Law Commons^™

Friendly Skies, Unfriendly Terms: Class Action Waivers And Force Majeure Clauses In Airline Contracts Of Carriage, Grant Glazebrook

Northwestern Journal of International Law & Business

The airline contract of carriage. These unassuming bits of language govern the relationship between passengers and their airlines. Over the past three years, a new term has sprouted in these agreements: the class action waiver. Before March 2020, only two of the ten largest United States-based airlines’ contracts of carriage had class action waivers. But as of April 2023, eight now have class action waivers. Why have airlines quickly adopted these copycat terms? What are the implications of this new contractual trend for flyers, airlines, and regulators? This note aims to contribute to the scholarship around these questions in three …

Trends In China-Africa Economic Relations And Dispute Settlement, Won Kidane

Northwestern Journal of International Law & Business

The rapid rise in the last two decades of China-Africa economic interactions in trade, investment, construction projects, and loans require sustained inquiry into the substantive rules of engagement and mechanisms of dispute settlement. Evidently, however, it would quickly emerge that the improvements in supranational legal frameworks have not kept pace with the growing scale and complexity of the economic interactions. While trade relations between China and Africa are theoretically subject to the same multilateral World Trade Organization (WTO) rules, they are in practice mostly based on informal unilateral concessions. Moreover, investment relations are partially governed by fragmented and mostly outdated …

The Efficient Breach Theory In International Investment Law, Sangwani Patrick Ng’Ambi

Northwestern Journal of International Law & Business

When a State unilaterally abrogates its contractual obligations, it is under a duty to compensate the investor. The aim of the compensation regime under International Investment Law is to restore the investor to a position he or she would have been in had the breach not taken place. Thus, the award of compensation should not only include sunk costs (damnum emergens) but also lost future profits (lucrum cessans).

In this article it is argued that the rules relating to compensation promote efficiency, as per the ‘efficient breach theory’ because they dissuade governments from unilaterally abrogating concession agreements, unless they can …

Can Smart Contracts Enhance Firm Efficiency In Emerging Markets?, Kevin J. Fandl

Northwestern Journal of International Law & Business

Blockchain technology has the potential to eliminate one of the most significant barriers to economic growth through private business transactions in developing countries—lack of trust. In a typical developed country, individuals and firms conduct transactions within an institutional environment that offers security through the enforcement of agreements. Transparent and effective courts, while imperfect to be sure, enable parties to feel secure in their transactions even if their level of trust in the other party is low. This security, in turn, facilitates transactions far afield from high-trust relationships (e.g., immediate relatives), generating transactions based upon economic value rather than party trust …

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 …

Inefficiency Of Specific Performance As A Contractual Remedy In Chinese Courts: An Empirical And Normative Analysis, Lei Chen, Larry A. Dimatteo

Northwestern Journal of International Law & Business

This article investigates the values and latent policies in the area of the availability of specific performance (SP) as a contractual remedy, which have shaped the development of Chinese law. The National People’s Congress (Legislature) and Supreme People’s Court in China have addressed the remedial structure of Chinese contract law, namely, the availability of the remedy of SP as opposed to the awarding of damages only. The law is clear that the remedies of SP and damages are ordinary remedies that a claimant is free to choose between. The question that this article confronts is whether in practice the equality …

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 …

Coping With Uncertainty: The Role Of Contracts In Russian Industry During The Transition To The Market, Kathryn Hendley

Northwestern Journal of International Law & Business

In the decade following the collapse of the Soviet Union, Russia earned a reputation for being a chaotic environment for business. Some commentators went so far as to label it as the "Wild East," a scary place where law was largely irrelevant and criminal gangs held sway. In a series of articles, I have begun to fill this gap in the literature by exploring the day-to-day reality of life for industrial enterprises in Yeltsin's Russia. The picture that emerges is more nuanced than the stereotype of industry beholden to the mafia that the popular media has perpetuated. In this article, …

Code Or Contract: Whether Wal-Mart's Code Of Conduct Creates A Contractual Obligation Between Wal-Mart And The Employees Of Its Foreign Suppliers, Katherine E. Kenny

Northwestern Journal of International Law & Business

This comment examines whether corporate codes of conduct and more specifically, Wal-Mart's Code of Conduct, are binding contracts between foreign suppliers and their employees or whether they are voluntary and non-contractual devices. An analysis of U.S. law and the text and implementation of Wal-Mart's Code of Conduct reveals that the Code should not be interpreted as a contract binding on foreign suppliers and their employees for the breach of contract for denial of minimum and overtime wages, the breach of contract for forced labor, and the breach of contract for denial of the fundamental right to freely associate. The comment …

Contractual Liability Of Suppliers Of Defective Software: A Comparison Of The Law Of The United Kingdom And United States, Stephen E. Blythe

Northwestern Journal of International Law & Business

The common law of contracts has its roots in medieval England. Traditional contract law, evolved from the age of feudalism, focused on "hard copy" documents and their authentication. Today, we frequently find ourselves entering into virtual, digital contracts. Instead of signing the written document with a seal, we merely type in our name on the computer screen and click on "I accept." Should contract law be changed to accommodate the digital nature of the modem contract and, if so, to what extent should it be changed? A traditionalist may contend that there is no need to completely overhaul contract law …

