form Cafaggi, F. Enforcement of transnational regulation: Ensuring compliance in a global world. (Cheltenham, 2nd edition UK: Edward Elgar 2012). Top of Form Bottom of Form Top of Form Levontin, A. V. Conflict of laws with reference to transnational contracts. (2nd edn, UOP, 1968) Crawford J, The Creation of States in International Law (2nd edn, OUP 2006)Bottom of Form Bottom of Form Bottom of Form Read More