Drawing up commercial contract according to international standards & ICC

22, 23 Dec 2020

Lecturer: Dr.Mehidine El- Chehimi

The webinar started at 10:00 a.m Tehran time with the welcome of Ms. Mina Alavash, International Director of Asre Qalam Institute to the participants and also Introducing the French  professor for 2 days teaching on the Business Contract law.

Dr. Chihimi divided his webinar into 2 categories:

On the first day, we will get acquainted with the basic principles and institutions of international trade law – the basics of the contract – the provisions of the contract – the common elements in a contract and finally the problems ahead in terminating contracts.

And on the second day, we will talk about how to resolve legal disputes – international commercial arbitration and the importance of the place of the contract and the law governing the concluded contracts.

Day 1 ,

International law includes legal matters for management levels and investment cases and any business interactions between specific individuals or different governments and companies.

International Trade Law (ITL) is the law regulating international commerce. It has two aspects: public and private.

This is substantially covered under Private International Law.

International trade has a positive impact on economic growth.

• Integration into the world economy
• development, and poverty diminution
• multilateral trade liberalization
• General Agreement on Tariffs and Trade (GATT) was created

The sources of international law:

• Bilateral treaties: kinds, significance and the sphere of application.
• Uniform laws.
• Codes of conduct.
• Arbitration rules.
• Acts of international organizations.
• National legislation as applicable to international trade.

Article I was envisioned to have two main applications. First, whenever WTO members negotiate and grant trade concessions to other countries, such concessions must automatically be extended to all other WTO Members. Second, outside of trade negotiations, whenever a WTO Member enacts legislation or certain trade-restrictive rules or requirements, it cannot, according to Most-Favored-Nation, discriminate between products from a WTO Member and the like products of any other country.

Agreement on Tariffs and Trade (GATT) forbids the imposition of quantitative restrictions on international trade.

It should be no surprise that an agreement intended to liberalize trade would not look fondly up on measures that function as absolute barriers to it. Quantitative restrictions are usually in the form of quotas.

Problems ahead in terminating contracts

Mistake

It is particularly important to distinguish between mistake and misrepresentation, since a contract affected by mistake may be void, whereas a contract affected by misrepresentation is only voidable

Mistakes may be classified into three categories:

(a) Mistake as to the nature of the contract itself.

(b)Unilateral mistakes, made by one party only.

(c) Bilateral mistakes, where both parties make a mistake

Day 2,

The GATT was essentially conceived as a stop-gap arrangement pending the establishment of the ITO. Article XXIX of the GATT dealing with the relation between the GATT and the proposed Havana Charter makes this point clear.

Therefore, the participant states thought of adopting the GATT provisionally through a protocol.

The Protocol contained two important provisions:

Part I and III of the GATT shall be accepted by all the Contracting Parties .

 Part II of the GATT shall be accepted “to the fullest extent not inconsistent with existing legislation.

How to Write a Contract?

Business Contracts: What Are They?

Also known as a contractual business relationship or an agreement, a contract describes expectations for an interaction. It ensures all parties agree to the terms of their relationship.

A contract should include:

Offer: One party makes the offer, and the other accepts it.

Exchange: This includes money, goods, and services.

Reasons to Consider Not Using a Contract

• It does not address all possible situations.
• It is not clear.
• It is verbal instead of written.
• You want to make a counteroffer.
• It can protect confidentiality.
• You have already made a verbal agreement.

How to write a memorandum of understanding (MOU)

First, make sure you understand what an MoU is

An MoU is a formal agreement between two or more parties, typically made by governmental organisations, non-governmental organisations and, to a lesser extent, corporate entities.

An MoU can be thought of as ‘an agreement to agree’ – they are designed to broadly outline an agreement. MoUs give a flexible framework for parties to work together. They are not binding contracts.

Resolution of International Commercial Disputes:

Because of the enormous growth in transnational business,  the number of commercial disputes between international parties is increasing.  international commercial disputes can escalate into major trade conflicts with serious political and economic repercussions. Thus, an increased need for fast and efficient dispute resolution is developing . This need is best satisfied through extra judicial means rather than litigation in national courts.

Arbitration

Arbitration, perhaps because of its resemblance to already familiar domestic litigation, is the most popular method of resolution of international commercial disputes and allows parties to avoid many of the problems associated with litigation. “Differences between legal systems have traditionally made arbitration attractive: it is by its essence the most international means of settling disputes” because it provides a neutral option. Arbitration is also the most formal and oldest method of ADR in international commerce.

Arbitration includes settlement of disputes between the litigating parties outside the court by mutually acceptable or appointed arbitrators being natural person/s or legal entity/ies .

International arbitration means that one party is not Iranian national under Iranian law at the time of conclusion of the arbitration agreement.

Arbitration agreement is an agreement between the parties under which any or all of the differences that may arise in relation with one or more contractual or non-contractual legal matter, will be referred to arbitration. Arbitration agreement can be in the form of an arbitration clause in the contract or in the form of a separate agreement.

Governing law

A choice of law clause should always be considered alongside a choice of jurisdiction clause, which nominates the forum in which disputes arising under the contract are to be litigated. Absent a clear choice of law clause, a choice of jurisdiction clause by which a party submits to the exclusive jurisdiction of a particular country may be taken as an indication that the intention of the parties is that the law of that country is to be the governing law of the contract.

At the end of the two-day legal contract webinar, Dr. Chihimi answered all the participants’ questions. Also, Ms. Mina Alavash appreciated and thanked the regular and continuous presence of the participants, as well as the professor and all colleagues in the international section and webinar sponsors, especially the president of t