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+% SiSU 2.0
+
+@title: Revisiting the Autonomous Contract
+ :subtitle: Transnational contract law, trends and supportive structures
+
+@creator:
+ :author: Amissah, Ralph
+
+@date:
+ :published: 2000-08-27
+
+@rights:
+ :copyright: Copyright (C) Ralph Amissah
+
+@classify:
+ :topic_register: SiSU markup sample:article;law:international:commercial arbitration|uniform law|harmonization;private law;arbitration:international commercial
+ :subject: international contracts, international commercial arbitration, private international law
+
+@make:
+ :italics: /CISG|PICC|PECL|UNCITRAL|UNIDROIT|lex mercatoria|pacta sunt servanda|caveat subscriptor|ex aequo et bono|amiable compositeur|ad hoc/i
+ :num_top: 1
+% :omit: minitoc
+
+% (Draft 0.90 - 2000-08-27)
+
+:A~ @title @author~{* Ralph Amissah is a Fellow of Pace University, Institute for International Commercial Law. http://www.cisg.law.pace.edu/ \\ RA lectured on the private law aspects of international trade whilst at the Law Faculty of the University of Tromsø, Norway. http://www.jus.uit.no/ \\ RA built the first web site related to international trade law, now known as lexmercatoria.org and described as "an (international | transnational) commercial law and e-commerce infrastructure monitor". http://lexmercatoria.org/ \\ RA is interested in the law, technology, commerce nexus. RA works with the law firm Amissahs. \\ /{[This is a draft document and subject to change.]}/ \\ All errors are very much my own. \\ ralph@amissah.com }~
+
+1~ Reinforcing trends: borderless technologies, global economy, transnational legal solutions?
+
+Revisiting the Autonomous Contract~{ /{The Autonomous Contract: Reflecting the
+borderless electronic-commercial environment in contracting}/ was published in
+/{Elektronisk handel - rettslige aspekter, Nordisk årsbok i rettsinformatikk
+1997}/ (Electronic Commerce - Legal Aspects. The Nordic yearbook for Legal
+Informatics 1997) Edited by Randi Punsvik, or at
+http://www.jus.uio.no/lm/the.autonomous.contract.07.10.1997.amissah/doc.html }~
+
+Globalisation is to be observed as a trend intrinsic to the world economy.~{ As
+Maria Cattaui Livanos suggests in /{The global economy - an opportunity to be
+seized}/ in /{Business World}/ the Electronic magazine of the International
+Chamber of Commerce (Paris, July 1997) at
+http://www.iccwbo.org/html/globalec.htm \\ "Globalization is unstoppable. Even
+though it may be only in its early stages, it is already intrinsic to the world
+economy. We have to live with it, recognize its advantages and learn to manage
+it. \\ That imperative applies to governments, who would be unwise to attempt
+to stem the tide for reasons of political expediency. It also goes for
+companies of all sizes, who must now compete on global markets and learn to
+adjust their strategies accordingly, seizing the opportunities that
+globalization offers."}~ Rudimentary economics explains this runaway process,
+as being driven by competition within the business community to achieve
+efficient production, and to reach and extend available markets.~{To remain
+successful, being in competition, the business community is compelled to take
+advantage of the opportunities provided by globalisation.}~ Technological
+advancement particularly in transport and communications has historically
+played a fundamental role in the furtherance of international commerce, with
+the Net, technology's latest spatio-temporally transforming offering, linchpin
+of the "new-economy", extending exponentially the global reach of the business
+community. The Net covers much of the essence of international commerce
+providing an instantaneous, low cost, convergent, global and borderless:
+information centre, marketplace and channel for communications, payments and
+the delivery of services and intellectual property. The sale of goods, however,
+involves the separate element of their physical delivery. The Net has raised a
+plethora of questions and has frequently offered solutions. The increased
+transparency of borders arising from the Net's ubiquitous nature results in an
+increased demand for the transparency of operation. As economic activities
+become increasingly global, to reduce transaction costs, there is a strong
+incentive for the "law" that provides for them, to do so in a similar
+dimension. The appeal of transnational legal solutions lies in the potential
+reduction in complexity, more widely dispersed expertise, and resulting
+increased transaction efficiency. The Net reflexively offers possibilities for
+the development of transnational legal solutions, having in a similar vein
+transformed the possibilities for the promulgation of texts, the sharing of
+ideas and collaborative ventures. There are however, likely to be tensions
+within the legal community protecting entrenched practices against that which
+is new, (both in law and technology) and the business community's goal to
+reduce transaction costs.
+
+Within commercial law an analysis of law and economics may assist in developing
+a better understanding of the relationship between commercial law and the
+commercial sector it serves.~{ Realists would contend that law is contextual
+and best understood by exploring the interrelationships between law and the
+other social sciences, such as sociology, psychology, political science, and
+economics.}~ "...[T]he importance of the interrelations between law and
+economics can be seen in the twin facts that legal change is often a function
+of economic ideas and conditions, which necessitate and/or generate demands for
+legal change, and that economic change is often governed by legal change."~{
+Part of a section cited in Mercuro and Steven G. Medema, /{Economics and the
+Law: from Posner to Post-Modernism}/ (Princeton, 1997) p. 11, with reference to
+Karl N. Llewellyn The Effect of Legal Institutions upon Economics, American
+Economic Review 15 (December 1925) pp 655-683, Mark M. Litchman Economics, the
+Basis of Law, American Law Review 61 (May-June 1927) pp 357-387, and W. S.
+Holdsworth A Neglected Aspect of the Relations between Economic and Legal
+History, Economic History Review 1 (January 1927-1928) pp 114-123.}~ In doing
+so, however, it is important to be aware that there are several competing
+schools of law and economics, with different perspectives, levels of
+abstraction, and analytical consequences of and for the world that they
+model.~{ For a good introduction see Nicholas Mercuro and Steven G. Medema,
+/{Economics and the Law: from Posner to Post-Modernism}/ (Princeton, 1997).
+These include: Chicago law and economics (New law and economics); New Haven
+School of law and economics; Public Choice Theory; Institutional law and
+economics; Neoinstitutional law and economics; Critical Legal Studies.}~
+
+Where there is rapid interrelated structural change with resulting new
+features, rather than concentrate on traditionally established tectonic plates
+of a discipline, it is necessary to understand underlying currents and concepts
+at their intersections, (rather than expositions of history~{ Case overstated,
+but this is an essential point. It is not be helpful to be overly tied to the
+past. It is necessary to be able to look ahead and explore new solutions, and
+be aware of the implications of "complexity" (as to to the relevance of past
+circumstances to the present). }~), is the key to commencing meaningful
+discussions and developing solutions for the resulting issues.~{ The majority
+of which are beyond the scope of this paper. Examples include: encryption and
+privacy for commercial purposes; digital signatures; symbolic ownership;
+electronic intellectual property rights.}~ Interrelated developments are more
+meaningfully understood through interdisciplinary study, as this instance
+suggests, of the law, commerce/economics, and technology nexus. In advocating
+this approach, we should also pay heed to the realisation in the sciences, of
+the limits of reductionism in the study of complex systems, as such systems
+feature emergent properties that are not evident if broken down into their
+constituent parts. System complexity exceeds sub-system complexity;
+consequently, the relevant unit for understanding the systems function is the
+system, not its parts.~{ Complexity theory is a branch of mathematics and
+physics that examines non-linear systems in which simple sets of deterministic
+rules can lead to highly complicated results, which cannot be predicted
+accurately. A study of the subject is provided by Nicholas Rescher
+/{Complexity: A Philosophical Overview}/ (New Brunswick, 1998). See also Jack
+Cohen and Ian Stewart, /{The Collapse of Chaos: Discovering Simplicity in a
+Complex World}/ (1994). }~ Simplistic dogma should be abandoned for a
+contextual approach.
