Revisiting the Autonomous Contract - Transnational contract law, trends and supportive structures
Ralph Amissah *


*. Ralph Amissah is a Fellow of Pace University, Institute for International Commercial Law. http://www.cisg.law.pace.edu/
RA lectured on the private law aspects of international trade whilst at the Law Faculty of the University of Tromsø, Norway. http://www.jus.uit.no/
RA built the first web site related to international trade law, now known as lexmercatoria.org and described as “an (international | transnational) commercial law and e-commerce infrastructure monitor”. http://lexmercatoria.org/
RA is interested in the law, technology, commerce nexus. RA works with the law firm Amissahs.
[This is a draft document and subject to change.]
All errors are very much my own.

1. The Autonomous Contract: Reflecting the borderless electronic-commercial environment in contracting was published in Elektronisk handel - rettslige aspekter, Nordisk årsbok i rettsinformatikk 1997 (Electronic Commerce - Legal Aspects. The Nordic yearbook for Legal Informatics 1997) Edited by Randi Punsvik, or at http://www.jus.uio.no/lm/the.autonomous.contract.07.10.1997.amissah/doc.html

2. As Maria Cattaui Livanos suggests in The global economy - an opportunity to be seized in Business World the Electronic magazine of the International Chamber of Commerce (Paris, July 1997) at http://www.iccwbo.org/html/globalec.htm
“Globalization is unstoppable. Even though it may be only in its early stages, it is already intrinsic to the world economy. We have to live with it, recognize its advantages and learn to manage it.
That imperative applies to governments, who would be unwise to attempt to stem the tide for reasons of political expediency. It also goes for companies of all sizes, who must now compete on global markets and learn to adjust their strategies accordingly, seizing the opportunities that globalization offers.”

3. To remain successful, being in competition, the business community is compelled to take advantage of the opportunities provided by globalisation.

4. Realists would contend that law is contextual and best understood by exploring the interrelationships between law and the other social sciences, such as sociology, psychology, political science, and economics.

5. Part of a section cited in Mercuro and Steven G. Medema, Economics and the Law: from Posner to Post-Modernism (Princeton, 1997) p. 11, with reference to Karl N. Llewellyn The Effect of Legal Institutions upon Economics, American Economic Review 15 (December 1925) pp 655-683, Mark M. Litchman Economics, the Basis of Law, American Law Review 61 (May-June 1927) pp 357-387, and W. S. Holdsworth A Neglected Aspect of the Relations between Economic and Legal History, Economic History Review 1 (January 1927-1928) pp 114-123.

6. For a good introduction see Nicholas Mercuro and Steven G. Medema, Economics and the Law: from Posner to Post-Modernism (Princeton, 1997). These include: Chicago law and economics (New law and economics); New Haven School of law and economics; Public Choice Theory; Institutional law and economics; Neoinstitutional law and economics; Critical Legal Studies.

7. Case overstated, but this is an essential point. It is not be helpful to be overly tied to the past. It is necessary to be able to look ahead and explore new solutions, and be aware of the implications of “complexity” (as to to the relevance of past circumstances to the present).

8. The majority of which are beyond the scope of this paper. Examples include: encryption and privacy for commercial purposes; digital signatures; symbolic ownership; electronic intellectual property rights.

9. Complexity theory is a branch of mathematics and physics that examines non-linear systems in which simple sets of deterministic rules can lead to highly complicated results, which cannot be predicted accurately. A study of the subject is provided by Nicholas Rescher Complexity: A Philosophical Overview (New Brunswick, 1998). See also Jack Cohen and Ian Stewart, The Collapse of Chaos: Discovering Simplicity in a Complex World (1994).

10. Robert Metcalf, founder of 3Com.

11. US Framework for Global Electronic Commerce (1997) http://www.whitehouse.gov/WH/New/Commerce/

12. The EU is lifting such restriction, and the US seems likely to follow suit.

13. Caveats extending beyond the purview of this paper. It is necessary to be aware that there are other overriding interests, global and domestic, that the market economy is ill suited to providing for, such as the environment, and possibly key public utilities that require long term planning and high investment. It is also necessary to continue to be vigilant against that which even if arising as a natural consequence of the market economy, has the potential to disturb or destroy its function, such as monopolies.

