WEEK1

WHAT IS LAW? Rules, set of regulations set up by a society at a specific moment in time. Rules are not static
they are dynamic.

LAW, ETHICS= It is more a philosophy, it is an unwritten rule, that define what is right and what is wrong.
Some law intersects with ethics.

3 power: Judiciary , legislative (write the law), executive=government (enforce, apply the law)

 PUBBLIC LAW= involve the government, how election are run, state and the individual, criminal law,
tax law, administrative law
 PRIVATE LAW= contract law, low of obbligation, tort
 INTERNATIONAL PUBLIC LAW= law between states.(WTO) International law dealing with states and
resolution of inter-state disputes by organs of WTO (World trade organization)
 INTERNATIONAL PRIVATE LAW= private matter resolution in international dispute, which law applies
in an international contest

STATE = JUSTICE, SECURITY, SATISFY BASIC NEEDS: food, healthcare, education.

INT BUSINESS LAW= it is the all the laws needed to know if you are in business (WTO, European law,
international property law, company law,..

DOCUMENTARY 21 OF OCTOBER= ERIN BROCKOVICH

CASES OF CHAP 7= 13 NOVEMBER

FOR CASES= IRAC SYSTEM

1) WE START WITH ISSUES (contract, parties, agreements, what went wrong?)

2) RULES (regulations, law)
3) APPLICATION (what wecan apply in this case to solve the litigation?, how to apply the law? how to
convince the court?)
4) CONCLUTION (who won? Why? What we learn from this, the takeaway)

EVIDENCE AND PROOF are the most important things.

LVMH= 1854. The first product= big luggage

PARTNERSHIP= there are different type of partnership, some peculiar example are: silent (NL, GERMAN),
secret partnership (UK, but if there is a bankruptcy, it is no longer secret). IT IS IMPORTANT BECAUSE
MINIMIZE RISK, CONTROL AND LESS COSTS.

LIMITED LIABILITY

LEGAL SYSTEM= 3 main legal system:

 Romano-Germanic Civil Law

 Anglo-American Common Law
 Islamic Law = no fit for business, only like the way to live
 Hybrids (e.g. Japan, South Africa)
 Tribal Customary Law; unique per area
CIVIL LAW= starting from Rome and the 12 tables to CISG (Vienna 1980).

JUS COMMUNE= born from the necessity of travel and sell

goods in other part of the world

LEX MERCATORIA AND JUS COMMUNE develop in different ways

in France, Germany and Holland based on nationalism decided
to translate and create their own law.

Lex mercatoria evolves too into CISG, the international sale of

goods act.

Cap 10 6 casi

CISG= VIENNA CONVENTION= MOST SUCCESSFUL COMMERCIAL LAW TREATY

This has a very wide participation (successful). Unlike Hague conventions it is not limited to Europe but
more international so it has a more impact.

 WIDE PARTICIPATION: BUT It was NOT ratified by UK, Ireland, Portugal, Hong Kong, India, Taiwan,
South Africa (to be remembered)
 Convention adopted in April 1980 and Came into force 1 January 1988
 Ratified by 83 states (today we are 93)
 Commonly known as “Vienna Convention”

WHY NOT UK? they have a Sales of goods act so they don’t want to reduce the power of this act. ts and
rights introduced, Doubts of producing uniformity due to various interpretations , Incomprehensive – does
not cover validity of contract and passing of property.

CHARATTERISTIC= it provides a framework for contract so parties only decide some specific clauses. It
helps small business and provide a balance.

