Article by Franco Ferrari
Although the trend towards a world-wide harmonization of trade law is at least one hundred years old, as confirmed, for instance, by the fact that in 1993 the Hague Conference on Private International Law celebrated the one hundred years anniversary of its first session, this tendency characterizes mainly the latter half of the twentieth century. Indeed, it is in this century that “[t]he globalization of most national economies has resulted in a dramatic increase in transnational commerce” and, consequently, in the increasing need for a correspondent legislative policy designed to regulate such transnational commerce. In other words, there appears to be an increased need for a body of law governing business transactions linked to a plurality of legal systems. International trade has traditionally been “hindered by a myriad of distinct domestic laws”; therefore, the law of international commercial contracts was necessary to “reduce the impact of national boundaries,” “the international merchants and traders worst enemy.”
Thus, there has been a continuing effort to promote international trade through the unification and harmonization of international commercial law. In order to achieve this goal, two principal techniques have been adopted: unification of rules of private international law (i.e. choice-of-law rules) and unification or harmonization of substantive rules. Unification of rules of private international law allows a business entity to enter a contract with a foreign corporation with the assurance that no matter what forum is chosen for an action, the same substantive law will apply. However, “when the substantive legal rules themselves are made uniform, on the other hand, the business is assured further that courts will apply the same legal rules no matter where the parties litigate the dispute.”
There has long been disagreement among legal scholars as to which technique is preferable. However today, there appears to be a tendency favoring the harmonization of the latter technique, even though the unification of the choice-of-law rules may prove advantageous from certain points of view.
Aside from the technique chosen, the efforts towards unification have usually taken only one form: “the form of binding instruments, be it supranational legislation, international conventions or model laws.” But this form is not the only one these efforts can take, as confirmed by the “Principles of International Commercial Contracts” (UNIDROIT Principles) drafted by the International Institute for the Unification of Private Law (UNIDROIT), one of several permanent institutions that prepare legal texts providing uniform substantive rules.
About the Author
Franco Ferrari. Professor of Comparative Private Law, Tilburg University Faculty of Law, Tilburg, The Netherlands. J.D., Bologna, Italy; LL.M., Augsburg, Germany.
Citation
69 Tul. L. Rev. 1225 (1995)