Internationally Laws of USA are very much influenced by

Internationally the preferred governing law for business
transactions is “English Law”. It has been prevailing all over the world
because it has well established and well developed reputable jurisprudence.

Historical evidence of
English Law, it connects to the period of British Empire, which was one of the
largest empires in history in conjunction
with French Empire. The former colonies had established their legal systems as
a legacy of the English Law. The System
of Common law has been retained till date
by several British colonies; it has been used by
respective courts as a  source of
interpretation, guidance, rules and
input, they refer to the judgments of the higher courts of England and Wales notably Privy Council for giving decisions or
new and unusual issues. In the same manner
the English court also seeks assistance
from the judgments of court and other jurisdictions of universal laws to consider issues as and when arises. Laws of USA
are very much influenced by “English Common law system”.

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Historically, the lasting legacy of international law is based on
the “East India Company”. The Royal Charter
of 1600 is the foundation stone of “English Joint –Stock company to commence trade with East India and China and
Indian Subcontinent. On behalf of English merchant the QueenElizabeth, I exercised her sovereign
power and treasury fund to establish trade
by creating the first-ever joint-stock
corporation, which contained investors
holding shares in the company. Base on some
shares the company was providing them profit and dividend. The liability of the investors of East India Company
was also limited by Queen Elizabeth due to making English joint-stock
company as world’s first largest “limited liability corporation”. Which granted protection to the money of the investors
against their initial investments. As a result,
if the company went in a loss the
outstanding debts were not divided among investors. Hence, a prototype was
established for modern corporations as we practice nowadays by Queen Elizabeth
by granting a charter to the East India
Company.  

The high quality of UK law firms,
judges, barristers, the reputation of
judges and their experiences, as well as the independence of the judiciary, strengthened English laws.
Individuals and businesses are given access to justices through HM courts and
services of tribunals which tends to administer the work of the courts.   The matters of financial conflicts, rights of employment,
family laws, administrative laws, are dealt with “magistrates of courts,
Country Court, Crown and FAMILY courts as well as the Royal court of justices”.

The arbitration claims, issues of
banking and commercial services, commercial agencies, matters of insurance,
trade, contracts and business documents professional and business disputes as
well as financial conflicts are dealt by the “Mercantile court”. The English
Law also received fame due to the provision
of relative and speedy justices regarding commercial disputes. The primary principle of judicial independence of UK constitution is based upon the careful selection, impartiality and experiences
of English law judges and their professional skills in dealing complex cases.
UK government do not pressurise judges to
get a judgment of their interest, as well
as judges, have been empowered to give
decisions according to their judgments. The judicial Appointment commission makes appointment for judges on merit bases
condition to having no political influence for holding the judicial office. Therefore,
they are not pressurised and influenced
by politicians or any other external forces in deciding cases, or maintaining
integrity and independence of English courts.

Hence, English Law dominates
many sectors such as “international commercial contracts, financing, banking,
maritime and shipping, mergers in
acquisitions disputes and international arbitration”. Indeed, it has four
interrelated characteristics. Firstly, it is “pragmatic” commercial law is all
about getting things done, solving issues1. It tends to deal with
meeting the legitimate requirements of the market,
formulating contract structures and many legal tools. Secondly, it is “responsive”. It provides a body of rules
developed in response to commerce needs. According to Professor Goodee, “the totality of laws with regards to
mercantile conflicts are represented by commercial law.2, he further indicated that
trading is impossible without commercial laws. Thirdly, the role of commercial
law is to facilitate the efficient operations of transactions rather than emphasising upon the content and forms of
transactions. Lastly, they are “consequentialist” rather than “normative”.
Commercial laws are said to be consequentialist because it provides determinate results without concerning
that would it be achieved or not. Indeed these four characteristics are the
caricature of commercial laws, and each
of them is debatable because in few cases
perceptions are different from interpreting in
the process of decision making, for example, the interpretation of facilitating
rule and mandate is not very clear.3 It is mentioned by Ayres et al., (1989) “How do we categories a
rule that says ‘there must be an offer by one party and acceptance of that
offer by another party for a contract to
be enforceable”. Besides, there are other key contemporary developments such as
apprehensions about normative queries about “fairness and good faith”.

