INTERNATIONAL LAW

 International Law: The body of written and unwritten

laws, including treaties, governing the relations between
and among nations and between nations and the citizens of
one or more other sovereign nations (e.g., the Geneva
Convention on the Treatment of Prisoners of War, the
Warsaw Convention on International Air Travel, the
General Agreement on Tariffs and Trade, the Nuclear Test
Ban Treaty).

 National Law: The system of laws that govern rights and

obligations of persons within a particular country or nation.

 The various legal systems countries employ today can

be broadly characterized as either civilian (e.g.,
France, Mexico) or common law (e.g., India, Canada)
systems.

 Key questions raised by international law, which are less

present with respect to national law, are:

(1) who will enforce the rights and obligations created by

a particular international law; and

(2) how will they enforce those rights and obligations?

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 SOURCES OF INTERNATIONAL LAW

 International Customs: Practices among countries in their

relations with one another that have evolved to the extent
that the international community recognize them as legal
rules – or, at least, legal norms.

 Treaties and Agreements: Formal agreements between

two (bilateral), or among several (multilateral), countries,
which each country’s domestic government has authorized
or ratified. For example:

 the U.N. Convention on Contracts for the International

Sale of Goods (CISG), and

 the North American Free Trade Agreement (NAFTA).

 International Organizations: Organizations of member

states and nations, generally designed and conducted
according to a treaty. For example:

 the United Nations, and

 the World Trade Organization.

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 LEGAL PRINCIPLES AND DOCTRINES

 Comity: One country’s deference to and willingness to

enforce the laws and judicial decrees of another country, as
long as those laws and decrees are consistent with the
fundamental laws and public policy of the deferring
country.

 Act of State Doctrine: One country’s courts will not

question the validity of another country’s governmental
acts committed within the other country’s territory.

 Expropriation: Government seizure of private

property for public use with just compensation.

 Confiscation: Government seizure of private property

without just compensation.

 Sovereign Immunity: Foreign states are exempt from the

jurisdiction of U.S. courts except when the foreign state has

(1) explicitly or implicitly waived its immunity,

(2) engaged in a commercial activity within, or having a

direct effect on, the United States,

(3) committed a tort in the United States, or

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 (4) violated certain international laws.

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 INTERNATIONAL BUSINESS

 Direct Export: The sale of goods directly to a foreign

purchaser.

 Indirect Export: The sale of goods abroad through some

third party.

 Foreign Agent: A firm or person empowered to

contract in the agent’s country on behalf of a U.S.
principal.

 Foreign Distributor: A firm or person empowered to

sell a U.S. principal’s products in a foreign country.

 Licensing: An agreement whereby a domestic company

permits a foreign company to produce and sell goods in the
foreign market using the domestic company’s materials or
process in return for a royalty.

 Franchising: An agreement whereby a domestic owner of

a trademark, trade name, copyright, etc. permits a foreign
company to use the trademark, trade name, copyright, etc.
in return for a fixed fee or royalty.

 Subsidiary/Joint Venture: Some U.S. firms expand into

foreign markets by establishing a wholly-owned subsidiary

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 or by entering into a joint venture with a company already
in the foreign market.

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 INTERNATIONAL TRADE

 Export Incentives: Devices designed to stimulate exports.

 Export/Import Restrictions: Devices designed to limit or

prohibit exports/imports of certain goods or exports
to/imports from certain countries.

 Quota: Numerical limit – either as a fixed quantity or

as a percentage of domestic sales or output – on the
amount of goods that can be imported or exported.

 Tariff: A tax on imported goods.

 Dumping: Selling imports at less than their fair market

value.

 Normal Trade Relations Status: Each member of the

World Trade Organization is required to treat all other
members at least as well as it treats the country to which it
gives the most favorable treatment with regard to imports
or exports.

 The European Union (EU), NAFTA, and Central

America-Dominican Republic-United States Free Trade
Agreement (CAFTA-DR) are examples of multilateral
organizations and agreements designed to promote freer

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 trade and investment between and among neighboring
countries.

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 INTERNATIONAL CONTRACTS

 Choice-of-Language Clause: A contractual provision

designating the language by which the terms of the contract
will be interpreted if a dispute arises.

 Choice-of-Forum Clause: A contractual provision

designating the jurisdiction, court, or tribunal that will
decide any disputes arising under the contract.

 Choice-of-Law Clause: A contractual provision

designating which jurisdiction’s law will govern the
contract.

 Force Majeure Clause: A contractual provision excusing

nonperformance in the event of war, political upheavals,
acts of God, and the like.

 Dispute Resolution Clause: A contractual provision

requiring the parties to submit any disputes to a designated
forum or body in an attempt to resolve the conflict without
litigation.

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 INTERNATIONAL PAYMENTS

 Monetary Exchange: Because foreign buyers and sellers

may prefer (or even insist) that they be able to pay or be
paid in their domestic currency, U.S. exporters and
importers must be able to convert U.S. dollars into foreign
currency and foreign currency into U.S. dollars.

 Foreign Exchange Market: One way to accomplish

foreign currency conversion is to buy or sell
currencies, in transactions separate from the purchase
or sale of goods, on a market that exists to facilitate
currency exchange.

 Correspondent Banking: Another way to accomplish

foreign currency conversion is to deal with a domestic
bank with one or more correspondent banks abroad.

 Letter of Credit: A written instrument, issued by a bank

(the issuer) on behalf of a customer (the account party),
promising that the bank will honor drafts and other
demands for payment by the recipient of the letter (the
beneficiary), or their assignee, in accordance with the terms
of the letter.

 The letter of credit is independent of the underlying

contract between the buyer and seller, and the issuer

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 is bound to honor the letter regardless of any dispute
between the buyer and seller.

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 U.S. LAWS IN A GLOBAL CONTEXT

 U.S. Antitrust Law applies to any conduct, occurring in

the U.S. or abroad, that substantially affects interstate
commerce.

 Per se violations of federal antitrust law (e.g., price

fixing, illegal tying) substantially affect interstate
commerce as a matter of law.

 International Tort Claims: The Alien Tort Claims Act

allows U.S. citizens to bring actions against companies
operating in other countries.

 Antidiscrimination Laws: U.S. companies employing

U.S. citizens abroad must comply with federal
antidiscrimination laws, including

 the Age Discrimination in Employment Act

(ADEA),

 the Americans with Disabilities Act (ADA), and

 Title VII of the 1964 Civil Rights Act, as amended,

unless doing so would violate the law of the country in

which the U.S. citizen is working. U.S. companies are not

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 excused simply because the host country’s domestic law
does not prohibit or restrict discrimination based on age,
disability, race, ethnicity, national origin, gender, or sexual
orientation.

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