International Business Law

public law

about the vertical relationship between the state and its citizens/subjects/business

• constitutional law

• administrative law

• criminal law

private law

branch of domestic law, governs relationships between 2 private parties (horizontal relationship)

• contract law

• tort law

• property law

• company law

criminal law

punish wrongful conduct and defer future offenses. Burden of proof is beyond reasonable doubt, and falls on the prosecution.

Civil law

compensate the injured party; provide a remedy to put in position before the accident. Burden of proof is balance of probabilities, and falls on the claimant

burden of proof

who must prove the case

standard of proof

hoe convincing must the proof be

substantive law

defines the right, duties and liabilities, looks at what the rule is

procedural law

governs how the right determined in substantive law are enforced

why source of law matters

• who made the rule

• how binding it is

• who interprets it

• how does it change

sources of law

• legislation

• delegated legislation

• case law

• EU law

• treaties in international law

ratio decidendi

higher courts decide a new rule based on a case which the lower courts must replicate (binding)

obiter dicta

comments, reflections or hypothetical reasoning made by the change that are not necessary for the case (persuasive, not binding)

primary eu law

law originating from the EU treaties and regulations (TEU and TFEU), which takes precedence over national laws of member states. Breaks off into binding and non-binding secondary law

binding secondary EU law

• regulations - directly applicable to all

• directives - tells them what do but not how

• decisions - binding in their entirety (often for specific companies)

non-binding secondary eu law

• recommendations - EU suggests what states should do

• opinions - express a view or interpretation

European commission

proposes and enforces EU law

Council of the EU

co-legislator that represents the governments of the EU states

European Parliament

co-legislator representing EU citizens

court of justice of the EU

interprets EU and ensures uniform interpretation it for member states

European Council

sets the EU overall political direction (prime ministers and presidents of EU countries are in it)

common law tradition

legal system made through case law and statute, where judges make and develop law. The precedent is binding, and there are adversarial procedures .

civil law tradition

legal system based on comprehensive written codes, where judges interpret and apply the code, The precedent is persuasive but it is not formally binding. Has inquisitorial procedures.

adversarial procedure

A legal procedure where two or more parties present their case before an impartial judge or jury, who resolves the dispute based on evidence and arguments.

inquisitorial procedure

A legal procedure where the judge plays an active role in investigating the case, questioning witnesses, and gathering evidence, as opposed to relying solely on the parties to present their arguments and evidence.

statute

formal, written law enacted by a legislate body (e.g. parliament or local council)

contract

legally binding agreement between 2 or more parties that creates rights and obligations enforceable by law

• one formed, the parties cannot simply walk away

• enforceable

• reach through offer and acceptance

bilateral contract

promise for a promise: each side undertakes an obligation at the moment of agreement

unilateral contract

promise for an act: only the offeror is committed and the other part is free to act or not. Acceptance means performing the requested act. There is promise from the other side that they actually will perform the act

void

no contract ever existed, in the eyes of the law: nothing was formed so neither party can sue (e.g. illegal agreements, fundamental mistakes, or agreement where something is not possible)

voidable

contract exists, but capable of being set aside → valid unless and until one party elects to rescind (e.g. contract with minors, misrepresentation, undue influence)

unenforceable

valid contract but the courts will not enforce it. Defect can be from: procedural or evidential mistake

requirements of simple contract

1. agreement

2. consideration

3. intention

4. capacity

5. form (if required)

offer

clear expression of willingness to contract on definite terms, made with the intention that it will become binding as soon as the other party accepts

features of an offer

1. sufficiently certain - no vague language (gathering v Lynn)

2. communicated - offer must reach other party (Bloom v American Swiss Watch)

3. to whom - can be made to a specific person, defined group, or world at large (Carlill)

invitation to treat

expression of willingness to negotiation = an invitation to others to make offers

• acceptance does not create contract

how an offer comes to an end

• revocation/withdrawal

• counteroffer

• rejection

• lapse of time

• death

• failure of condition

counteroffer

proposes different terms which immediately destroys the original offer, thus offer cannot go back and accept it

3 acceptance rules

1. mirror image —> any change in “acceptance” becomes a counter offer

2. must be communicated

3. silence is not acceptable

postal rule

where post is a reasonable method of reply, acceptance is effective the moment the letter is posted, even if it is delayed or lost

2 exceptions to communication of acceptance

1. Postal rule - says that when acceptance is sent by post, acceptance is effective the moment the letter is properly posted, not when it is received. Breaks the normal rule that acceptance must be communicated and received.