+
+1~ Common Property - advocating a common commercial highway
+
+Certain infrastructural underpinnings beneficial to the working of the market
+economy are not best provided by the business community, but by other actors
+including governments. In this paper mention is made for example of the
+/{United Nations Convention on the Recognition and Enforcement of Foreign
+Arbitral Awards}/ (New York, 10 June 1958), which the business community
+regularly relies upon as the back-stop for their international agreements.
+Common property can have an enabling value, the Net, basis for the "new"
+economy, would not be what it is today without much that has been shared on
+this basis, having permitted /{"Metcalf's law"}/~{ Robert Metcalf, founder of
+3Com. }~ to take hold. /{Metcalf's law}/ suggests that the value of a shared
+technology is exponential to its user base. In all likelihood it applies as
+much to transnational contract law, as to technological networks and standards.
+The more people who use a network or standard, the more "valuable" it becomes,
+and the more users it will attract. Key infrastructure should be identified and
+common property solutions where appropriate nurtured, keeping transaction costs
+to a minimum.
+
+The following general perspective is submitted as worthy of consideration (and
+support) by the legal, business and academic communities, and governments.
+*(a)* Abstract goals valuable to a transnational legal infrastructure include,
+certainty and predictability, flexibility, simplicity where possible, and
+neutrality, in the sense of being without perceived "unfairness" in the global
+context of their application. This covers the content of the "laws" themselves
+and the methods used for their interpretation. *(b)* Of law with regard to
+technology, "rules should be technology-neutral (i.e., the rules should neither
+require nor assume a particular technology) and forward looking (i.e., the
+rules should not hinder the use or development of technologies in the
+future)."~{ /{US Framework for Global Electronic Commerce}/ (1997)
+http://www.whitehouse.gov/WH/New/Commerce/ }~ *(c)* Desirable abstract goals in
+developing technological standards and critical technological infrastructure,
+include, choice, and that they should be shared and public or "open" as in
+"open source", and platform and/or program neutral, that is, interoperable. (On
+security, to forestall suggestions to the contrary, popular open source
+software tends to be as secure or more so than proprietary software). *(d)*
+Encryption is an essential part of the mature "new" economy but remains the
+subject of some governments' restriction.~{ The EU is lifting such restriction,
+and the US seems likely to follow suit. }~ The availability of (and possibility
+to develop common transnational standards for) strong encryption is essential
+for commercial security and trust with regard to all manner of Net
+communications and electronic commerce transactions, /{vis-à-vis}/ their
+confidentiality, integrity, authentication, and non-repudiation. That is,
+encryption is the basis for essential commerce related technologies, including
+amongst many others, electronic signatures, electronic payment systems and the
+development of electronic symbols of ownership (such as electronic bills of
+lading). *(e)* As regards the dissemination of primary materials concerning
+"uniform standards" in both the legal and technology domains, "the Net" should
+be used to make them globally available, free. Technology should be similarly
+used where possible to promote the goals outlined under point (a). Naturally,
+as a tempered supporter of the market economy,~{ Caveats extending beyond the
+purview of this paper. It is necessary to be aware that there are other
+overriding interests, global and domestic, that the market economy is ill
+suited to providing for, such as the environment, and possibly key public
+utilities that require long term planning and high investment. It is also
+necessary to continue to be vigilant against that which even if arising as a
+natural consequence of the market economy, has the potential to disturb or
+destroy its function, such as monopolies.}~ proprietary secondary materials and
+technologies do not merit these reservations. Similarly, actors of the market
+economy would take advantage of the common property base of the commercial
+highway.
+
+1~ Modelling the private international commercial law infrastructure
+
+Apart from the study of "laws" or the existing legal infrastructure, there are
+a multitude of players involved in their creation whose efforts may be regarded
+as being in the nature of systems modelling. Of interest to this paper is the
+subset of activity of a few organisations that provide the underpinnings for
+the foundation of a successful transnational contract/sales law. These are not
+amongst the more controversial legal infrastructure modelling activities, and
+represent a small but significant part in simplifying international commerce
+and trade.~{ Look for instance at national customs procedures, and consumer
+protection.}~
+
+Briefly viewing the wider picture, several institutions are involved as
+independent actors in systems modelling of the transnational legal
+infrastructure. Their roles and mandates and the issues they address are
+conceptually different. These include certain United Nations organs and
+affiliates such as the United Nations Commission on International Trade Law
+(UNCITRAL),~{ http://www.uncitral.org/ }~ the World Intellectual Property
+Organisation (WIPO)~{ http://www.wipo.org/ }~ and recently the World Trade
+Organisation (WTO),~{ http://www.wto.org/ }~ along with other institutions such
+as the International Institute for the Unification of Private Law (UNIDROIT),~{
+http://www.unidroit.org/ }~ the International Chamber of Commerce (ICC),~{
+http://www.iccwbo.org/ }~ and the Hague Conference on Private International
+Law.~{ http://www.hcch.net/ }~ They identify areas that would benefit from an
+international or transnational regime and use various tools at their disposal,
+(including: treaties; model laws; conventions; rules and/or principles;
+standard contracts), to develop legislative "solutions" that they hope will be
+subscribed to.
+
+A host of other institutions are involved in providing regional solutions.~{
+such as ASEAN http://www.aseansec.org/ the European Union (EU)
+http://europa.eu.int/ MERCOSUR http://embassy.org/uruguay/econ/mercosur/ and
+North American Free Trade Agreement (NAFTA)
+http://www.nafta-sec-alena.org/english/nafta/ }~ Specialised areas are also
+addressed by appropriately specialised institutions.~{ e.g. large international
+banks; or in the legal community, the Business Section of the International Bar
+Association (IBA) with its membership of lawyers in over 180 countries.
+http://www.ibanet.org/ }~ A result of globalisation is increased competition
+(also) amongst States, which are active players in the process, identifying and
+addressing the needs of their business communities over a wide range of areas
+and managing the suitability to the global economy of their domestic legal,
+economic, technological and educational~{ For a somewhat frightening peek and
+illuminating discussion of the role of education in the global economy as
+implemented by a number of successful States see Joel Spring, /{Education and
+the Rise of the Global Economy}/ (Mahwah, NJ, 1998). }~ infrastructures. The
+role of States remains to identify what domestic structural support they must
+provide to be integrated and competitive in the global economy.
+
+In addition to "traditional" contributors, the technology/commerce/law
+confluence provides new challenges and opportunities, allowing, the emergence
+of important new players within the commercial field, such as Bolero,~{
+http://www.bolero.org/ also http://www.boleroassociation.org/ }~ which, with
+the backing of international banks and ship-owners, offers electronic
+replacements for traditional paper transactions, acting as transaction agents
+for the electronic substitute on behalf of the trading parties. The acceptance
+of the possibility of applying an institutionally offered lex has opened the
+door further for other actors including ad hoc groupings of the business
+community and/or universities to find ways to be engaged and actively
+participate in providing services for themselves and/or others in this domain.
+
+1~ The foundation for transnational private contract law, arbitration
+
+The market economy drive perpetuating economic globalisation is also active in
+the development and choice of transnational legal solutions. The potential
+reward, international sets of contract rules and principles, that can be
+counted on to be consistent and as providing a uniform layer of insulation
+(with minimal reference back to State law) when applied across the landscape of
+a multitude of different municipal legal systems. The business community is
+free to utilise them if available, and if not, to develop them, or seek to have
+them developed.
