The Lex Mercatoria can be translated into English as the ‘Mercantile law’ which was a law that was mostly used by the early merchants as they carried out their trading activities. This law harmonized the laws of the different nations to come up with a single law that governs international commercial disputes (breach of contracts) and also help the parties involved to avoid the disparities of the different parties’ countries laws.
This is because application of a country’s national law in cases of international commercial disputes has not always been appealing as it results in conflict in commercial legal dispute settlements. The best and the most appropriate approach to such disputed is the application of commercial laws to specific international transactions (Lex Mercatoria). It is a common law for the international commercial contracts disputes.
The United Nations Convention for Contracts on International Sale of Goods (CISG) is an international trade agreement. This agreement came into being in January 1988 after it was ratified by 11 countries. This is an agreement that has been ratified by about 77 countries most of who are engaged in international trade. It is a way of offering and providing a uniform platform for the settlement of international legal disputes. It provides common rules on which drafting of international sales contracts should be based thereby eliminating the difficulties and making the settlement of disputes easier.
This agreement helps to define the legal rights of both the buyer and the seller of goods and the services under international contracts. This law however is only applicable to sales contracts between the countries that have ratified and are privy to this convection. This law helps to prevent those parties that are involved in the export trade from choosing specific laws in commercial disputes as it provides substantial principles on which parties engaged in international contracts should follow their various courts in different nations as well as those which the arbitrators may rely on.
United Nations Commission on International Trade Law was established by the General Assembly on December 1966. The assembly set the commission which would play a vital role in the elimination of obstacles such as different laws in different countries that hindered international trade. The assembly allowed this commission to enhance the harmonization of the different laws and to ensure that the international trade laws were uniform in all the countries involved in export.
Today, the commission is the core body charged with the responsibility of the international commercial laws by the United Nation. This body also ensures that the existing, international as well as the uniform laws are accepted in the different countries.
Letter of Credit (LOC)
A Letter of Credit (LOC) is a promise, that is, a contract agreement between the issuing bank (buyers bank) confirming to another bank (sellers bank) that payment of the goods and the services sold will be met if all the conditions in the letter of credit are met. The parties involved in the letter of credit (the banks) deal with the documents and not the goods.
The banks responsibility is to examine all the documents involved in the transactions and to ensure that they meet the conditions stated in the letter of credit. If the bank is satisfied that all the conditions are met, then it authorizes payment to the seller. They are mostly used in international transactions as the bank in this case acts as an uninterested party in the transaction and therefore can be trusted by both parties.
Bill of Lading
A bill of lading is a document used in the international trade that is issued by the carrier (transportation or shipping company) to the shipper (the person carrying the goods). In the document the company acknowledges that indeed it has received the goods for shipment, indicates the vessel that is going to carry the goods, the destination of the goods, and the incortems (international trade terms) provided for the shipment of goods to the destination, for example, the particular place of delivery as well as a brief description of the goods being shipped, their weight and other shipment details.
A freight forwarder acts as an intermediary. He acts as a link between the importers and the exporters of the goods and services. Freight forwarders organize safe and efficient delivery of goods and services, sometimes deliver the goods themselves or outsource the transport services. They consider the type of goods and the requirements of the customers as far as the delivery of goods are concerned prior to the shipment.
An exporter is a businessperson who transports goods or services outside the geographical boundaries of his/her country. An Importer on the other hand is a person or agent involved in the sourcing of goods outside his/her country (especially from a foreign country).
WTO (World Trade Organization)
This is an organization that is primarily concerned with the rules that govern trade from a global perspective. The main function of this organization is to ensure that trade across the globe is conducted in a smooth and predictable way. The WTO provides a platform on which international trade agreements are based as well as a mechanism for dispute resolution
Association of Southeast Asian Nations (ASEAN) is International organization that was established by a declaration in Bangkok in 1967. This treaty was established with the sole aim of enhancing cooperation, economic as well as stability within the different nations as far as banking, trade, agricultural activities and the tourism industry was concerned
Caux Round Table Principles
The Caux Round Table (CRT) stipulates the principles that the business leaders world wide should follow in an effort to promote ethical behavior in their dealings. The CRT principles were developed in 1964 as leaders believed that the business community around the globe can be instrumental in the improvement of both economic and social issues.
