Lecture Notes Complete

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Lecture notes - Complete
International Commercial Law (Deakin University)
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MLL336 International Commercial Law
Topic 1 Introduction
What is it?
 Collection of disciplines
 Public and private international law
 Governments acting publicly vs. privately
o Main focus on private in this unit
 Performance, settlement.
Sources of ICL
 Treaties/ conventions/ protocols
 Model Laws: blueprint legislation that states can enact in their own
jurisdiction. States not bound
 Contractually agreed upon rules
 Soft Law: like model law, but not intended to be enacted into state
legislation, but rather to be used for contractual agreements etc. Used as
instruments.
 Domestic Law: where no international convention is available
Examples
CISG: UN Convention on International Sale of Goods

 S86 Goods Act 1958: convention implemented. Also attached to Schedule
UNCITRAL Model Law on international commercial arbitration

 S16 International Arbitration Act: Model law given force of law. Also
attached as schedule
Lex Mercatoria
 Transnational practices developed through the course of international trade
 Controversy over credibility
Conflict of Laws
Three main questions:
 Jurisdiction?
o Voth v Manildra: Court may nevertheless decline to hear the case, if
court is clearly inappropriate forum
 Balancing approach has been less significiant
 Applicable law?
o Substantive and procedural law
 Lex causae: applicable substantive law

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 Bonython v Cth: parties have a choice of law if they can agree,

if not courts will use closest connection test.
o Private international law v domestic law
 Enforcement?
o Australian and English courts have long recognized and enforced
foreign judgements.
o In the absence of a treaty, a local court recognizes and enforces
foreign judgment only when such enforcement is consistent with
local law governing that matter.
o Enforcement of foreign judgments in all Australian states but
Queensland, still regulated by statutes of parliaments (pg.770)
o Re Word Publishing Co LTD.: Court may refuse to register foreign
judgment because:
 Made in a country which has not been approved by governor
general as being eligible for the benefit of the Act under the
reciprocal principle
 It is of the kind that has not been approved by GG as being
registrable under the Act under the reciprocal principle
 More than 6 years from the date of application for
registration, and
 Contrary to any provisions of the Act or the rules of the court,
which hears the application.

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Topic 2 International Sale of Goods

Terminology
CISG: United Nations Convention on Contracts for The International Sale of goods.
(Aka Vienna sales convention)
UNCITRAL: United Nations Commission on International trade Law
UNIDROIT: International Institute for the Unification of private law
International Sale of Goods

 Contract law and statutory rules for sales contracts: Basic contract law
and on top of that we have specific legislation (goods Act) which is used to
supplement basic contract law and deal with areas not covered.
 International sale of goods is present where we have a sale of goods with an
international element.
o Not just factual international element but one that the law
recognizes as international.
o Aim to harmonize and unify the law, in order to promote
international trade and economic trade. And reduce transaction
costs.
Introducing CISG
 Applies specifically for contracts for international sale of goods
 Not a comprehensive code
 E.g. CIETAC award Para. 13.3, 16.16.2, 16.16.3
Introducing The UNIDROIT Principles

 Superficially similar, but fundamentally different to CISG

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o Soft law rather than convention, and hence do not exist as part of
any states domestic law, but states may choose to adopt them.
 Where there is a conflict between choice of law between the
parties, arbitrators may choose to adopt UNIDROIT (Rare).
o International commercial contracts in general, rather than solely
international sale of goods
o Broader subject matters covered than the CISG
o They can assist to interpret other bodies of law, such as CISG.
Application of CISG Around the world

 Potentially governing 80% of the world’s international goods trade
 http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_
status.html
 Binds member states at public international law to each other

 Incorporated into laws of member states if they choose to sign up to
convention.
o Monist States: by signing up to convention, it signals an automatic
incorporation into domestic law.
o Dualist states: Even after signing up, they make a distinction
between international and domestic law, and international
conventions must be implemented into domestic legislation.
 Goods Act s86 and 87: gives CISG Power of law in Victoria, for international
sale of goods. CISG becomes Victorian law in this element.
 As appose to UK: Who is not a signatory to CISG and has not included a
provision in their Goods Act about the CISG and ordinary UK law applies
internationally
CISG: Application and Contract Formation

Application
Art. 1 CISG:
This Convention applies to contracts of sale of goods between
Parties whose places of business are in different States:
a) When the States are Contracting States; or
b) When the rules of private international law lead to the application of
the law of a Contracting State
 If court or arbitrator decided that the law of the contracting
state party applied. E.g. court decides Australian law applied in
decision of UK v AUS.
 Legal internationality: Only requires ‘place of business’ to be

international, goods themselves don’t need to cross borders.

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Art. 2 CISG:
This Convention does not apply to sales:
a) Of goods bought for personal, family or household use (business to
business contracts only), unless the
Seller, at any time before or at the conclusion of the contract, neither knew
nor ought to have known that the goods were bought for any such use;
b) By auction;
c) On execution or otherwise by authority of law;
d) Of stocks, shares, investment securities, negotiable instruments or
money;
e) Of ships, vessels, hovercraft or aircraft;
f) Of electricity.
Art. 3 CISG: mixed contracts (all in, or all out)

1. Contracts for the supply of goods to be manufactured or produced
are to be considered sales unless the party who orders the goods undertakes
to supply a substantial part of the materials necessary for such manufacture
or production.
2. This Convention does not apply to contracts in which the preponderant

(50%) part of the obligations of the party who furnishes the goods consists
in the supply of labour or other services.
Article 4 (Boundaries)
This Convention governs only the formation of the contract of sale and
the rights and obligations of the seller and the buyer arising from such a
contract. In particular, except as otherwise expressly provided in this Convention, it
is not concerned with:
a) The validity of the contract or of any of its provisions or of any usage;
b) The effect, which the contract may have on the property in, the goods sold.
Article 5
This Convention does not apply to the liability of the seller for death
or personal injury caused by the goods to any person.
Article 6
The parties may exclude the application of this Convention or, subject to
article 12, derogate from or vary the effect of any of its provisions
 Exclusion: Even if all boxes are ticked off, parties may exclude its operation,
provided they have a sufficient reason for it.