Recovering Attorneys' Fees As Damages Under The U.N. Sales Convention (Cisg): The Role Of Case Law In The New International Commercial Practice, With Comments On Zapata Hermanos V. Hearthside Baking, Harry M. Fletcher

Northwestern Journal of International Law & Business

The conclusion I ultimately draw is that, although the holdings of individual cases are ambiguous, as a group the relevant foreign decisions clearly sanction an award of CISG damages to cover attorneys' fees that would not normally be compensable under U.S. national law. As I discuss in Part III of the article, the firmly-established "American rule" on recovery of attorneys' fees is that, in the absence of a statutory or contractual provision to the contrary, each party to a dispute must bear his or her own attorneys' fees. A line of U.S. cases construing Article 2 of the U.C.C. strongly …

The Cisg Convention And Thomas Franck's Theory Of Legitimacy, Anthony S. Winer

Northwestern Journal of International Law & Business

The Contracts for the International Sale of Goods (CISG) Convention is one of the most talked-about, and written-about, aspects of international commercial law. Ss time progresses, it may become evident that significant numbers of commercial actors and significant numbers of courts and other adjudicatory bodies are simply choosing not to apply the Convention. In such event, the question as to why there should be such a reluctance to adopt the Convention will present itself. This Article finds helpful perspective on this question in the work of international legal scholar Thomas Franck. Specifically, guidance is drawn from the theory of international …

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 …

Relational Contract Theory And Sovereign Debt, Keith A. Palzer

Northwestern Journal of International Law & Business

Relational contract theory will first be presented using principles gleaned from writings in the field 7 to craft a functional/relational model with which to approach legal practice.8 This version of relational contract will then be applied to the problem of developing country debt through description of a hypothetical sovereign loan relationship.9 By exploring the conflicts and trends of this association under a general "taxonomy of relational contract," normative analysis of the restructuring process can be accomplished, contractual trends identified, and suggestions for change offered.'

China's Foreign Economic Contract Law: Its Significance And Analysis, Zhang Yuqing, James S. Mclean

Northwestern Journal of International Law & Business

Postrevolutionary China did not trade with the West prior to the announcement of its "open door policy" in 1977, when one-fifth of the world's population joined the mainstream global trading system. Since then, China's trade has increased dramatically, particularly with the United States. China's need for trade regulation and control resulted in the Foreign Economic Contract Law' ("FECL") in 1985. Through an understanding of the FECL's provisions and East-West trade characteristics, the practitioner may become an effective advisor to clients who trade with China or who are considering doing so.

International Franchising Arrangements And Problems In Their Negotiation, Warren Pengilley

Northwestern Journal of International Law & Business

Franchising is little understood in legal circles. Almost certainly the reason for the lack of any common jurisprudential approach to franchising is that franchising relationships simply do not fit neatly into any of the common law moulds with which we are all familiar. Franchising typically partakes of a number of these relationships while not totally embracing any of them. For example, it partakes of, but does not totally embrace, the concepts of (1) employer and employee; (2) distributorship; (3) licensor and licensee; (4) agency; or (5) vendor and purchaser, to varying degrees, depending upon individual transactions. Because of the scope …

The Termination Of Agency And Distributorship Agreements: A Comparative Survey, A.H. Puelinckx, H.A. Tielemans

Northwestern Journal of International Law & Business

The termination of agency agreements in most EEC Member States is regulated by statute, while the termination of distributorship agreements, with the exception of Belgium, is governed by case law. Messrs. Puelinckx and Tielemans first survey the state of the law governing the termination of agency and distributorship agreements in the EEC Member States and then discuss the efforts of the EEC to harmonize the national laws of the Member States in the area of commercial representation. The authors conclude by supporting the EEC harmonization effort relating to the laws regulating agency agreements and by calling for further efforts to …

Characteristic Performance -- A New Concept In The Conflict Of Laws In Matters Of Contract For The Eec, Kurt Lipstein

Northwestern Journal of International Law & Business

The concept of "characteristic performance, " used in conflicts law to determine which country's law applies in the absence of an express or implied choice of law, has been incorporated into Article 4 of the Draft Convention on the Law Applicable to Contractual and Non-Contractual Obligations. In this article, Professor Lipstein examines the purpose, history, and criticisms of the concept of "characteristic performance" and concludes by supporting the use by the Member States of characteristic performance as a means of determining the legal system governing the contract as a whole.

A New Uniform Law For The International Sale Of Goods: Is It Compatible With American Interests?, Martin L. Ziontz

Northwestern Journal of International Law & Business

The prospects for adoption of a law gov- erning commercial' contracts for the international sale of goods should be of compelling interest to American merchants and their legal advi- sors. The text which was presented to the diplomatic conference in March was completed by the United Nations Commission on Interna- tional Trade Law (UNCITRAL) in 1978.1 Its eighty-two articles em- body the substantive revisions of a similar document that was rejected by the United States sixteen years ago'--the 1964 Hague Convention Relating to a Uniform Law for the International Sale of Goods