Purpose and Perspective of Chapter 3 - International Law

The purpose of this chapter is to understand the sources of international law, the various actors, and the differing legal traditions around the world.

Chapter 3 - Objectives

The following objectives are addressed in this chapter:

Describe the concept of sovereignty and its implications for conducting business transactions.
Identify sources of international law.
Summarize international dispute resolution procedures.
Describe the role of international organizations in providing regulation and governance.
Describe the doctrine of sovereign immunity.
Compare the principle of comity and the act of state doctrine.
Identify forms of multinational enterprises related to international law.
Describe the legal mechanisms associated with exporting, importing, manufacturing, and expropriation.
Summarize investment protections for businesses that invest in foreign nations.
Describe the role and purpose of trade barriers.
Explain how U.S. laws differ from international laws.
Describe how the CISG applies to international contracts.

Key Terms

Public international law: Rules and norms governing relationships among states and international organizations

Private international law: International rules and standards applying to cross-border commerce

Treaty: A binding agreement between two or more states or international organizations that establishes their duties to each other

Customary international law: International rules that have become binding through a pattern of consistent, longstanding behavior

Jus cogens: A fundamental legal principle that cannot be changed by custom or practice

Comity: The deference countries choose to give to each other’s laws and judgments

Sovereignty: A country’s absolute authority to rule its people and its territory

Foreign Sovereign Immunities Act (FSIA): A U.S. statute that provides that American courts generally cannot entertain suits against foreign governments

Reparations: The amends states must make to one another after a breach of international law

Regional trade agreements (RTAs): Treaties that reduce trade restrictions and promote common policies among member nations

Nongovernmental organization (NGO): An entity not affiliated with any government that is formed to provide services and advocacy on a range of issues

Intergovernmental organization (IGO): A supranational entity of states established by treaty

Tariff: A tax on an imported good, often for the purpose of protecting domestic competitors

Most favored nation: A treaty clause requiring members to treat each other equally

National treatment: The principle of nondiscrimination between foreigners and locals

World Trade Organization (WTO): An international organization whose mandate is to lower trade barriers

Legal system: A country’s framework for interpreting and enforcing its law

Stare decisis: The principle that legal conclusions must be reached after an analysis of past judgments

Gharar: The Islamic prohibition on risk and deception

Extraterritoriality: The power of one country’s laws to reach activities outside of its borders

Foreign recognition: Means that a foreign judgment has legal validity in another country

Foreign enforcement: Means that the court system of a country will assist in enforcing or collecting on the verdict awarded by a foreign court

Arbitration: A binding form of private dispute resolution

New York Convention: Widely accepted treaty on the court enforcement of arbitral awards