14. Look for instance at national customs procedures, and consumer protection.

15. http://www.uncitral.org/

16. http://www.wipo.org/

17. http://www.wto.org/

18. http://www.unidroit.org/

19. http://www.iccwbo.org/

20. http://www.hcch.net/

21. such as ASEAN http://www.aseansec.org/ the European Union (EU) http://europa.eu.int/ MERCOSUR http://embassy.org/uruguay/econ/mercosur/ and North American Free Trade Agreement (NAFTA) http://www.nafta-sec-alena.org/english/nafta/

22. e.g. large international banks; or in the legal community, the Business Section of the International Bar Association (IBA) with its membership of lawyers in over 180 countries. http://www.ibanet.org/

23. For a somewhat frightening peek and illuminating discussion of the role of education in the global economy as implemented by a number of successful States see Joel Spring, Education and the Rise of the Global Economy (Mahwah, NJ, 1998).

24. http://www.bolero.org/ also http://www.boleroassociation.org/

25. at http://www.jus.uio.no/lm/un.arbitration.recognition.and.enforcement.convention.new.york.1958/

26. at http://www.jus.uio.no/lm/un.arbitration.model.law.1985/

27. Lando, Each Contracting Party Must Act In Accordance with Good Faith and Fair Dealing in Festskrift til Jan Ramberg (Stockholm, 1997) p. 575. See also UNIDROIT Principles, Preamble 4 a. Also Arthur Hartkamp, The Use of UNIDROIT Principles of International Commercial Contracts by National and Supranational Courts (1995) in UNIDROIT Principles: A New Lex Mercatoria?, pp. 253-260 on p. 255. But see Goode, A New International Lex Mercatoria? in Juridisk Tidskrift (1999-2000 nr 2) p. 256 and 259.

28. “ICA” being shaped by market forces and competition adheres more closely to the rules of the market economy, responding to its needs and catering for them more adequately.

29. As examples of this, it seeks to give effect to the parties' agreement upon: the lex mercatoria as the law of the contract; the number of, and persons to be “adjudicators”; the language of proceedings; the procedural rules to be used, and; as to the finality of the decision.

30. UNCITRAL Convention on Contracts for the International Sale of Goods 1980 see at http://www.jus.uio.no/lm/un.contracts.international.sale.of.goods.convention.1980/
The CISG may be regarded as the culmination of an effort in the field dating back to Ernst Rabel, (Das Recht des Warenkaufs Bd. I&II (Berlin, 1936-1958). Two volume study on sales law.) followed by the Cornell Project, (Cornell Project on Formation of Contracts 1968 - Rudolf Schlesinger, Formation of Contracts. A study of the Common Core of Legal Systems, 2 vols. (New York, London 1968)) and connected most directly to the UNIDROIT inspired Uniform Law for International Sales (ULIS http://www.jus.uio.no/lm/unidroit.ulis.convention.1964/ at and ULF at http://www.jus.uio.no/lm/unidroit.ulf.convention.1964/ ), the main preparatory works behind the CISG (Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) and the Convention relating to a Uniform Law on the International Sale of Goods (ULIS) The Hague, 1964.).

31. UNIDROIT Principles of International Commercial Contracts commonly referred to as the UNIDROIT Principles and within this paper as PICC see at http://www.jus.uio.no/lm/unidroit.contract.principles.1994/ and http://www.jus.uio.no/lm/unidroit.international.commercial.contracts.principles.1994.commented/
The first edition of the PICC were finalised in 1994, 23 years after their first conception, and 14 years after work started on them in earnest.

32. As of February 2000.

33. “[P]arties often want to close contracts quickly, rather than hold up the transaction to negotiate solutions for every problem that might arise.” Honnold (1992) on p. 13.

34. http://www.jus.uio.no/lm/wta.1994/

35. See Amissah, On the Net and the Liberation of Information that wants to be Free in ed. Jens Edvin A. Skoghoy Fra institutt til fakultet, Jubileumsskrift i anledning av at IRV ved Universitetet i Tromsø feirer 10 år og er blitt til Det juridiske fakultet (Tromsø, 1996) pp. 59-76 or the same at http://www.jus.uio.no/lm/on.the.net.and.information.22.02.1997.amissah/

36. Also consider present and future possibilities for such use of PICC under CISG articles 8 and 9.

37. Drobnig, id. p. 228, comment that the CISG precludes recourse to general principles of contract law in Article 7. This does not refer to the situation where parties determine that the PICC should do so, see CISG Article 6. Or that in future the PICC will not be of importance under CISG Articles 8 and 9.

38. “Special principles have precedence over general ones.” See Huet, Synthesis (1995) p. 277.

