Module III·Article IV·~2 min read
International Commercial Contracts
Contract Law
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Features of International Transactions
An international contract is more complex than a national one: the parties are in different legal systems, speak different languages, and use different business practices. Key issues: applicable law, language, currency, dispute resolution, sanctions, and export control.
UNIDROIT Principles
The UNIDROIT Principles of International Commercial Contracts (PICC) are an unofficial code of international contract law developed by the International Institute for the Unification of Private Law. The parties may choose them as the applicable law. They are distinguished by their balance and independence from national systems.
CISG: United Nations Convention on Contracts for the International Sale of Goods
The United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) has been ratified by 95 countries, including Russia, most EU countries, the USA, and China. It applies automatically to contracts between parties from participant countries unless otherwise provided in the agreement. Parties may exclude the CISG.
CISG covers: contract conclusion (offer, acceptance), rights and obligations of the parties, remedies for breach, risk transfer. Does not cover: validity of the contract, property rights, torts.
Currency Risks and Clauses
For long-term contracts (construction, supplies), it is important to manage currency risk. Tools: linking the price to a hard currency (USD/EUR), currency clauses (price adjustment in case of exchange rate changes), hedging with forward contracts.
Sanctions Compliance
Since 2022, sanctions risk has become critically important for Russian business. Key sanctions regimes: OFAC (USA), EU Sanctions, UK Sanctions. Companies must: screen counterparties against sanctions lists (SDN List), control cross-border transactions, monitor dual-use goods (export control).
Practical Assignment
A Russian company wishes to conclude a contract for the supply of equipment with a German manufacturer for the amount of 2 million euros. Develop the structure of an international sales contract: (1) Applicable law and jurisdiction, (2) Delivery basis according to INCOTERMS, (3) Currency and pricing clauses, (4) Force majeure, (5) Sanctions clause.
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