+
+The kernel for the development of a transnational legal infrastructure
+governing the rights and obligations of private contracting individuals was put
+in place as far back as 1958 by the /{UN Convention on the Recognition and
+Enforcement of Foreign Arbitral Awards}/ (/{"NY Convention on ICA"}/),~{ at
+http://www.jus.uio.no/lm/un.arbitration.recognition.and.enforcement.convention.new.york.1958/
+}~ now in force in over a hundred States. Together with freedom of contract,
+the /{NY Convention on ICA}/ made it possible for commercial parties to develop
+and be governed by their own /{lex}/ in their contractual affairs, should they
+wish to do so, and guaranteed that provided their agreement was based on
+international commercial arbitration (/{"ICA"}/), (and not against relevant
+mandatory law) it would be enforced in all contracting States. This has been
+given further support by various more recent arbitration rules and the
+/{UNCITRAL Model Law on International Commercial Arbitration 1985}/,~{ at
+http://www.jus.uio.no/lm/un.arbitration.model.law.1985/ }~ which now explicitly
+state that rule based solutions independent of national law can be applied in
+/{"ICA"}/.~{ Lando, /{Each Contracting Party Must Act In Accordance with Good
+Faith and Fair Dealing}/ in /{Festskrift til Jan Ramberg}/ (Stockholm, 1997) p.
+575. See also UNIDROIT Principles, Preamble 4 a. Also Arthur Hartkamp, The Use
+of UNIDROIT Principles of International Commercial Contracts by National and
+Supranational Courts (1995) in UNIDROIT Principles: A New Lex Mercatoria?, pp.
+253-260 on p. 255. But see Goode, /{A New International Lex Mercatoria?}/ in
+/{Juridisk Tidskrift}/ (1999-2000 nr 2) p. 256 and 259. }~
+
+/{"ICA"}/ is recognised as the most prevalent means of dispute resolution in
+international commerce. Unlike litigation /{"ICA"}/ survives on its merits as a
+commercial service to provide for the needs of the business community.~{
+/{"ICA"}/ being shaped by market forces and competition adheres more closely to
+the rules of the market economy, responding to its needs and catering for them
+more adequately. }~ It has consequently been more dynamic than national
+judiciaries, in adjusting to the changing requirements of businessmen. Its
+institutions are quicker to adapt and innovate, including the ability to cater
+for transnational contracts. /{"ICA"}/, in taking its mandate from and giving
+effect to the will of the parties, provides them with greater flexibility and
+frees them from many of the limitations of municipal law.~{ As examples of
+this, it seeks to give effect to the parties' agreement upon: the lex
+mercatoria as the law of the contract; the number of, and persons to be
+"adjudicators"; the language of proceedings; the procedural rules to be used,
+and; as to the finality of the decision. }~
+
+In sum, a transnational/non-national regulatory order governing the contractual
+rights and obligations of private individuals is made possible by: *(a)*
+States' acceptance of freedom of contract (public policy excepted); *(b)*
+Sanctity of contract embodied in the principle pacta sunt servanda *(c)*
+Written contractual selection of dispute resolution by international commercial
+arbitration, whether ad hoc or institutional, usually under internationally
+accepted arbitration rules; *(d)* Guaranteed enforcement, arbitration where
+necessary borrowing the State apparatus for law enforcement through the /{NY
+Convention on ICA}/, which has secured for /{"ICA"}/ a recognition and
+enforcement regime unparalleled by municipal courts in well over a hundred
+contracting States; *(e)* Transnational effect or non-nationality being
+achievable through /{"ICA"}/ accepting the parties' ability to select the basis
+upon which the dispute would be resolved outside municipal law, such as through
+the selection of general principles of law or lex mercatoria, or calling upon
+the arbitrators to act as amiable compositeur or ex aequo et bono.
+
+This framework provided by /{"ICA"}/ opened the door for the modelling of
+effective transnational law default rules and principles for contracts
+independent of State participation (in their development, application, or
+choice of law foundation). Today we have an increased amount of certainty of
+content and better control over the desired degree of transnational effect or
+non-nationality with the availability of comprehensive insulating rules and
+principles such as the PICC or /{Principles of European Contract Law}/
+(/{"European Principles"}/ or /{"PECL"}/) that may be chosen, either together
+with, or to the exclusion of a choice of municipal law as governing the
+contract. For electronic commerce a similar path is hypothetically possible.
+
+1~ "State contracted international law" and/or "institutionally offered lex"?
+CISG and PICC as examples
+
+An institutionally offered lex ("IoL", uniform rules and principles) appear to
+have a number of advantages over "State contracted international law" ("ScIL",
+model laws, treaties and conventions for enactment). The development and
+formulation of both "ScIL" and "IoL" law takes time, the CISG representing a
+half century of effort~{ /{UNCITRAL Convention on Contracts for the
+International Sale of Goods 1980}/ see at
+http://www.jus.uio.no/lm/un.contracts.international.sale.of.goods.convention.1980/
+\\ The CISG may be regarded as the culmination of an effort in the field dating
+back to Ernst Rabel, (/{Das Recht des Warenkaufs}/ Bd. I&II (Berlin,
+1936-1958). Two volume study on sales law.) followed by the Cornell Project,
+(Cornell Project on Formation of Contracts 1968 - Rudolf Schlesinger, Formation
+of Contracts. A study of the Common Core of Legal Systems, 2 vols. (New York,
+London 1968)) and connected most directly to the UNIDROIT inspired /{Uniform
+Law for International Sales}/ (ULIS
+http://www.jus.uio.no/lm/unidroit.ulis.convention.1964/ at and ULF at
+http://www.jus.uio.no/lm/unidroit.ulf.convention.1964/ ), the main preparatory
+works behind the CISG (/{Uniform Law on the Formation of Contracts for the
+International Sale of Goods}/ (ULF) and the /{Convention relating to a Uniform
+Law on the International Sale of Goods}/ (ULIS) The Hague, 1964.). }~ and PICC
+twenty years.~{ /{UNIDROIT Principles of International Commercial Contracts}/
+commonly referred to as the /{UNIDROIT Principles}/ and within this paper as
+PICC see at http://www.jus.uio.no/lm/unidroit.contract.principles.1994/ and
+http://www.jus.uio.no/lm/unidroit.international.commercial.contracts.principles.1994.commented/
+\\ The first edition of the PICC were finalised in 1994, 23 years after their
+first conception, and 14 years after work started on them in earnest. }~ The
+CISG by UNCITRAL represents the greatest success for the unification of an area
+of substantive commercial contract law to date, being currently applied by 57
+States,~{ As of February 2000. }~ estimated as representing close to seventy
+percent of world trade and including every major trading nation of the world
+apart from England and Japan. To labour the point, the USA most of the EU
+(along with Canada, Australia, Russia) and China, ahead of its entry to the WTO
+already share the same law in relation to the international sale of goods.
+"ScIL" however has additional hurdles to overcome. *(a)* In order to enter into
+force and become applicable, it must go through the lengthy process of
+ratification and accession by States. *(b)* Implementation is frequently with
+various reservations. *(c)* Even where widely used, there are usually as many
+or more States that are exceptions. Success, that is by no means guaranteed,
+takes time and for every uniform law that is a success, there are several
+failures.
+
+Institutionally offered lex ("IoL") comprehensive general contract principles
+or contract law restatements that create an entire "legal" environment for
+contracting, has the advantage of being instantly available, becoming effective
+by choice of the contracting parties at the stroke of a pen. "IoL" is also more
+easily developed subsequently, in light of experience and need. Amongst the
+reasons for their use is the reduction of transaction cost in their provision
+of a set of default rules, applicable transnationally, that satisfy risk
+management criteria, being (or becoming) known, tried and tested, and of
+predictable effect.~{ "[P]arties often want to close contracts quickly, rather
+than hold up the transaction to negotiate solutions for every problem that
+might arise." Honnold (1992) on p. 13. }~ The most resoundingly successful
+"IoL" example to date has been the ICC's /{Uniform Customs and Practices for
+Documentary Credits}/, which is subscribed to as the default rules for the
+letters of credit offered by the vast majority of banks in the vast majority of
+countries of the world. Furthermore uniform principles allow unification on
+matters that at the present stage of national and regional pluralism could not
+be achieved at a treaty level. There are however, things that only "ScIL" can
+"engineer", (for example that which relates to priorities and third party
+obligations).
