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Revisiting the Autonomous Contract (Draft 0.90 - 2000.08.27 ;)

Transnational contract "law", trends and supportive structures

1. Reinforcing trends: borderless technologies, global economy, transnational legal solutions?

2. Common Property - advocating a common commercial highway

3. Modelling the private international commercial law infrastructure

4. The foundation for transnational private contract law, arbitration

5. "State contracted international law" and/or "institutionally offered lex"? CISG and PICC as examples

6. Contract Lex design. Questions of commonweal

6.1 The neutrality of contract law and information cost
6.2 Justifying mandatory loyalty principles

7. Problems beyond uniform texts

7.1 In support of four objectives
7.2 Improving the predictability, certainty and uniform application of international and transnational law
7.3 The Net and information sharing through transnational databases
7.4 Judicial minimalism promotes democratic jurisprudential deliberation
7.5 Non-binding interpretative councils and their co-ordinating guides can provide a focal point for the convergence of ideas - certainty, predictability, and efficiency
7.6 Capacity Building

8. Marketing of transnational solutions

9. Tools in future development

10. As an aside, a word of caution

11. Endnote

Endnotes

Endnotes

Metadata

SiSU Metadata, document information

Manifest

SiSU Manifest, alternative outputs etc.

Revisiting the Autonomous Contract

Transnational contracting, trends and supportive structures

Ralph Amissah

copy @ Lex Mercatoria

Revisiting the Autonomous Contract (Draft 0.90 - 2000.08.27 ;)

Transnational contract "law", trends and supportive structures

7. Problems beyond uniform texts

7.1 In support of four objectives
7.2 Improving the predictability, certainty and uniform application of international and transnational law
7.3 The Net and information sharing through transnational databases
7.4 Judicial minimalism promotes democratic jurisprudential deliberation
7.5 Non-binding interpretative councils and their co-ordinating guides can provide a focal point for the convergence of ideas - certainty, predictability, and efficiency
7.6 Capacity Building
38

In the formulation of many international legal texts a pragmatic approach was taken. Formulating legislators from different States developed solutions based on suitable responses to factual example circumstances. This was done, successfully, with a view to avoiding arguments over alternative legal semantics and methodologies. However, having arrived at a common text, what then? Several issues are raised by asking the question, given that differences of interpretation can arise and become entrenched, by what means is it possible to foster a sustainable drive towards the uniform application of shared texts? Four principles appear to be desirable and should insofar as it is possible be pursued together: (i) the promotion of certainty and predictability; (ii) the promotion of uniformity of application; (iii) the protection of democratic ideals and ensuring of jurisprudential deliberation, and; (iv) the retention of efficiency.

40

The key to the (efficient) achievement of greater certainty and predictability in an international and/or transnational commercial law regime is through the uniform application of shared texts that make up this regime.

Obviously a distinction is to be made between transnational predictability in application, that is "uniform application", and predictability at a domestic level. Where the "uniform law" is applied by a municipal court of State "A" that looks first to its domestic writings, there may be a clear - predictable manner of application, even if not in the spirit of the "Convention". Another State "B" may apply the uniform law in a different way that is equally predictable, being perfectly consistent internally. This however defeats much of the purpose of the uniform law.

A first step is for municipal courts to accept the UN Convention on the Law of Treaties 1969 (in force 1980) as a codification of existing public international law with regard to the interpretation of treaties.  44  A potentially fundamental step towards the achievement of uniform application is through the conscientious following of the admonitions of the interpretation clauses of modern conventions, rules and principles  45  to take into account their international character and the need to promote uniformity in their application,  46  together with all this implies.  47  However, the problems of uniform application, being embedded in differences of legal methodology, go beyond the agreement of a common text, and superficial glances at the works of other legal municipalities. These include questions related to sources of authority and technique applied in developing valid legal argument. Problems with sources include differences in authority and weight given to: (a) legislative history; (b) rulings domestic and international; (c) official and other commentaries; (d) scholarly writings. There should be an ongoing discussion of legal methodology to determine the methods best suited to addressing the problem of achieving greater certainty, predictability and uniformity in the application of shared international legal texts. With regard to information sharing, again the technology associated with the Net offers potential solutions.