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Article 7
1. In the interpretation of this Convention, regard is to be had to its
international character and to the need to promote uniformity in its
application and the observance of good faith in international trade.
 International Character: CISG provisions don’t necessarily

don’t have the same meaning as similar provisions in
domestic law.
 Uniformity: Eventhough foreign decisions on CISG are not
binding, verdicts made using CISG around the world, should
be used as a guide for uniformity requirements.
 Good faith: when interpreting CISG, we should keep good faith
norms in mind. (not definitive)
2. Questions concerning matters governed by this Convention which are not

expressly settled in it are to be settled in conformity with the general
principles on which it is based or, in the absence of such principles,
in conformity with the law applicable by virtue of the rules of private
international law.
 Note: different to gaps referred to in Article 4.
 Still refers to contract formation issues, but aspects, which
are not expressly mentioned in the CISG.
 General principles to be derived from CISG, scholarly
literature and common law. If still can’t be solved, another
body of law must be referred to.
Contract Formation
Starting Point:
 Art. 4 CISG: the CISG includes contract formation rules
 Where the CISG applies – its provisions determine whether,
how, and when a binding contract is concluded (ie. formed)
Important! Keep in mind:

Art. 7(1) CISG: autonomous interpretation
 CISG rules need to be interpreted differently to domestic law.
General comments:
• Offer and acceptance methodology
• No requirement for consideration
• Electronic communications accommodated
• And always remember Art. 7(1) CISG’s autonomous interpretation rule
Rules for Contract Formation

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1. Offer
Article 14:
1)
One or more specific persons
Sufficiently definitive
Indicates intention of the offeror to be bound with acceptance
A proposal is sufficiently definite if it indicates the goods and expressly or

implicitly fixes or makes provision for determining the quantity and
the price.
2) A proposal other than one addressed to one or more specific persons is to be

considered merely as an invitation to make offers, unless the contrary is
clearly indicated by the person making the proposal.
Art. 15(1): An offer becomes effective when it reaches the offeree.
2. Acceptance
Article 18:
1) A statement made by or other conduct of the offeree-indicating assent to an
offer is an acceptance. Silence or inactivity does not in itself amount to
acceptance.
2) Within reasonable time
3) An act may be a form of acceptance, without notice to the offeror
3. Rejection, revocation and withdrawal of Offers
 Art.17 (Rejection): An offer, even if it is irrevocable, is terminated when a

rejection reaches the offeror.
 Art.16 (Revocation):
1) Until a contract is concluded an offer may be revoked if the
revocation reaches the offeree before he has dispatched an
acceptance.
2) However, an offer cannot be revoked:

a) If it indicates, whether by stating a fixed time for acceptance
or otherwise, that it is irrevocable; or
b) If it was reasonable for the offeree to rely on the offer as
being irrevocable and the offeree has acted in reliance on the
offer.
 Art.15 (Withdrawal):
2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal
reaches the offeree before or at the same time as the offer.
4. Quasi-Postal acceptance rule

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Eventhough there is no postal acceptance rule under Article 16, no revocation can
apply, after acceptance has been dispatched.
5. Withdrawing acceptance
Art. 22: An acceptance may be withdrawn if the withdrawal reaches the offeror
before or at the same time as the acceptance would have become effective.
6. Late acceptance and modified acceptance

Art 21: late acceptance can be effective if offeror promptly informs the offeree that
it is satisfactory
Art.19: Default rule is that variations that do not materially alter terms of
contract, do lead to acceptance, unless the offeror promptly objects.
 19(3): examples of terms that materially alter .
7. Conclusion
Art.23: A contract is concluded at the moment when an acceptance of an offer
becomes effective in accordance with the provisions of this Convention.
Note: specifies time when contract is formed, but not where.
Further points:
 Art.11: Contracts don’t need to be concluded in writing.
 Art.8: must look at parties’ subjective interpretation of a contract. If this

isn’t clear then an objective test is to be used and surrounding
circumstances can also be used to determine intent.
 Art. 9: The parties are bound by any usage to which they have agreed and by
any practices, which they have established between themselves.
o Implied knowledge that trade practices are applicable, unless otherwise
agreed.

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CISG: OBLIGATIONS & REMEDIES
Rights & Obligations

Seller’s Obligations
Art. 30: Seller’s obligations:
 Must deliver goods
 Hand over any documents
 Transfer property in goods
As required by the contract and this conventions
Note:
 Art.6 (Provisions in contract has primacy over CISG), but CISG is default.
 Art.4: Actual rules for passing of property outside CISG
Delivery of Goods and handing over of documents (Art.31-34)

Art 31: If seller is not bound to deliver in any particular way, then:

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 Where contract involves carriage of goods: handing over goods to first

carrier to transmission to the buyer
 For specific goods still to be manufactured: placing goods at buyer’s
disposal at place of production
 Placing goods at buyer’s disposal at seller’s place of business
Art. 32:
 Where seller hands goods to a carrier and they aren’t clearly identifiable to
the contract by markings or shipping documents, seller must notify buyer of
the consignment specifying the goods.
 Where seller is bound to arrange carriage for goods, he must ensure proper
and appropriate transportation to the place fixed
 If seller is not bound to effect insurance in respect to carriage, he must, at
buyer’s request, provide all information necessary to enable him to effect
such insurance.
Art 33:seller must deliver goods

 On the day of the fixed date of contract
 If there is a period of time, within that period
 Or within reasonable time if nothing is specified
Art 34:
 If seller is bound to hand over documents he must do so at time and place
specified by contract.
 If he hands it over before that time, he may cure any lack of conformity in
the documents, if it doesn’t cause buyer unreasonable inconvenience. Buyer
still retains right to claim damages, pursuant to CISG.
Conformity
Art 35:
1. Goods must be of same quantity, quality and description required by
contract and packaged in manner required by contract.
2. Except where parties have otherwise agreed, goods do not conform with
contract unless:
a. Fit for purpose for ordinary use of goods of same description
b. Fit for any particular purpose expressly or impliedly made known to
seller at time of contract, except where buyer did not rely or was
unreasonable to rely on seller’s judgment
c. Has same qualities as model/sample shown to buyer by seller
d. Packaged in manner usual for such goods, or adequate manger to
preserve and protect goods
3. Seller not liable under ss2 if buyer knew or could not have been unaware of
lack of conformity at time of conclusion of contract.
Examinations and notice requirements

Art 38:
1. Buyer must examine goods or cause examination within as shorter period as
practicable

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2. For carriage situations, examination may happen upon arrival

3. Where buyer redirects goods and seller has known this, examination may
happen upon arrival at new destination
Art 39:
1. Buyer loses right to lack of conformity, if he doesn’t notify seller within
reasonable time after he discovered it or ought to have discovered
2. Or, 2 years after goods handed to buyer.
Art 40:
Seller cannot rely on 38 and 39, where he knew of lack of conformity or could not
have been unaware and did not disclose to buyer
Art 44:
Buyer may reduce price in accordance with Art 50 or claim damages, except for loss
of profit if he has reasonable excuse for his failure to give required notice.
Buyer’s Obligation
Art 53:Buyer must

 Pay the price
 Take delivery as required
Note: subject to Art 6(party autonomy)
Payment of price
Art 54: includes taking steps and complying with formalities required under
contract or any laws to enable payment to be made
Art 55: where price isn’t expressly mentioned at conclusion of contract, parties are
considered to have impliedly made reference to price generally for such goods
under comparable circumstances in the trade concerned
Art 56: if price fixed by weight, net weights is to be used
Art 57

