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International Commercial Law 1

st
Course
Topics:
Introductive aspects regarding law.
Defining concepts of Commercial law and International Commercial law
Introductive aspects regarding law.
There are 3 main legal systems:
Roman legal system;
Anglo American legal system (common law);
Religious legal system/ Islamic system (Sharia).
The distribution of the main legal systems
Blue Roman Legal Systems; Red Common Law; Orange Islamic Law; Brown Bijuridical law (Roma and
common law)


Main characteristics:
Roman legal system interpretation of legal provisions for each case; No judiciary precedent.
Anglo American legal system (common law) judiciary precedent is used along with general legal
provisions.
Religious legal system/ Islamic system (Sharia) judiciary precedent is not used. Has general legal
provisions, that are strongly influenced by religion. Also, interpretation of the religious norm represents a
source of legal solutions.
Commercial law definition:
Commercial law, also known as business law, is the body of law that applies to the rights, relations, and
conduct of persons and businesses engaged in commerce, merchandising, trade, and sales. It is often
considered to be a branch of civil law and deals with issues of both private law and public law.
Commercial law includes within its compass such titles as carriage by land and sea; merchant shipping;
guarantee; marine, fire, life, and accident insurance; bills of exchange and partnership. It can also be
understood to regulate corporate contracts, hiring practices, and the manufacture and sales of consumer
goods. Many countries have adopted civil codes that contain comprehensive statements of their
commercial law (Including Romania).
Lex mercatoria refers to that part of international commercial law which is unwritten, including customary
commercial law; customary rules of evidence and procedure; and general principles of commercial law.
Aspects regarding International Commercial Law:
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The main difference between Commercial Law and International Commercial Law is the so called foreign
element.
In a legal relation, we have a Foreign element if the parties are of different nationality or the goods/
merchandise is carried over at least one border.
In the commercial area, a large number of contracts are closed every day between companies or private
people from different countries and a significant quantity of merchandise is carried across the world.
In this situation in the hypothesis of a legal trial which law will we apply? Which national court will judge
the case or the plea?
The answer is a complex one, different from case to case, but respecting some common rules.
International Commercial Law is the body of law that governs international sale transactions. A transaction
will qualify to be international if elements of more than one country are involved or the goods are carried
across at least on border.
Parties of an international commercial contract can establish by their own free will, expressed in the
contract or in additional acts following the initial contract, which law will be applied to the contract and
which court of law will judge an eventual legal problem occurring between them.

International Commercial Law 2
nd
course
Topic:
International commercial law sources.
1. International Conventions.
The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the main
convention for international sale of goods.
It was signed in Viena in 1980.
The Convention governs the conclusion of the sale contract; and buyer and seller obligations, including respective
remedies. It is not concerned with the validity or provisions of the contract nor its effect on the property sold.
The importance of CISG is its interpretation. International context, uniformity and observance of good faith must be
regarded when interpreting the Convention. Matters not expressly settled by CISG are to be determined according
to the general principles of CISG; or in such absence, according to rules of private international law.
As of 6 March 2013, it had been ratified by 79 countries that account for a significant proportion of world trade,
making it one of the most successful international uniform laws. Brazil was the most recent state to ratify the
Convention.
Other important international commerce conventions:
Most of the international commerce acts have been designed to serve to the harmonisation of the legal
provisions in this area. This predominantly occurs through legal instruments governing commercial
contracts is limited in its scope since it depends upon incorporation into contracts. There must be a degree
of uniformity in commercial practice between the contracting parties.
Model Laws promote the unification of international commercial law. Some examples are the UNCITRAL
(United Nations Commission on International Trade Law) Model Laws on:
International Commercial Arbitration.
International Credit Transfers 1992 (largely adopted by the EU).
Procurement of Goods, Construction and Services 1994.
Electronic Signatures.
Electronic Commerce 1996.
International organisations that attempt to harmonise international commercial law include:
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UNCITRAL: Important in the areas of international carriage of goods, international bills of exchange and
promissory notes, and international arbitration.
Hague Conference on Private International Law: The organisation drafts conventions in the field of private
international law.
