Law Commons^™

Toward Decentralized Commercial Law For Digital Assets, Marek Dubovec

Northwestern Journal of Technology and Intellectual Property

Technology affects various facets of the society and law. It has been tightly coupled in a symbiotic relationship with commercial law, including the Uniform Commercial Code (U.C.C.). While the conceptual framework of the U.C.C. and its realist ethos has fostered innovation since the 1950s, recent technological advances pose new challenges. In particular, digital assets traded in decentralized blockchain systems promise to engender a wide array of applications, prompting new business practices.

A number of efforts have been recently undertaken to address the fundamental challenges to established legal concepts posed by these technological advances. All these efforts march forward grappling with …

Business Information And Nondisclosure Agreements: A Public Policy Framework, Rex N. Alley

Northwestern University Law Review

Trade secret law, as codified in the Uniform Trade Secrets Act, gives businesses in nearly every U.S. jurisdiction a uniform, clearly defined right to protect secret and valuable business information from misappropriation. But how can businesses protect information that, while potentially useful, falls short of the legal definition of a trade secret? Businesses often require their employees to sign nondisclosure agreements (NDAs) to protect this category of information, which this Note refers to as “confidential business information” or “CBI.” These CBI NDAs are often drafted so broadly that, read literally, they would encompass every piece of information an employee learns …

Corporate Law For Good People, Yuval Feldman, Adi Libson, Gideon Parchomovsky

Northwestern University Law Review

This Article offers a novel analysis of the field of corporate governance by viewing it through the lens of behavioral ethics. It calls for both shifting the focus of corporate governance to a new set of loci of potential corporate wrongdoing and adding new tools to the corporate governance arsenal. Behavioral ethics scholarship emphasizes that the large share of wrongdoing is generated by “good people” whose intention is to act ethically. Their wrongdoing stems from “bounded ethicality”—various cognitive and motivational limitations in their ethical decision-making processes—that leads to biased decisions that seem legitimate. Bounded ethicality has important implications for a …

Delaware's New Competition, William J. Moon

Northwestern University Law Review

According to the standard account in American corporate law, states compete to supply corporate law to American corporations, with Delaware dominating the market. This “competition” metaphor in turn informs some of the most important policy debates in American corporate law.

This Article complicates the standard account, introducing foreign nations as emerging lawmakers that compete with American states in the increasingly globalized market for corporate law. In recent decades, entrepreneurial foreign nations in offshore islands have used permissive corporate governance rules and specialized business courts to attract publicly traded American corporations. Aided in part by a select group of private sector …

Mechanisms For Consultation And Free, Prior And Informed Consent In The Negotiation Of Investment Contracts, Sam Szoke-Burke, Kaitlin Cordes

Northwestern Journal of International Law & Business

Investor-state contracts are regularly used in low- and middle-income countries to grant concessions for land-based and natural resource investments, such as agricultural, extractive industry, forestry, or renewable energy projects. These contracts are rarely negotiated in the presence of, or with meaningful input from, the people who risk being adversely affected by the project. This practice will usually risk violating requirements for meaningful consultation, and, where applicable, free, prior and informed consent (FPIC), and is particularly concerning when the investor-state contract gives the investor company rights to lands or resources over which local communities have legitimate claims.

This article explores how …

Crowding Out Theory: Protecting Shareholders By Balancing Executives’ Incentives In France, The United States, & China, Palden Flynn

Northwestern Journal of International Law & Business

This paper explores the differences between executive compensation regimes in France, the United States, and China. It asks whether there is a link between state regulation of real options as a form of executive compensation and state regulation of shareholder protections. This paper argues that if a country regulates the use of real options as compensation, then that country is also more likely to have strong shareholder protection laws. This argument seems to be true based on a descriptive review of executive compensation law and shareholder protections in France, the United States, and China.

If it is true that countries …

Traceable Shares And Corporate Law, George S. Geis

Northwestern University Law Review

A healthy system of shareholder voting is crucial for any regime of corporate law. The proper allocation of governance power is subject to debate, of course, but the fitness of the underlying mechanism used to stuff the ballot boxes should concern everyone. Proponents of shareholder power, for instance, cannot argue for greater control if the legitimacy of the resulting tallies is suspect. And those who advocate for board deference do so on the bedrock of authority that reliable shareholder elections supposedly confer.

