Globalization of Contract Law

Asynchronous Activity
February 19, 2023
Obligations and Contracts
MLQU AY 2022-23

The demands of contracting in an electronic age is necessarily

international. The growth of e-commerce, especially during the height of
the Covid 19 pandemic, poses considerable challenges for existing
principles. Given the increasingly international dimension of
contracting, it is seen as important to address differences in principles
and treatment of specific issues arising in contractual formation,
performance, and breach. It is therefore important that students should
be aware of the existence of international conventions on contracts and
have some exposure to examples of relevant articles in individual
instances.

In the context of international sales contracts, the United Nations

Commission on International Trade Law (UNCITRAL) was responsible
for the 1980 Vienna Convention on Contracts for the International Sale
of Goods (CISG). Being an international convention, this can have effect
only if ratified by the country concerned.

In 1994. UNIDROIT (the International Institute for the

Unification of Private Law), produced its Principles of International
Commercial Contracts in an attempt to provide a uniform set of
principles (or articles) which might be adopted for use in any
jurisdiction. At the same time the Lando Commission produced a set of
contract of law principles for Europe as the basis for a possible
harmonization of contract and commercial law within the European
Union and, in the meantime, might also be explicitly adopted by the
parties. These Principles of European Contract Law (PECL) were
published in three parts in 2000 and 2003. However, neither have any
legal force and their use was always dependent upon adoption by the
parties. Both UNIDROIT and PECL have been cited as examples of
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alternative approaches on how the law might develop. Since the articles
of the new Draft Common Frame of Reference (DCFR), intended as the
European ‘toolkit’, appear to be based on and overlap with the
provisions of PECL.
In October 2011, the European Commission published a proposal
for an EU law containing a Common European Sales Law (CESL)
which covers digital sales as well as those conducted traditionally, on
and off the trader’s premises.

QUESTIONS:

Q1. Has the PH ratified the CISG? 1a. If not, why not? 1b. Should the
PH ratify it? 1.c. Why or why not?

Q2. Has the PH ratified UN Electronic Communication Convention in

International Contracts (2005)? 2.a If yes, when will it be enforced in
the PH? 2b. What are its implications , if any, on the implementation of
the Civil Code of PH?
[see
https://uncitral.un.org/en/texts/ecommerce/conventions/electronic_com
munication.]

Q.3 In terms of contract breach, what are the differences and similarities,
if any, of UNIDROIT Principles of International Commercial Contracts,
PECL, DCFR, CESL, and the UN Electronic Communication
Convention in International Contracts and the Civil Code of PH?

Q.4 Case problem: Clause 1 of a contract for the charter of a vessel for a
period of two years (commencing in Feb 1957) described the vessel as
“being in every way fitted for ordinary cargo service.” When delivered
to the charterers, the vessel was unseaworthy, because her engines were
old and her crew were insufficient and incompetent to maintain the old
machinery, while the captain was a confirmed drunkard. On her first
voyage under the charter, the engine suffered several breakdowns and
required extensive repairs for 20 weeks to make it seaworthy again, and
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the vessel was not properly seaworthy until mid-September 1957 , with
just 17 months remaining , of the 2 year charter party agreement.
However, the charterers had treated the breach as a ground for rescission
(resolution) and terminated the charter. The shipping line company,
owner of the vessel, challenged the propriety of the extra judicial
rescission and claimed that charterer was entitled only to damages. After
the lower court judge found that the breach was NOT substantial, the
charterers appealed the case.

Assume that your group are all members of the Supreme Court,
decide whether or not the judge was in error in not finding the breach
substantial enough to be a ground for extra judicial rescission under Art
1191 CC.

INSTRUCTIONS:

1. The class, arranged alphabetically according to family name, is

to be divided into three teams: Team Vincenzo will be
composed of student number 1 to 10; