This 18-hour course is dispensed in English at the Paris Business College in Paris to junior and senior undergraduate students from foreign countries.

It is divided into two modules: one covering issues in international commercial contracts and the other covering issues arising in the context of international regulation of business.

The objectives of the Trade and Finance module are:

- to introduce students to the basic rules applicable to international trade and commercial financing agreements, and

- to present and compare the most influential legal systems (common law, civil law, hybrid, emerging) in the contexts of international trade and finance.

Frequent recourse is made to economic analysis to explain legal rules.
 
 

In addition to the book of readings which will be distributed to participants, ample use should be made of the materials on the Professor's Webliography on International and Comparative Business Law, in particular the sections on Public and private international law and on International trade

For additional readings, sudents are referred to Richard Schaffer, Beverly Earle, and Filiberto Agusti, International Business Law and its Environment, South-Western, New York, 2005 in particular chapters 4, 5, 6, 7, 9, 16 and 17.
 

SESSIONS 1 - 3 (4.5 class hours):

Topics:

Subjects of private international law
Sources of private international law
Jurisdiction
Choice of law
Enforcement of foreign judgments

Web sources:

Hague Institute for Private International Law
International Institute for the Unification of Private Law (UNIDROIT)

Assignment 1:

LICRA vs Yahoo, the nazi memorabilia case

Cases:

International - Judas Priest

Assignment 2: Applicable law in matters of contract

An American tourist comes to France for a holiday. He goes into a boutique on Boulevard Saint-Germain and buys a couch. He pays cash. He gets a receipt on the letterhead of the boutique which identifies the couch, indicates the price, that it has been paid, and that the price includes the cost of freight, insurance and duties to the New York apartment of the buyer.

72 hours later, after his return to New York, the customer measures his living room and decides that the couch is too big. So he immediately sends a fax to the Paris boutique, which the boutique receives, stating that he cancels the order.

In the meantime, the boutique has already had the couch loaded onto a ship toward New York.

Suppose that under French law, any consumer has the right to cancel any contract with a merchant within 7 days of the conclusion of the contract. Supppose that under New York law, any consumer has the right to cancel any contract with a merchant within 48 hours of the conclusion of the contract.

Assuming that either a New York or a Paris court would accept jurisdiction to hear the case, what are the US customer's chances of getting his money back?
 

SESSIONS 4-5 (3 class hours):

Topics:

Offer and acceptance
Battle of the forms
Electronic contracts

Web sources:

Guide to International Trade Law Sources on the Internet
European Union Electronic Commerce Directive, in particular article 11.

Assignment 3 - The battle of the forms in international sales

A French exporter of textile weaving machinery receives a letter from an American company containing a document on the letterhead of the US firm and which is entitled "Order". The US firm orders a weaving machine from the French exporter and indicates the seller's stock keeping unit reference and a price of € 500,000 ex works as per the catalogue, delivery whenever possible. The American buyer's form states on its front that "All other terms and conditions of this order appear on the back hereof". On the reverse side, there are such terms which include the following provision: "This contract shall be governed by the law of the State of New York."

The French exporter decides to accept the order and mails back to his US customer, who receives, his standard form of "Conditions de vente" (terms of sale). On its face, the French exporter reproduces the stock keeping unit, the price of € 500,000 and states that delivery will be carried out within 30 days. This form also makes reference on its face to the "Autres conditions de vente" (other terms of sale) on the reverse side. Indeed on the reverse side of the "Conditions de vente", there is a provision which states that "Ce contrat sera régi par la loi française" (This contract shall be governed by the law of France).

After exchange of these documents, the French exporter duly delivers the machine. But, in the meantime, the US buyer has run into a major problem: his own customer, for whose production it has ordered the French machine, has gone bankrupt and the US firm no longer needs (or wants) the French exporter's machine.

Can the US buyer get out of the deal? On what basis? Please refer to the relevant articles of the UN Convention on the International Sale of Goods (Vienna Convention).

Suppose now that the transaction is conducted by e-mail and that the respective standard forms are sent as PDF file attachments which neither party ever actually opens though they reach their respective designated (in advance) e-mail boxes. Applying the EU Directive's relevant provisions, what would the result be?
 
 

SESSIONS 6-8 (4.5 class hours):

Topics:

representations, errors and fraud in international contracts
transfer of ownership - reservations of property
warranties - implied and contractual
transfer of risks - INCOTERMS etc.
international transportation
international insurance

Web sources:

International Institute for the Unification of Private Law (UNIDROIT)

Assignment 4: Ownership

On April 10, 2001, an art dealer from New York City places an order with a French dealer for an original Picasso painting. The price is F 5 million FOB Paris Roissy Charles de Gaulle. The price is paid at the time of signing the order. According to the contract, the painting is to be loaded on board no later than May 15.

On May 1, 2001, a well known Museum in New York City, not knowing that the painting has already been sold, offers the French dealer F 6 million. The French dealer decides to sell the painting to the Museum; they sign a bill of sale and the second buyer walks away with the painting.

