International Commercial Law Soft Law

1. International Commercial LawSoft Law University of Oslo Giuditta Cordero Moss, Ph.D., Dr.Juris Prof.ass., International Commercial Law, Oslo University

2. ”Soft Law” • A set of rules regulating international transactions • Does not emanate from national sources of law or international treaties

3. ”Soft Law”- Grounds in Favour • National law is primarily aimed at regulating domestic relationships • National laws differ from one another • National laws are confusing and an hindrance for international trade • International commercial usages and practices are more adequate to regulate transactions across national borders

4. ”Soft Law” – Grounds against • Not a system but a fragmentary collection of rules • Rules are too vague • Rules are difficult to determine • Rules are not issued by competent authorities

5. Sources of ”Soft Law” • ”Principles rooted in the good sense and common practice of the generality of civilised nations” • Usages and practices • Model Laws • E.g. UNCITRAL Model Arbitration Law • Private Codifications • E.g. INCOTERMS, UCP 500 • Restatements • E.g. UNIDROIT Principles, European Principles

6. International Conventions - Sources of Soft Law? • If they are applicable, they are not soft law but applicable law • If they are not applicable: Can soft law achieve application of convention in lieu of ratification?

7. Private Codifications • International Chamber of Commerce, ISDA, branch associations • INCOTERMS, UCP 500, Model Agreements, Codes, Definitions • May be considered as expression of trade practices • Are applicable if incorporated by the parties • May not prevail over conflicting madatory rules of the applicable law • Have a clearly determined scope of application

8. INCOTERMS • Terms of sale: • Passage of risk • Division of costs • Obligations in connection with delivery (customs formalities, transportation, etc.) • Integration of applicable law (e.g. Art. 66 CISG- Incoterms are not in contradiction, are specification of when risk passes) • Do not replace applicable law (e.g. Validity, Limitation, Interests, Remedies, etc.)

9. UNIDROIT Principles of International Commercial Contracts • Drafted in 1994 by the International Institute for the Unification of Private Law • Establish a balanced set of rules designed for use throughout the world • No binding effect • Persuasive authority

10. UNIDROIT- Irrevocable Offer • Art. 2.4: An offer cannot be revoked if it indicates that it is irrevocable (by fixing a time for acceptance or otherwise).

11. UNIDROIT – Definition of Force Majeure • Art. 7.1.7: non-performance excused if due to an impediment beyond the party’s control and that could not be expected to be foreseen or avoided

12. UNIDROIT- Partial Impediment • Not regulated

13. UNIDROIT- Amendments to a contract • Art. 1.3: Contract may be modified in accordance with its terms or by agreement

14. Application of UNIDROIT Principles • As an integral part of the contract, if they have been incorporated by the parties • Not applicable if contrast with mandatory governing law (art. 1.4) • As an expression of trade uses, if they have not been incorporated • To corroborate governing law • Rarely as an independent source of law

15. ”Soft Law” – Scope of Application • Soft law is mostly compatible with national laws • Soft law is a desirable integration of national law • If conflict, the applicable national law prevails