Javascript is disabled. Please enable Javascript to log in.
Published: 2008-03-26

FAQ: International Law



  1. What is the Foreign Corrupt Practices Act (FCPA)?
  2. What is the Anti-boycott Act?
  3. What is the U.N. Convention on Contracts for the International Sale of Goods (CISG)?
  4. What is the significance of the U.N. Convention on Contracts for the International Sale of Goods (CISG)?
  5. What methods of dispute resolution are commonly used to resolve international business disputes?
  6. Which dispute resolution method is currently the preferred method of dispute resolution in international business transactions?
  7. What is arbitration?
  8. What is mediation?
  9. What is the New York Convention?
  10. Is the U.S. a signatory to any treaties or conventions on the enforcement of court awards?
  11. Which procedural rules are most commonly used in the arbitration of international business disputes?
  12. What is Comity of Nations?
  13. What are INCOTERMS?
  14. Do INCOTERMS determine when title to goods passes?
  15. Which issues hinge on the timing of title passage to the buyer in an international sale of goods transaction?
  16. What is a Romalpa clause?
  17. What is the Carriage of Goods by Sea Act (COGSA)?
  18. What is the Warsaw Convention?
  19. What is a "force majeure" clause?
  20. What does the concept of "general average" mean?




  1. What is the Foreign Corrupt Practices Act (FCPA)?

    The Foreign Corrupt Practices Act (FCPA) is a U.S. law which makes it illegal for a U.S. person (citizen or company) or any person who acts on behalf of a U.S. person to offer, to pay, to promise to pay or to authorize another person to pay money or of anything of value to a foreign government official for the purpose of obtaining or retaining business.


  2. What is the Anti-boycott Act?

    The Anti-boycott Act is a U.S. law, which makes it unlawful for a U.S. person (citizen or company) to participate in other countries' boycotts of a country, which in its own right is not subject to a U.S.-sponsored boycott.


  3. What is the U.N. Convention on Contracts for the International Sale of Goods (CISG)?

    The CISG is an international set of rules designed to provide clarity to most international sales transactions involving the sale of goods. The CISG went into effect on January 1, 1988, with the United States as a party. Most Western countries are now signatories to the CISG.


  4. What is the significance of the U.N. Convention on Contracts for the International Sale of Goods (CISG)?

    The CISG can be both a discretionary and mandatory set of rules. It is discretionary when both parties agree to be bound by its rules; it has mandatory application when the parties do not choose to use it but become bound to it by virtue of its automatic application. As a result of the mandatory application of the CISG, most international sale of goods contracts with parties in western countries will be subject to the CISG, unless specifically excluded in accordance with the CISG's terms.


  5. What methods of dispute resolution are commonly used to resolve international business disputes?

    Litigation, arbitration and mediation.


  6. Which dispute resolution method is currently the preferred method of dispute resolution in international business transactions?

    Arbitration.


  7. What is arbitration?

    Arbitration is a dispute resolution method in accord with which a panel of one or three neutral third parties (arbiters or arbitrators): (a) presides over a hearing during which the disputants present their cases; and (b) renders a ruling, which is binding on the parties.


  8. What is mediation?

    Mediation is a dispute resolution method in accord with which a neutral third party (mediator) assists the disputants in negotiating a settlement, which is not binding on the parties.


  9. What is the New York Convention?

    The New York Convention is a common term of reference for the Convention on the Recognition and Enforcement of Foreign Arbitral Awards which provides for signatory countries a set of uniform rules for the recognition and enforcement of arbitral awards from foreign jurisdictions.


  10. Is the U.S. a signatory to any treaties or conventions on the enforcement of court awards?

    No.


  11. Which procedural rules are most commonly used in the arbitration of international business disputes?


  12. The procedural rules of the International Chamber of Commerce are currently the most commonly used procedural rules in the arbitration of international business disputes, but the International Commercial Rules of the American Arbitration Association are gaining in prominence.
  13. What is Comity of Nations?


  14. Comity of Nations is a concept under which the acts or practices of nations are based on good will and mutuality, rather than strict application and enforcement of rules of law.
  15. What are INCOTERMS?


  16. INCOTERMS are standardized shipping terms defined by the International Chamber of Commerce, e.g., F.O.B., C.I.F., EX WORKS, (qq.v) etc. The terms divide the responsibility for the cost of carriage, and liability for the safety of the goods between the buyer and seller.
  17. Do INCOTERMS determine when title to goods passes?


  18. Contrary to general belief, Incoterms do not determine when title to goods passes. This is either determined by the applicable governing law, the CISG or specific provisions contained in the agreement.
  19. Which issues hinge on the timing of title passage to the buyer in an international sale of goods transaction?


    • Risk of loss: Transfer of title affects the parties' rights in the event of total or partial loss and damage or destruction of the goods.
    • Rejection of goods: Once it has occurred, transfer of title may preclude the buyer from rejecting the goods despite valid complaints of quality, quantity or description.
    • Payment for goods: Once the buyer acquires title, the seller can sue the buyer for non-payment.
    • Rights of action: After acquiring title, the buyer can enforce its property rights against others through court action or otherwise.

  20. What is a Romalpa clause?


  21. A Romalpa clause is a title retention clause, which serves to separate the passing of title, and risk of loss and which provides that until payment is received, title remains with the seller. The following is an example of a Romalpa clause. Risk of loss and damage shall pass to the Buyer upon delivery. Title shall pass to the buyer upon payment in full.
  22. What is the Carriage of Goods by Sea Act (COGSA)?


  23. Carriage of Goods by Sea Act is a U.S. statute that defines terms and establishes liability for carriers engaged in international maritime transportation. The act limits the carrier's liability to $500 per shipping package, and imposes for the filing of claims against the carrier.
  24. What is the Warsaw Convention?


  25. Warsaw Convention is a private international law treaty creating certain uniform rules for the liability of international air transport operators. These include limitations on their liability for injury to passengers or cargo.
  26. What is a "force majeure" clause?


    • A force majeure clause excuses nonperformance arising out of causes beyond either party's control and without any fault or negligence on the part of the non-performing party.
    • A force majeure affects both buyer and seller. For the seller, force majeure may affect its ability to deliver and/or service the goods. For the buyer, force majeure may affect its ability to take delivery and/or to pay for the goods.
    • If the parties are not specifically protected by a force majeure clause, then they are left to rely upon the doctrine of frustration for excusing performance in an appropriate case.

  27. What does the concept of "general average" mean?


  28. General Average is equitable system which provides for contribution to be given by all interested parties when an accidental loss of ship, cargo, or freight arises as a result of an extraordinary sacrifice, reasonably and voluntarily incurred, in time of peril for the safety of the common adventure.