Unfortunately, our trust in the corporate franchise was forged during an era that predates modern complexities in the …

Commitment And Entrenchment In Corporate Governance, K.J. Martijn Cremers, Saura Masconale, Simone M. Sepe

Northwestern University Law Review

Over the past twenty years, a growing number of empirical studies have provided evidence that governance arrangements protecting incumbents from removal promote managerial entrenchment, reducing firm value. As a result of these studies, “good” corporate governance is widely understood today as being about stronger shareholder rights.

This Article rebuts this view, presenting new empirical evidence that challenges the results of prior studies and developing a novel theoretical account of what really matters in corporate governance. Employing a unique dataset that spans from 1978 to 2008, we document that protective arrangements that require shareholder approval—such as staggered boards and supermajority requirements …

Shareholders On Shaky Ground: Section 271'S Remaining Loophole, Alex Righi

Northwestern University Law Review

No abstract provided.

The Hierarchy That Wasn’T There: Elevating “Usage” To Its Rightful Position For Contracts Governed By The Cisg, William P. Johnson

Northwestern Journal of International Law & Business

Under domestic U.S. sales law, usage of trade is relevant in ascertaining the meaning of an agreement, and it can be used to supplement, qualify, or explain an agreement. However, usage of trade may not be used under domestic U.S. sales law to contradict a written agreement. Moreover, any course of performance or course of dealing between the parties will prevail over inconsistent usage of trade. The United Nations Convention on Contracts for the International Sale of Goods, or CISG, similarly provides for consideration of usage to establish the terms of the agreement between the parties, as well as to …

The Interpretive Turn In International Sales Law: An Analysis Of Fiften Years Of Cisg Jurisprudence, Larry A. Dimatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer

Northwestern Journal of International Law & Business

The United Nations Convention on Contracts for the International Sale of Goods ("CISG") was adopted on April 11, 1980, under the auspices of the United Nations Commission on International Trade Law ("UNCITRAL"). The focus of this article is not whether the CISG mandates or should mandate absolute uniformity of application. The literature on this subject is quite extensive.15 Instead, this article recognizes that many CISG provisions are the product of compromise and thus we ask whether these compromises have proven to be effective or have resulted in a chaotic jurisprudence. How have the articles of the CISG actually been interpreted …

The Treatment Of Global Mergers: An Australian Perspective, S.G. Corones

Northwestern Journal of International Law & Business

The purpose of this article is to examine some recent global mergers from an Australian perspective. The article begins by considering the administrative tribunal and Court structure in Australia, as well as the procedural, substantive. and remedial aspects of Australian laws regulating global mergers. It then considers the Merger Guidelines and their focus on the unilateral and co-ordinated post-merger effects that are likely to occur. The article examines a number of recent global mergers. including Coopers & Lybrand/Price Waterhouse, BAT/Rothmans, Pepsi Co/Smith's Snack Foods and Coca-Cola/Cadbury Schweppes, as well as their assessment by the ACCC. Finally, it considers some of …

Transnational Competition Law Aspects Of Mergers And Acquisitions, William M. Hannay

Northwestern Journal of International Law & Business

As more and more U.S. companies engage in overseas operations, even the most routine merger or acquisition seems to have a transnational component which requires analysis and perhaps premerger notification under an increasing number of foreign "competition laws" (or what we call antitrust laws). An understanding of those competition rules has become an imperative for American lawyers.

Foreword: The Rocky Road Toward The Rule Of Law In China: 1979-2000, James Hugo Friend

Northwestern Journal of International Law & Business

This Twentieth Anniversary Issue of JILB again has a symposium on law in China entitled China Revisited: Examining the Rule of Law After Twenty Years." The impetus for the 2000 China Symposium is the unprecedented integration of China into the world economic community, evidenced by China's imminent entry into the World Trade Organization ("WTO").2 The road to China's integration into the WTO was paved by the U. S. Senate's recent vote, "the most significant advance in U.S.-China relations since President Nixon's 1972 visit,'13 which grants China permanent normalized trade relations without annual Congressional review. Although the Senate approval was expected, …

Massachusetts, Myanmar, Market Participation, And The Federal Shutdown Of Selective Purchasing Laws: Is The Power To Purchase Really The Power To Regulate , Scott Sommers