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1. Is place of payment not specified, buyer must pay at seller’s business place
or if payment is to be mad upon handing over of goods, at the place where
that takes place.
2. Seller must bear any increase in expenses incidental to payment, caused by
change in place of business subsequent to conclusion of contract
Art 58:
1. Where time of payment not specified, it must occur, when seller places either
the goods or documents at buyer’s disposal.
2. For carriage situations, seller may dispatch the goods on terms where goods
or documents will not be handed over unless payment is made.
3. Buyer not bound to pay price until he has examined, unless procedures are
inconsistent with him having such an opportunity
Art 59:
Buyer must pay price on date fixed or determinable by contact or CISG, without
need for any request by seller.
Taking delivery
Art 60:
 Act reasonably to enable seller to make delivery
 Take over the goods
Note: subject to Art 6(party autonomy)
REMEDIES
Buyer’s Remedies (Seller’s breach)
Main source
Art 45(1): buyer may exercise rights (ART. 46-52) and claim damages (74-77)
Buyer may exercise rights

Art 46:
1. Buyer may require performance by seller.
 Art 28: confirms that consideration must be given to law of specific country
where court is sitting
2. If goods do not conform with contract, and there is a fundamental breach,
buyer may request substitute goods, with respect to Article 39
3. May also require repair, with respect to article 39

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47:
1. Buyer may fix additional time for performance by seller and buyer may not
perform any remedy during that period for breach of contract unless seller
has notified he will not perform. However damages for delay in performance
still available to buyer.
48:
1. Seller may remedy at own expense even after delivery date any failure to
perform obligations if it doesn’t inconvenience the buyer
2. If the seller requests buyer to make known if he will accept such
performance and buyer does not respond within reasonable time, seller may
perform within reasonable time and buyer cannot use remedy within that
time.
3. Buyer must receive such a request for it to be effective.
49:
1. Buyer may declare the contract avoided:
a. Seller’s failure to perform is a fundamental breach (Art.25) of
contact
b. Where there is non-delivery and seller does not deliver within
additional period of time fixed by buyer under 47 or declares he will
not deliver
2. Where delivery has occurred, buyer cannot avoid unless he does so:
a. Late delivery
b. Any breach other than late delivery, within reasonable time
i. After he knew or ought to have known of breach
ii. After expiration of additional period of time under 47 or
seller declared he will not deliver
iii. After expiration of additional period indicated by seller in
accordance with 48, or after buyer had declared he will not
accept performance.
NOTE: Art 7: CISG Autonomous interpretation of CISG.
50: Buyer may reduce price if goods do not conform, regardless of whether or not
price has already been paid. Must be in proportion to goods that were actually
delivered to properly conforming goods.
 However, if seller remedies any failure to perform under 37 or 48, or if buyer
refuses to accept performance, buyer may not reduce price
51: Part Delivery

1. If only part of the goods have been delivered in conformity, 46-50 only
applies to the missing part
2. Contract may only be avoided in its entirely if incomplete delivery is a
fundamental breach.
52:
1. If seller delivers before fixed date, buyer has discretion to take or not to.
2. If seller delivers excess quantity, buyer has discretion to accept, but must pay
for excess at contract rate.

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Seller’s Remedies
Art 61(1): Seller may exercise rights as provided in 62-65 and claim damages as
provided in 74-77
62: may require buyer to perform (pay price and take delivery)
63:
1. Seller may fix additional period for buyer to perform
2. Unless seller has received notice from buyer that he will not perform within
that period, seller may not resort to remedy for breach, but is still able to
claim damages for delay in performance
64:
1. Seller may avoid:
a. Buyer’s failure to perform is fundamental breach
b. If buyer does not in accordance with 63, perform his obligations or
declares he will not do so
2. Where buyer has paid, seller cannot avoid unless:
a. Late performance by buyer, before seller has become aware that
performance has been rendered, or
b. In respect of any breach other than late performance within
reasonable time
i. After he knew or ought to have known of breach
ii. After expiration of additional period of time under 63 or after
buyer has declared he will not perform
65: If Buyer must specify form or other features of goods and fails to do so in
reasonable time, seller may make a judgment in accordance with requirement of
buyer made known to him, but he must inform the buyer and give him reasonable
ti9me to make a different specification.
Damages (same for both buyer and seller)

Refer back to 45(Buyer) and 61(seller), as source to use damages.
Art. 74: Damages consist of a sum equal to the loss, including loss of profit, suffered
by the other party as a consequence of breach. May not exceed loss with the party in
breach foresaw at time of conclusion of contact.
75: If contract is avoided, and buyer has bought replacement goods or seller has
resold goods, party claiming damages may recover difference between contract
price and price in substitute transaction.
76:

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1. If contract is avoided, and no purchase or resale has happened, party may

recover the difference between fixed price and current price at the time of
avoidance.
a. However is party claiming damages, has avoided the contract after
taking over the goods the current price at the time of taking over
the goods shall be applied and not the price at the time of avoidance.
77: A party who relies on a breach of contract must take such measures as
are reasonable in the circumstances to mitigate the loss, including loss of
profit, resulting from the breach. If he fails to take such measures, the party
in breach may claim a reduction in the damages in the amount by which the
loss should have been mitigated.
Topic 3 International Carriage of Goods
Carriage of Goods
Only carriage by sea & Air will be considered in this Unit.
Carriage contracts: separate, but complementary to international Sale of Goods

contract.
Carriage of Goods by Sea

 Sea as a mode of transport

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 Shipper & Carriers

 Regulates by various international instruments
 Uniformity in this area of law would harness trade/reduce costs etc.
Instruments
• International Convention for the Unification of Certain Rules of Law
Relating to Bills of Lading 1924
• Hague Rules
• Brussels Protocol Amending the Hague Rules Relating to Bills of Lading
1968
• Hague-Visby Rules
• United Nations Convention on the Carriage of Goods by Sea 1978
• Hamburg Rules
• United Nations Convention on Contracts for the International Carriage of
Goods Wholly or Partly by Sea 2008
• Rotterdam Rules
Hague Rules & Hague-Visby Rules

 Large number of signatory states, as well as states that incorporate into
their law without formally adopting.
 Australia Position: Carriage of Goods by Sea Act 1991(Cth)
Hamburg Rules
 UN Instrument
 Not adopted in Australia, but see Carriage of Goods by Sea Act review
mechanisms
o S2 (3) CGSA: provides a review mechanism, to adopt Hamburg rules,
but these weren’t followed and so Hamburg rules automatically
repealed.
 34 State parties
o Note: many countries who sign but haven’t ratified and entered into
force.
Rotterdam Rules
 Idea is to supersede other regimes and further enhance uniformity and
harmonization. Aim is to consolidate other regimes into one body.
 A number of signatories, only 3 State parties, and not enforced in any
country in the world.
 Australia has not signed
o S88 (2): signature not enough, must also be ratified
o S89: If a state adopts convention, earlier conventions (Hague etc.)
are to be denounced.
Specific Provisions:
Article 94: Entry into Force