44

The Net has been a godsend permitting the collection and dissemination of information on international law. With the best intentions to live up to admonitions to "to take into account their international character and the need to promote uniformity in their application" of "ScIL" and "IoL", a difficulty has been in knowing what has been written and decided elsewhere. In discussing solutions, Professor Honnold in "Uniform Words and Uniform Application"   48  suggests the following: "General Access to Case-Law and Bibliographic Material: The development of a homogenous body of law under the Convention depends on channels for the collection and sharing of judicial decisions and bibliographic material so that experience in each country can be evaluated and followed or rejected in other jurisdictions." Honnold then goes on to discuss "the need for an international clearing-house to collect and disseminate experience on the Convention" the need for which, he writes there is general agreement. He also discusses information-gathering methods through the use of national reporters. He poses the question "Will these channels be adequate? ..."

The Net, offering inexpensive ways to build databases and to provide global access to information, provides an opportunity to address these problems that was not previously available. The Net extends the reach of the admonitions of the interpretation clauses. Providing the medium whereby if a decision or scholarly writing exists on a particular article or provision of a Convention, anywhere in the world, it will be readily available. Whether or not a national court or arbitration tribunal chooses to follow their example, they should be aware of it. Whatever a national court decides will also become internationally known, and will add to the body of experience on the Convention.  49 

Such a library would be of interest to the institution promulgating the text, governments, practitioners and researchers alike. It could place at your fingertips: (a) Convention texts. (b) Implementation details of contracting States. (c) The legislative history. (d) Decisions generated by the convention around the world (court and arbitral where possible). (e) The official and other commentaries. (f) Scholarly writings on the Convention. (g) Bibliographies of scholarly writings. (h) Monographs and textbooks. (i) Student study material collections. (j) Information on promotional activities, lectures - moots etc. (k) Discussion groups/ mailing groups and other more interactive features.

With respect to the CISG such databases are already being maintained.  50 

The database by ensuring the availability of international materials, used in conjunction with legal practice, helps to support the forenamed four principles. That of efficiency is enhanced especially if there is a single source that can be searched for the information required.

The major obstacle that remains to being confident of this as the great and free panacea that it should be is the cost of translation of texts.

51

How to protect liberal democratic ideals and ensure international jurisprudential deliberation? Looking at judicial method, where court decisions are looked to for guidance, liberal democratic ideals and international jurisprudential deliberation are fostered by a judicial minimalist approach.

For those of us with a common law background, and others who pay special attention to cases as you are invited to by interpretation clauses, there is scope for discussion as to the most appropriate approach to be taken with regard to judicial decisions. US judge Cass Sunstein suggestion of judicial minimalism  51  which despite its being developed in a different context  52  is attractive in that it is suited to a liberal democracy in ensuring democratic jurisprudential deliberation. It maintains discussion, debate, and allows for adjustment as appropriate and the gradual development of a common understanding of issues. Much as one may admire farsighted and far-reaching decisions and expositions, there is less chance with the minimalist approach of the (dogmatic) imposition of particular values. Whilst information sharing offers the possibility of the percolation of good ideas.  53  Much as we admire the integrity of Dworkin's Hercules,  54  that he can consistently deliver single solutions suitable across such disparate socio-economic cultures is questionable. In examining the situation his own "integrity" would likely give him pause and prevent him from dictating that he can.  55  This position is maintained as a general principle across international commercial law, despite private (as opposed to public) international commercial law not being an area of particularly "hard" cases of principle, and; despite private international commercial law being an area in which over a long history it has been demonstrated that lawyers are able to talk a common language to make themselves and their concepts (which are not dissimilar) understood by each other.  56 

54

A respected central guiding body can provide a guiding influence with respect to: (a) the uniform application of texts; (b) information management control. Given the growing mass of writing on common legal texts - academic and by way of decisions, we are faced with an information management problem.  57 

Supra-national interpretative councils have been called for previously  58  and have for various reasons been regarded impracticable to implement including problems associated with getting States to formally agree upon such a body with binding authority.