+
+*{PICC:}* The arrival of PICC in 1994 was particularly timely. Coinciding as it
+did with the successful attempt at reducing trade barriers represented by the
+/{World Trade Agreement,}/~{ http://www.jus.uio.no/lm/wta.1994/ }~ and the
+start of general Internet use,~{ See Amissah, /{On the Net and the Liberation
+of Information that wants to be Free}/ in ed. Jens Edvin A. Skoghoy /{Fra
+institutt til fakultet, Jubileumsskrift i anledning av at IRV ved Universitetet
+i Tromsø feirer 10 år og er blitt til Det juridiske fakultet}/ (Tromsø, 1996)
+pp. 59-76 or the same at
+http://www.jus.uio.no/lm/on.the.net.and.information.22.02.1997.amissah/ }~
+allowed for the exponential growth of electronic commerce, and further
+underscored the transnational tendency of commerce. The arrival of PICC was all
+the more opportune bearing in mind the years it takes to prepare such an
+instrument. Whilst there have been some objections, the PICC (and PECL) as
+contract law restatements cater to the needs of the business community that
+seeks a non-national or transnational law as the basis of its contracts, and
+provide a focal point for future development in this direction. Where in the
+past they would have been forced to rely on the ethereal and nebulous lex
+mercatoria, now the business community is provided with the opportunity to make
+use of such a "law" that is readily accessible, and has a clear and reasonably
+well defined content, that will become familiar and can be further developed as
+required. As such the PICC allow for more universal and uniform solutions.
+Their future success will depend on such factors as: *(a)* Suitability of their
+contract terms to the needs of the business community. *(b)* Their becoming
+widely known and understood. *(c)* Their predictability evidenced by a
+reasonable degree of consistency in the results of their application. *(d)*
+Recognition of their potential to reduce transaction costs. *(e)* Recognition
+of their being neutral as between different nations' interests (East, West;
+North, South). In the international sale of goods the PICC can be used in
+conjunction with more specific rules and regulations, including (on parties
+election~{ Also consider present and future possibilities for such use of PICC
+under CISG articles 8 and 9. }~) in sales the CISG to fill gaps in its
+provisions.~{ Drobnig, id. p. 228, comment that the CISG precludes recourse to
+general principles of contract law in Article 7. This does not refer to the
+situation where parties determine that the PICC should do so, see CISG Article
+6. Or that in future the PICC will not be of importance under CISG Articles 8
+and 9. }~ Provisions of the CISG would be given precedence over the PICC under
+the accepted principle of /{specialia generalibus derogant}/,~{ "Special
+principles have precedence over general ones." See Huet, Synthesis (1995) p.
+277. }~ the mandatory content of the PICC excepted. The CISG has many
+situations that are not provided for at all, or which are provided for in less
+detail than the PICC.
+
+Work on PICC and PECL under the chairmanship of Professors Bonell and Ole Lando
+respectively, was wisely cross-pollinated (conceptually and through
+cross-membership of preparatory committees), as common foundations strengthen
+both sets of principles. A couple of points should be noted. Firstly, despite
+the maintained desirability of a transnational solution, this does not exclude
+the desirability of regional solutions, especially if there is choice, and the
+regional solutions are more comprehensive and easier to keep of uniform
+application. Secondly, the European Union has powers and influence (within the
+EU) unparalleled by UNIDROIT that can be utilised in future with regard to the
+PECL if the desirability of a common European contract solution is recognised
+and agreed upon by EU member States. As a further observation, there is,
+hypothetically at least, nothing to prevent there in future being developed an
+alternative extensive (competing) transnational contract /{lex}/ solution,
+though the weighty effort already in place as represented by PICC and the high
+investment in time and independent skilled legal minds, necessary to achieve
+this in a widely acceptable manner, makes such a development not very likely.
+It may however be the case that for electronic commerce, some other
+particularly suitable rules and principles will in time be developed in a
+similar vein, along the lines of an "IoL".
+
+1~ Contract /{Lex}/ design. Questions of commonweal
+
+The virtues of freedom of contract are acknowledged in this paper in that they
+allow the international business community to structure their business
+relationships to suit their requirements, and as such reflect the needs and
+working of the market economy. However, it is instructive also to explore the
+limits of the principles: freedom of contract, pacta sunt servanda and caveat
+subscriptor. These principles are based on free market arguments that parties
+best understand their interests, and that the contract they arrive at will be
+an optimum compromise between their competing interests. It not being for an
+outsider to regulate or evaluate what a party of their own free will and
+volition has gained from electing to contract on those terms. This approach to
+contract is adversarial, based on the conflicting wills of the parties,
+achieving a meeting of minds. It imposes no duty of good faith and fair dealing
+or of loyalty (including the disclosure of material facts) upon the contracting
+parties to one another, who are to protect their own interests. However, in
+international commerce, this demand can be more costly, and may have a negative
+and restrictive effect. Also, although claimed to be neutral in making no
+judgement as to the contents of a contract, this claim can be misleading.
+
+2~ The neutrality of contract law and information cost
+
+The information problem is a general one that needs to be recognised in its
+various forms where it arises and addressed where possible.
+
+Adherents to the caveat subscriptor model, point to the fact that parties have
+conflicting interests, and should look out for their own interests. However
+information presents particular problems which are exacerbated in international
+commerce.~{ The more straightforward cases of various types of
+misrepresentation apart. }~ As Michael Trebilcock put it: "Even the most
+committed proponents of free markets and freedom of contract recognise that
+certain information preconditions must be met for a given exchange to possess
+Pareto superior qualities."~{ Trebilcock, (1993) p. 102, followed by a
+quotation of Milton Friedman, from /{Capitalism and Freedom}/ (1962) p. 13. }~
+Compared with domestic transactions, the contracting parties are less likely to
+possess information about each other or of what material facts there may be
+within the other party's knowledge, and will find it more difficult and costly
+to acquire. With resource inequalities, some parties will be in a much better
+position to determine and access what they need to know, the more so as the
+more information one already has, the less it costs to identify and to obtain
+any additional information that is required.~{ Trebilcock, (1993) p. 102, note
+quoted passage of Kim Lane Scheppele, /{Legal Secrets: Equality and Efficiency
+in the Common Law}/ (1988) p. 25. }~ The converse lot of the financially weaker
+party, makes their problem of high information costs (both actual and
+relative), near insurmountable. Ignorance may even become a rational choice, as
+the marginal cost of information remains higher than its marginal benefit.
+"This, in fact is the economic rationale for the failure to fully specify all
+contingencies in a contract."~{ See for example Nicholas Mercuro and Steven G.
+Medema, p. 58 }~ The argument is tied to transaction cost and further
+elucidates a general role played by underlying default rules and principles. It
+also extends further to the value of immutable principles that may help
+mitigate the problem in some circumstances. More general arguments are
+presented below.
+
+2~ Justifying mandatory loyalty principles
+
+Given the ability to create alternative solutions and even an independent
+/{lex}/ a question that arises is as to what limits if any should be imposed
+upon freedom of contract? What protective principles are required? Should
+protective principles be default rules that can be excluded? Should they be
+mandatory? Should mandatory law only exist at the level of municipal law?