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 20 countries must ratify in order to come into force (not yet achieved)
Article 1 Definition:
 Contract of Carriage: carrier carries goods from one place to another
against payment of freights. Contract shall provide for several modes of
transport in addition to sea carriage.
 Carrier: Enters into contract of carriage with shipper, and has the carriage
obligations. Performing party may differ from carrier themselves.
 Shipper: Enters into contract of carriage with carrier
 Consignee: person entitled to delivery of goods under contract of carriage
 Transport document: Document issued under a contract of carriage by
carrier (includes electronic documents)
 Goods: Wares, merchandise and articles of every kind that a carrier
undertakes to carry under contract. Includes packing.
 Freight: remuneration payable to carrier for carriage.
Article 2: regard has to be had to international character, promote uniformity and

good faith in international trade.
4: Any provision that limits liability or provides defence for either the carrier or
shipper, applied in any judicial or arbitral proceeding.
5: Scope of convention
 Place of receipt and place of delivery must be in different states, and
 Port of loading of sea carriage and port of discharge in different states.
8: Any transport document may be recorded electronically, given consent of both

parties. Both electronic communications and written communications are treated
equally.
Obligations of Parties
Carrier:
11: Carrier shall carry goods to destination and deliver goods to consignee.
12: period of responsibility of carrier starts when carrier or performing party

receives goods for carriage and ends when goods are delivered.
13: Specific obligations of carrier
14: Specific obligations applicable to voyage
16: Carrier may sacrifice goods at sea, when sacrifice is reasonable for common
safety, or preserve human life or other property.
Liability of Carrier:

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17: only liability for things that happen during period of responsibility defined
earlier.
 Carrier relived from liability in particular situations outlined in 17(3).
18: Carrier is liable for breach by performing party, master or crew of ship,
employees of carrier or performing party, any other persons who performs carrier’s
obligations.
21: delay in delivery occurs when goods not delivered at destination in contract,
within time agreed.
23 (4): No compensation in respect of delay is payable unless notice of loss due to

delay was given to carrier within 21 days of delivery of goods.
24: when deviation occurs.
26: When loss or damage occurs outside carrier’s responsibility, another instrument
may be used to determine result.
Obligations of Shipper
27: Shipper has to deliver goods ready for carriage, and must be in condition that
they will withstand intended carriage.
30: Shipper liable for loss or damage when it was caused by breach of shipper’s
obligations. Liability may be severed.
32: Shipper must inform carrier of dangerous nature of goods and must be marked
and labeled. They may be liable for loss or damage if this doesn’t occur. Must be
causal connection between loss and failure to notify or label.
41: general rule is that transport document is prima facie evidence of carrier’s
receipt of goods (same as bill of lading).
Delivery of goods
43: obligation to accept delivery by consignee.
48: goods remain undelivered even at place of destination, where consignee

doesn’t collect or refuses to accept receipt or carrier is not allowed to deliver due to
laws.
 Carrier may store goods, unpack, move or cause goods to be sold or
destroyed if laws require it.
 Reasonable notice must be given by carrier
49: nothing in convention affects right of carrier pursuant to the contract of

carriage.
Limits of liability
59: 875 units of account per package or 3 units per kilo. Parties may agree on
higher limit, but not a lower one.

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 Unit of account is the special drawing right as defined by international

monetary fund. (Keeps the limit of liability from fluctuating like other
currencies)
60: Limits of liability for delay
61: loss of benefit from limitation of liability.
62: sets a 2 year limitation period for judicial and arbitral proceedings,
commencing from date of delivery by carrier or when good should have been
delivered.
64: extensions of time limit
Jurisdiction & Arbitration

States have a choice to implement these provisions 66-78
Validity of Contractual terms

79:
83: nothing in this convention affects application of any convention regulation

global vessel limitation
85: Don’t apply to passengers and their luggage.
Carriage of Goods by Air

Montreal convention 1999 (most contempary)
 Enforced in Australia and by a large number of states.
Provisions
Scope
1: This Convention applies to all international carriage of persons, baggage or

cargo performed by aircraft for reward. It applies equally to gratuitous carriage
by aircraft performed by an air transport undertaking
 International carriage: place of departure and destination must be in
different states or where in single state party if there is a stopover in
another country.

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2: convention applies to carriage performed by government
5: Air waybill or cargo receipt contents

 9: non-compliance with requirements of receipt in Article 5, does not affect
validity of contract.
 11: Air waybill is prima facie evidence of the conclusion of contract
13: Delivery of Cargo
18: Damage to cargo

The carrier is liable for damage sustained in the event of the destruction or loss of
or damage to, cargo upon condition only that the event, which caused the damage
so sustained, took place during the carriage by air.
However, the carrier is not liable if and to the extent it proves that the destruction,
or loss of, or damage to, the cargo resulted from one or more of the following:
 Inherent defect, quality or vice of that cargo;
 Defective packing of that cargo performed by a person other than the
carrier or its servants or agents;
 An act of war or an armed conflict;
 An act of public authority carried out in connection with the entry, exit or
transit of the cargo.
19: Carrier is liable from losses that come about by delay but not liable when they
prove them and their agents took all measures that could reasonably be required to
avoid damage or that it was impossible for them to take such measures.
20: Exoneration: If the carrier proves that the damage was caused or contributed
to by the negligence or other wrongful act or omission of the person claiming
compensation, or the person from whom he or she derives his or her rights, the
carrier shall be wholly or partly exonerated from its liability to the claimant to the
extent that such negligence or wrongful act or omission caused or contributed to
the damage
22: Limits of liability (read full)

 4150 special drawing rights
23: converting special drawing rights to monetary units
24: limits reviewed at 5-year intervals
25 and 26: party’s can increase to increase limits but not reduce, so consignee and
shipper are protected.
 27: carrier still has freedom on contract
49: Mandatory application of convention

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If convention applies, its application if mandatory
50: Insurance
By signing up to convention, there’s an obligation on states to implement a form of
insurance in their domestic law and airline regulations.
51: Extraordinary circumstances
57: no reservation
Warsaw System
• Warsaw Convention 1929
• Hague Protocol 1955
• Guadalajara Convention 1961
• Montreal Protocol No. 4(different to Montreal 1999)
Chicago system
 Sharing of civil airspace.
Australia: Civil Aviation (Carrier’s liability) Act 1959 (Cth)

