INTERNATIONAL BUSINESS LAW

International Business Law



International Business Law

Introduction

On the one hand it is true to say that UK Commercial Law facilitates international trade by having straightforward rules that are strictly applied by the English courts in relation to "free on board" and "cost, insurance and fright" contracts. On the other hand such treatment did not follow as a response to the needs of the international business community. This hypothesis will be proved by outlining the needs of the international business community. Followed by an outline of the rules and duties applicable to the seller and buyer under both "free on board" and "cost, insurance and freight" contracts. The examination will include the relevant case law, Acts of Parliament and Conventions. Lastly, some criticisms and analysis of problems, if they exist, that arise with interpreting and consequently applying international trade terms in relation to FOB and CIF contracts under Convention of Contracts for the International Sale of Goods 1980, Hague-Visby Rules 1924, the Sale of Goods Act 1979 and the Carriage of Goods by Sea Act 1971 and 1992, will be presented.

Discussion

First of all it is important to outline the needs of the international business community. The most important is the free exchange of goods which had been promoted by many countries for a long time. This is evident from the creation of such big organisations as the General Agreement on Tariffs and Trade 1947. GATT was "a multilateral treaty that set out the principles under which its contracting states, on the basis of reciprocity and mutual advantage, were to negotiate a substantial reduction in custom tariffs and other impediments to trade" . The General Agreement on Tariffs and Trade was followed by the Uruguay Round concluded in 1994, and as a result of which the World Trade Organisation (WTO) had emerged, transforming the GATT into a membership agreement .

Although on the one hand it could be argued that because UK Commercial law is not really a part to most of the provisions, rules and Conventions that are set out above, aimed at the harmonisation of the international trade to simplify it, UK law cannot be said to "respond" to the needs of the international business communities as such. On the other hand, because of the straightforward rules that are applicable to both FOB and CIF contracts, sometimes referred to as "legal certainty and predictability" , it could be argued that UK Commercial law facilitates international trade.

In order to be able to support the above-mentioned hypothesis, definitions and the duties of the seller and buyer applicable to both FOB and CIF contracts will be given a brief consideration. In addition, a relevant case law would be provided.

Before considering the "free on board" and "cost, insurance and fright" contracts there are two points that should be mentioned. The first is the general rule under international trade, whereby the parties to a contract will, in the majority of cases, outline the law that they would like to govern their contract in case the breach ...