Northwestern Journal of International Law & Business

This article does not discuss whether intentionally giving companies an incentive to withdraw from Burma is economically or politically desirable for the people of Burma. The First Circuit did not concern itself with this subject either in rejecting the Massachusetts Burma Law. The question of interest to the court, and which should be of interest to any state citizen or global corporation interested in doing business with state agencies, was whether Massachusetts had the discretion to make a purchasing law directly concerning the business involvement of suppliers in foreign countries. While legitimate legal and practical arguments may be made that …

Litigating Claims Over Foreign Government-Owned Corporations Under The Commercial Activities Exception To The Foreign Sovereign Immunities Act, Sunil R. Harjani

Northwestern Journal of International Law & Business

First, this article will examine the way courts have dealt with suits against FGOCs claiming immunity under the FSIA. Second, this article will argue that obtaining jurisdiction over a FGOC has become relatively easy under the FSIA due to the way courts have applied the commercial activities exception in recent decisions. Third, this article will suggest methods for United States and foreign businesses to avoid difficulties in obtaining jurisdiction over FGOCs. Finally, this article will advocate that FGOCs should no longer be provided sovereign immunity under U.S. law.

The Parameters Of The Attorney-Client Privilege For In-House Counsel At The International Level: Protecting The Company's Confidential Information, Joseph Pratt

Northwestern Journal of International Law & Business

The gaps in the privilege at the international level present a major problem for general counsel. In the worst case scenario, the company's own legal opinions could be used against it by a foreign tribunal. To reduce this risk, general counsel at multinationals should become familiar with the parameters of the attorney-client privilege at the international level and use this knowledge to devise strategies to protect the corporation's sensitive information in foreign jurisdictions. Part II of this comment begins by describing the roots of the modem attorney-client privilege in the United States and its extension to in-house counsel. This section …

The Revision Of Ucc Article 2, Sales In Light Of The United Nations Convention On Contracts For The International Sale Of Goods, Richard E. Speidel

Northwestern Journal of International Law & Business

This article discusses UCC, Article 2, in light of CISG, and discusses how they create bands of uniformity in their respective spheres. It also discusses where they overlap.

Influence Of International Practice On The Revision Of Article 5 Of The Ucc, James J. White

Northwestern Journal of International Law & Business

I focus today on the influence of the Uniform Customs and Practice1 (UCP) on the revision of Article 5 of the Uniform Commercial Code (UCC).

Internationalization Of Revised Ucc Article 5--Letters Of Credit, James G. Barnes

Northwestern Journal of International Law & Business

The 1995 revision of Article 5 of the Uniform Commercial Code (UCC) was heavily influenced by international practice as reflected in the Uniform Customs and Practice for Documentary Credits (UCP). The Reporter for Revised UCC Article 5, Professor James J. White," acknowledges the heavy influence of international practice, views it as a mixed blessing, and attributes it to the focused efforts of the letter of credit bankers' trade association, the United States Council on Inter- national Banking, Inc. (USCIB). This article further explains and welcomes the internationalization of Revised UCC Article 5.

Books Received

Northwestern Journal of International Law & Business

No abstract provided.

Resolving Commercial Disputes In China: Foreign Firms And The Role Of Contract Law, Roy F. Grow

Northwestern Journal of International Law & Business

It is not my intention to explicate China's Foreign Economic Contract Law (FECL), the Joint Venture Law (JVL), or the Foreign Enterprise Income Tax Law (FEITL). The analysis of these codes has been done in great detail by others.' Instead, I will examine the actual behavior of the most important actors governed by this set of laws-the Chinese and foreign enterprises that work with one another and which must find ways to resolve their competing claims. In this study, I will examine the tension between Chinese and foreign firms by focusing on several specific and limited questions having to do …

Wysko Investment Company V. Great American Bank: A New Attack On The Usefulness Of Letters Of Credit, Robert Jay Gavigan

Northwestern Journal of International Law & Business

The letter of credit has long been accepted as a valuable instrument of assured payment in international business. In Wysko Investment v. Great American Bank, however, an Arizona district court jeopardized the usefulness of the letter of credit transaction by enjoining payment to the beneficiary after the issuing party became insolvent.' This note addresses the issue of whether a bankruptcy court has the power to enjoin payment of a letter of credit issued by the debtor's principal, pursuant to 11 U.S.C. § 105(a), when the court finds the injunction necessary for the debtor's reorganization. Further, this note examines whether such …