ICC: Influential in harmonising international contract terms and global arbitration practices.
International Conventions relevant to international sale of goods include:
UN Convention on the Limitation Period in the International Sale of Goods 1974
UNIDROIT Convention on Agency in the International Sale of Goods 1983
UN Convention on International Bills of Exchange and International Promissory Notes 1988
UN Convention on Independent Guarantees and Stand-By Letters of Credit 1995
2.Customary Law rules born from practice, used for a long time and respected as laws.
The Incoterms rules
The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms
published by the International Chamber of Commerce (ICC) that are widely used in International
commercial transactions. A series of three-letter trade terms related to common contractual sales
practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks
associated with the transportation and delivery of goods.
The Incoterms rules are accepted by governments, legal authorities, and practitioners worldwide for the
interpretation of most commonly used terms in international trade. They are intended to reduce or remove
altogether uncertainties arising from different interpretation of the rules in different countries. As such
they are regularly incorporated into sales contracts worldwide.
First published in 1936, the Incoterms rules have been periodically updated, with the eighth version
Incoterms 2010having been published on January 1, 2011. "Incoterms" is a registered trademark of the
International Chamber of Commerce.
The International Chamber of Commerce (ICC; French: Chambre de commerce internationale) is the
largest, most representative business organization in the world.Its hundreds of thousands of member
companies in over 130 countries have interests spanning every sector of private enterprise. It is
headquartered in Paris, France.
Examples of Incoterms rules:
FCA Free Carrier (named place of delivery)The seller delivers goods, cleared for export, to the buyer-
designated carrier at a named location. This is used for any mode of transport. The seller must load goods
onto the buyer's carrier. The key document signifying transfer of responsibility is receipt by carrier to
exporter.
DAP Delivered at Place (named place of destination) Seller pays for carriage to the named place, except
for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for
unloading by the buyer.
FOB Free on Board (named port of shipment)
The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when
the goods are actually on board of the vessel. The seller must clear the goods for export. The term is
applicable for maritime and inland waterway transport only but NOT for multimodal sea transport in
containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the
vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use
of a carrier or forwarder.
3.Jurisprudence
Jurisprudence = the totality of relevant court decisions regarding a certain juridical aspect.
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Even though jurisprudence, both national and international is not recognized as a legal source for
International Commercial Law, there are some situations in which court decisions are mandatory for cases
appearing after their enforcement.
E.g. European jurisprudence of the European Court for Human Rights or European Court of Justice is
binding not only for litigation parties but for all future cases similar which the decision comes from.

International Commercial Law 3rd course
Topics:
International commercial activity.
Parties involved in international commercial activity.
International commercial activity
At international level, there is a very persistent trend to include in the notion of commercial activity
economical aspects regarding agriculture, providing services activities as well as the liberal professions (e.g.
lawyers). This tendency is taking into consideration that aside from companies and private persons, there
are more categories of entities that are involved in economical life.
Romania, as part of E.U. and European Unique Market has adopted the same economical politics found in
most of European countries.
From a traditional point of view, we include in the notion of commercial activity production of goods,
circulation of goods and financial resources, service provision excluding liberal professions and agricultural
activities. According to the newest legal changes, agriculture is considered to be a commercial activity when
profit is obtained.
International Commercial Activity Definition
Economical Activity = an agricultural, industrial or commercial activity that is developed for the purpose of
obtaining goods or services destined to be sold or exchanged on relevant markets.
International Commercial Activity = legal and economical actions that imply a foreign element and
include producing of goods, circulation of goods and/or service provision with the purpose of obtaining
profit.
European Economical Relations and main Organizations


Parties involved in international commercial activity
There are two main categories of parties involved in international commercial activity:
- natural/ private persons.
- enterprises (legal persons).
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Natural persons as traders
According to Romanian legislation, a natural person can develop commercial activities in Romania if he/she
embraces one of the forms in which internal legislation provides that the commercial activity may be
developed:
- registered sole trader/ owner of an individual enterprise;
- family enterprise representative;
A natural person is considered to be foreign if he/she has a different citizenship that Romanian.
