Contracts

Part Four Contracts

Chapter 1 Introduction

Contracts are at the center of international business. They govern the relationships between parties by setting forth the rights and duties of each party. They may also include provisions to resolve disputes that may arise in performing the contract.

When writing contracts, many lawyers simply take an agreement from an earlier deal and update it for the new deal. This will work when the earlier deal was substantially similar to the new deal, but often the earlier contracts may include terms that are irrelevant to the new deal. When the lawyer does not really understand those new terms,the lawyer may be afraid to delete them. But leaving irrelevant terms in a contract can also create problems if there is a dispute later about performance of the contract.

Contract is a course that law students usually take in the first year of law school in the United States. Many of the words and concepts learned in that course appear in later law school course involving commercial sales, corporate law, international business transactions, securities law, and taxation of particular transactions, business franchise law, and licensing. The law of contracts is taught from common law concepts of contract law, but concepts from the Uniform Commercial Code often appear in standard courses. Unfortunately, concepts from the Convention on the International Sales of Goods( CISG) are often taught only in" specialty" courses such as" International Business Transactions. " Many U. S lawyers never learn that there is an international treaty that governs transactions made with parties from other signatory countries.

Although many of the principles of contract law will be familiar to lawyers trained in civil law countries, some principles—such as" consideration"—may cause some difficulty because they are unique to common law contract formation. Additionally, the concept of" consideration" is confusing not only because it is a unique concept,but because it uses a common word—the nominalized form of the verb" to consider. " As the late American philosopher Mortimer j. Adler noted, we are all familiar with the fact that" most words have multiple meanings. " Why, then, do we give" consideration" to the concept of" consideration" in contract law? Consideration,in con¬tract law,has been defined as an inducement to contract,but the definition is subject to many qualifications and explanations. First - year law students in the United States may spend several weeks trying to answer that question. In a contract negotiation, should an international attorney be concerned about a clause which claims that a contract is been made for" good and valuable consideration,receipt of which is hereby acknowledged" by the other party?