• Part IA – Montreal Convention 1999
• Part II – Warsaw Convention and Hague Protocol
• Part III – Warsaw Convention without Hague Protocol
• Part IIIA – Guadalajara Convention
• Part IIIC – Montreal Protocol No. 4
• Part IV – Other carriage (where no applicable convention)
Topic 4 Letters of Credit

Role of Payment
Payment is an inherent part of goods of trade.
Problems in Payment
International payment is much different to everyday payments, as the issues of
time and distance is prevalent.
Considerations that effect method of payment:

 Exchange control regulations of particular countries
 Exchange risks
 Domestic regulation of financial transactions
 Export and import licenses

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 Financial credibility of the other party

 Fraud in documentation
 Reliability of the other’s performance
 Effectiveness of communication
 Effectiveness of recourse against each other
Tensions: Seller prefers payment as early as possible, but buyer prefers payment to
differ as long as possible, until they receive item.
Basic Methods of Payment

Direct payment v Intermediated payment
Eventhough each method of payment has no legal standing, parties are bound by
method agreed upon in sales contract.
 Cash in advance
o Cash in advance of contractual performance.
o Most of the risk on Buyer
 Open account
o Payment by buyer at particular time or on occurrence of particular
event.
o More balanced risk between seller and buyer
 Collection
o Intermediated method
o Bank acts on seller’s behalf to collect payment.
o Buyer pays for the price of the contract in exchange for the
documents of title over the goods with the assistance of the bank
o More balanced risk of payment than open account.
Documentary Credit (Letter of Credit)

Matrix of contracts that’s work together involving buyer, seller, bank(s)
See Para 4.90. (standard model)
UCP 600 Rules:

Set of rules governing how letters of credit works. Not a body of law, but a body of
contractual rules, that can be used by buyer and seller.
Note: applicable law may vary in various contracts in a letter of credit.
Categories of letters of credit:

See pg.465.

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Topic 5 Trade Agreements

International Trade Agreements
Nature of WTO (World Trade Organisation)
 International trading system
 Established by series of international treaties
 Public international law
o Eventhough countries don’t necessarily trade with each other they
set laws that regulate how private companies trade internationally.
 Important, because it is the only true international trading system.
 1st January 1995
 Built on GATT 1947

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WTO Agreements
 Final Act
 Marrakesh Agreement
 Annexes:
o 1A – Trade in goods
 Includes GATT1994, but is not the same as the original GATT
and has been amended.
 Also includes agreements on agriculture, textiles and clothing
etc.
o 1B – Trade in services
 General Agreement on Trade in services
o 1C – IP
 Intellectual property Rights
o 2 – DSU
 Rules on disputes will be resolved
o 3 – TPRM
 Trade policy review mechanism of member states
o 4 – Plurilateral agreement (PTA’s)
 4(a): trade in civil Aircraft
 4(b): Agreement on Government Procurement
Note: Annexes 1A-3 are ‘integral’ agreements and must be adopted by member
states. Annex 4 is ‘optional’.
Functions of WTO
Art. 3 WTO Agreements
5 main tasks:
1. Implement and Administer WTO Agreement and its Annexes. Includes
providing a framework for administering PTA’s se out in Annex 4, for states
that have ratified them.
2. Provide a forum of negotiation for members to discuss issues of concern
3. Provide a dispute settlement mechanism pursuant to the understanding on
Rules and Procedures Governing the settlement of disputes (DSU).
4. Administer the trade Policy Review Mechanism established under Annex 3.
5. Cooperate with international Monetary fund (IMF) and the International
Bank for reconstruction and development (IBRD).
Organisational Structure of WTO

Art. 4
 Ministerial Conference
o Highest decision making body
o Represented by all members, meeting once every 2 years
 General Council
o Second highest authority
o Represented by all members

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o Not a rule making body, however it can make administrative or

limited policy decisions for the implementation of agreements under
WTO Agreement.
o Has discretion to perform functions of Dispute Settlement body and
Trade policy Review Body. This ensures the function can be
performed even when the relevant bodies fails to perform tasks
adequately.
 Dispute Settlement Body (sits through General council)

 Trade Policy review Body (sits through general council)
o No decision making power itself
 Council for trade in goods

 Council for trade in-services
 Council for intellectual property
 Various Functional bodies and Committees
Key principle: Non-discrimination

 Most favoured nation (at the border)
o Member states given at the border, same rights best treatment given
to non-member/member states.
 National treatment (behind the border)
o Once goods cross a border, foreign goods can’t be subject to higher
rate of GST than locally produced goods.
Ensures traders are on a level playing field with each other, in comparison to local
business activity.
WTO Dispute Settlement
Dispute Settlement Process (DSP)

 Key principles: Equitable, Fast, effective, mutually acceptable
 WTO members have agreed that if they believe fellow-members are
violating trade rules, they will use the multilateral system of settling
disputes instead of taking action unilaterally
How long to settle a dispute? back to top
These approximate periods for each stage of a dispute settlement procedure are target
figures — the agreement is flexible. In addition, the countries can settle their dispute
themselves at any stage. Totals are also approximate.

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60 days Consultations, mediation, etc
45 days Panel set up and panellists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (Without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1y 3m (With appeal)
First stage: consultation (up to 60 days). Before taking any other actions the
countries in dispute have to talk to each other to see if they can settle their
differences by themselves. If that fails, they can also ask the WTO director-general
to mediate or try to help in any other way.
Second stage: the panel (up to 45 days for a panel to be appointed, plus 6
months for the panel to conclude). If consultations fail, the complaining country can
ask for a panel to be appointed. The country “in the dock” can block the creation of
a panel once, but when the Dispute Settlement Body meets for a second time, the
appointment can no longer be blocked (unless there is a consensus against
appointing the panel).
Officially, the panel is helping the Dispute Settlement Body make rulings or
recommendations. But because the panel’s report can only be rejected by consensus
in the Dispute Settlement Body, its conclusions are difficult to overturn. The panel’s
findings have to be based on the agreements cited.
The panel’s final report should normally be given to the parties to the dispute
within six months. In cases of urgency, including those concerning perishable goods,
the deadline is shortened to three months.
The agreement describes in some detail how the panels are to work. The main
stages are:

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Before the first hearing: each side in the dispute presents its case in writing to
the panel.
First hearing: the case for the complaining country and defence: the
complaining country (or countries), the responding country, and those that have
announced they have an interest in the dispute, make their case at the panel’s first
hearing.
Rebuttals: the countries involved submit written rebuttals and present oral
arguments at the panel’s second meeting.
Experts: if one side raises scientific or other technical matters, the panel may
consult experts or appoint an expert review group to prepare an advisory report.
First draft: the panel submits the descriptive (factual and argument) sections
of its report to the two sides, giving them two weeks to comment. This report does
not include findings and conclusions.
Interim report: The panel then submits an interim report, including its
findings and conclusions, to the two sides, giving them one week to ask for a review.
Review: The period of review must not exceed two weeks. During that time, the
panel may hold additional meetings with the two sides.
Final report: A final report is submitted to the two sides and three weeks later,
it is circulated to all WTO members. If the panel decides that the disputed trade
measure does break a WTO agreement or an obligation, it recommends that the
measure be made to conform with WTO rules. The panel may suggest how this
could be done.
The report becomes a ruling: The report becomes the Dispute Settlement
Body’s ruling or recommendation within 60 days unless a consensus rejects it. Both
sides can appeal the report (and in some cases both sides do).
Note: Only governments can sue or be sued.