 Modern → drafted to provide a uniform and fair framework for contract for the international sale of
goods.
 Introduces certainty and reduces costs→ as it provides a framework the parties only have to decide
on the specific clauses and peculiarities of their specific transaction
 It is fair → provides a balance between the interest of the buyer and of the seller
 It helps small and medium-sized businesses → which have limited access to legal advice when
negotiating a contract (there’s already a framework)

Application of this convention: Contract of sales, only if both parties have ratified or if one not but the
governing law is of one nation that has ratified. Parties must be from different state

 CONTRACT= It is applied to CONTRACT OF SALE BETWEEN BUSINESS ONLY B2B

Seller has to deliver the goods, hand over documents and transfer any property in the goods,
whereas the buyer is bound to pay the price and take delivery. It must include payment of money in
exchange.
 INTERNATIONAL= PARTIES’ PLACES OF BUSINESS MUST BE IN DIFFERENT STATE
Not necessary that the goods move from one state to another, IT IS NOT IMPORTANT WHERE GOOD
GOES BUT THE NATIONALITY OF THE COMPANY.
 EX Italian company that transport goods in an italian company in Brazil= in this case we can't apply
CISG, only if one is an Italian company and other one a Brazilian company
 CONNECTION= BOTH PARTIES SHOULD BE FROM A STATE WHICH HAS RATIFIED CISG
 BOTH RATIFIED CONVENTION= WE CAN APPLY CISG (but they can decide differently)
 ONE NOT RATIFIED CONVENTION= we have to look to the governing law if the governing
law is that of a ratifying State, we can apply CISG

EXCLUTION:

 We don’t apply this convention if parties SPECIFIC EXCLUDED IT.

Parties, if they ratified the convention, have the freedom to choose if they want to apply the
convention of another domestic law.
 Excludes contracts for “services” (i.e., work and materials)
 Excludes consumer contracts (indeed, it’s only B2B) and sale of services
 Excludes contracts where the buyer supplies a “substantial part” of the materials necessary for
production (i.e., it becomes “services” contract) (ex: if the buyer provides a software, then the
manufacturing is just provision of services (assembly rather than manufacturing))
 Does not apply to barter (exchange, no payment) or Agency agreements= it is not transfert, we
don't have the sales part

Note: sometimes difficult to distinguish sale of “services” in electronic goods and computing in modern
world (e.g., software provided on physical disk (“good”) downloaded (“service”))

What does CISG cover? 4 main areas: (to be known)

 Formation of sales contract

 Contractual rights and obligations of parties (set up provisions)
 Passing of risk of goods (does NOT deal with passing of title)
 Remedies for non-performance
What does CISG NOT cover?

 “passing of title” → CISG does NOT specify when title passes in the goods (too difficult to unify
different nation states laws on this), so it should be dealt within the specific contract. Doesn't deal
with ownership.
 Liability of seller for death/personal injury caused by negligence (as we know that by law certain
things CANNOT be limited)
 Validity of contract
 Contract about the sale of real property (land and buildings)

OBBLIGATION OF THE SELLER (CISG)

 Deliver the goods to a specified place (under contract) or under the convention (depends on
whether or not the contract includes carriage or goods specifically identifiable in contract)
 Ensure conformity of goods (ex: they are the same of what has been represented, what I see in the
sample online is what I get)
 Ensure the goods are free of undisclosed 3rd party claims/rights (ex: if the seller previously agreed
to sell to someone else or I sell something that isn’t mine)
 Where necessary, preserve the goods (ex: refrigerate bananas)

OBBLIGATION OF THE BUYER (CISG)

 Check conformity of the goods (as they arrive)

  Take delivery of goods (important as if the buyer doesn’t take delivery in time, the seller might sell
those goods to somebody else and the customer CANNOT take legal action)
ex: go to the store to pick up 100 chairs, I never go, seller can resell them
 Pay the price
 Where necessary, preserve the goods

REMEDIES= in case of non performance, both can force the other party to perform or terminate the
contract and receive money back.

FONDAMENTAL BREACH= a breach is fundamental if it results in such detriment to the other party as to
substantially deprive him of what he is entitled to expect under the contract, unless the party in breach did
NOT foresee (or a reasonable person would not have foreseen) such a result

IN OTHERS WORDS= A breach is considered fundamental when it significantly hinders the other party from
receiving what they should reasonably expect from the contract. However, this does not apply if the party in
breach could not have reasonably foreseen such a consequence.

