Legal Aspects and Contracts
by Xavier Van Overmeire
The content of this course has been carefully defined with a view to enabling each participant to:
- Define the impact of various clauses and conditions of sale within the context of international sales;
- Be able to identify the key legal clauses to which attention must be paid within the framework of international negotiations;
- Be capable of understanding a sales, distribution or production technology transfer contract, whilst determining the advantages and drawbacks for each of the signatories;
- Be attentive to the legal implications that recourse to new technologies in international trade introduces.
Given that the essential function of training enables participants to understand the various legal mechanisms regarding international sales contracts, contracts and technology transfer distribution contracts, these mechanisms must be envisaged from the point of view of their traditional aspects, but also their more innovative forms related to the development of electronic commerce. Three aspects are covered therefore:
- An internal legal analysis especially concerning the various aspects and forms of the international sales contract;
- An external legal analysis covering in particular the various aspects and forms of commercial export strategy, particularly via the various types of distribution imaginable and with particular emphasis on technology transfer;
- An introduction to the legal implications of new technologies (NTIC) in international trading operations.
The international sales contract
The presentation of an international sales contract provides pragmatic guidelines whilst also highlighting the basic text on the subject covered by the Vienna Convention on Contracts for the International Sale of Goods.
Participants are introduced to the everyday reality of international sales contracts by approaching the various problems related to this fundamental institution (see pedagogic section):
- How to draw up this type of contract. Participants are initiated in the genesis and composition of this type of contract, as well as various questions of a practical nature linked to negotiation and the negotiators for such a contract;
- The obligations of the parties – purchaser and seller – engaged in such a contract once the contract has been drawn up. The trainer discusses with participants the basic obligations which are, for the seller, the obligation to deliver the goods or services in good condition and in accordance with the terms agreed and, for the purchaser, the obligation to pay for what has been delivered. The legal principles concerned relate to specific examples from international trade and the trainer will discuss practical solutions with participants which can limit the effects of such circumstances in the spirit of a preventative right;
- What sanctions are available in the event of a breach of obligations by one of the parties. Here too, legal institutions will be analysed with reference to practical cases that have been the object of disputes before commercial jurisdictions;
- What contractual facilities exist to best guarantee the seller’s rights. Various traditional clauses will be examined with a view to encouraging participants to have a conception of “preventive” law and to make them aware of the security that correct drafting of a contract can provide for entrepreneurs.
The legal aspects of international sales are presented in two parts, enabling participants to evaluate and apply the knowledge they have acquired:
- Participants are invited to imagine the issues that could arise in drawing up a sales contract whilst applying the various legal aspects evoked during the course. Exercises in actually drawing up contracts can thus be organized;
- In most export markets, entrepreneurs do not have the time available to draw up a tailor-made contract and so the practice of using « conditions of sale » is rather standard usage. Participants are therefore invited to study models of terms and conditions, using real examples, and to check whether they conform to current legal principles regarding international sales contracts. In other words, the trainer initiates participants in the requirements demanded for these conditions to be accepted and constituted, based on a real international sales contract.
Thus, without ignoring the presentation of a minimum of indispensable theoretical bases, this course is above all participatory and linked to the real needs of participants.
Practical case studies emanating from corporate life are therefore presented for consideration by the participants. To help them do so, participants are provided with an indispensable work tool consisting of a volume of international texts and conventions. Each group of (3-4) participants studies and discusses the case studies as a group, enabling participants to share the experience and knowledge of each member of the group. The group is then asked to present firstly the problem posed, secondly the legal issue involved, and thirdly the solutions that can be applied.
There are two objectives to such a teaching method:
- A greater awareness of the solutions that the law can bring, whether that be within the framework of the fundamental institution that the international sales contract represents, or in the choice of an export distribution strategy, or in the regulation of electronic commerce. The accent will constantly be placed on the preventative and proactive aspects of law, especially in the choice and drawing up of clauses adapted to specific situations encountered in the life of international business. Participants experience their critical senses developing through the analysis of contracts and standard clauses, as well as through the resolution of cases where legal rules are applied to the reality of international business life;
- Better awareness of the constraints, but also the security offered by the law in the organization of export and import activities.