Importance of unification, harmonization and codification of private international law for international contracts and their usage in international business

“Importance of unification, harmonization and codification of private international law for international contracts and their usage in international business”

A brief introduction to the International Contracts: The contract is a machanism which people use worldwide to agree on commercial transaction, social agreements and any form of stating the rights and obligations agreed between two parties, the importance of the contract in the development of all the countries in the world and the advancement of the human race is undebatable, the contract has been the main vehicle for the raising of nations and the way people, companies and countries protect their interests. Because of that the regulation worldwide of the contract is of great significance and is not to be disregarded, on the contrary the observance of the international regulations of the contract must be a priority for everyone who plans to do anything regarding an agreement, also these regulations among all the countries all around the world, this has led to many contradictions between regulations and these contradictions and discrepancies matter a lot if we are trying to do business or social agreements between two or more international parties, because of the complexity of the different legal bodies around the world.

As stated above, the difficulty of aligning all international legislations to become one (this idea is highly improbable, unaffordable and organizationally impossible) has led to the international organizations that deal within legislations such as UNIDROIT, and the ICC, among others. They have had the initiative to develop and produce distinct types of international agreements and models to internationalize the contract, for example UNIDROIT has come out with the publication of the Principles for International Commercial Contracts, they came out with 120 different articles which may be used as a base for international contracts which function only as a guidance for the parties, as they may be agreed and change by them. The United nations has also published the “United Nations Convention on Contracts for the International Sale of Goods” commonly known as the Vienna Convention, this convention, if ratified by the countries that signed it, it becomes applicable to their sphere of action regarding sale of goods.

In this Essay we will state the distinct opinions regarding the difficulties of international contracts and why the unification, harmonization and codification of the private international law for international contracts is very important as we stated in the first two paragraphs the evolution of the contract to international contracts has become an issue for study and intervention from several International Organizations and law academics, in search for a better way “to pave the road” for a better understanding of the international contracts, their problems and how to solve them in an easy and speedy way.

During the drafting of contracts parties may encounter several difficulties almost all of them will have something to do with the parties not understanding or misunderstanding some information, it could be because the language spoken, the meaning of a word or legal term in two different countries, among the most common, but also it could be problems of cultural behaviour or misconceptions of the opposite party, this difficulties or problems make the drafting of a contract a very difficult process and it can create the loss of the business in hand, it could also reach the loss of the business partner or until the point of a legal action against one of the parties. This is why it is so important that we learn how to deal with these problems, so we can avoid them and create better business and social relations with foreign parties.

As stated above the international contracts had led to different difficulties and problems, this problems are encounter because of the many forms of law around the world and the way each country sees law, for example the civil law and common law systems may differ in the ways they are created, but the similarities that have been create through time have make this systems come closer, mainly because of the commercial relations between the civil law system and the common law system, for example we can see the commercial relationship between the United States of America and the United Mexican States, or the United Kingdom and the European Union Countries, these are examples of how good two systems can coexist and interact with each other, but this is not free given, there has been many years of relationship and many hours dedicated to make these two systems work, and the only way to make the “gears” of this systems to work is to harmonize the different systems through international agreements between countries. For example, we can look at what the NAFTA treaty states for solving controversy, it created different mechanisms to clear a controversy via an arbitrary institution, by creating a model for arbitration and moderation clause which helps the two parties drafting a contract to better solve their differences. As stated in the 4th paragraph there are problems regarding the drafting stage of a contract, which can be avoided by the simple task of making the international contract models, conventions, etc. made by the international organizations in behalf of the countries that signed them: available, applicable (regarding the harmonization of the local legislation) and easy to replicate for the distinct parties interested in making international business. As an example of this we can look at what the International Trade Centre, created to provide trade related technical assistance in international commerce in 1964, has created the ITC Contract for an International Contractual Alliance “This model contract template is for partnerships between two companies or businesses either locally or internationally. This is the most common type of business contract. This contract template is for two parties who wish to form an alliance or collaboration. Every contract situation is different, and this model provides a series of options to help users tailor the contract to their specific needs (International Trade Centre)^[1].” Looking at this model, we can infer that a lot has been made for making international business collaborations easier and faster for the people that need to do business easier and at lower costs.

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