SELLER BUYER

IN CASE OF FUNDAMENTAL BREACH

Affected party can terminate for non-
performance
IN CASE OF FUNDAMENTAL BREACH
Buyer can demand substitute goods if NOT in
conformity with contract
Affected party can terminate for non-
performance
Buyer can terminate for partial delivery of
goods

INTEREST= in case of late payment, not relevant the damage caused

 If a party fails to pay the price or another sum due (somma dovuta), the other party is entitled to
interest on the outstanding sum (non-paid amount)
The rate of interest is not defined, because it depends on the interest fixed by central banks
 No need to show “damage” for late payment (the injured party may also have a claim in damages)
(ex: the seller does NOT have to show that, because of no payment, he could not pay his workers)

FORCE MAJEURE = “A party in NOT liable for failure to perform his obligations due to “an impediment”
beyond his control and that he could NOT reasonably be expected to have taken it account at the time of
conclusion of the contract or avoided its consequences”.

Even if the contract does NOT have a clause dealing with force majeure, if the convention applies, you are
protectedVery similar to “force majeure” clause in most contracts, indeed:

 Excuse for non-performance has effect during the “impediment” event

 MUST give notice within reasonable time
 Only protects against a claim of damages (NOT other remedies like specific performance) (ex: only
when a monetary payment is involved, NOT equitable remedies)
  Potentially includes “non-physical” impediment (like economic difficulty) (ex: under Italian law it
would, under common law it would NOT).

RISK= the risk is to bear the possible loss if goods are accidently damaged or destroyed without the fault of
either party to the contract. So it is necessary to define which of the parties must bear this risk= COMMON
RULE= RISK PASSES WITH THE CONTROL OR CUSTODY

 Risk passes to buyer when he takes over the goods or a “reasonable time” after goods are placed at
his disposal and he fails to take delivery (ex: risk passes to buyer when he goes to seller shop and
picks up the goods or after a reasonable time in which he should have gone pick up the goods)
 For contracts involving transport of goods, risk is passed to buyer when goods are handed over the
1st carrier.
 Buyer’s claim for damaged goods would be against the carrier, NOT the seller (unless seller knew of
loss/damage and did NOT disclose it)
 When goods already in transit when sold, risk passes “at time of conclusion of contract”

BUYER= WHEN HE TAKES THE GOOD (immediately or after a reasonable time), WHEN THERE IS THE
TRASPORT THE BUYER HAS THE RISK WHEN GOODS ARRIVED AT FIRST CARRIER (in case of damage, the
claim is against the carrier), BUT IF GOOD IS SOLD DURING THE TRANSIT THE RISK PASSES AT THE TIME OF
CONCLUSION OF THE CONTRACT.

JURISDICTION OF COURTS= jurisdiction is the authority of a court to apply the law

PLANTIF VS DEFENDENT

In case of dispute which country’s courts will decide ad resolve it?? FREEDOM OF CHOICE, CAN BE
DIFFERENT FROM GOVERNING LAW, IT IS EASIER IF GOVERNING LAW AND JURISDICTION COINCIDE NO
INTERPRETATION PROBLEMS

 JURISDITION CAUSE= Which country’s Courts will decide a dispute in relation to a contract?
Freedom of choice? → yes Can be different from governing law? → yes Of course, it’s easier if
governing law and jurisdiction coincide → no interpretation problems
 EUROPE= BRUSSELS REGULATION. If the jurisdiction is not expressed, we refer to Brussels I
Regulation. NB=> where at least one party has domicile in an EU Member State

BRUSSELS I REGULATION

IF PARTIES CHOSE THE JURISDICTION THOSE COURST HAVE EXCLUSIVE JURISDICTION UNLESS
PARTIES SPECIFY IT IS NON-EXCLUSIVE ART 25
INDIVIDUAL ARE SUED ONLY IN THEIR MEMBER STATE OF DOMICILIE ART 5
PERS. DOMICILED IN EU STATE SHALL BE SUED IN THE COURTS OF THAT MEMBER STATE ART 4

o Brussels I Regulations (Art. 25) → if the parties agree jurisdiction to settle disputes those courts
have in principles exclusive jurisdiction. (unless you specify it’s non exclusive, it will be exclusive)
(you may want a non-exclusive jurisdiction especially in finance contracts where different parts of
the contract follow different jurisdictions)
o Brussels I Regulation (Art.5) → individuals (rather than businesspersons) should only be sued in their
member state of domicile (a person’s habitual or ordinary residence)
o Article 4(1): persons domiciled in a Member State shall, whatever their nationality, be sued in the courts
of that Member State
Exception:
 Ownership/rights in land – jurisdiction is where the land is situated
  Validity of entries in public registers – jurisdiction is where the register is kept
 In disputes concerning the registration or validity of IP rights - where registered
 Enforcement of judgments - the courts of the member state in which the judgment is to be
enforced