39. The more straightforward cases of various types of misrepresentation apart.

40. Trebilcock, (1993) p. 102, followed by a quotation of Milton Friedman, from Capitalism and Freedom (1962) p. 13.

41. Trebilcock, (1993) p. 102, note quoted passage of Kim Lane Scheppele, Legal Secrets: Equality and Efficiency in the Common Law (1988) p. 25.

42. See for example Nicholas Mercuro and Steven G. Medema, p. 58

43. Examples include: the deliberately excluded validity (Article 4); the provision on interest (Article 78); impediment (Article 79), and; what many believe to be the inadequate coverage of battle of forms (Article 19).

44. The commented PECL explain “'Good faith' means honesty and fairness in mind, which are subjective concepts... 'fair dealing' means observance of fairness in fact which is an objective test”.

45. Special problem regarding common/shared resources discussed by Garrett Hardin in Science (1968) 162 pp. 1243-1248. For short discussion and summary see Trebilcock, (1993) p. 13-15.

46. This is the position in English law see Lord Diplock in Fothergill v Monarch Airlines [1981], A.C. 251, 282 or see http://www.jus.uio.no/lm/england.fothergill.v.monarch.airlines.hl.1980/2_diplock.html also Mann (London, 1983) at p. 379. The relevant articles on interpretation are Article 31 and 32.

47. Examples: The CISG, Article 7; The PICC, Article 1.6; PECL Article 1.106; UN Convention on the Carriage of Goods by Sea (The Hamburg Rules) 1978, Article 3; UN Convention on the Limitation Period in the International Sale of Goods 1974 and 1978, Article 7; UN Model Law on Electronic Commerce 1996, Article 3; UNIDROIT Convention on International Factoring 1988, Article 4; UNIDROIT Convention on International Financial Leasing 1988, Article 6; also EC Convention on the Law Applicable to Contractual Obligations 1980, Article 18.

48. For an online collection of articles see the Pace CISG Database http://www.cisg.law.pace.edu/cisg/text/e-text-07.html and amongst the many other articles do not miss Michael Van Alstine Dynamic Treaty Interpretation 146 University of Pennsylvania Law Review (1998) 687-793.

49. Such as the CISG provision on interpretation - Article 7.

50. Based on the CISG, and inputs from several professors from different legal jurisdictions, on the problems of achieving the uniform application of the text across different legal municipalities. J. Honnold, Uniform words and uniform applications. Uniform Words and Uniform Application: The 1980 Sales Convention and International Juridical Practice. Einheitliches Kaufrecht und nationales Obligationenrecht. Referate Diskussionen der Fachtagung. am 16/17-2-1987. Hrsg. von P. Schlechtriem. Baden-Baden, Nomos, 1987. p. 115-147, at p. 127-128.

51. Nor is it particularly difficult to set into motion the placement of such information on the Net. With each interested participant publishing for their own interest, the Net could provide the key resources to be utilised in the harmonisation and reaching of common understandings of solutions and uniform application of legal texts. Works from all countries would be available.

52. Primary amongst them Pace University, Institute of International Commercial Law, CISG Database http://www.cisg.law.pace.edu/ which provides secondary support for the CISG, including providing a free on-line database of the legislative history, academic writings, and case-law on the CISG and additional material with regard to PICC and PECL insofar as they may supplement the CISG. Furthermore, the Pace CISG Project, networks with the several other existing Net based “autonomous” CISG projects. UNCITRAL under Secretary Gerold Herrmann, has its own database through which it distributes its case law materials collected from national reporters (CLOUT).

53. Cass R. Sunstein, One Case at a Time - Judicial Minimalism on the Supreme Court (1999)

54. His analysis is developed based largely on “hard” constitutional cases of the U.S.

55. D. Stauffer, Introduction to Percolation Theory (London, 1985). Percolation represents the sudden dramatic expansion of a common idea or ideas thought he reaching of a critical level/mass in the rapid recognition of their power and the making of further interconnections. An epidemic like infection of ideas. Not quite the way we are used to the progression of ideas within a conservative tradition.

56. Ronald Dworkin, Laws Empire (Harvard, 1986); Hard Cases in Harvard Law Review (1988).

57. Hercules was created for U.S. Federal Cases and the community represented by the U.S.

58. In 1966, a time when there were greater differences in the legal systems of States comprising the world economy Clive Schmitthoff was able to comment that:
“22. The similarity of the law of international trade transcends the division of the world between countries of free enterprise and countries of centrally planned economy, and between the legal families of the civil law of Roman inspiration and the common law of English tradition. As a Polish scholar observed, ”the law of external trade of the countries of planned economy does not differ in its fundamental principles from the law of external trade of other countries, such as e.g., Austria or Switzerland. Consequently, international trade law specialists of all countries have found without difficulty that they speak a 'common language'
23. The reason for this universal similarity of the law of international trade is that this branch of law is based on three fundamental propositions: first, that the parties are free, subject to limitations imposed by the national laws, to contract on whatever terms they are able to agree (principle of the autonomy of the parties' will); secondly, that once the parties have entered into a contract, that contract must be faithfully fulfilled (pacta sunt servanda) and only in very exceptional circumstances does the law excuse a party from performing his obligations, viz., if force majeure or frustration can be established; and, thirdly that arbitration is widely used in international trade for the settlement of disputes, and the awards of arbitration tribunals command far-reaching international recognition and are often capable of enforcement abroad."
Report of the Secretary-General of the United Nations, Progressive Development of the Law of International Trade (1966). Report prepared for the UN by C. Schmitthoff.

59. Future if not current.

60. UNCITRAL Secretariat (1992) p. 253. Proposed by David (France) at the second UNCITRAL Congress and on a later occasion by Farnsworth (USA). To date the political will backed by the financing for such an organ has not been forthcoming. In 1992 the UNCITRAL Secretariat concluded that “probably the time has not yet come”. Suggested also by Louis Sono in Uniform laws require uniform interpretation: proposals for an international tribunal to interpret uniform legal texts (1992) 25th UNCITRAL Congress, pp. 50-54. Drobnig, Observations in Uniform Law in Practice at p. 306.

61. UNIDROIT and the EU

62. For references on interpretation of the CISG by a supranational committee of experts or council of “wise men” see Bonell, Proposal for the Establishment of a Permanent Editorial Board for the Vienna Sales Convention in International Uniform Law in Practice/ Le droit uniforme international dans la practique [Acts and Proceedings of the 3rd Congress on Private Law held by the International Institute for the Unification of Private Law (Rome, 1987)], (New York, 1988) pp. 241-244

63. UNCITRAL Secretariat (1992) p. 255.

64. Erich Schanze, New Directions in Business Research in Børge Dahl & Ruth Nielsen (ed.), New Directions in Contract Research (Copenhagen, 1996) p. 62.

65. See http://www.cisg.law.pace.edu/vis.html

66. See http://www.cisg.law.pace.edu/cisg/text/essay.html

67. http://www.thecommonwealth.org/

68. An excellent approachable introduction is provided by A.F. Chalmers What is this thing called Science? (1978, Third Edition 1999).

69. Karl R. Popper The Logic of Scientific Discovery (1959).

70. Thomas S. Kuhn The Structure of Scientific Revolutions (1962, 3rd Edition 1976).

71. Karl R. Popper The Open Society and Its Enemies: Volume 1, Plato (1945) and The Open Society and Its Enemies: Volume 2, Hegel & Marx. (1945)

72. FIDIC is the International Federation of Consulting Engineers http://www.fidic.com/

73. Concept originally developed by Lotfi Zadeh Fuzzy Sets Information Control 8 (1965) pp 338-353. For introductions see Daniel McNeill and Paul Freiberger Fuzzy Logic: The Revolutionary Computer Technology that is Changing our World (1993); Bart Kosko Fuzzy Thinking (1993); Earl Cox The Fuzzy Systems Handbook (New York, 2nd ed. 1999). Perhaps to the uninitiated an unfortunate choice of name, as fuzzy logic and fuzzy set theory is more precise than classical logic and set theory, which comprise a subset of that which is fuzzy (representing those instances where membership is 0% or 100%). The statement is not entirely without controversy, in suggesting the possibility that classical thinking may be subsumed within the realms of an unfamiliar conceptual paradigm, that is to take hold of the future thinking. In the engineering field much pioneer work on fuzzy rule based systems was done at Queen Mary College by Ebrahim Mamdani in the early and mid-1970s. Time will tell.

74. See for example Open Sources : Voices from the Open Source Revolution - The Open Source Story http://www.oreilly.com/catalog/opensources/book/toc.html

75. Sale of goods (CISG), contract rules and principles (PICC), related Arbitration, and the promotion of certain egalitarian ideals.

76. It is not as evident in the area of private international commercial contract law the chosen focus for this paper, but appears repeatedly in relation to other areas and issues arising out of the economics, technology, law nexus.

77. Low fixed costs have a “regressive” effect

78. In such circumstances either economics or law on their own would be sufficient to result in politics arising as an emergent property.

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