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CHAPTER 4: THE LEGAL FRAMEWORK

I. Questions and answers 1. What are the differences between Anglo-American Law and Continental Law? Criteria Goal Anglo-American family Continental family

Justice in the individual Consistency and uniformity of case Unless matters are enforcement

carefully regulated in the Decisions in all but the most Predictability and consistency of court decisions contract, the decision of difficult cases are predictable the judge is not fully with some accuracy. Decisions predictable. Different are generally consistent from

judges may give widely court to court. different judgment To be clear, contracts must Length and detail of contract regulate many issues, so they tend to be long and detailed English and American laws have been relined over the Continental law does not have centuries International acceptance issues of to cope with the prestige of Anglo-American Because the law regulates most problems, contracts can be short and lack of details

international law in international practice.

trade. The principles are They tend to focus on national widely respected 2. Give the main characteristics of Continental Law ? See question 1. 3. Give the main characteristics of Anglo-American Law ? See question 1. 1 understood and rather than international issues

4. What does the applicable law govern? It governs the contract (questions concerning the validity, interpretation and performance of the contract). 5. What are the principles of an enforceable contract? 3 principles: The parties achieve a meeting of mind through a process of offer and acceptance. Both sides are capable of entering a contract. The purpose of the contract is legal. 6. The Entire Agreement? The Entire Agreement is obtained when the background of the contract must be established with the contract itself, important letters and memoranda must be listed as contract documents and definitions play an important part in contract drafting. 7. What is The Whereas Recital? Why is it necessary? It is the background of the contract. It is necessary because if a dispute arises, the recital allows the court to discover the real meaning of the contract through an understanding of the expectations of the parties when they signed it. (Ni ngn gn l it helps the court to establish the truth ^^ nu khng nh c ci cu di long ngong ny) 8. What is discharge by performance? (Hon thnh ngha v hp ng) If both parties perform their duties exactly, a contract is discharged by performance. 9. What is termination? (n phng chm dt hp ng) Termination occurs when the contract specifically allow one party to end it inder given circumstances. 10. What is Cancelation ? (Hy hp ng) Cancellation occurs when one party ends the contract because of breach by the other party. 11. What is Rescission? (Hai bn cng tha thun chm dt hp ng). Rescission occurs when the parties agree to end the contract. 12. What are the ways to solve disputes? Give the definition of each type. Litigation: the conduct of a lawsuit (civil action brought to a court of law by a plaintiff against a defendant) 2

 Amicable Settlement: friendly settlement of disputes/disagreements. Conciliation: dispute resolution by an impartial third party. Arbitration: procedure for dispute resolution on a private basis through the appointment of an independent, neutral third party (an arbitrator) who hears and considers the merits of the dispute and renders a final and binding decision. 13. What is a panel of arbitrators ? A panel of arbitrators consists of 3 arbitrators, one chosen by each party and the third (the chairman) chosen either by both parties or by the two-appointed arbitrators. 14. What are the advantages of using a panel of arbitrators ? Private (confidential/away from public eyes) Quicker (than litigation) Costs are predictable Technical expertises Neutral Business-oriented (business-like) rather than law-oriented 15. What are the disadvantages of using a panel of arbitrators ? No right of appeal No right of discovery In case of a panel of arbitrators: high fees Inability to enforce temporary and immediate measures 16. What are the advantages of using a court ? Decision made by legally qualified judges Reasoned decision. The right to appeal The right to discovery Power of enforcement 17. What are the disadvantages of using a court ? Expensive costs Complex procedures Open to public eyes and press Hardly any technical expertise Slower 3

18. Give definition of contract documents? Give some examples. Contract documents are any important documents that predate the contract and are listed in the contract. Ex: letters, memoranda, training materials 19. When do parties to contract have to agree on the language of contract? What is the agreement? Whenever versions of a contract exist in more than one language. The agreement is to make it clear that the original contract language will prevail/the translations do not have the same authority as the original contract language. 20. What are the conditions for a arbitration panel venue? The availability of good experienced arbitrators The availability of good experienced lawyers, witnesses The fee for the above mentioned people The support or otherwise that the local legal system gives to the arbitration. Accessibility of basic factors like facilities, administrative backup, good telecommunication, IT support and even climate

II.

Further questions

21. What are the 6 steps in negotiating legal framework? The applicable law Contract or no contract Entire agreement The parties Status of the contract Settlement of disputes 22. Which family of law is more popular in international trade? Why? The Anglo-American law (or common law/case law). Because: It helps avoid waste of time It helps avoid misunderstading It helps save money It has good preparation 4

23. Why are provisions of the United Nations Convention on the Contract for the Sale of Goods of some important though business community is not large interested in it? Because the convention has been ratified by important trading nations like the US, Germany, China 24. When to apply the Vienna Convention? The nations of the exporter and importer are signatories of the Vienna Convention. 25. What happens when a contract does not specify an applicable law? The rules of international private law (t php quc t) decide the law that applies. 26. What makes an agreement not a contract? Duress (Undue pressure) Mistake and fraud Failure to follow the rules of offer and acceptance. 27. Why do most contract imclude a partial invalidity clause? To avoid problems with contracts that might infringe government regulations. 28. What is a well-drafted arbitration clause? A well-drafted arbitration clause specifies the rules of the arbitration to be used, the place and the language of arbitration, the number of arbitrators and commits both party to accepting the arbitral decision. 29. What are well written specifications? Well written specifications usually state what sysytem of measurement (metric or nonmetric) applies. 30. When do frustration and impossibility discharge a contract? When one side faces an excessive burden in complying with the contract terms.

THE END