However it is not necessary to go this route. In relation to "IoL" in such forms as the PICC and PECL it is possible for the promulgators themselves,  59  to update and clarify the accompanying commentary of the rules and principles, and to extend their work, through having councils with the necessary delegated powers. In relation to the CISG it is possible to do something similar of a non-binding nature, through the production of an updated commentary by an interpretive council (that could try to play the role of Hercules).  60  With respect, despite some expressed reservations, it is not true that it would have no more authority than a single author writing on the subject. A suitable non-binding interpretative council would provide a focal point for the convergence of ideas. Given the principle of ensuring democratic jurisprudential deliberation, that such a council would be advisory only (except perhaps on the contracting parties election) would be one of its more attractive features, as it would ensure continued debate and development.

58

"... one should create awareness about the fact that an international contract or transaction is not naturally rooted in one particular domestic law, and that its international specifics are best catered for in a uniform law."  61 

Capacity building - raising awareness, providing education, creating a new generation of lawyers versed in a relatively new paradigm. Capacity building in international and transnational law, is something relevant institutions including arbitration institutions; the business community, and; far sighted States, should be interested in promoting. Finding means to transcend national boundaries is also to continue in the tradition of seeking the means to break down barriers to legal communication and understanding. However, while the business community seeks and requires greater uniformity in their business relations, there has paradoxically, at a national level, been a trend towards a nationalisation of contract law, and a regionalisation of business practice.  62 

As an example, Pace University, Institute of International Commercial Law, plays a prominent role with regard to capacity building in relation to the CISG and PICC. Apart from the previously mentioned CISG Database, Pace University organise a large annual moot on the CISG  63  this year involving students of 79 universities from 28 countries, and respected arbitrators from the word over. Within the moot the finding of solutions based on PICC where the CISG is silent, is encouraged. Pace University also organise an essay competition  64  on the CISG and/or the PICC, which next year is to be expanded to include the PECL as a further option.


 44. The commented PECL explain "'Good faith' means honesty and fairness in mind, which are subjective concepts... 'fair dealing' means observance of fairness in fact which is an objective test".

 45. Special problem regarding common/shared resources discussed by Garrett Hardin in Science (1968) 162 pp. 1243-1248. For short discussion and summary see Trebilcock, (1993) p. 13-15.

 46. This is the position in English law see Lord Diplock in Fothergill v Monarch Airlines [1981], A.C. 251, 282 or see ‹http://www.jus.uio.no/lm/england.fothergill.v.monarch.airlines.hl.1980/2_diplock.html› also Mann (London, 1983) at p. 379. The relevant articles on interpretation are Article 31 and 32.

 47. Examples: The CISG, Article 7; The PICC, Article 1.6; PECL Article 1.106; UN Convention on the Carriage of Goods by Sea (The Hamburg Rules) 1978, Article 3; UN Convention on the Limitation Period in the International Sale of Goods 1974 and 1978, Article 7; UN Model Law on Electronic Commerce 1996, Article 3; UNIDROIT Convention on International Factoring 1988, Article 4; UNIDROIT Convention on International Financial Leasing 1988, Article 6; also EC Convention on the Law Applicable to Contractual Obligations 1980, Article 18.

 48. Such as the CISG provision on interpretation - Article 7.

 49. For an online collection of articles see the Pace CISG Database ‹http://www.cisg.law.pace.edu/cisg/text/e-text-07.html› and amongst the many other articles do not miss Michael Van Alstine Dynamic Treaty Interpretation 146 University of Pennsylvania Law Review (1998) 687-793.

 50. Based on the CISG, and inputs from several professors from different legal jurisdictions, on the problems of achieving the uniform application of the text across different legal municipalities. J. Honnold, Uniform words and uniform applications. Uniform Words and Uniform Application: The 1980 Sales Convention and International Juridical Practice. Einheitliches Kaufrecht und nationales Obligationenrecht. Referate Diskussionen der Fachtagung. am 16/17-2-1987. Hrsg. von P. Schlechtriem. Baden-Baden, Nomos, 1987. p. 115-147, at p. 127-128.

