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International Business Transactions
University of Iowa School of Law
Steinitz, Maya

INTERNATIONAL BUSINESS TRANSACTIONS
STEINITZ
FALL 2011
UNIT I – INTRODUCTION
I. Introduction & Overview (p. 2-49)
o   International Economic Institutions
§  Bretton Woods World Order
–      Conference 1947 – need for international rules to deal with
·      Trade
·      Investment
·      Currency organization to protect against inflation
–      Established
·      IMF
·      GATT
·      World Bank
§  IMF (Int’l Monetary Fund)
–      Currency/Exchange Issues
–      Developing nations
·      lender of last resort for nations unable to pay foreign debts
§  Trade
–      GATT (General Agreement on Tariffs and Trade)
·      Developed Nations/Major Economic Powers
·      Addresses issues with tariffs and nontariff barriers
·      “most favored nation” principle – when trade barrier reductions are adopted they should apply to all trading members rather than only to a single or few limited trading partners
–      WTO (established during Uruguay Round 1994)
·      Multilateral regime regulating trade
·      rare occurrence in Int’l law to get nations to agree
§  World Bank – lending agency
–      Int’l Bank for Reconstruction and Development (IBRD)
·      Loans for infrastructure projects in dev. world
–      Int’l Finance Corporation (IFC)
·      Loans to private investors for projects in dev. world
–      Int’l Development Association (IDA)
·      Provide lowest interest loans for poorest
–      Int’l Center for Settlement of Investment Disputes (ICSID)
·      Provides panels for arbitration or conciliation
–      Multilateral Investment Guaranty Agency (MIGA)
·      Offers various forms of insurance for trade and investment
§  U.N Conference on Trade and Development (UNTAD)
–      Promotes world trade and seeks multilateral trade agreements and the harmonization of trade and development policies
§  U.N. Commission on International Trade Law (UNICITRAL)
–      Drafted Convention on the International Sale of Goods (CISG)
§  European Union/NAFTA/APEC
–      Regional
–      EU – create one common market to facilitate free trade
§  Organization for Economic Cooperation & Development (OECD)
–      Most advanced countries
o   Int’l Law in the U.S.
§  Incorporated into U.S. law through treaties
–      Art. II Treaties
·      Shall have the power by and with advice and consent of the Senate (2/3) to make treaties
–      Art. IV Treaties
·      Become supreme law of the land
§  President’s authority under existing Art. II treat
§  Congressional signed authority
–      Congressional-Executive treaties
§  Implied authority as President to conduct foreign relations
–      Presidential-Executive treaties
II. Transnational Lawyering (readings – “Transnational Business Problems

erms
§  F.O.B. (Free On Board)
–      Seller pays cost of goods – production
§  F.A.S. (Free AlongSide carrier vessel)
–      cost of goods + domestic transportation to carrier vessel
§  C. & F. (Cost & Freight)
–      cost of goods + domestic transportation + international transportation
§  C.I.F.
–      Goods + domestic transportation + international transportation + insurance
–      Gets paid before they ship goods, upon certain documents
o   Three Contracts:
§  Sale of Goods/Sales Contract
–      Seller ß à Buyer
§  Letter of Credit
–      Seller ß à Buyer’s Bank
§  Bill of Lading
–      Seller ß à Carrier
o   Negotiable Instruments (payment devices)
§  Bill of Lading
§  Draft/Bill of Exchange
o   Contract Formation – Sales Contract
§  Sale of Goods (contract: S B (seller & buyer))
–      Buyer requests price quote (form 1)
–      Seller gives price quotes for several terms (form 2)
–      Purchase Order (form 3)
§  Possible Problem – “Battle of Forms”
o   Financing – Letter of Credit (form 4)
§  Letter of Credit (S — docs –> B’s Bank)