+
+A kernel of mandatory protective principles with regard to loyalty may be
+justified, as beneficial, and even necessary for "IoL" to be acceptable in
+international commerce, in that they (on the balance) reflect the collective
+needs of the international business community. The present author is of the
+opinion that the duties of good faith and fair dealing and loyalty (or an
+acceptable equivalent) should be a necessary part of any attempt at the
+self-legislation or institutional legislation of any contract regime that is
+based on "rules and principles" (rather than a national legal order). If absent
+a requirement for them should be imposed by mandatory international law. Such
+protective provisions are to be found within the PICC and PECL.~{ Examples
+include: the deliberately excluded validity (Article 4); the provision on
+interest (Article 78); impediment (Article 79), and; what many believe to be
+the inadequate coverage of battle of forms (Article 19). }~ As regards PICC
+*(a)* The loyalty (and other protective) principles help bring about confidence
+and foster relations between parties. They provide an assurance in the
+international arena where parties are less likely to know each other and may
+have more difficulty in finding out about each other. *(b)* They better reflect
+the focus of the international business community on a business relationship
+from which both sides seek to gain. *(c)* They result in wider acceptability of
+the principles within both governments and the business community in the
+pluralistic international community. These protective principles may be
+regarded as enabling the PICC to better represent the needs of the commonweal.
+*(d)* Good faith and fair dealing~{ The commented PECL explain "'Good faith'
+means honesty and fairness in mind, which are subjective concepts... 'fair
+dealing' means observance of fairness in fact which is an objective test". }~
+are fundamental underlying principles of international commercial relations.
+*(e)* Reliance only on the varied mandatory law protections of various States
+does not engender uniformity, which is also desirable with regard to that which
+can be counted upon as immutable. (Not that it is avoidable, given that
+mandatory State law remains overriding.) More generally, freedom of contract
+benefits from these protective principles that need immutable protection from
+contractual freedom to effectively serve their function. In seeking a
+transnational or non-national regime to govern contractual relations, one might
+suggest this to be the minimum price of freedom of contract that should be
+insisted upon by mandatory international law, as the limitation which hinders
+the misuse by one party of unlimited contractual freedom. They appear to be an
+essential basis for acceptability of the autonomous contract (non-national
+contract, based on agreed rules and principles/ "IoL"). As immutable principles
+they (hopefully and this is to be encouraged) become the default standard for
+the conduct of international business and as such may be looked upon as "common
+property." Unless immutable they suffer a fate somewhat analogous to that of
+"the tragedy of the commons."~{ Special problem regarding common/shared
+resources discussed by Garrett Hardin in Science (1968) 162 pp. 1243-1248. For
+short discussion and summary see Trebilcock, (1993) p. 13-15. }~ It should be
+recognised that argument over the loyalty principles should be of degree, as
+the concept must not be compromised, and needs to be protected (even if they
+come at the price of a degree of uncertainty), especially against particularly
+strong parties who are most likely to argue against their necessity.
+
+1~ Problems beyond uniform texts
+
+2~ In support of four objectives
+
+In the formulation of many international legal texts a pragmatic approach was
+taken. Formulating legislators from different States developed solutions based
+on suitable responses to factual example circumstances. This was done,
+successfully, with a view to avoiding arguments over alternative legal
+semantics and methodologies. However, having arrived at a common text, what
+then? Several issues are raised by asking the question, given that differences
+of interpretation can arise and become entrenched, by what means is it possible
+to foster a sustainable drive towards the uniform application of shared texts?
+Four principles appear to be desirable and should insofar as it is possible be
+pursued together: *(i)* the promotion of certainty and predictability; *(ii)*
+the promotion of uniformity of application; *(iii)* the protection of
+democratic ideals and ensuring of jurisprudential deliberation, and; *(iv)* the
+retention of efficiency.
+
+2~ Improving the predictability, certainty and uniform application of international and transnational law
+
+The key to the (efficient) achievement of greater certainty and predictability
+in an international and/or transnational commercial law regime is through the
+uniform application of shared texts that make up this regime.
+
+Obviously a distinction is to be made between transnational predictability in
+application, that is "uniform application", and predictability at a domestic
+level. Where the "uniform law" is applied by a municipal court of State "A"
+that looks first to its domestic writings, there may be a clear - predictable
+manner of application, even if not in the spirit of the "Convention". Another
+State "B" may apply the uniform law in a different way that is equally
+predictable, being perfectly consistent internally. This however defeats much
+of the purpose of the uniform law.
+
+A first step is for municipal courts to accept the /{UN Convention on the Law
+of Treaties 1969}/ (in force 1980) as a codification of existing public
+international law with regard to the interpretation of treaties.~{ This is the
+position in English law see Lord Diplock in Fothergill v Monarch Airlines
+[1981], A.C. 251, 282 or see
+http://www.jus.uio.no/lm/england.fothergill.v.monarch.airlines.hl.1980/2_diplock.html
+also Mann (London, 1983) at p. 379. The relevant articles on interpretation are
+Article 31 and 32. }~ A potentially fundamental step towards the achievement of
+uniform application is through the conscientious following of the admonitions
+of the interpretation clauses of modern conventions, rules and principles~{
+Examples: The CISG, Article 7; The PICC, Article 1.6; PECL Article 1.106; /{UN
+Convention on the Carriage of Goods by Sea (The Hamburg Rules) 1978}/, Article
+3; /{UN Convention on the Limitation Period in the International Sale of Goods
+1974}/ and /{1978}/, Article 7; /{UN Model Law on Electronic Commerce 1996}/,
+Article 3; /{UNIDROIT Convention on International Factoring 1988}/, Article 4;
+/{UNIDROIT Convention on International Financial Leasing 1988}/, Article 6;
+also /{EC Convention on the Law Applicable to Contractual Obligations 1980}/,
+Article 18. }~ to take into account their international character and the need
+to promote uniformity in their application,~{ For an online collection of
+articles see the Pace CISG Database
+http://www.cisg.law.pace.edu/cisg/text/e-text-07.html and amongst the many
+other articles do not miss Michael Van Alstine /{Dynamic Treaty
+Interpretation}/ 146 /{University of Pennsylvania Law Review}/ (1998) 687-793.
+}~ together with all this implies.~{ Such as the CISG provision on
+interpretation - Article 7. }~ However, the problems of uniform application,
+being embedded in differences of legal methodology, go beyond the agreement of
+a common text, and superficial glances at the works of other legal
+municipalities. These include questions related to sources of authority and
+technique applied in developing valid legal argument. Problems with sources
+include differences in authority and weight given to: *(a)* legislative
+history; *(b)* rulings domestic and international; *(c)* official and other
+commentaries; *(d)* scholarly writings. There should be an ongoing discussion
+of legal methodology to determine the methods best suited to addressing the
+problem of achieving greater certainty, predictability and uniformity in the
+application of shared international legal texts. With regard to information
+sharing, again the technology associated with the Net offers potential
+solutions.
+
+2~ The Net and information sharing through transnational databases
+
+The Net has been a godsend permitting the collection and dissemination of
+information on international law. With the best intentions to live up to
+admonitions to "to take into account their international character and the need
+to promote uniformity in their application" of "ScIL" and "IoL", a difficulty
+has been in knowing what has been written and decided elsewhere. In discussing
+solutions, Professor Honnold in /{"Uniform Words and Uniform Application" }/~{
+Based on the CISG, and inputs from several professors from different legal
+jurisdictions, on the problems of achieving the uniform application of the text
+across different legal municipalities. J. Honnold, /{Uniform words and uniform
+applications. Uniform Words and Uniform Application: The 1980 Sales Convention
+and International Juridical Practice}/. /{Einheitliches Kaufrecht und
+nationales Obligationenrecht. Referate Diskussionen der Fachtagung}/. am
+16/17-2-1987. Hrsg. von P. Schlechtriem. Baden-Baden, Nomos, 1987. p. 115-147,
+at p. 127-128. }~ suggests the following: "General Access to Case-Law and
+Bibliographic Material: The development of a homogenous body of law under the
+Convention depends on channels for the collection and sharing of judicial
+decisions and bibliographic material so that experience in each country can be
+evaluated and followed or rejected in other jurisdictions." Honnold then goes
+on to discuss "the need for an international clearing-house to collect and
+disseminate experience on the Convention" the need for which, he writes there
+is general agreement. He also discusses information-gathering methods through
+the use of national reporters. He poses the question "Will these channels be
+adequate? ..."