2. Unilateral contracts - acceptance is by performance, not communication

the last shot doctrine

whichever set of terms was sent last before performance wins, because its the last one, and technically a counter offer so it destroys the other terms.

consideration

something of value, given in return for the promise and moving from the promise (person suing in the case must have given consideration themselves)

• necessary otherwise English law will not enforce it

rules for consideration

1. sufficient not adequate

2. must move from promise

3. past consideration is no consideration

4. existing public duty is not consideration

promissory estoppel

a legal doctrine that prevents a party from withdrawing a promise made to another when the latter has relied on that promise to their detriment (person reasonably changed their actions or made decisions based on someone else's commitment, and as a direct result, suffered a significant loss, harm, or disadvantage when the other person failed to keep that promise)

intention

looking at whether the parties actually mean for the agreement to be legally enforceable —> courts starts from presumptions

• business dealings = legal intention presumed

• domestic & social dealings = legal intention not presumed

capacity

the legal power/ability to enter a binding contract

special exceptions to capacity

• minors

• mental incapacity & intoxication

• companies

privity

says who is inside the contract and thus has the legal right to enforce (aka sue)

contracts (right of third parties) Act 1999

third party may enforce a term if the contract expressly so, or if the term clearly gives them a benefit (unless the parties did not intend to)

6 seps of formation

checking whether a valid contract still exists:

1. offer (offer or ITT)

2. open (open or revoked, rejected, destroyed by counteroffer)

3. acceptance (by communication, posted, performed, conduct)

4. consideration (value from each side)

5. intention (commercial or domestic)

6. capacity (do parties have legal powers to bind themselves)

why contract performance matters for business

• risk allocation (breach = termination or only damages)

• limiting liability (exemption clauses)

• when performance fails discharge by breach (anticipating breach means innocent part can terminate now or wait)

• beyond parties’ control (e.g. frustration)

• recovery and its limits (damages capped by remoteness, mitigation and reasonableness)

express terms

what the parties actually agreed (written or oral promises)

implied terms

term implied by statue, customer or courts, —> not necessarily written in a contract but generally always applied by law

• court may imply a term into the contract to make it work properly in practice

term

part of the contract itself: a binding promise by one party

condition

a breach means innocent party is entitled to terminate contract and claim damages (also have choice to affirm contract and only collect damages)

warranty

collateral to the main purpose, more minor/incidental. A breach would mean only damages are recovered and the contract continues

innominate term

means it depends on the effect of the breach. If the whole benefit is taken away from the innocent party, you can terminate and get damages, otherwise its only damages (Hong Kong Fir 1962)

exemption clauses

contractual terms that attempt to exclude or limit liability, comes in 2 different forms and has 3 stages to filter them

2 forms of exemption clauses

1. exclusion - “accept no liability for any loss”

2. limitation - “our total liability shall not exceed 10,000 dollars”

3 stages to filter exemption clauses

1. incorporation - is the clause part of the contract (signature, reasonable notice, previous dealings)

2. construction - does it, properly interpreted, cover the breach

3. statutory control - does it comply with UCTA 1977/ CRA 2015

UCTA 1977

indicates what can and cannot be excluded in contract clauses

reasonableness test under UCTA

1. bargaining power - parties had equal commercial strength

2. inducement - was the customer offered a different price/option without the clause to get them to accept it

3. alternatives - could the customer have contracted this elsewhere without the clause included

4. knowledge - did the customer know about it

5. insurance - who was better placed to insure against the loss

CRA 2015

(for consumer contracts) replaced the UCTA with a stricter more consumer protective regime, ensuring that goods and services are of satisfactory quality, fit for purpose, and as described, providing consumers with rights against breaches of these standards. Has 4 controls

4 controls of CRA 2015

1. s.65 - death/personal injury cannot be excluded

2. s.62 - unfair terms are not binding on the consumer

3. unfair terms - refers to a significant imbalance towards the customer

4. s.68 - terms must be in plain intelligible language

4 ways to end a contract

1. agreement - both sides agree to release each other (can be bilateral or unilateral)

2. performance - obligations are completed as agreed

3. frustration - supervening event making performance impossible, illegal or radically different - has 4 categories

4. breach - failure to perform, innocent party can elect to terminate or affirm

4 categories of frustration

1. destruction

2. death/incapacity

3. cancellation

4. illegality

4 limits of frustration

1. foreseeable

2. merely more difficult/expensive

3. self-induced

4. contractual allocation

different types of breach + how innocent part can respond

1. breach of condition - party may terminate and claim damages or affirm contract and claim damages only

2. breach of warranty - get only damages and contract continues

3. breach of innominate - severity dependent

anticipatory breach

one part indicates that they will not be able to perform the promised act before the performance due date. Innocent part may accept the repudiation and sue immediately, or wait for the performance date (but once the breach occurs the innocent party must take reasonable steps to mitigate loss)

second limb

losses that are recoverable : whether the special circumstances were communicated at contracting

first limb

natural consequence of the breach, losses any reasonable person would foresee as probable (= recoverable)

3 ways to determine actual loss from a breach

1. difference in value

2. cost of cure

3. loss of amenity

equitable remedies

are court-ordered actions requiring a party to act (specific performance) or refrain from acting (injunction) in a specific way, often used when monetary damages are insufficient.

• are discretionary and secondary

7 steps breach analysis framework

1. term

2. severity

3. discharge

4. exemption

5. remoteness

6. mitigation

7. remedy