Persons from an E.U. country or from a country from European Economic Area (EEA) can register herself as
a trader in Romania directly, thus becoming a registered sole trader/ owner of an individual enterprise or a
family enterprise representative.
Persons from different countries that the ones mentioned above, can develop commercial activity in
Romania only indirectly, by founding companies.
Foreign natural persons as traders
Regarding the legal capacity of a natural person in being a trader, lex partiae (the law of the country of
origin) will be applied (e.g. the moment of which a person comes of age 21 years in UK, 18 years in
Romania).
Regarding registration conditions, foreign natural persons (from UE or EEA) must fulfill the same conditions
as the Romanians.
For becoming an owner of an individual enterprise main conditions:
- proof of qualification in a profession that can be subject of a free initiative (act as an individual).
- proof of an existent headquarter in Romania.
- proof of fulfilling capacity conditions.
The same conditions will apply for registered sole trader.
For becoming an family enterprise representative main conditions:
- A family enterprise consists of 2 or more family members from whom one is selected by the others to be the
enterprises representative.
- In order to become a member, one needs to have at least 16 years old.
- For the representative, lex patriae will be applied.
Legal persons as traders
As a Romanian legal principle, any legal person having its headquarters in Romania is a Romanian legal
person.
In Romania, there are also foreign legal persons that may function and participate in our economical
activities:
- Romanian companies with foreign capital;
- Romanian companies with partially foreign capital.
- Foreign companies (headquartered in other countries than Romania).
From an international commercial law point of view, the law that governs the activity of the company - lex
societatis is the law from the country in which the company has its headquarters situated.
Foreign legal persons can function in Romania trough their local branches (filial) or branch offices.
Local branches are distinct companies founded by another mother company in another country,
according to that countrys legislation.
Branch offices are not distinct companies from the main company, but only an extension on that company
in another country, without the necessity of founding another company.


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International commercial law 4th course
TOPIC:
International commercial contracts
General aspects
DEFINITION: International commercial contracts are sale transaction agreements made between parties from
different countries (e.g. companies with headquarters in different countries) or regarding goods that will be
transported over at leas one border during the execution of the contract.
The methods of entering the foreign market, with choice made balancing costs, control and risk, include:
Export directly.
Use of foreign agent to sell and distribute.
Use of foreign distributor to on-sell to local customers.
Manufacture products in the foreign country by either setting up business or by acquiring a foreign
subsidiary.
Licence to a local producer.
Enter into a joint venture with a foreign entity.
Appoint a franchisee in the foreign country.
1.Provisions regarding closing, executing and ending international commercial contracts
Two or more parties may close a contract, either expressly mentioned by law or with clauses decided by
themselves, in the limits provided by relevant legislation.
As a particular feature of those contracts, parties can choose which internal law is applied to the contract,
which court o arbitration court would judge an eventual law suit (choosing the forum).
Particular documents before closing an international commercial contract:
Gentlemens agreement situations in which commercial relations may start or develop without closing a
written contract. Not respecting such an agreement will not legally oblige the parties in any way.
Subject to contract it is a clause referring to an informal agreement that will close if a condition will be
fulfilled. Not respecting such an agreement will not legally oblige the parties in any way.
Letter of intent a written proposal sometimes used to start a negotiation for closing a future contract,
fixing the terms of a negotiation. Not respecting such an agreement will not legally oblige the parties in any
way, unless the actual negotiation would start. In this case, the party sending the letter is obliged to
negotiate in good faith.
Conditions in closing the contract
Generally, an international commercial contract has to fulfill all the legal conditions provided by the law
that governs the contract.
Regarding the form of the contract, it has to be in accordance with the above mentioned legislation. If that
legislation requests a special form of the contract, it will have to be fulfilled.
The moment for closing the contract
This is a very important aspect, since it represents the moment from which the contract comes into force
and parties have rights and obligations.
The importance of the moment in which the contract is considered to be closed regards the situation in
which parties arent both present at the closing of the contract, thus closing it trough correspondence or
online etc.