+
+The Net, offering inexpensive ways to build databases and to provide global
+access to information, provides an opportunity to address these problems that
+was not previously available. The Net extends the reach of the admonitions of
+the interpretation clauses. Providing the medium whereby if a decision or
+scholarly writing exists on a particular article or provision of a Convention,
+anywhere in the world, it will be readily available. Whether or not a national
+court or arbitration tribunal chooses to follow their example, they should be
+aware of it. Whatever a national court decides will also become internationally
+known, and will add to the body of experience on the Convention.~{ Nor is it
+particularly difficult to set into motion the placement of such information on
+the Net. With each interested participant publishing for their own interest,
+the Net could provide the key resources to be utilised in the harmonisation and
+reaching of common understandings of solutions and uniform application of legal
+texts. Works from all countries would be available. }~
+
+Such a library would be of interest to the institution promulgating the text,
+governments, practitioners and researchers alike. It could place at your
+fingertips: *(a)* Convention texts. *(b)* Implementation details of contracting
+States. *(c)* The legislative history. *(d)* Decisions generated by the
+convention around the world (court and arbitral where possible). *(e)* The
+official and other commentaries. *(f)* Scholarly writings on the Convention.
+*(g)* Bibliographies of scholarly writings. *(h)* Monographs and textbooks.
+*(i)* Student study material collections. *(j)* Information on promotional
+activities, lectures - moots etc. *(k)* Discussion groups/ mailing groups and
+other more interactive features.
+
+With respect to the CISG such databases are already being maintained.~{ Primary
+amongst them Pace University, Institute of International Commercial Law, CISG
+Database http://www.cisg.law.pace.edu/ which provides secondary support for the
+CISG, including providing a free on-line database of the legislative history,
+academic writings, and case-law on the CISG and additional material with regard
+to PICC and PECL insofar as they may supplement the CISG. Furthermore, the Pace
+CISG Project, networks with the several other existing Net based "autonomous"
+CISG projects. UNCITRAL under Secretary Gerold Herrmann, has its own database
+through which it distributes its case law materials collected from national
+reporters (CLOUT). }~
+
+The database by ensuring the availability of international materials, used in
+conjunction with legal practice, helps to support the fore-named four
+principles. That of efficiency is enhanced especially if there is a single
+source that can be searched for the information required.
+
+The major obstacle that remains to being confident of this as the great and
+free panacea that it should be is the cost of translation of texts.
+
+2~ Judicial minimalism promotes democratic jurisprudential deliberation
+
+How to protect liberal democratic ideals and ensure international
+jurisprudential deliberation? Looking at judicial method, where court decisions
+are looked to for guidance, liberal democratic ideals and international
+jurisprudential deliberation are fostered by a judicial minimalist approach.
+
+For those of us with a common law background, and others who pay special
+attention to cases as you are invited to by interpretation clauses, there is
+scope for discussion as to the most appropriate approach to be taken with
+regard to judicial decisions. US judge Cass Sunstein suggestion of judicial
+minimalism~{ Cass R. Sunstein, /{One Case at a Time - Judicial Minimalism on
+the Supreme Court}/ (1999) }~ which despite its being developed in a different
+context~{ His analysis is developed based largely on "hard" constitutional
+cases of the U.S. }~ is attractive in that it is suited to a liberal democracy
+in ensuring democratic jurisprudential deliberation. It maintains discussion,
+debate, and allows for adjustment as appropriate and the gradual development of
+a common understanding of issues. Much as one may admire farsighted and
+far-reaching decisions and expositions, there is less chance with the
+minimalist approach of the (dogmatic) imposition of particular values. Whilst
+information sharing offers the possibility of the percolation of good ideas.~{
+D. Stauffer, /{Introduction to Percolation Theory}/ (London, 1985). Percolation
+represents the sudden dramatic expansion of a common idea or ideas thought he
+reaching of a critical level/mass in the rapid recognition of their power and
+the making of further interconnections. An epidemic like infection of ideas.
+Not quite the way we are used to the progression of ideas within a conservative
+tradition. }~ Much as we admire the integrity of Dworkin's Hercules,~{ Ronald
+Dworkin, /{Laws Empire}/ (Harvard, 1986); /{Hard Cases in Harvard Law Review}/
+(1988). }~ that he can consistently deliver single solutions suitable across
+such disparate socio-economic cultures is questionable. In examining the
+situation his own "integrity" would likely give him pause and prevent him from
+dictating that he can.~{ Hercules was created for U.S. Federal Cases and the
+community represented by the U.S. }~ This position is maintained as a general
+principle across international commercial law, despite private (as opposed to
+public) international commercial law not being an area of particularly "hard"
+cases of principle, and; despite private international commercial law being an
+area in which over a long history it has been demonstrated that lawyers are
+able to talk a common language to make themselves and their concepts (which are
+not dissimilar) understood by each other.~{ In 1966, a time when there were
+greater differences in the legal systems of States comprising the world economy
+Clive Schmitthoff was able to comment that: \\ "22. The similarity of the law
+of international trade transcends the division of the world between countries
+of free enterprise and countries of centrally planned economy, and between the
+legal families of the civil law of Roman inspiration and the common law of
+English tradition. As a Polish scholar observed, "the law of external trade of
+the countries of planned economy does not differ in its fundamental principles
+from the law of external trade of other countries, such as e.g., Austria or
+Switzerland. Consequently, international trade law specialists of all countries
+have found without difficulty that they speak a 'common language' \\ 23. The
+reason for this universal similarity of the law of international trade is that
+this branch of law is based on three fundamental propositions: first, that the
+parties are free, subject to limitations imposed by the national laws, to
+contract on whatever terms they are able to agree (principle of the autonomy of
+the parties' will); secondly, that once the parties have entered into a
+contract, that contract must be faithfully fulfilled (pacta sunt servanda) and
+only in very exceptional circumstances does the law excuse a party from
+performing his obligations, viz., if force majeure or frustration can be
+established; and, thirdly that arbitration is widely used in international
+trade for the settlement of disputes, and the awards of arbitration tribunals
+command far-reaching international recognition and are often capable of
+enforcement abroad." \\ /{Report of the Secretary-General of the United
+Nations, Progressive Development of the Law of International Trade}/ (1966).
+Report prepared for the UN by C. Schmitthoff. }~
+
+2~ Non-binding interpretative councils and their co-ordinating guides can provide a focal point for the convergence of ideas - certainty, predictability, and efficiency
+
+A respected central guiding body can provide a guiding influence with respect
+to: *(a)* the uniform application of texts; *(b)* information management
+control. Given the growing mass of writing on common legal texts - academic and
+by way of decisions, we are faced with an information management problem.~{
+Future if not current. }~
+
+Supra-national interpretative councils have been called for previously~{
+/{UNCITRAL Secretariat}/ (1992) p. 253. Proposed by David (France) at the
+second UNCITRAL Congress and on a later occasion by Farnsworth (USA). To date
+the political will backed by the financing for such an organ has not been
+forthcoming. In 1992 the UNCITRAL Secretariat concluded that "probably the time
+has not yet come". Suggested also by Louis Sono in /{Uniform laws require
+uniform interpretation: proposals for an international tribunal to interpret
+uniform legal texts}/ (1992) 25th UNCITRAL Congress, pp. 50-54. Drobnig,
+/{Observations in Uniform Law in Practice}/ at p. 306. }~ and have for various
+reasons been regarded impracticable to implement including problems associated
+with getting States to formally agree upon such a body with binding authority.