But, Business’ can lobby governments.
Regional Trade Agreements

Rationale for RTA’s
 They cover aspects that fall outside scope of WTO agreements
 They may be able to improve areas over and above WTO system
Example RTA’s
• European Union (EU)
• Asia Pacific Economic Co-Operation (APEC)
• Association of South East Asian Nations (ASEAN)
• North American Free Trade Agreement (NAFTA)
• Australia – New Zealand Closer Economic Relations (ANZCER)

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How do these RTA’s distinguish themselves from WTO’s and how are they
significant?
Australia NZ Relations (ANZER)

 To eliminate barriers to trade between Australia and NZ in a gradual and
progressive manner under an agreed timetable and with minimum
disruption.
 Preferential treatment given to each other with respect to tariffs (atleast
5% less) compared to another country. Contravenes WTO’s non-
discrimination policy.
Trans-Pacific Partnership Agreement

 Under negotiation
 12 negotiating parties
 Highly controversial- ISDS
Key interests and benefits
 The TPP has the potential to forge stronger economic links between
economies in the Asia-Pacific region based on common rules for trading. It is
in Australia’s interests to be involved in order to shape the direction of the
initiative.
 The TPP will provide new opportunities for Australian goods to be used in
manufacturing and production processes in the region.
 Australia does not have existing trade agreements with a number of the
current TPP parties. The TPP could provide Australian exporters of goods
and services with increased access to these new markets. The TPP could also
build on the FTAs Australia has concluded by providing additional access for
Australian goods and services into those TPP countries.
 The TPP provides an opportunity to benefit Australia’s significant services
sector, through enhanced access for service suppliers involved in education,
legal, financial, mining and agricultural services.
 The TPP will provide substantive outcomes on electronic commerce, which
will benefit consumers and businesses.
Investor-state dispute settlement (ISDS) is an instrument of public

international law, that grants an investor the right to use dispute settlement
proceedings against a foreign government.

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Topic 6 Foreign Investment Law

Foreign Investment – In General
Motivations for Foreign investment
 Post WW11, number of newly independent countries, in need of help for
economic development.
 Traditional viewpoint was to nationalize instead of looking for foreign
investment.
o Expropriation: Government taking control of foreign investors’
asset in their country.
 Australia’s foreign investment Policy 2013: The Government welcomes
foreign investment. It has helped build Australia’s economy and will
continue to enhance the wellbeing of Australians by supporting economic
growth and prosperity
 Conflict of interest between foreign investor and host state, and so it is
closely regulated.
o Foreign investors have private profit motives in mind, whilst Host
states have their states economic growth as their main motive.
Economic Advantages
AFP 2013: Foreign investment brings many benefits. It supports existing jobs and
creates new jobs, it encourages innovation, it introduces new technologies and
skills, it brings access to overseas markets and it promotes competition amongst
our industries
Who is involved?
Foreign Investor:
 Is a party undertaking foreign investment activities
 Maybe private or government entity (mostly private)
 IS not a citizen of the host state
Host State
 State in which the foreign investment occurs

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Foreign Investment: Two main types as defined by UNCTAD

 Foreign Direct investment (FDI): investment involving a long term
relationship and reflecting a lasting interest and control by a resident entity
in one economy (investor) in an enterprise resident in an economy other
that of the investor
 Foreign portfolio Investment (FPI): Entry of funds into a country where
foreigners make purchases in the country’s stock and bond markets,
sometimes for speculation
Note: Foreign investment is not a mere sale of goods or supply of services!! Hence it
differs from previous topics of sale of goods.
Forms (pg. 567)

 Multinational corporations
 Joint Ventures
 Sole foreign ventures
 Licensing and countertrade
 BOT projects (not a form of expropriation)
 Foreign takeovers and acquisition
Foreign Investment- International regulation

Another conflict of interest: host country may wish to regulate foreign investment,
whereas the capital exporting country (home of investor) may feel the need to
protect it’s nationalists’ interests for the purposes of promoting its overseas
investment and trade.
No comprehensive treaty, but many soft law instruments that aren’t

binding. (576-592)
Closest we have come:
(Draft) Multilateral Agreement on investment:

Didn’t go pat 1998, where negotiations broke down. It is very hard to regulate
internationally in this area. What to regulate? How to regulate? Minimum
standards? The conflict of interests that are present makes it hard to find the right
balance. Not as easy as the GATT regulations on sales of goods etc.
Investment Arbitration
 Bilateral investment treaties (BIT’s): If they include ISDS clauses, can
provide for investment arbitration to resolve disputes
 Washington convention 1965: IXIT arbitration happens autonomously
 Protections granted (encourage investment) and effective enforcement
provided (arbitration)

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Phillip Morris claim: ISDS mechanism contained in Australia-Hong Kong

agreement.
Foreign Investment- Domestic (Australian) Regulation

Foreign Acquisitions & Takeovers Act 1975 (Cth):
S18 Acquisition of Shares is our main focus. (Also includes associated sections)
S16: Applies within and outside Australia

S17: All persons required to comply, whether resident or citizen as well as all
corporations
S18 (2): Treasurer may prohibit proposed acquisition where;

 Person(s) proposes to acquire shares, or corporation proposes to issue
shares, and
o This would result in a corporation not previously controlled by
foreign persons, now being controlled by a foreign person, or
o A corporation being controlled by a foreign person, would not be
controlled by a new foreign person
And, that result would be contrary to national interests.

Considerations include;
 Australian Policy 2013: national security, competition, and other Australian
policies, impact on economy and community, as well as character of
investor.
S18 (1): defines corporation. Look at s7 for definition of ‘business’.
S13A (1): s18 not applicable to shares in exempt corporation

 Exempt Corporation defined in s13A (4).
 Under 5mil. Of assets under this Act.
Control: s18 (7A): foreign person holds a controlling interest in the corporation or 2
or more foreign persons hold an aggregate controlling interest in the corporation;
 S9 (2): Substantial interest or aggregate substantial interest equates to a
controlling interest.

