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International Business Transactions

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* Recognition which one action extends w/in its own territory to the legislative, exec, or judicial acts of another. It's not a rule of law, but one of practice, convenience, and expediency. More than courtesy, less than obligation

* Show due regard for another state's expression of understanding for international duty

* BUT it's limited. Comity will be withheld when it would be prejudicial to an interest of the U.S. (e.g. if it would violated 1st amendment)

* Equity principle (Criticized for being a conclusion not a principle)

* Somporex- Ct recognized UK judgment por comity

Reasons for Comity

* Reciprocity, justice, reasonable expectation of the businesses, stability, efficiency, inconsistent judgments

Choice of Law

Steps to take in a conflict (is this order right?)

* 1. Is there a conflict between the choices of law? Is there an actual conflict?

o Look at the two laws to see if they conflict

* 2. Choice of law rule

o use the forum's procedural choice of law rule to determine what choice of law rule is used

o In NY, they use the greatest interest analysis- who has the greatest interest in the case (very fact specific). Other types are: apply the forum where the case is, P's nationality, forum where the breach occurred

* 3. Decide whose law applies

Karaha- Indonesian oil drilling co. NY ct still does the interest analysis. Indo vs. NY interests

Bills of Lading and INCOTERMS

Bill of Lading

* Document of title- Whoever holds the bill of lading can be given the goods

* 1. K of carriage bt the shipper and carrier

* 2. Document of Title (Represents the goods)

o Give the goods to the person on the other side of the world who has the bill of lading (shipper sends it to the buyer and buyer gives it to the carrier to get the goods)


* Standardized terms for commerce and business practice- published by the International Chamber of Commerce (org that facilitates business)

* INCOTERMS are recognized by the CISG

o Default K terms. Can incorporate terms by reference in the K.

Seller Ex Free Cost Delivery Buyer

FOB (named port)

(port where the goods are leaving from. Seller delivers and loads goods at this port.) CIF (port of destination) (port where the goods arrive)

Cost of Shipping Buyer pays Seller pays

Cost of Insurance Buyer pays Seller pays

Risk of Loss Buyer obtains risk of loss when the seller places the goods on the ship. Passes at the ship's rail from the seller to the buyer (when seller puts goods on ship)

Inspection of Goods - Right to inspect pre-shipment but buyer has to pay

- Seller has to pay for mandated inspections (country of export) Typically buyer has no right to inspect (B can pay for inspection b4 it ships but once it gets to the buyer's port, the buyer owns it)

Customs (Dutch treat) - Seller pays for customs export.

- Buyer pays for customs import. - Seller pays for customs export.

- Buyer pays for customs import.

How should the courts interpret the INCOTERMS? Argue both for exam

Strict Construction Loose Construction

- Predictability

- Uniformity (even more important in the int'l arena por different languages and courses of business)

- Stability

- Affect of commerce: could make it more efficient bc party's can't be creative - strict construction is formalistic and doesn't reflect reality

- INCOTERMS should just be gap fillers and shouldn't interfere w/ the terms in the K

- Intent of the parties making the K

- Flexibility in contracting facilitates business

Types of interpretation that courts can use for INCOTERMS:

1. Strict construction

Interpret terms exactly as they are in INCOTERMS

2. Strict default

Strict INCOTERMS, but if the parties specifically said that one term didn't apply everything else would be INCOTERMS

3. Gap filler

Example: no insurance term in K so ct looks to INCOTERMS to fill the gap

More flexibility, safety net

4. Party intent

St. Paul and Julia Issue

What do you want the law to do? Do you want to look at the intent of the parties or do you want an objective std for what these terms need?

* St. Paul- strictly interpreted CIF even though the parties changed its meaning

* THE JULIA- Ct interpreted CIF loosely according to the parties' intent, not according to the traditional meaning

CISG and the UCC

When does the CISG apply?

* Article 1:

o (1) K for the sale of goods bt parties whose places of business are in different states:

 A. when the states are contracting states

 B.



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