+
+However it is not necessary to go this route. In relation to "IoL" in such
+forms as the PICC and PECL it is possible for the promulgators themselves,~{
+UNIDROIT and the EU }~ to update and clarify the accompanying commentary of the
+rules and principles, and to extend their work, through having councils with
+the necessary delegated powers. In relation to the CISG it is possible to do
+something similar of a non-binding nature, through the production of an updated
+commentary by an interpretive council (that could try to play the role of
+Hercules).~{ For references on interpretation of the CISG by a supranational
+committee of experts or council of "wise men" see Bonell, /{Proposal for the
+Establishment of a Permanent Editorial Board for the Vienna Sales Convention}/
+in /{International Uniform Law in Practice/ Le droit uniforme international
+dans la practique [Acts and Proceedings of the 3rd Congress on Private Law held
+by the International Institute for the Unification of Private Law}/ (Rome,
+1987)], (New York, 1988) pp. 241-244 }~ With respect, despite some expressed
+reservations, it is not true that it would have no more authority than a single
+author writing on the subject. A suitable non-binding interpretative council
+would provide a focal point for the convergence of ideas. Given the principle
+of ensuring democratic jurisprudential deliberation, that such a council would
+be advisory only (except perhaps on the contracting parties election) would be
+one of its more attractive features, as it would ensure continued debate and
+development.
+
+2~ Capacity Building
+
+_1 "... one should create awareness about the fact that an international
+contract or transaction is not naturally rooted in one particular domestic law,
+and that its international specifics are best catered for in a uniform law."~{
+UNCITRAL Secretariat (1992) p. 255. }~
+
+_{/{Capacity building}/}_ - raising awareness, providing education, creating a
+new generation of lawyers versed in a relatively new paradigm. Capacity
+building in international and transnational law, is something relevant
+institutions including arbitration institutions; the business community, and;
+far sighted States, should be interested in promoting. Finding means to
+transcend national boundaries is also to continue in the tradition of seeking
+the means to break down barriers to legal communication and understanding.
+However, while the business community seeks and requires greater uniformity in
+their business relations, there has paradoxically, at a national level, been a
+trend towards a nationalisation of contract law, and a regionalisation of
+business practice.~{ Erich Schanze, /{New Directions in Business Research}/ in
+Børge Dahl & Ruth Nielsen (ed.), /{New Directions in Contract Research}/
+(Copenhagen, 1996) p. 62. }~
+
+As an example, Pace University, Institute of International Commercial Law,
+plays a prominent role with regard to capacity building in relation to the CISG
+and PICC. Apart from the previously mentioned /{CISG Database}/, Pace
+University organise a large annual moot on the CISG~{ See
+http://www.cisg.law.pace.edu/vis.html }~ this year involving students of 79
+universities from 28 countries, and respected arbitrators from the word over.
+Within the moot the finding of solutions based on PICC where the CISG is
+silent, is encouraged. Pace University also organise an essay competition~{ See
+http://www.cisg.law.pace.edu/cisg/text/essay.html }~ on the CISG and/or the
+PICC, which next year is to be expanded to include the PECL as a further
+option.
+
+1~ Marketing of transnational solutions
+
+Certain aspects of the Net/web may already be passé, but did you recognise it
+for what it was, or might become, when it arrived?
+
+As uniform law and transnational solutions are in competition with municipal
+approaches, to be successful a certain amount of marketing is necessary and may
+be effective. The approach should involve ensuring the concept of what they
+seek to achieve is firmly implanted in the business, legal and academic
+communities, and through engaging the business community and arbitration
+institutions, in capacity building and developing a new generation of lawyers.
+Feedback from the business community, and arbitrators will also prove
+invaluable. Whilst it is likely that the business community will immediately be
+able to recognise their potential advantages, it is less certain that they will
+find the support of the legal community. The normal reasons would be similar to
+those usually cited as being the primary constraints on its development
+"conservatism, routine, prejudice and inertia" René David. These are problems
+associated with gaining the initial foothold of acceptability, also associated
+with the lower part of an exponential growth curve. In addition the legal
+community may face tensions arising for various reasons including the
+possibility of an increase in world-wide competition.
+
+There are old well developed legal traditions with developed infrastructures
+and roots well established in several countries, that are dependable and known.
+The question arises why experiment with alternative non-extensively tested
+regimes? The required sophistication is developed in the centres providing
+legal services, and it may be argued that there is not the pressing need for
+unification or for transnational solutions, as the traditional way of
+contracting provides satisfactorily for the requirements of global commerce.
+The services required will continue to be easily and readily available from
+existing centres of skill. English law, to take an example is for various
+reasons (including perhaps language, familiarity of use, reputation and
+widespread Commonwealth~{ http://www.thecommonwealth.org/ }~ relations) the
+premier choice for the law governing international commercial transactions, and
+is likely to be for the foreseeable future. Utilising the Commonwealth as an
+example, what the "transnational" law (e.g. CISG) experience illustrates
+however, is that for States there may be greater advantage to be gained from
+participation in a horizontally shared area of commercial law, than from
+retaining a traditional vertically integrated commercial law system, based
+largely for example on the English legal system.
+
+Borrowing a term from the information technology sector, it is essential to
+guard against FUD (fear, uncertainty and doubt) with regard to the viability of
+new and/or competing transnational solutions, that may be spread by their
+detractors, and promptly, in the manner required by the free market, address
+any real problems that are discerned.
+
+1~ Tools in future development
+
+An attempt should be made by the legal profession to be more contemporary and
+to keep up to date with developments in technology and the sciences, and to
+adopt effective tools where suitable to achieve their goals. Technology one way
+or another is likely to encroach further upon law and the way we design it.
+
+Science works across cultures and is aspired to by most nations as being
+responsible for the phenomenal success of technology (both are similarly
+associated with globalisation). Science is extending its scope to (more
+confidently) tackle complex systems. It would not hurt to be more familiar with
+relevant scientific concepts and terminology. Certainly lawyers across the
+globe, myself included, would also benefit much in their conceptual reasoning
+from an early dose of the philosophy of science,~{ An excellent approachable
+introduction is provided by A.F. Chalmers /{What is this thing called
+Science?}/ (1978, Third Edition 1999). }~ what better than Karl Popper on
+scientific discovery and the role of "falsification" and value of predictive
+probity.~{ Karl R. Popper /{The Logic of Scientific Discovery}/ (1959). }~ And
+certainly Thomas Kuhn on scientific advancement and "paradigm shifts"~{ Thomas
+S. Kuhn /{The Structure of Scientific Revolutions}/ (1962, 3rd Edition 1976).
+}~ has its place. Having mentioned Karl Popper, it would not be unwise to go
+further (outside the realms of philosophy of science) to study his defence of
+democracy in both volumes of /{Open Society and Its Enemies}/.~{ Karl R. Popper
+/{The Open Society and Its Enemies: Volume 1, Plato}/ (1945) and /{The Open
+Society and Its Enemies: Volume 2, Hegel & Marx}/. (1945) }~
+
+Less ambitiously there are several tools not traditionally in the lawyers set,
+that may assist in transnational infrastructure modelling. These include
+further exploration and development of the potential of tools, including to
+suggest a few by way of example: flow charts, fuzzy thinking, "intelligent"
+electronic agents and Net collaborations.
+
+In the early 1990's I was introduced to a quantity surveyor and engineer who
+had reduced the /{FIDIC Red Book}/~{ FIDIC is the International Federation of
+Consulting Engineers http://www.fidic.com/ }~ to over a hundred pages of
+intricate flow charts (decision trees), printed horizontally on roughly A4
+sized sheets. He was employed by a Norwegian construction firm, who insisted
+that based on past experience, they knew that he could, using his charts,
+consistently arrive at answers to their questions in a day, that law firms took
+weeks to produce. Flow charts can be used to show interrelationships and
+dependencies, in order to navigate the implications of a set of rules more
+quickly. They may also be used more pro-actively (and /{ex ante}/ rather than
+/{ex post}/) in formulating texts, to avoid unnecessary complexity and to
+arrive at more practical, efficient and elegant solutions.
