According to Kronke (2010), Law consists of a system of rules in which a community or a county subscribe to as fundamental for regulating the actions of its members, which if enforced, may lead to the imposition of a penalty. International legal challenges may arise due to distinct legal systems that each nation has. The legislation, bureaucracies, monarchs, and courts of countries usually differ significantly from one another. This aspect varies the way rules, rights, and responsibilities associated with citizens, contracts, and the constitution of criminal conducts are handled with regards to the law. The paper therefore, explores different case scenarios where Colossal Corporation would negotiate a contract provision and alternative approaches for renegotiating the contract in different legal jurisdictions, a determination of whether arbitration is good for dispute resolution of contracts, and the impact of a lawsuit against the company in a country, even if it has ceased operations.
Case I
In normal circumstances, the significance of an offer and acceptance must match in material aspects—price, quantity, and delivery, for an agreement to be considered a contract. Even a contract with the potential for dispute and dispute resolution must consider the material aspects. Considering the aspect of a contractual arrangement and disputes resolution that may arise from a contract of Colossal Corporation in Zintar country, it is significant for the VP of the company to realize that there is no federal law governing the laws of contracts (CISG, 19888). The jurisdiction of the contract disputes that may affect the company in Zintar or outside the borders of the country will solely be based on the laws that govern the Zintar state, even when the disputes may arise from the other companies in Europe. All the decisions of the contract disputes and any future variations will fundamentally be based on the initial agreement to settle any arising issues in Zintar court.
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Case II
The UN Convention of contracts on sale transactions is governed by the CISG international law of sales. When Colossal subsidiary company in Bartan wants to enter into a sales contract with a subsidiary there, it will be prudent for the VP to understand that since the initial contract requirements were set in Zintar country, the company will be required to follow that specific legal regime that will apply to all of its contracts. Otherwise, the CISG law would be a matter of priority applicable to the sales contract. The CISG convention is the default regime in contracts, which other particular laws subscribe to for determination of contract terms (ICC, 2006). It is, therefore, a good idea for the company to consider the UN convention on contracts for the International Sale of Goods as this sets the foundation of how international contracts should be set out.
Q 3
The Idea of Arbitration as a Dispute Resolution Mechanism
Arbitration is an alternative way of settling disputes out of the corridors of courts. However, an arbitrator imposes decisions that the parties to a dispute would be required to adhere since the decisions are made on behalf of the said parties (Kronke, 2010). Colossal Corporation should realize that arbitration is a good alternative dispute resolution for both domestic and international contracts since the aspect of confidentiality and efficiency to a contract settlement dispute is a forefront consideration. Most significantly is the enforceability of the arbitration decision since the Convention on the Recognition and Enforcement of Foreign Arbitral Awards demands so (Lee, & Lee, 2013). The good thing is that most of the world’s trading nations have subscribed to the convention.
Q 4
A move to sue the Colossal Corporation Company that was based in South America, Notso, because of the pollution that would result in the company paying millions of dollars in damages was interrupted by the company’s exit strategy, which involved selling its mines to another party in that country. The VP of the company is right since there is no danger even if it loses the court case. Indeed, there would be no assets of the company in Notso that the court would execute against, which explains the inability of the overseas court to honor the judgment of the court in Notso.
Q 5
Ramifications of Granting Edfin’s Request
Letters of Credit are a basic element of international sales transaction contracts. In essence, they make a transaction between a buyer and a seller enforceable in a way that if one party refuses to honor their obligations, then it is easier for the bereaved party to seek the court’s jurisdiction over the party that is not complying with the sale agreement. As earlier noted with the international legal challenges, it is challenging to get judgments enforced in a country other than where the jurisdiction of the judgment is based. As a solution to this problem, the Letter of Credit forms a crucial international trade tool, which helps the sellers because the document forms the basis by which payments are made (ICC, 2006). Colossal’s grant of this request to Edfin will ensure that the company must pay for the latter’s services and if not, Edfin can base the document as a subject in court, which will ensure that Colossal complies with the sale agreement.
In conclusion, it is significant to note that different countries have different legal systems that govern the way they behave, which makes it challenging to apply laws of one state to another. However, treaties like the UN conventions have significantly influenced the way international business contracts are handled and enforced. The case in the paper provides a scenario where different situations in a different jurisdiction can be dealt with, and a decision reached upon to either vary the situation or solve a dispute arising from the international contract.
References
CISG (Convention on Contracts for the International Sale of Goods), Jan. 1, 1988, 1489 U.N.T.S. 3.
ICC (International Chamber of Commerce). (2006). ICC uniform customs and practice for documentary credits - UCP 600 . Paris: ICC.
Kronke, H. (2010). Recognition and enforcement of foreign arbitral awards: A global commentary on the New York Convention . Austin: Wolters Kluwer.
International Court of Justice. (1948, May 28). Conditions of admission of a state to membership in the United Nations. International Law Quarterly, 2 (3), 483–519.
Lee, S., & Lee, H. E. (2013). Northeast Asian perspectives on international law: Contemporary issues and challenges .