There are 4 main theories regarding this aspect:
The Issuing Theory the contract is closed in the moment in which the recipient accepts the offer for
closing a commercial contract;
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The expedition Theory - the contract is closed in the moment in which the recipient sends back the offer
acceptance;
The receipt Theory - the contract is closed in the moment in which the offer acceptance arrives to the one
that made the proposal.
The information Theory - the contract is closed in the moment in which the acceptance of the offer actually
gets to the one that made the proposal.
Aspects regarding the content of the contract
Most of the times, international commercial contracts are closed using a pre established form/ pattern,
created by international organisms such as U.N.
Therefore, parties will have some GENERAL CONDITIONS that they can use, if they expressly mention this in
their contract. In this situation, we have a contract and some G.C. that will become a part of the contract.
The language of the contract will be established by the parties.
Main clauses of an international commercial contract
Most of the times, in such a contract one will find clauses regarding the following aspects:
- parties (identification data, their role seller, buyer etc.);
- goods/ merchandise/ services;
- quantity and quality of goods;
- warranty for the quality of goods;
- parties obligations;
- price;
- time conditions.
2.The Law of the contract
Determining which legislation governs a contract is important regarding the closing, the execution of the contract
and the eventual litigation aspects.
In case parties choose the law for their contract, things are clear and that law will be applied in all aspects regarding
that legal relation.
Parties usually choose between:
- one of their internal legislations;
- the legislation form the place where they closed the contract (lex loci contractus);
- a foreign legislation (neither one of their internal law nor lex loci contractus).
Nevertheless, regarding international commercial contracts that involve in any way a member state
of E.U., those will be interpreted in accordance with comunitary law provisions.
There are some problems when parties fail to choose a law for their contract.
According to international principles, the law that should be applied to such a contract is the law of the
state with which the contract has the closest connection with.
Also, some of the most often closed international commercial laws have their own rules e.g. the sale
purchase contract is governed by law of the state in which the seller has its headquarters.

INTERNATIONAL COMMERCIAL LAW 5th course
TOPIC:
Main types of international commercial contracts
1.Contract for International Sale of Goods
It is a sale purchase contract with a foreign element.
It represents the base of international commercial activity.
Most of the times, its object is represented by movable goods.
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The United Nations Convention on Contracts for the International Sale of Goods (CISG; the Vienna
Convention) is a treaty that is a uniform international sales law. As of 6 March 2013, it had been ratified by
79 countries that account for a significant proportion of world trade, making it one of the most successful
international uniform laws. Brazil was the most recent state to ratify the Convention.
The CISG was developed by the United Nations Commission on International Trade Law (UNCITRAL), and
was signed in Vienna in 1980. The CISG is sometimes referred to as the Vienna Convention (but is not to be
confused with other treaties signed in Vienna). It came into force as a multilateral treaty on 1 January 1988,
after being ratified by 11 countries.
The CISG allows exporters to avoid choice of law issues, as the CISG offers "accepted substantive rules on which
contracting parties, courts, and arbitrators may rely". Unless excluded by the express terms of a contract, the CISG
is deemed to be incorporated into (and supplant) any otherwise applicable domestic law(s) with respect to a
transaction in goods between parties from different Contracting States.
Main regulations of the contract:
United Nations Convention on Contracts for the International Sale of Goods contains provisions regarding
The CISG defines the duty of the seller, stating the obvious, as the seller must deliver the goods, hand over
any documents relating to them, and transfer the property in the goods, as required by the contract.
Similarly, the duty of the buyer is to take all steps which could reasonably be expected to take delivery of
the goods, and to pay for them.
Generally, the goods must be of the quality, quantity, and description required by the contract, be suitably
packaged and fit for purpose. The seller is obliged to deliver goods that are not subject to claims from a
third party for infringement of industrial or intellectual property rights in the State where the goods are to
be sold.The buyer is obliged to promptly examine the goods and, subject to some qualifications, must
advise the seller of any lack of conformity within a reasonable time and no later than within two years of
receipt.
The CISG describes when the risk passes from the seller to the buyer but it has been observed that in
practice most contracts define the seller's delivery obligations quite precisely by adopting an established
shipment term, such as FOB and CIF.
