Reproduced with permission of 41 Uniform Commercial Code Law Journal (2008) 77-80
Jan Ramberg [*]
There is no doubt that this impressive work by Albert Kritzer  and his collaborators, as expressed by Tim Cummins in the Foreword, provides "a path through the uncertain terrain" of international contractual relationships.
The work consists of five volumes. Volume 1 deals with the basic contractual problems and Volume 2 with export regulations and controls together with accounts of the legal systems in a number of countries and regions. This continues in Volume 3. Volume 4-5 contain detailed analyses of the provisions of the UN Convention on Contracts for the International Sale of Goods (CISG).
It is difficult, in a review of such a comprehensive work, to comment on everything dealt with therein. However, some particular aspects contained in the various chapters merit particular attention.
Chapter 3 is particularly important, as it contains useful recommendations on style and precision in contract drafting and warnings not to use certain impressions. Checklists provide invaluable help for anyone engaged in contemplating, negotiating, or drafting an international contract. [page 77] Further, illustrations are provided giving detailed examples how the contract should be formulated.
Chapter 4 deals with tax issues, which is extremely important and useful in order to avoid unexpected taxation or to obtain optimal tax effect.
Chapter 5, dealing with pricing, is particularly important for adjustment of prices in long-term agreements, which is a source of frequent disagreements and litigation. It contains recommendations with respect to choice and application of indexes.
Chapter 6 on delivery, storage, shipment, and insurance deals not only with the usual legal problems but also with difficulties to be expected in certain problem areas, particularly where sellers are exposed to unknown customs of the port of the buyer's country.
Chapter 7 deals with liquidated damages and penalty provisions with an account of different approaches in different jurisdictions. The important question of whether damages can be claimed in addition to liquidated damages and penalties is addressed, and it is recommended to clarify that penalty or liquidated damages provisions are intended to replace damages and thus constitute the buyer's sole remedy.
Chapter 9 deals with excusable delays and temporary or ultimate relief from obligations in case of so-called force majeure events.
Chapter 14 deals with limitation of liability as related to warranties with comments on the classification of damages as direct, consequential, or indirect.
Resolution of disputes is the subject of Chapter 18, where a distinction is made between alternative dispute resolution (ADR) or mediation procedures as compared with the adversarial dispute settlement--litigation and arbitration.
Chapter 19 addresses the important matter of formation of contracts and the need for written contracts to avoid fraudulent behaviour (statute of frauds). Here, the so-called $500 rule in the United States constituting the borderline between contracts in writing and oral contracts is mentioned as opposed to the rule on no formality in CISG Art. 11. The problem of battle of forms--where each party refers to its respective standard conditions--is dealt with in Chapter 21. The risk of one party using any discrepancy as a means of reneging on the contract is pointed out. It is suggested that the risk is greater under CISG Art. 19, which only would make an exception for matters of material importance (the test of materiality), which would seem to invite a party struck by an unfavourable contract to avoid it pointing at such material matters as defined in CISG Art. 19. If the contract stands, there is of course the risk of having adverse clauses from the other party's general conditions incorporated. [page 78]
Chapter 23, dealing with revocability of offers, also includes comments on so-called letters of intent and identifies risks due to different approaches in different legal systems, where good faith or culpa in contrahendo may convert intent into binding obligations.
Chapter 25 on "preventive contracting" explains how to cover dangerous gaps in contracts and comments on the hazard of tacit ignorance and tacit assumptions. The chapter contains valuable advice of particular importance where previous well-designed contracts or standard contract forms of the same kind cannot be used as guidelines. New business markets and technologies develop, and, as a result, a more proactive approach is needed where business as well as legal skills are required. This chapter is concluded by an extensive list of references.
Chapter 26 on contract negotiations is particularly useful for those engaged in concluding more or less complicated business transactions. This may be a complex activity where inspiration may be drawn from game theories and knowledge of organizational behaviour. In particular, it may usually be possible for the negotiator to consider a so-called BATNA (Best Alternative to Negotiated Agreement) in case the negotiation would fail. This may also assist in determining a bottom line as a requirement for a contract or settlement of a dispute.