The principles lay down by the leaders in the Caux Table acts as a standard within which behaviors of the businesses across the globe can be benchmarked. These principles are founded on the basis of two main principles, that is, Kyosei (enhancement of all parties’ progression and the existence of healthy competition) and Human dignity (Valuing of parties involved in commercial deals as an end rather than a means).
ESSAY #1 RISK OF LOSS
FOB Place of Shipment
Free on Board Place of Shipment is an International Trade Commerce Term (Inco term) that stipulates that the seller bears all the risks and the costs associated with the shipment of goods to the specified carrier. This contractual term is mostly used in cases of heavy goods. The risk of loss and damage to the goods under this term passes from the buyer to the seller when the goods are delivered to the specified carrier.
FOB Place of Destination
This is a contract that deals with the shipment of goods and that stipulates that the seller of the goods and services bears all he risks associated with the goods while in transit and is therefore responsible for any loss or damage that may arise during their transportation until they are actually delivered to the buyer. The risk passes to the buyer when the goods are delivered to him/her.
CIF (Cost Insurance and Freight) means that the buyer bears the responsibility of paying all the shipment expenses up to the ship which will carry the goods, the insurance of the cargo or goods as well as the cost of transporting these goods (freight charges) to the place where the cargo is destined. Here, the risk passes to the buyer when the goods are delivered to the specified carrier.
Cost and Freight(C&F) means that the price that the buyer is to pay for goods and services paid in an international transaction is excusive of the cost of the insurance of the goods as well as the cost of transporting them to the specific destination(freight charges). This means that under this term, the seller bears the responsibility of insuring the goods as well as their transportation to the buyers place. The responsibility of loss to the goods or damages is however passed on to the buyer when the goods pass the ships rail at the port at which the goods are being shipped.
What is meant by Blood Diamonds or Conflict Diamonds?
Blood or conflict diamond refers to diamond sold especially in African countries and that was used to fund illegitimate activities. Conflict diamonds are diamonds that ignite conflicts and wars especially in the African countries leading to the death as well as displacement of millions of people in the countries involved.
How, as portrayed in the video, does it impact on political, economic and ethical stability?
In the political aspect, the mining as well as the trading of the blood diamond has led to conflicts especially in Africa. Economically, the countries involved have experienced bans from the importing countries of their exportation of the diamond thereby hindering any economic gain from its sale. The ethical stability of the country was undermined as money laundering was common in the blood diamond trade.
What is the Kimberly Process?
This is a certification scheme that contains the legal origin of the diamond on sale. Prior to the Kimberly Process, the importers of the diamond were only required to present a certificate which had no legal implication of the origin of the diamond. The Kimberly Process aims at the prevention of blood diamond from flowing or trading in the international market.
Where the U.S. buys 70% of the diamonds in the world, what is the Clean Diamond Trade Act (CDTA) attempting to do?
The CDTA was a legislation that was signed into law by George .W. Bush in 2003 in the United States. The aim of this law was to stop the illegal trade of conflict diamond that was being used to fund conflict in the African countries. The CDTA states that all the retailers in the US are supposed to buy diamond from the manufacturers who have the right documentation as pertains to the legal origin of the diamond under purchase and that verify that the diamond was sourced through lawful channels. This was an effort to control the trade of rough diamond in the US which consumes almost 70% of the world’s diamond.
What role did child-soldiers play in this conflict?
Children especially in Sierra Leone played a crucial role in the civil war that was experienced in the country between 1991 and 2001. There were about 10,000 children who were recruited to assist in the conflict at that time. They fought in the government forces where they were also recruited besides the illegal groups engaged in the conflict. Here, they were used as massagers, spies or even servants of the senior soldiers besides engaging in the war. Most of them agreed to fight as they were in search of food and water which was being provided in the ‘army’. The children were a preference because they hardly asked many questions especially under the influence of drugs which they were given or injected.