Remedies of the buyer and seller depend upon the character of a breach of the contract. If the breach is
fundamental, then the other party is substantially deprived of what it expected to receive under the
contract. Provided that an objective test shows that the breach could not have been foreseen, then the
contract may be avoided and the aggrieved party may claim damages. Where part performance of a
contract has occurred, then the performing party may recover any payment made or good supplied; this
contrasts with the common law where there is generally no right to recover a good supplied unless title has
been retained or damages are inadequate, only a right to claim the value of the good.
2.Franchising contract
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of
Anglo-French derivation - from franc - meaning free, and is used both as a noun and as a (transitive) verb.
For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods that avoids
the investments and liability of a chain. The franchisor's success depends on the success of the
franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she
has a direct stake in the business.
Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a
franchisee, to use the supplier's trademark and distribute the supplier's goods. In return, the operator
pays the supplier a fee.
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Thirty three countries, including the United States and Australia, have laws that explicitly regulate
franchising, with the majority of all other countries having laws which have a direct or indirect impact on
franchising.
A franchise usually lasts for a fixed time period (broken down into shorter periods, which each require
renewal), and serves a specific territory or geographical area surrounding its location. One franchisee may
manage several such locations. Agreements typically last from five to thirty years, with premature
cancellations or terminations of most contracts bearing serious consequences for franchisees. A franchise is
merely a temporary business investment involving renting or leasing an opportunity, not the purchase of a
business for the purpose of ownership. It is classified as a wasting asset due to the finite term of the license.
A franchise can be exclusive, non-exclusive or 'sole and exclusive'.
Obligations of the parties
A franchising contract has 2 parts franchisor and franchisee.
Each party of a franchise contract has several interests to protect. The franchisor is involved in securing
protection for the trademark, controlling the business concept and securing know-how. The franchisee is
obligated to carry out the services for which the trademark has been made prominent or famous. There is a
great deal of standardization required. The place of service has to bear the franchisor's signs, logos and
trademark in a prominent place.
The uniforms worn by the staff of the franchisee have to be of a particular design and color. The service has to be
in accordance with the pattern followed by the franchisor in the successful franchise operations. Thus, franchisees
are not in full control of the business, as they would be in retailing.
Common regulations for franchising contract at European level include:
The use of a common name or brand or any other intellectual property right and a uniform presentation of
the premises or the transport means included in the agreement.
The communication by the franchisor to the franchise of certain technical knowledge or substantial and
singular know-how that has to be owned by the franchisor, and
Technical or commercial assistance or both, provided by the franchisor to the franchisee during the
agreement, without prejudice to any supervision faculty to which the parties could freely agree in the
contract.
Identification of the franchisor;
Justification of ownership or license for use of any trademark or similar sign and judicial claims affecting
them as well as the duration of the license;
General description of the sector in which the franchise operates;
Experience of the franchisor;
Contents and characteristics of the franchise and its exploitation;
Structure and extension of the network in the country of origin and in other countries;
Essential elements of the franchise agreement.
Examples of franchises and their costs:
1. Subway (sandwiches and salads) | startup costs $84,300 $258,300 (22,000 partners worldwide
in 2004).
2. McDonald's | startup costs in 2010, $995,900 $1,842,700 (37,300 partners in 2010)
3. 7-Eleven Inc. (convenience stores) |startup costs in 2010 $40,500- $775,300, (28,200 partners in
2004)
4. Hampton Inns & Suites (midprice hotels) |startup costs in 2010 $3,716,000 $15,148,800
5. Great Clips (hair salons) | startup costs in 2010 $109,000 - $203,000
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6. H&R Block (tax preparation and now e-filing) | startup costs $26,427 - $84,094 (11,200 partners
in 2004)
7. Dunkin' Donuts | startup costs in 2010 $537,750 - $1,765,300
8. Jani-King (commercial cleaning) | startup costs $11,400 - $35,050, (11,000 partners worldwide in
2004)
9. Servpro (insurance and disaster restoration and cleaning) | startup costs in 2010 $102,250 -
$161,150
10. MiniMarkets (convenience store and gas station) | startup costs in 2010 $1,835,823 -
$7,615,065