INTERNATIONAL
BUSINESS LAW
Dr. Bui Le Thuc Linh
OVERVIEW ON GENERAL ISSUES
1. What is International Business?
2. Overview of International Commercial Contracts.
3. Settling disputes arising from International Business.
4. International Sales Contracts.
5. International Cargo Transportation Contracts.
6. International Payment.
1.1. The concept of international business law
▪ What is business?
Business is the continuous execution of one, some, or all stages of the
investment process, from production to the consumption of products or the
provision of services in the market to make a profit. (Clause 21, Article 4 of
the 2020 Enterprise Law)
▪ How about International Business?
International business is an international scale or business activity with
foreign elements.
E.g.: - International transportation contracts;
- International investment contracts.
1.1. The concept of international business law
International business law is a compilation of legal
regulations governing international business relations among
merchants.
1.1. The concept of international business law
▪ Subject
▪ Object
▪ Related legal events
▪ Governing laws
▪ Dispute settlement agencies.
1.1.1. Subjects of international business law
▪ A legal entity means having legal capacity, and the
signatory has the capacity to act and the authority to sign
the contract.
▪ The subject of an international sales contract includes
foreign traders.
▪ The legal capacity of a foreign trader is determined
according to the laws of the country in which the trader
has a nationality.
1.1.2. Objects of international business law
Article 2 of the CISG 1980 states that this Convention does not apply to
sales:
▪ (a) of goods bought for personal, family or household use, unless the
seller, at any time before or at the conclusion of the contract, neither
knew nor ought to have known that the goods were bought for any such
use;
▪ (b) by auction;
▪ (c) on execution or otherwise by authority of law;
▪ (d) of stocks, shares, investment securities, negotiable instruments, or
money;
▪ (e) of ships, vessels, hovercraft, or aircraft; (f) of electricity.
1.1.3. Forms of international commercial contracts
▪ Article 11 CISG 1980;
▪ Article 12 CISG 1980;
▪ However, according to Clause 2, Article 27, Vietnam
Commercial Law 2005
Furthermore:
“Forms of validity equivalent to documents include telegraph,
telex, facsimile, data message and other forms provided for by
law” Clause 15, Article 3 Commercial Law 2005.
Article 11 CISG 1980:
“A contract of sale need not be concluded in or evidenced
by writing and is not subject to any other requirement as to
form. It may be proved by any means, including
witnesses.”
Article 12 CISG 1980:
“Any provision of article 11, article 29 or Part II of this
Convention that allows a contract of sale or its modification
or termination by agreement or any offer, acceptance or
other indication of intention to be made in any form other
than in writing does not apply where any party has his
place of business I. United Nations Convention on
Contracts for the International Sale of Goods 5 in a
Contracting State which has made a declaration under
article 96 of this Convention. The parties may not derogate
from or vary the effect of this article.”
1.1.4. Dispute settlement agencies
Generally are International/Foreign Courts or Arbitration
1.1.5. Legal basis
▪ Convention relating to a Uniform Law on the Formation of Contracts
for the International Sales of Goods (The Hague, 1964);
▪ United Nations Convention on Contracts for the International Sale of
Goods (CISG) 1980;
▪ Other International Commercial Treaties;
▪ Municipal Laws;
▪ Vietnam Commercial Law 2005 (VCL 2005);
▪ International Customs/Practices (Incoterms 2010, UCC, UCP 600,...);
▪ Lex mercatorica;
▪ Model contracts, cases,…
1.1.5.1. Treaties
❖It is a general term for various legal documents that
regulate contracts and issues related to international
commercial contracts, including conventions,
agreements, protocols, etc...
1.1.5.2. Municipal laws
Classification of legal norms regulating contracts:
▪First, the mandatory provisions regulate the validity of
the contract;
▪Secondly, substantive rules, which are the rules that
stipulate the rights and obligations of the parties in the
contract.
1.1.5.3. International practices
▪Commercial practices can be practices within a limited
geographical area or can be trade customs in a
specific locality.
1.1.5.4. International customs
International commercial customs have the following characteristics:
▪ The rules of conduct have been formed for a long time.
▪ They are popular, applied in similar circumstances, and are known to many
people.
International commercial customs are effective in the following cases:
▪ The country of the subject of the international commercial contract
recognizes in writing the effectiveness of international commercial customs
as legal norms.
▪ The will of the parties to agree to include international commercial customs
in the contract or not.
1.1.5.4. International customs
In addition, other means are also used, such as :
▪ Model Contracts;
▪ General terms of transaction;
▪ Signing instructions.
1.1.5.5. Lex mercatorica
The main characteristics of Lex mercatorica
▪ Transnational law;
▪ The main sources are the customs of merchants/traders;
▪ Merchants are the ones who evaluate and judge.
▪ The process is quick and informal;
▪ Bona fide (good faith).
1.2. The validity of international commercial contracts
Conditions for the validity of the international sales contract:
▪ The parties to the contract must have legal capacity and be
authorized to enter into the international sales contract;
▪ The purpose and content of the contract do not violate legal
prohibitions and do not go against social ethics.
▪ The contract is concluded on the basis of the principle of
voluntariness;
▪ The contract is signed in writing (written documents).
1.3. Void contract and legal consequences
1. Invalidity of civil transactions due to misunderstandings:
Article 126 Vietnam Civil Code 2015. Invalidity of civil transactions due to
misunderstandings:
“ 1. Where an established civil transaction involves a misunderstanding
resulting in the failure by one or more parties to reach the objective of the
transaction establishment, the misunderstanding party has the right to
request that the court declare the civil transaction invalid, except for the
case prescribed in clause 2 of this article.
2. An established civil transaction involving a misunderstanding shall not
be invalid in the case the objective of the civil transaction establishment of
the parties has been achieved, or the parties may immediately rectify the
misunderstanding, thus achieving the objective of the civil transaction
establishment.”
1.3. Void contract and legal consequences
2. Invalidity of civil transactions due to deception:
“Deception in a civil transaction means an intentional
act of a party or of a third person for the purpose of
misleading the other party as to the subject, nature of
the entity, or contents of the civil transaction which has
caused the other party to enter into the transaction.”-
Article 127 Vietnam Civil Code 2015.
1.3. Void contract and legal consequences
3. Invalidity of civil transactions due to threat :
▪ Invalid due to violation of the principle of voluntary
agreement.
▪ “Threat or coercion in a civil transaction means an intentional
act of a party or of a third person which compels the other
party to implement the civil transaction in order to avoid
danger to life, health, honour, reputation, dignity or property
or that of its relatives.”- Article 27 Vietnam Civil Code 2015.
1.4. The statute of limitations for requesting the court to
declare the contract void
Clause 1, Article 132 Vietnam Civil Code 2015 states that:
“The time-limit within which a request may be made to a court to
declare a civil transaction invalid in articles 125, 126, 127, 128 and 129
of this Code shall be two years as from the date:…”
1.4. The statute of limitations for requesting the court to
declare the contract void
(a)The representative of a minor, a person who has lost the capacity for civil acts or has
restricted capacity for civil acts, or a person who has difficulty in awareness or control of
his or her acts, knew or should have known that the principal himself or herself
established or performed the transaction;
(b) The misunderstanding or deceived person knew or should have known that the
transaction was established due to the misunderstanding or deception;
(c) The threatening or coercing person ceases the act of threat or coercion;
(d) The person incapable of being aware of or controlling his or her acts establishes the
transaction;
(dd) The civil transaction is established, in the case that the civil transaction did not
conform to the provisions on its form.