The Selection Of Choice Of Law Provisions In International Commercial Arbitration: A Case For Contractual Depeҫage, Craig M. Gertz

Northwestern Journal of International Law & Business

One additional advantage of arbitration, the parties' ability to predetermine the law governing the resolution of the dispute, has gained growing recognition in recent years. This recognition, however, has been myopic to some extent. Some commentators see choice of law options confined either to the selection of one national legal system from several possibilities or to the selection of a single national, international, or anational legal system. Such a self-imposed limitation of the applicable law to one system of law often denies parties many of the benefits and powers allowed them in international commercial arbitration. As an alternative, an agreement …

The International Arbitrator: From The Perspective Of The Icc International Court Of Arbitration, Stephen R. Bond

Northwestern Journal of International Law & Business

In short, an arbitrator must have what Professor Pierre Lalive has called the "ability to judge," which implies a capacity to evaluate conflicting statements of law and/or fact and to have the wisdom, courage and expertise to reach and render a decision in such a way that the parties - and perhaps most of all the losing party - will recognize both the essential fairness of the procedure and the futility of efforts to overturn the award or oppose its execution. Only when this occurs, as happens in about ninety percent of ICC cases, can arbitration truly achieve the relative …

Non-Lawyers In International Commercial Arbitration: Gathering Splinters On The Bench, James E. Meason, Alison G. Smith

Northwestern Journal of International Law & Business

In light of the frequent appearance of arbitration clauses in international contracts, and the volume of litigation handled in this manner, international commercial arbitration' has become a favorite subject of commentators who have primarily focused on the relative benefits of arbitration versus litigation and cross-institutional rules comparisons. One area that has received scant attention is the factors concerning the actual selection of particular individuals to serve as arbitrators. This article looks at how arbitrators are chosen today within the institutional context. Following this are general discussions of selected professions for indications of their members' inherent suitability for and adaptability to …

Recent Developments In Inter-American Commercial Arbitration, Charles Robert Norberg

Northwestern Journal of International Law & Business

Arbitration has become an effective procedure for resolving international commercial disputes in the Western Hemisphere. A framework of treaties exists, establishing substantive law and procedure for that purpose. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) has been ratified by sixteen Western Hemisphere countries. The Inter-American Convention on International Commercial Arbitration (1975) has been ratified by thirteen countries. Furthermore, the World Bank's Convention establishing the International Centre for the Settlement of Investment Disputes has been ratified by four Latin American countries and six anglophobe Western Hemisphere countries and it has been signed but not …

The Place Of Arbitration In The Conflict Of Laws Of International Commercial Arbitration: An Exercise In Arbitration Planning, Filip De Ly

Northwestern Journal of International Law & Business

Growing complexities in the law and practice of international commercial arbitration and a certain loss of the spirit of arbitration require reflection by all interested parties (litigating parties, their counsels, arbitrators and arbitration centers) in order to maintain some of the traditional advantages of arbitration… The purpose of such reflection is to maintain the reputation of international commercial arbitration as a speedy and cost efficient dispute resolution mechanism for international business transactions. This may be achieved by an attempt to identify the options which interested parties may have and to indicate their respective advantages and disadvantages. This process may be …

1992: The Case Of Financial Services, Caroline Bradley

Northwestern Journal of International Law & Business

By the end of 1992 the European Community (EC) intends to create a single internal market in goods, services, labor and capital. Of all the internal markets to be created by the end of 1992, the single internal market in financial services may be the most interesting. This paper considers three aspects of the single market in financial services: regulatory harmonization as a solution to the problems caused by the development of international financial markets; the rules which the EC has adopted and proposed to create the single market in financial services; and the extent to which the single market …

The Regulation Of Insider Trading In Germany: Who's Afraid Of Self-Restraint, Joseph Blum

Northwestern Journal of International Law & Business

From near total destruction forty-one years ago, the Federal Republic of Germany has emerged as the fourth wealthiest industrialized nation. Yet despite this wealth, the German capital markets remain miniscule in comparison to those of other industrialized nations. This development has had a significantly adverse effect on the ability of German companies to raise equity capital. The aversion of individual Germans to invest in equity securities can be explained on a number of levels. First, many investors find that fixed-rate bonds and similar securities provide equal if not better yields than stocks, without the concomitant risk. Another significant reason that …