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Foreign Persons: s5 (1): person not residing in Australia
Proposal to acquire shares: s5 (3)
S26: compulsory notification to treasurer for proposal to acquire shares.
Consequences
S30 and 31
S18 (4): treasurer can order to dispose of shares.
S39: The Governor-General may make regulations, not inconsistent with this Act,
prescribing all matters required or permitted by this Act to be prescribed or
necessary or convenient to be prescribed for carrying out or giving effect to this Act.
 This is the section that validates FATR 1989 regulations.
Foreign Acquisitions & Takeover Regulations 1989:

Prescribe higher values for ‘Exempt Corporation’, than in S13A.
Note how, the Act, the regulations, and the policy work in tandem to regulate this
area, in the absence of an international treaty.
However, domestic legislation only prohibits exceptional cases of foreign
investment, but there is no benchmark that needs to be met. Hence, there is a pre-
determined idea that foreign investment is endorsed in Australia.

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Topic 7 International Dispute Resolution

International Dispute Resolution
Three principal means:
 Negotiation/mediation
 ‘Settlement’
 Informal: controlled entirely by parties themselves
 Usually voluntary to commence/continue. (Sometimes parties may involve
dispute resolution system in their contract)
 It is only after this method is attempted, that parties go to other methods
like arbitration.
 Eventhough this is a voluntary method there are UNCITRAL model laws that
are relevant.
 State court litigation

 Very different to previous method
 Recourse to ordinary state courts
 Using ordinary state court litigation to resolve an international commercial
dispute
 Disputes externally (judges and courts) resolved. This is binding on parties.
 There is however conflict of laws issues (enforcement?).
 Defined procedure
 International commercial arbitration

 Parties resort to external entity (impartial arbitrator(s))
 Domestic law is very important and plays a key role
 Supported by international conventions, state law and contractual
agreements (also soft law).
 Eventhough it is voluntary, this ends after the process is entered into. From
then on parties can’t pull out.
 Flexible procedure: parties can agree on how process will happen, if they
can’t there are a broad set of fall back rules, and arbitrators can help
decide on process too.

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State Court litigation

 Choice of forum and commencing proceedings
o Forum shopping: looking for the most favourable forum for the
client.
 Carrying out the proceedings
o Applying ordinary court procedures on international law
o Procedural rules of the court will apply, but they will decide on
applicable law, if parties haven’t agreed it on.
 Enforcing judgments
o If defendant doesn’t have assets in particular country where
litigation occurs, then judgment will have to be enforced in another
country where assets are held. (Enforcement topic 1)
o Doesn’t involve a re-hearing. Winning party tries to enforce their

favourable judgment in another country.
 No review of decision and whether it was right/wrong. Purely

a procedural question.
 Not an automatic right
 Enforcement law of place of enforcement is relevant here.
 Common law/legislation
 Treaties?
 No worldwide convention
In Australia, common law:

Enforceable judgment must satisfy following 3:
 Foreign court has jurisdiction (Schisby v Westenbolz)
 Judgment must be final (Vogel v R and A kohnstamm)
 Judgment must be for a fixed sum
But now,
Foreign Judgment Act 1991

S6: holder of foreign judgment may aply to an appropriate court for registration of
the judgment. Once judgment is registered in a state Supreme Court, it is regarded
as the judgment of the court registering it and is register able, in other states and
territories.
S5 AND 6.: Court may refuse to register foreign judgment because:

 Made in a country which has not been approved by governor
general as being eligible for the benefit of the Act under the
reciprocal principle

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 It is of the kind that has not been approved by GG as being

registrable under the Act under the reciprocal principle
 More than 6 years from the date of application for
registration, and
 Contrary to any provisions of the Act or the rules of the court,
which hears the application.
S5: reciprocity
GG may allow foreign judgments to be registered under the Act if he or she is
satisfied that the country would reciprocally enforce Australian judgments in
similar circumstances
S7: Court may set aside registration: (pg773)

 If they decide court has no jurisdiction
 Judgment obtained by fraud
 Reversed or set aside in original country
 Enforcement is contrary to public policy
International Commercial Arbitration

Pryles Reading:
o Arbitration is the ‘usual’ method
o It is flexible
o Scope for parties themselves to appoint arbitrators, with specific
expertise in the area, even if they cant practice law
o Neutral/ arbitral set
o International enforceability of awards (New york Convention)
o Freedom to choose governing laws
How does it work?

 Recognized and supported by law, which makes it effective
 Several instruments, that interact with each other
o Conventions
o Model laws
o Contractual rules
o Ordinary domestic law
All countries have (state) arbitration law- a lex arbitri: regulates arbitral
proceedings in a country.
 Validates arbitration that occurs in that country
 International Arbitration Act
o S16, gives the UNCITRAL model law force in Australia
UNCITRAL 1985 model law was made as a guide for countries when enacting own
legislation

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o UNCITRAL Revised in 2006 but has no force, until countries decide to

amend their own legislation accordingly.
o A default regime for arbitrators to follow. Only procedural law not
substantive law. Only sets out process, doesn’t deal with actual
legal outcome.
Art 19:
1: Subject to the provisions of this Law, the parties are free to agree on the
procedure to be followed by the arbitral tribunal in conducting the proceedings
 There are procedural rule formats, which the parties can choose from and
agree upon, that work as an overlay to the model law. (E.g. ACICA rules)
 Mandatory provisions: can’t be changed by parties. These are decided by
case law and scholarly writings.
o E.g. Art 18: equal treatment
ACICA Rules
 Institutional arbitration: arbitrations that are supervised by a particular
international body that is not the court of a particular country. They usually
have their own set f rules that can be employed by the parties. E.g. ACICA
rules
 Note: These rules can be used in other countries as well, not just Australia.
Ad hoc rules: arbitration rules may still be used, but there is no institution that is
supervises and the court does this instead. The parties may adopt ad hoc rules such
as UNCITRAL arbitration rules.
Enforcement regime:
Instead of rendering judgments, arbitrators render awards to resolve the dispute.
Like judgments, party may want to enforce the award in another country. They rely
on New York Convention.
 Adopted in Australian law: S3-14 International Arbitration Act.
o Art4 New York: Court must not re-examine arbitrators decision on
facts, when enforcing the award.
Consent in Arbitration
 Art 7 Model Law: Must be initial consent
 Once consent is given, parties then cant later withdraw. If they do courts can
refer parties back to arbitration. (Art 2(3) NYC)
Governing Law
 Art 19 Model Law: Parties have autonomy to choose the procedural law
(so ACICA rules shall override Art 28 if parties so choose)
 Art 28 model law: substantive law on how to decide on dispute (not
mandatory law)
o 28(1): parties may choose substantive law that will apply.

