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COURSE OUTLINE ON INTERNATIONAL BUSINESS TRANSACTIONS

by Atty. Josh Carol T. Ventura

Course Description :

This course examines the legal framework of international business


transactions. It will tackle nuances of common law and civil law as it affects
sales transactions.

Comparative law regimes of ASEAN compared to the European Union and


other regional trade groupings will likewise be studied. Analyzing WTO as a
supra body for trade rules would also be undertaken. For this semester,
students will be immersed as well in understanding the cultural diversity of
ASEAN nations in the light of ASEAN Integration.

Time permitting, we will then conclude with a brief examination of some of the
issues associated with the resolution of international commercial
disputes, at the end of the semester. These are topics which potentially
concern any business dealing internationally, from global multinational
corporations to small start-up ventures desiring to expand abroad.

Objectives
The principal objective of this course is to introduce students to a wide range
of problems and issues that a private business entity may encounter in doing
business across national borders. In this regard, the course is specifically
designed to assist students in:
Analyzing a variety of cross-border business transactions and
transaction techniques
Developing skills to identify issues in cross-border transactions and
understanding cultural diversity especially among ASEAN nations
Acquiring a general knowledge on comparative law among various
countries and regulatory regimes affecting cross-border transactions
Comprehending the importance of trade agreements to international
commercial law
Explaining the relationship between law, politics and economics in
international trade

Main Topics

I. Introduction to International Business Transactions


1.1 Defining International Business Transactions

1.2 What makes international business international?

1.3 Foreign Exchange

1.4 Two Core Aspects of Economic Globalization


1.5 Different types of international business transactions
1) Sale of goods (exporting-importing)
2) sale of services (consulting, transportation, marketing)
3) licensing(technology transfer, franchising)
4) Foreign Direct Investment

1.6 Sources of International business laws (4 sources)


- What is the primary source of law in IBT/
- What is Lex Mercatoria

1.7 Risks involved in IBT


a) Language risk
b) Cultural risk
c) Currency risk
d) Political risk

**** How are these risks managed?

1.8 Countertrade and its different variants and other trade arrangements
between nations

Activity for Group I Presentation/Discussion on countertrade and its


different variants including other trade arrangements between nations
(15 to 20 mins) 5 mins interpellation

a) Include countries practicing countertrade and the products and value


involved
b) How about the Philippines, is it practicing countertrade or any of its
variant?
c) Countertrade in ASEAN

1.9 Main Features of International Contracts

II. Lex Mercatoria

2.1 Definition of Lex Mercatoria


2.2 History of Lex Mercatoria and how it has affected international business
2.3 Constraints on National Legal Systems
2.4 . Foreign Sovereign Immunity Doctrine vs, Act of State Doctrine (US)
2.5 Foreign Corrupt Practices Act of the U.S (Do we have a similar law in the
Phils?) If none, what government agencies require that business
transactions should not be tainted with corruption?
2.6 Choice of Law & Choice of Forum
2.7 Forum Non conveniens
2.8 Depecage
2.9 Doctrine of Minimum Contacts

Case assignment for the class :


1) Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer 515 U.S. 528
(1995)
2) Argentine Republic v. Amerada Hess Shipping 488 U.S 428 (1989)
3) W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp. 493 U.S. 400
(1990)
4) U. S vs. Liebo 923 F2d 1308

Activity for Group II


a) Differentiate the Foreign Sovereign Immunity Doctrine vs. Act of State
Doctrine
b) Effect of inserting Choice of Law and Choice of Forum clauses in
international contracts
c) Discuss form non conveniens, depecage and doctrine of minimum
contacts

III. Strategies for International Business


3.1 Various Legal Systems: e.g. Anglo-American Common Law; Romano-
Germanic-Civil Law; Islamic Law; Japanese Legal System
3.2 Different Strategies to enter a foreign market
3.3 Choice of Investment Vehicles (Agents, Distributors, Joint Ventures,
Licensees, and Subsidiaries) and Foreign Regulation of Investment
3.4 International Business Ethics and the different approaches.
3.5 FDIs under Philippine Laws

**** Comparing BOI vs. PEZA

Activity for Group III


a) Present a chart bin on the various legal systems in the world and its
important features
b) The different approaches in international business ethics
c) Discuss the Salient Features of the incentives between BOI vs. PEZA

IV. Understanding ASEAN


4.1 Overview and History of ASEAN
4.2 . Fundamental Principles
4.3 Identifying which ASEAN countries are civil law countries and which
are common law countries
4.4 ASEAN Charter
4.5 ASEAN Community and the 2015 ASEAN Integration
4.6 ASEAN Structure
4.7 Dispute Resolution

Activity for Group IV

a) How different is the ASEAN structure from that of EU


b) Research on the culture and traditions of ASEAN countries and how it
impacts in doing business.(Output : presentation of a matrix of the
cultural nuances of ASEAN and its impact on international business)

V. International Rules of Trade - WTO and World Trade


Globalization and Trade
International Trade Institutions
WTO
Background of WTO
GATT and its Results
Functions of the WTO
Structure of the WTO
WTOs fundamental principles
Dumping and Subsidies
Safeguards

Class Activity : Quiz Bowl or Points System

VI. International Contract Law & Special Forms


a) Negotiating an International Contract Introduction
b) Three Parts of an International Contract from the Drafting Lawyers
Perspective
b.1 The Business Deal
b.2 Legal Enforcement Provisions
b.3 Business Protection Provisions
c) Checklist of Important International Contract Clauses
d) Practical Tips for International Contracting
e) Focus: Japans way of negotiating a contract
f) Principles of International contract law
g) UNIDROIT Principles of International Commercial Contracts

Activity for Group V

a) Comparing basic features of contract laws of Europe vs US


b) Presentation of important international contract clauses
- Forum selection clause or arbitration clause
- Hardship clause
- Force majeure clause
- Price escalation or price adjustment clause
- Termination clauses
c) Draft of an international contract for a Filipino furniture exporter to
China

VII. Commercial Trade Terms What are Incoterms?


a) Incoterms 2010 and its features
b) Differentiate Incoterms 2010 from 2000
c) Illustrations on Incoterms

Source: http://www.iccwbo.org/incoterms/id3042/index.html

Activity for Group VI


***Make a presentation regarding the topics cited above.

VIII. Documentary Transactions and Letter of Credit Transactions


- Mechanics of a Letter of Credit
IX. United Nations Convention on Contracts for the International Sale of
Goods (CISG) Read the annotations as well

What is UNCITRAL? What is UNIDROIT?


What is the difference between model law and a convention?
What is countertrade?
Other terminologies used in IBT

Source: http://www.uncitral.org

X. When things go wrong: International Commercial Dispute Resolution


dispute settlement options
Jurisdiction and forum non conveniens
Choice of law, choice of forum and arbitration clauses
Enforcement of foreign arbitral awards
Enforcement of foreign judgments

Textbook : The Law of International Business Transactions : by Larry A.


Dimatteo 2002 edition

Electronic Sources:
1) www.wto.org
2) www.uncitral.org.
Case Law and Online Resources
3.)www.cisg.law.pace.edu/cisg/biblio/goldstajn.html

Usages of Trade and Other Autonomous Rules of International Trade


According to the UN (1980) Sales Convention by Aleksandar Goldstajn

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