INTERNATIONAL BUSINESS TRANSACTIONS OUTLINE
Prof. Hans Baade – Spring 1999
This outline is e-mailware! While there is no cost for using the outline, you must drop me a line at dfalgoust@alumni.utexas.net to tell me what you think, if it helped you, etc.; it’d also be nice if you dropped by my web page at http://www.geocities.com/NapaValley/3578/ and signed my guest book.
Feel free to redistribute this outline unmodified to anyone who may find it useful. This outline is provided “as is” and I make no promises as to its accuracy (it worked for me, your mileage may vary). Good Luck on exams!
Damien Falgoust
University of Texas School of Law
Ed. Note: This isn’t a traditional outline, for reasons that are hard to explain unless you’ve actually had Baade’s class.
Documents for the basic transaction
1. Pro forma invoice – this is the offer.
2. Purchase order – this is the acceptance. Note the “back side” clauses (battle of the forms)
3. Commercial invoice – serves two purposes:
· States the value of goods for customs (if arm’s length) (recall customs value = transaction value)
· Is the “royal document” for the description of goods
4. Shipper’s Export Declaration
5. Certificate of Origin – important for customs in the non-issuing country for customs treatement; also important for anti-boycott legislation (i.e., can’t say “no Israeli parts”).
6. Bill of Lading – K between shipper (seller) and carrier. “Carrier” issues BoL when goods are on board. BoL goes to consignee.
· What is it?
· K of carriage between shipper and carrier
· K of bailment between shipper and carrier
· Document of Title
· On back: loads of provisions. Most important: choice of law/forum, “paramount clause” (required by law), arbitration clause (generally enforceable, see Vimer)
7. Certificate of Insurance – covers goods, typically runs to buyer’s benefit. Recall CIF = seller procures insurance for buyer, FOB = buyer procures insurance for himself.
8. Sight Draft – certificate provided by the beneficiary of a letter of credit (commerical paper, can cut off certain defenses).
Contract Formation
Vienna Convention on Int’l Sale
e absolute as to impossibility of performance; all that is needed is a change fundamentally altering the performance of the terms.
· France = no frustration; Switzerland & Germany = judge will readjust K terms.
· Suez Canal cases
Charterpartys
· A charterparty is the contract for renting/leasing a ship between the “charterer” and the vessel owner. (The “shipper” has nothing to do with it).
· Three types:
· Time charter (think limo rental)
· Voyage charter (taxi)
· De mise (rental car)
Letters of Credit
Generally, written by and for the banks…
Refer to the Uniform Conditions on Letters of Credit
· Banks deal with documents, not goods (Art. 4, also see 7, 9, 11)
· Standard examination (Art. 13) (can only examine face of documents; discrepancies must be noted in 7 banking days)
· FM – Art. 17 – for the banks and no one else.