+
+Explore such concepts as "fuzzy thinking"~{ Concept originally developed by
+Lotfi Zadeh /{Fuzzy Sets}/ Information Control 8 (1965) pp 338-353. For
+introductions see Daniel McNeill and Paul Freiberger /{Fuzzy Logic: The
+Revolutionary Computer Technology that is Changing our World}/ (1993); Bart
+Kosko Fuzzy Thinking (1993); Earl Cox The Fuzzy Systems Handbook (New York, 2nd
+ed. 1999). Perhaps to the uninitiated an unfortunate choice of name, as fuzzy
+logic and fuzzy set theory is more precise than classical logic and set theory,
+which comprise a subset of that which is fuzzy (representing those instances
+where membership is 0% or 100%). The statement is not entirely without
+controversy, in suggesting the possibility that classical thinking may be
+subsumed within the realms of an unfamiliar conceptual paradigm, that is to
+take hold of the future thinking. In the engineering field much pioneer work on
+fuzzy rule based systems was done at Queen Mary College by Ebrahim Mamdani in
+the early and mid-1970s. Time will tell. }~ including fuzzy logic, fuzzy set
+theory, and fuzzy systems modelling, of which classical logic and set theory
+are subsets. Both by way of analogy and as a tool fuzzy concepts are better at
+coping with complexity and map more closely to judicial thinking and argument
+in the application of principles and rules. Fuzzy theory provides a method for
+analysing and modelling principle and rule based systems, even where
+conflicting principles may apply permitting /{inter alia}/ working with
+competing principles and the contextual assignment of precision to terms such
+as "reasonableness". Fuzzy concepts should be explored in expert systems, and
+in future law. Problems of scaling associated with multiple decision trees do
+not prevent useful applications, and structured solutions. The analysis assists
+in discerning what lawyers are involved with.
+
+"Intelligent" electronic agents can be expected both to gather information on
+behalf of the business community and lawyers. In future electronic agents are
+likely to be employed to identify and bring to the attention of their
+principals "invitations to treat" or offers worthy of further investigation. In
+some cases they will be developed and relied upon as electronic legal agents,
+operating under a programmed mandate and vested with the authority to enter
+certain contracts on behalf of their principals. Such mandate would include
+choice of law upon which to contract, and the scenario could be assisted by
+transnational contract solutions (and catered for in the design of "future
+law").
+
+Another area of technology helping solve legal problems relates to various
+types of global register and transaction centres. Amongst them property
+registers being an obvious example, including patents and moveable property.
+Bolero providing an example of how electronic documents can be centrally
+brokered on behalf of trading parties.
+
+Primary law should be available on the Net free, and this applies also to "IoL"
+and the static material required for their interpretation. This should be the
+policy adopted by all institutions involved in contributing to the
+transnational legal infrastructure. Where possible larger databases also should
+be developed and shared. The Net has reduced the cost of dissemination of
+material, to a level infinitesimally lower than before. Universities now can
+and should play a more active role. Suitable funding arrangements should be
+explored that do not result in proprietary systems or the forwarding of
+specific lobby interests. In hard-copy to promote uniform standards,
+institutions should also strive to have their materials available at a
+reasonable price. Many appear to be unacceptably expensive given the need for
+their promotion and capacity building, amongst students, and across diverse
+States.
+
+Follow the open standards and community standards debate in relation to the
+development of technology standards and technology infrastructure tools -
+including operating systems,~{ See for example /{Open Sources : Voices from the
+Open Source Revolution - The Open Source Story}/
+http://www.oreilly.com/catalog/opensources/book/toc.html }~ to discover what if
+anything it might suggest for the future development of law standards.
+
+1~ As an aside, a word of caution
+
+I end with an arguably gratuitous observation, by way of a reminder and general
+warning. Gratuitous in the context of this paper because the areas focused
+upon~{ Sale of goods (CISG), contract rules and principles (PICC), related
+Arbitration, and the promotion of certain egalitarian ideals. }~ were somewhat
+deliberately selected to fall outside the more contentious and "politically"
+problematic areas related to globalisation, economics, technology, law and
+politics.~{ It is not as evident in the area of private international
+commercial contract law the chosen focus for this paper, but appears repeatedly
+in relation to other areas and issues arising out of the economics, technology,
+law nexus. }~ Gratuitous also because there will be no attempt to concretise or
+exemplify the possibility suggested.
+
+Fortunately, we are not (necessarily) talking about a zero sum game, however,
+it is necessary to be able to distinguish and recognise that which may harm.
+International commerce/trade is competitive, and by its nature not benign, even
+if it results in an overall improvement in the economic lot of the peoples of
+our planet. "Neutral tests" such as Kaldor-Hicks efficiency, do not require
+that your interests are benefited one iota, just that whilst those of others
+are improved, yours are not made worse. If the measure adopted is overall
+benefit, it is even more possible that an overall gain may result where your
+interests are adversely affected. The more so if you have little, and those
+that gain, gain much. Furthermore such "tests" are based on assumptions, which
+at best are approximations of reality (e.g. that of zero transaction costs,
+where in fact not only are they not, but they are frequently proportionately
+higher for the economically weak). At worst they may be manipulated /{ex ante}/
+with knowledge of their implications (e.g. engineering to ensure actual or
+relative~{ Low fixed costs have a "regressive" effect }~ asymmetrical
+transaction cost). It is important to be careful in a wide range of
+circumstances related to various aspects of the modelling of the infrastructure
+for international commerce that have an impact on the allocation of rights and
+obligations, and especially the allocation of resources, including various
+types of intellectual property rights. Ask what is the objective and
+justification for the protection? How well is the objective met? Are there
+other consequential effects? Are there other objectives that are worthy of
+protection? Could the stated objective(s) be achieved in a better way?
+
+Within a system are those who benefit from the way it has been, that may oppose
+change as resulting in loss to them or uncertainty of their continued
+privilege. For a stable system to initially arise that favours such a Select
+Set, does not require the conscious manipulation of conditions by the Select
+Set. Rather it requires that from the system (set) in place the Select Set
+emerges as beneficiary. Subsequently the Select Set having become established
+as favoured and empowered by their status as beneficiary, will seek to do what
+it can, to influence circumstances to ensure their continued beneficial status.
+That is, to keep the system operating to their advantage (or tune it to work
+even better towards this end), usually with little regard to the conditions
+resulting to other members of the system. Often this will be a question of
+degree, and the original purpose, or an alternative "neutral" argument, is
+likely to be used to justify the arrangement. The objective from the
+perspective of the Select Set is fixed; the means at their disposal may vary.
+Complexity is not required for such situations to arise, but having done so
+subsequent plays by the Select Set tend towards complexity. Furthermore, moves
+in the interest of the Select Set are more easily obscured/disguised in a
+complex system. Limited access to information and knowledge are devastating
+handicaps without which change cannot be contemplated let alone negotiated.
+Frequently, having information and knowledge are not enough. The protection of
+self-interest is an endemic part of our system, with the system repeatedly
+being co-opted to the purposes of those that are able to manipulate it.
+Membership over time is not static, for example, yesterday's "copycat nations"
+are today's innovators, and keen to protect their intellectual property. Which
+also illustrates the point that what it may take to set success in motion, may
+not be the same as that which is preferred to sustain it. Whether these
+observations appear to be self-evident and/or abstract and out of place with
+regard to this paper, they have far reaching implications repeatedly observable
+within the law, technology, and commerce (politics) nexus. Even if not arising
+much in the context of the selected material for this paper, their mention is
+justified by way of warning. Suitable examples would easily illustrate how
+politics arises inescapably as an emergent property from the nexus of commerce,
+technology, and law.~{ In such circumstances either economics or law on their
+own would be sufficient to result in politics arising as an emergent property.
+}~
+
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