Moreover, the perspective to define contemporary
commercial law is the evaluation of the historical origin of commercial law. Researchers
believe that ancient laws which tend to govern merchants and traders’ disputes
and practices formerly “credited or borrowed, absorbed and incorporated by
common law” which was initiated in the 17th century.4  Hence, it laid down the foundation of current
modern commercial law.5 It is described by John Braithwaite and Peter Drahos, (2000) that the extraordinary evidence of transcontinental
private rule is “Medieval Lex Mercatoria”. These laws were formulated by
merchants and established policies to
regulate commercial relations. In the domain of commercial life, the role of the court was to operate in a
declarative model.6

Significantly, the law merchant was applied internationally
due to its’ composition, the ability of
adaptability, flexibility and freedom from technical rules of evidence and procedure. According to Gunther and Teubner,
(1983) the merchant law comprised of broader principles which possess the
potential of changing their application case to case. Indeed it is more about the law
of values rather than the law of rules
and structures and procedure.7 Thus, the most important
feature is the “commitment to good faith” which is the superseding need of
making agreements.8

In recent years, globally, the commercial lawyer’s emphasis upon the idea of good faith
principles rather than rules though there are conflicts with regards to
contemporary consequence. Hence all these features are useful to comprehend the
meaning of commercial law.

In the 19th century, the lawyers
laid down importance upon the role and significance of commercial law , the
research of Ferguson’s revealed that lawyers were the driving force behind
raising the concerns with perspective of the interest of “men of business”. 9 in 1889
the barrister responsible for the “Bills of Exchange Act 1882, the Sale of Good
Acts 1893, and the Marine insurance Act 1906 , Mr. Mackenzie D Chalmers
augmented that mercantile laws are not meant for lawyers, though they are made
by lawyers or laymen to regulate the conduct of business with relation to rules
mentioned by the law.10 The categorisation was made to provide legal
certainty to people in business and
support them to refrain from litigation11.

Briefly, speaking the “commercial law codes were commercial
laws for commercial lawyers”. Thus the closer examination of history reveals
that the relationship between commercial law and commercial practices should be
explained cautiously and in a simple framework.
Thus, it could be assumed that complex
series of modifications and connections among self-regulation of commerce and
law of mercatoria is revealed in the history of regulation of commercial activity.
Nevertheless, nowadays the commercial law is perceived as important and practical
meaning it is the law for getting things done. Cranston
observes, it is the vital concerns for researchers of commercial law and
also the practitioners required to investigate it.12, it is also believed that
it has no relevance for practitioners and it is also
noticed that leading law agencies
judging through their websites13 are not using the term
“commercial law” to define the services offered by them although they use the specialisations
attached to commercial law such as banking and finance or competition law”.
Hence, it seems to be the matter of academics and needs to expand to the
element of the diminishing capacity of cross-pollination among the categories of
commercial law.14

Risk factors

There are various wide categories of commercial
contract risks such as

“Liability risk; breach of contract issues; claims;
problems of warranty; terminations; intellectual property breach charges,
supposed confidentiality disclosures, disputes and allegations.”

The international and
English courts concentrated upon “tort law and warranted the potential liability of successor corporations primarily by the desirability of spreading the risk of accidents” while considering the issue of
successor liability as a matter of corporate or commercial law.15

Traditionally, the contractual
expectation is perceived as promises made
for receiving the benefits. The operational standards of good faith performance
are based upon the costs perspectives
articulated in the jurisdiction of common law. The perspective of good faith
could be implemented when one party
workout the discretion in performance and another party controls the projected
benefit the risk arises when discretion is used in bad faith to recapture the
predetermined opportunities.16

Another risk factor is revelations of
supposed confidentiality leads to an information
leak. Companies implement
innovations and inventions which serves as legal protection against copying inventions because they are not protected by
charters and copyrights because their process involves
to the public and may disclose the
information, and as a result, a company would not be able to defend the intellectual
property. unlawful if it is related to the acquisition of the investment that is relevant to the jurisdiction of
the tribunal; un        lawful conduct ex-post the establishment of investment is instead a question for the
admissibility.” However some tribunals deny jurisdiction after finding
establishment illegality (Fraport I, II, Metal-Tech Ltd. v. the Republic of Uzbekistan), other tribunals find such claims inadmissible (Plama v.
Bulgaria, World Duty-Free v. The
Republic of Kenya, SGS v. Republic of the Philippines

Breach of international law jurisdiction is and another
issue. Investment treaties are meant to encourage and protect foreign investors,
but mostly they are not respected.
Nevertheless, many investment treaty cases have ruled that foreign investment
by foreign national in host countries not be
protected in front of investment arbitration tribunals. It has been debated that whether the illegal considerations are the issue of
jurisdiction, the research reveals that it is
considered

Moreover, in the era of globalised
business, industries are commissioned to select governing law for cross-border business contracts. English law is
mainly preferred because they are adaptable to allow and implement limitations
of the “cause of liability, waivers of consequential loss, liquidation of
assumed damages, time and procedural bars on claims”. Further, clauses of
“knock to knock” and pay when paid” are favourable
elements to choose English Law.17