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o 28(2): Arbitrators can decide on choice of law, using conflict of laws

rule, if the parties can’t decide themselves. (Restricted to national
legal systems and cannot apply lex mercatoria or UNIDROIT
principles.)
 Art 34(1) ACICA: similar principle to art 28 of model law.

o Difference to Art 28 model law is that Tribunal isn’t restricted and
Lex Mercatoria and UNIDROIT can be used. And conflict of laws rules
isn’t required, when deciding choice of law.
Other Arbitral related bodies

 ACICA
 IAMA
 CIArb
Challenging Awards
 Can be challenged not appealed
o Different to appeal because decision cannot be changed, merely a
judgment on whether award stands or not.
o Can be done in 2 ways:
i. Art 34 Model Law: party that has award rendered against

them can challenge in Australian court. (Proactive approach)
 If challenge is successful award ceases to exist
ii. Wait until other party tries to enforce award in another
country and challenge under Art 5 of NYC. (More passive)
 If challenge is successful award still stands, but is
not enforceable in that particular country.
Both types can only be used for procedural due process issues, not on
substantive law issues.

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Topic 8 Current Issues A: Regulating

International Commercial Contracts at the global
and Regional levels
An analysis of current developments, regarding the harmonisation of international
commercial contract law, at the global and regional levels
The Swiss Proposal

Proposal by government of Switzerland, that UNCITRAL should undertake further
work in the areas of harmonizing International Commercial Contract law.
 It is suggested that UNICTRAL should increase their scope to greater than
just sale of goods.
 Still just a proposal. Highly controversial
 Advocates, argue the benefits of harmonizing laws to make trade easier and
efficient.
The common European Sales Law (CESL)

 Intended to be applicable regionally (EU)
 Come about as a result of continual pushed within EU to harmonize law
between member states
 Intended to non be compulsory unlike CISG
 Aimed at sales context, but Also covers consumer transactions
 Bit more progressed than Swiss proposal, as there is a draft made for it.
 CISG V CESL
Principles of Asian contract Law
 Intended to be a collection of commonly acknowledged Contract law

principles of Asia.
 Driven by scholars not governments
 Intended to be Non-binding soft law instrument
If China, the world’s second largest economy, Japan, the world’s third largest
economy, and South Korea will cooperate, it will absolutely attract the world’s
attention. The significant volume of transactions among the three countries calls
for common rules. But all 3 are members of CISG, so why is PACL relevant or
needed?
 CISG only covers sales contracts
 CISG doesn’t cover every aspect of contracts
 CISG outdated?

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2012 Review of Australian Contract Law

 Idea proposed for review of Australian Contract Law
o Controversial because majority of contract law is from common law
o Aim to more closely align Australian contract law with international
contract law. And use the CISG as a guide.
Globalization, and Regionalization of international Commercial Contract Law

 Aim to harmonize law either regionally (CESL) or globally (CISG).
 Processes are related, because they inform each other.
 Regionalization may in fact fracture global harmonisation, as it may lead to
a number of different systems around the world.
 Harmonisation, only as good as the quality of the law.

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Topic 9 Current Issues B: E-Commerce Law and

International Commercial Contracts
A consideration of the work of UNCITRAL in preparing
e-commerce laws to facilitate cross-border trade in modern global commerce
E-Commerce Law
Branch of law that is developed to deal with modern communication technologies.
Reason we need it, is due to the tension that exists to previous law that requires
writing requirements and modern technology that may not be treated as
‘writing’.
 In jurisdictions where these ‘writing requirements’ still exist, there is tension
as to whether modern technologies should be treated as ‘writing’.
Functional equivalence: modern communication technologies should be given same

treatment as traditional paper-based counterparts, for the purposes of existing
laws that require ‘writing’.
This leads to harmonisation, as there aren’t boundaries due to writing issues.
UNCITRAL’s E-Commerce Work

 Electronic Communications Conventions (ECC)
o Contemporary Instrument
o 2006, so up to date
o UNCITRAL considered this as the preferred law
o Purpose is functional equivalence
o 6 ratified countries (Honduras, Singapore and Dominican republic
were first 3)
 Model Law on Electronic Commerce (MLEC)

 Model Law on Electronic Signatures
Functional Equivalence and the CISG

Art 11:General rule is there are no form requirements. But,
Art 12: Writing requirements can still apply, f domestic laws of particular countries
say so.
New York Convention

Art 2: does show a writing requirement.
Hence, purpose of e-commerce laws is to ensure functional equivalence, so these

provisions in CISG and NYC, can be satisfied by Electronic communications as well.

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Lecture notes - Complete

International Commercial Law (Deakin University)

Studocu is not sponsored or endorsed by any college or university

MLL336 International Commercial Law

CISG: UN Convention on International Sale of Goods

UNCITRAL Model Law on international commercial arbitration

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 Bonython v Cth: parties have a choice of law if they can agree,

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Topic 2 International Sale of Goods

UNCITRAL: United Nations Commission on International trade Law

UNIDROIT: International Institute for the Unification of private law

International Sale of Goods

Introducing The UNIDROIT Principles

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Application of CISG Around the world

 Binds member states at public international law to each other

CISG: Application and Contract Formation

 Legal internationality: Only requires ‘place of business’ to be

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Art. 3 CISG: mixed contracts (all in, or all out)

2. This Convention does not apply to contracts in which the preponderant

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 International Character: CISG provisions don’t necessarily

2. Questions concerning matters governed by this Convention which are not

Important! Keep in mind:

Rules for Contract Formation

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A proposal is sufficiently definite if it indicates the goods and expressly or

2) A proposal other than one addressed to one or more specific persons is to be

Art. 15(1): An offer becomes effective when it reaches the offeree.

3. Rejection, revocation and withdrawal of Offers

 Art.17 (Rejection): An offer, even if it is irrevocable, is terminated when a

2) However, an offer cannot be revoked:

4. Quasi-Postal acceptance rule

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6. Late acceptance and modified acceptance

Note: specifies time when contract is formed, but not where.

 Art.11: Contracts don’t need to be concluded in writing.

 Art.8: must look at parties’ subjective interpretation of a contract. If this

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CISG: OBLIGATIONS & REMEDIES

Rights & Obligations

Delivery of Goods and handing over of documents (Art.31-34)

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 Where contract involves carriage of goods: handing over goods to first

Art 33:seller must deliver goods

Examinations and notice requirements

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2. For carriage situations, examination may happen upon arrival

Art 53:Buyer must

Art 56: if price fixed by weight, net weights is to be used

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Note: subject to Art 6(party autonomy)

Buyer may exercise rights

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51: Part Delivery

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Damages (same for both buyer and seller)

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1. If contract is avoided, and no purchase or resale has happened, party may

Topic 3 International Carriage of Goods

Carriage contracts: separate, but complementary to international Sale of Goods