Chapter 27 deals with outsourcing and Chapter 28 contains a guide to consortium agreements. While partners in consortia may achieve better results than when acting individually, dangers are also inherent in any partnership, such as breach of the duty of loyalty or, even worse, withdrawal of partners needed or important in order to ensure success of the venture.
Chapter 29 deals with international contracting with governments and government procurement and Chapter 30 with foreign sale of military equipment.
Chapter 31 contains advice how to manage international political risks, and Chapter 32 deals, in particular, with antibribery standards. Chapter 33 contains information on the U.S. Sarbanes-Oxley Act, which is of particular importance for non-U.S. issuers.
Chapter 34 contains a U.S. exporters' guide to foreign laws applicable to use of representatives and distributors.
Needless to say, compliance with export and antitrust controls as well as with customs and trade laws in the U.S. and the European Union is extremely important, as well as knowledge of at least the main situation prevailing in other countries. In this respect, Chapter 40 on antitrust law is particularly important with the comparison between the two main competition law systems, the United States and the European Union. Also, an account is given not only on the laws of the European Union but also of the Principles of European Contract Law (PECL). [page 79]
In total, the legal systems of no less than 32 States are briefly described, starting with Afghanistan to Honduras in Volume 2 and finishing with India to the United States in Volume 3.
Volumes 4 and 5 give an account of CISG, elegantly tailored to suit the needs of practitioners. Considering the fact that CISG has now (as of June 2008) been ratified by 71 States representing more than three-quarters of world trade -- with Japan the most recent country to accede to its terms -- such focus on CISG is indeed indispensible in an International Contract Manual. Volume 5 contains an Annexure E with six CISG Advisory Council Opinions and an Annexure G, Incoterms Extracts. In commenting upon the provisions of CISG, important guidance is given on the need for contract modifications and gap filling of such areas that are not covered by CISG, such as validity of contract and transfer of title. The need of an appropriate terminology in order to add clarity and precision to contracts is underlined. The views appearing in the main commentaries to CISG and case law are presented together with a detailed analysis of each article.
No one could pass on the required knowledge to practitioners better than Albert Kritzer, the initiator of the CISG Advisory Council. Indeed, his impressive expertise gained during his long-time position as International Sales Counsel of the General Electric Company is such that it would be imprudent for anyone to engage in the negotiation, drafting, and implementation of international commercial transactions without first having gained from the wealth of valuable information contained in Volumes 1-5 of the International Contract Manual. [page 80]
* Jan Ramberg is Professor emeritus of Private Law, University of Stockholm, Sweden. Former Dean of the Law Faculty of the University of Stockholm and First Rector of Riga Graduate School of Law, Professor honoris causa of Riga Graduate School of Law, Chairman of CISG Advisory Council 2004-2007, Honorary Vice-President of Comité Maritime International (CMI), Vice-President of the Commission on Commercial Law and Practice of the International Chamber of Commerce 1996-2007, honorary member of FIATA, and author of i.a. Guide to Incoterms (ICC Publ. 620) and International Commercial Transactions 3rd ed. (ICC publ. 691).
1. Albert H. Kritzer has been a member of the New York Bar since 1952. He practiced law with Donovan, Leisure, Newton & Irvine and progressed from there to the General Electric Company where he served as GE's International Sales Counsel. Recipient of the International Affairs Award of the New York State Bar Association, he is Executive Secretary of the Institute of International Commercial Law at the Pace University School of Law and Editor and Architect of the Electronic Library on the United Nations Convention on Contracts for the International Sale of Goods. (http://cisgw3.law.pace.edu).
For further data on his contributions to the world trade community, see Andersen & Schroeter, eds., Sharing International Commercial Law across National Boundaries: Festschrift for Albert H. Kritzer on the Occasion of his Eightieth Birthday (Wildy, Simmons & Hill Publishers 2008).