Considering himself to be quite honest, the French dealer then writes to the New York dealer apologizing for the change of plans, returning his payment and offering him a special effort on his next purchase as compensation for his disappointment. In closing he consoles the New York dealer by telling that in any case he will have easy access to the painting which will be on exhibit at the  Museum right around the corner from his Gallery!

The New York dealer decides to sue to get the painting. What are his chances of success?

web sources:

Incoterms 2000

Assignment 5:

A rapidly expanding French exporter of fashion goods has contracted with a United States chain store for the delivery of a consignment of specially made goods. The exporter has agreed to deliver DDP individual stores within the chain which are located all over the US.

The exporter subscribes an export insurance policy with a specialized insurer in France according to which the insurer will indemnify the exporter for bad debts of the chain.

Once the goods are produced, the exporter pays for them, and has them loaded in a container at Le Havre for shipment to New York where the bulk will be broken and the packages sent to the individual stores throughout the US. The exporter has an office in New York which is expected to clear the goods through US customs and the exporter's freight forwarder will break the bulk and re-despatch the small lots to the individual stores.

The exporter's French bank has agreed to pay an advance of 80% against all invoices drawn on the US chain and covered by the export insurance policy.

The exporter presents to the bank a bill of lading showing the French exporter's NY office as "consignee". The exporter also presents a set of invoices issued by the French company against the various stores in the chain for the goods in the consignment.

While the shipment is on the water toward New York, the US buyer goes bankrupt. In the meantime, the exporter has spent most of the money from the bank to pay suppliers. The goods are virtually impossible to sell to anyone other than the bankrupt chain.

With the bank threatening to sue to get refunded its advance against the invoices, the exporter turns to the export insurance company to claim indemnification off the policy. The policy stipulates as one of the conditions for coverage that the exporter must have performed its obligations under the contract of sale.

What are the chances that the exporter will be indemnified by the insurance company?

What advice would you give the exporter about managing the legal risks of doing business internationally.
 
 

SESSIONS 9-10 (3 class hours):

Topics:

breaches
remedies
excuses for non-performance
arbitration

Web sources:

Pace University Center for International Commercial Law in USA
 

Assignment 6:

In pre-Khadafi times, a French engineering and construction company accepts a contract to build a highway across the desert in Lybia. The contract is with a Libyan company owned by a group of private Libyan investors.

Shortly after work is started on the highway, Khadafi takes power. The new government promptly triples the import duties on all imported asphalt.

Secondly the new government enacts a law requiring that all transportation within Libya of certain products (including specifically asphalt) must be carried out by Libyan nationals. Consequently, the French company must now contract the transportation of its asphalt through Libyan companies whereas it had intended to organize internally this strategic activity. The result of the law in practice is that the fuel supplies are sporadic, unpredictable and insufficient. Consequently, the contractor's equipment progressively rots in the Libyan desert.

Still the French company considers itself force to continue building the highway, otherwise how would it ever get paid anything. And the Libyan companies and officials with which it has contact all say that eventually the Libyan Government will make an effort to reward total completion of the highway.

Finally the highway is completed but late.

The Libyan invokes the delay to refuse to make the last payment of 33% of the price of the project.

The contract expressly provides that:

"A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences."

The French contractor asks what are its chances of success in the upcoming arbitration.
 

SESSIONS 11-12 (3 class hours):

Topics:

International trade finance
Letters of credit
Bills of exchange
 

Web research:

Uniform Customs and Practice for Documentary Credits (UCP 500) defined by the International Chamber of Commerce (ICC).

Assignment 8

A French importer obtains that his bank in Paris a letter of credit in favor of his Chinese supplier to pay for a shipment of goods. The LC is payable at sight of various documents, including "an invoice conform with the pro forma invoice referenced herein". It is expressly stipulated in the LC that partial shipments are not allowed.

A few days before the expiration of the LC, the Chinese supplier realizes that it will not be able to deliver all the goods covered in the LC. So the exporters send a message to the French importer requesting an extension of the LC. But the French buyer answers insisting on the improtance of receiving a full shipment of the order or nothing at all.

In these circumstances, the Chinese exporter decides to deliver the goods available at the LC's expiration, in other words to make a partial shipment, but to set down documents showing a full shipment of the goods as indicated on the pro forma invoice. Also, the exporter presents to the French bank a  set of documents that is conform with the LC.

The Chinese exporter then sends a message to the French importer explaining that the amount of over-invoicing would be under-invoiced on the next export.

But the French company does not at all appreciate the maneuver and requests of its bank whether the payment on the LC can be avoided. Suppose that you are advising the bank, what would you recommend?
 
 

At the end of the course, a written exam is held. The exam will consist of a case study.

In the final evaluation account is taken of participation in class work and discussions, in particular the assignments submitted during the course.
 
 

DANIEL ARTHUR LAPRES

Cabinet d'avocats
adresse: 29 boulevard Raspail, 75007 Paris
tel: (331) 01.45.04.62.52 - fax: (331) 45.44.64.45

nous répondrons à vos messages