The BERTIX incidence
also did not have a negative impact on
the England and Wales jurisdiction, specifically related to international
commercial contracts as mentioned by “Law Society of England and Wales”.18 It has not been
affected by EU law because it is formulated on the perimeters of global
standards and derived from common law as well as the flexibility of English
contract law enable the contract to be adapted therefore it does not tend to have any commercial risk. The
bottom line is that English solicitors, law agencies and judges are the best in
the world and English contract law is being used internationally because it offers “certainty, stability and
predictability.19
 

Moreover, the sanctions imposed by EU
are ambiguous, but it lays major
obligations on commercial entities with relation to compliances and might
affect the performance of existing contracts, workable limits etc. are a matter
of risk for firms. However, the UK’s new office of “Foreign Sanctions
Implementations” is providing a high level of quality services to the private sector but it cannot eliminate the risk which is
imposed through EU sanctions. It is essential
to consider the element of risk of sanctions under below-mentioned aspects

·        
Risk of breaching sanctions

·        
Signing a contract because of connected to the current breach
of sanctions

·        
Risk imposed or extended due to sanctions to an extent to interfere with the parties
potential to operate as per original commitments mentioned in the contract;

·        
Change in status is also a risk which is a result of
sanctions although it was not indicated
in the original contract before
sanctions.  

Frustration is another doctrine of the risk factor; the contract can come to an end if
the contractual parties are unable to oblige
to the commitments made in the contract,
or are incapable of delivering because of
unfavourable circumstances.20 Dependency on frustration
and illegality may refrain the contractual, parties to avoid liability caused due to a breach
of contract resulted from the imposition
of sanctions.

Conclusion

English law is predictable
and transparent; it provides freedom of contract,
a pro-business approach. There is no implied rule of duty of good faith in
commercial law, unlike other jurisdictions. According to English law, a “duty of faith requires neither party to take advantage of the other”. In the context of foreign investors agreements, the parties are obliged to inform
each other the fundamental aspects and
rules if the parties are unable to comprehend. Hence, the law bound both
parties to be reasonably persistence about
contractual obligations and observe moral and ethical behaviours as mentioned in the contract.

1 .
Ziegel, “The Future of Commercial Law in Canada” (1986) 20 University of British Columbia Law Review 1 at 2.

 

2
Ibid at 8; and also Goode, above n.33, at
23)

3 Ayres,
I., & Gertner, R. (1989). Filling gaps in incomplete contracts: An economic
theory of default rules. The Yale Law Journal, 99(1),
87-130.

4 L.
Trakman, The Law Merchant: The Evolution
of Commercial Law (1983, Rothman & Co., Colorado)

5
Giles, above n.4, at
16; Goode, above n.33, at
3-6; and W. S. Holdsworth, A History of
English Law, vol. 1 (1969 ed., Sweet & Maxwell, London) at pp. 569-572.

 

6 Braithwaite,
J., & Drahos, P. (2000). Global business regulation. Cambridge
university press.

7 Teubner,
G. (1983). Substantive and reflexive elements in modern law. Law and
society review, 239-285.

8 Trakman,
L. E. (1983). The law merchant: the evolution of commercial law. William
S. Hein & Co., Inc..

9 R.
Ferguson, “Legal Ideology and Commercial Interests: The Social Origins of the
Commercial Law Codes” (1977) 4 British
Jnl of Law and Society 18.

 

10 Chalmers,
B. D., Mackenzie, C. A., & Kapoor, K. K. (1989). U.S. Patent No. 4,890,174.
Washington, DC: U.S. Patent and Trademark Office.

11 Starr,
C. (1969). Social benefit versus technological risk. Science,
1232-1238.

12 Gullan,
P. J., & Cranston, P. S. (2014). The insects: an outline of
entomology. John Wiley & Sons.

13 Bai,
B., Law, R., & Wen, I. (2008). The impact of website quality on customer
satisfaction and purchase intentions: Evidence from Chinese online
visitors. International journal of hospitality management, 27(3),
391-402.

14 Shapiro,
S. (1991). Foundations without foundationalism: A case for second-order
logic (Vol. 17). Clarendon Press.

15 Gilson,
R. J. (1986). The law and finance of corporate acquisitions.
Foundation Pr.

16 Teubner,
G. (1998). Legal irritants: good faith in British law or how unifying law ends
up in new divergencies. The Modern Law Review, 61(1),
11-32.

17 ?????,
?. ?., & ?????, ?. ?. (2015). A Step To Perfection (Part II).

18 Crawford,
A. (2005). Plural policing: The mixed economy of visible patrols in
England and Wales. Policy Press.

19 Andrews,
R., & Martin, S. (2010). Regional variations in public service outcomes:
the impact of policy divergence in England, Scotland and Wales. Regional
Studies, 44(8), 919-934.

20 Posner,
R. A., & Rosenfield, A. M. (1977). Impossibility and related doctrines in
contract law: An economic analysis. The Journal of Legal Studies, 6(1),
83-118.

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