 51. Nor is it particularly difficult to set into motion the placement of such information on the Net. With each interested participant publishing for their own interest, the Net could provide the key resources to be utilised in the harmonisation and reaching of common understandings of solutions and uniform application of legal texts. Works from all countries would be available.

 52. Primary amongst them Pace University, Institute of International Commercial Law, CISG Database ‹http://www.cisg.law.pace.edu/› which provides secondary support for the CISG, including providing a free on-line database of the legislative history, academic writings, and case-law on the CISG and additional material with regard to PICC and PECL insofar as they may supplement the CISG. Furthermore, the Pace CISG Project, networks with the several other existing Net based "autonomous" CISG projects. UNCITRAL under Secretary Gerold Herrmann, has its own database through which it distributes its case law materials collected from national reporters (CLOUT).

 53. Cass R. Sunstein, One Case at a Time - Judicial Minimalism on the Supreme Court (1999)

 54. His analysis is developed based largely on "hard" constitutional cases of the U.S.

 55. D. Stauffer, Introduction to Percolation Theory (London, 1985). Percolation represents the sudden dramatic expansion of a common idea or ideas thought he reaching of a critical level/mass in the rapid recognition of their power and the making of further interconnections. An epidemic like infection of ideas. Not quite the way we are used to the progression of ideas within a conservative tradition.

 56. Ronald Dworkin, Laws Empire (Harvard, 1986); Hard Cases in Harvard Law Review (1988).

 57. Hercules was created for U.S. Federal Cases and the community represented by the U.S.

 58. In 1966, a time when there were greater differences in the legal systems of States comprising the world economy Clive Schmitthoff was able to comment that:

"22. The similarity of the law of international trade transcends the division of the world between countries of free enterprise and countries of centrally planned economy, and between the legal families of the civil law of Roman inspiration and the common law of English tradition. As a Polish scholar observed, "the law of external trade of the countries of planned economy does not differ in its fundamental principles from the law of external trade of other countries, such as e.g., Austria or Switzerland. Consequently, international trade law specialists of all countries have found without difficulty that they speak a 'common language'

23. The reason for this universal similarity of the law of international trade is that this branch of law is based on three fundamental propositions: first, that the parties are free, subject to limitations imposed by the national laws, to contract on whatever terms they are able to agree (principle of the autonomy of the parties' will); secondly, that once the parties have entered into a contract, that contract must be faithfully fulfilled (pacta sunt servanda) and only in very exceptional circumstances does the law excuse a party from performing his obligations, viz., if force majeure or frustration can be established; and, thirdly that arbitration is widely used in international trade for the settlement of disputes, and the awards of arbitration tribunals command far-reaching international recognition and are often capable of enforcement abroad."

Report of the Secretary-General of the United Nations, Progressive Development of the Law of International Trade (1966). Report prepared for the UN by C. Schmitthoff.

 59. Future if not current.

 60. UNCITRAL Secretariat (1992) p. 253. Proposed by David (France) at the second UNCITRAL Congress and on a later occasion by Farnsworth (USA). To date the political will backed by the financing for such an organ has not been forthcoming. In 1992 the UNCITRAL Secretariat concluded that "probably the time has not yet come". Suggested also by Louis Sono in Uniform laws require uniform interpretation: proposals for an international tribunal to interpret uniform legal texts (1992) 25th UNCITRAL Congress, pp. 50-54. Drobnig, Observations in Uniform Law in Practice at p. 306.

 61. UNIDROIT and the EU

 62. For references on interpretation of the CISG by a supranational committee of experts or council of "wise men" see Bonell, Proposal for the Establishment of a Permanent Editorial Board for the Vienna Sales Convention in International Uniform Law in Practice/ Le droit uniforme international dans la practique [Acts and Proceedings of the 3rd Congress on Private Law held by the International Institute for the Unification of Private Law (Rome, 1987)], (New York, 1988) pp. 241-244

 63. UNCITRAL Secretariat (1992) p. 255.

 64. Erich Schanze, New Directions in Business Research in Børge Dahl & Ruth Nielsen (ed.), New Directions in Contract Research (Copenhagen, 1996) p. 62.


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