WHEN BRUSSELS I DOES NOT APPLY:

1. Family law
2. Bankruptcy or insolvency
3. Social security
4. Arbitration matter

8. A professional designer who has her place of business in France, signs a contract whereby she will design
a line of furniture for a professional manufacturer with its place of business located in Germany, and whose
main market is Italian consumers. The contract says nothing regarding the applicable law of the contract.
Please indicate the national applicable law to this international contract for services according the Rome I
Regulation? (1 mark) (a) French

1. Article 5 of the Brussels I Regulation states that: Individuals should only be sued in their member state
of domicile
Which is not an exception to the rule of domicile under art. 6 of the Brussels I regulation? Exceptions
are: when a property is involves as well as public registers, registration or validity of IP rights,
enforcement of judgement. The combined effect of which articles of the Rome 1 Regulation provide
almost unlimited freedom to choose the law of any country irrespective of any connection with that
country (subject to mandatory rules)? Arts. 1 and 3

Which article of the Rome 1 regulations states that a contract for the provision of a service shall be
governed by the law of the country where the service provider has his habitual residence? ART 4

FORUM SHOPPING→ tactical practice pursued by some litigants (the party suing) to commence legal action
in “plaintiff friendly” jurisdiction even where NO connection with claim exists (even if the contract says
otherwise?) Objective → have their legal case heard in the court most likely to produce a favorable
judgment. Why “forum shop”?

 Convenience to pursue action in home country or where witnesses are

 Reduced costs or availability of special payment schemes (ex: in the US there are contingency fees)
- Favorable court procedures (ex: greater discovery)
 Favorable remedies/damages awards
 Language
 Pace of proceedings (fast or stalled)
 Quality of judiciary (competence, corruption)

A plaintiff might have selected one forum on the following grounds:

  The forum is NOT convenient to the defendant or his witnesses (ex: expense of travel, health or
visa or entry permit)
 The court, the judge, or the law is most likely to favor the plaintiff’s case

A defendant may take the following actions to obtain a change of venue:

 Petition the forum court that it should reject the jurisdiction and petition to transfer the case to a
more convenient forum; or
 If a case has been filed in another jurisdiction, the defendant may seek injunction (equitable
remedy) against the plaintiff to discontinue action in 1st forum and submit to more convenient
one.

Contexts in which “forum shopping” can occur:

 Some contractual disputes

 Family court matters (ex: divorce, child custody)
 Criminal cases
 Product liability claims
 Tortious actions

Concurrent litigation → different courts are hearing the same case. “race to judgment” as a result.

 “Race to judgment”: when party A (US) and party B (IT) take action at the same time in the
respective court to take advantage.
 “Italian torpedo” – tactical legal action (slowing down procedures to take time) where a prospective
defendant in a jurisdiction with swift relief (e.g., Germany) would file a suit for declaratory
judgment in a jurisdiction with slow relief (e.g., Italy) to stall the proceedings against him
(sometimes for years..

Which is not an exception to the rule of domicile under art. 6 of the Brussels I regulation? Exceptions are:
when a property is involves as well as public registers, registration or validity of IP rights, enforcement of
judgement.
The term "Italian torpedo" is applied to tactical legal actions often used in the context of which type of
matters? Slow down procedures to gain time in context of current litigation
Forum non conveniens is a tool available at a court's discretion to transfer a case if the court selected is not
the most convenient one on the basis of which consideration? Fairness, other court best equipped, avoid
excessive forum shopping, avoid to waste scares judicial resources