International Commercial Law Soft Law University of Oslo Giuditta Cordero Moss, Ph.D., Dr.Juris Prof.ass., International Commercial Law, Oslo University

”Soft Law” A set of rules regulating international transactions Does not emanate from national sources of law or international treaties

”Soft Law”- Grounds in Favour National law is primarily aimed at regulating domestic relationships National laws differ from one another National laws are confusing and an hindrance for international trade International commercial usages and practices are more adequate to regulate transactions across national borders

”Soft Law” – Grounds against Not a system but a fragmentary collection of rules Rules are too vague Rules are difficult to determine Rules are not issued by competent authorities

Sources of ”Soft Law” ”Principles rooted in the good sense and common practice of the generality of civilised nations” Usages and practices Model Laws –E.g. UNCITRAL Model Arbitration Law Private Codifications –E.g. INCOTERMS, UCP 500 Restatements –E.g. UNIDROIT Principles, European Principles

International Conventions - Sources of Soft Law? If they are applicable, they are not soft law but applicable law If they are not applicable: Can soft law achieve application of convention in lieu of ratification?

Private Codifications International Chamber of Commerce, ISDA, branch associations INCOTERMS, UCP 500, Model Agreements, Codes, Definitions May be considered as expression of trade practices Are applicable if incorporated by the parties May not prevail over conflicting madatory rules of the applicable law Have a clearly determined scope of application

INCOTERMS Terms of sale: –Passage of risk –Division of costs –Obligations in connection with delivery (customs formalities, transportation, etc.) Integration of applicable law (e.g. Art. 66 CISG- Incoterms are not in contradiction, are specification of when risk passes) Do not replace applicable law (e.g. Validity, Limitation, Interests, Remedies, etc.)

UNIDROIT Principles of International Commercial Contracts Drafted in 1994 by the International Institute for the Unification of Private Law Establish a balanced set of rules designed for use throughout the world No binding effect Persuasive authority

UNIDROIT- Irrevocable Offer Art. 2.4: An offer cannot be revoked if it indicates that it is irrevocable (by fixing a time for acceptance or otherwise).

UNIDROIT – Definition of Force Majeure Art : non-performance excused if due to an impediment beyond the party’s control and that could not be expected to be foreseen or avoided

UNIDROIT- Partial Impediment Not regulated

UNIDROIT- Amendments to a contract Art. 1.3: Contract may be modified in accordance with its terms or by agreement

Application of UNIDROIT Principles As an integral part of the contract, if they have been incorporated by the parties –Not applicable if contrast with mandatory governing law (art. 1.4) As an expression of trade uses, if they have not been incorporated –To corroborate governing law –Rarely as an independent source of law

”Soft Law” – Scope of Application Soft law is mostly compatible with national laws Soft law is a desirable integration of national law If conflict, the applicable national law prevails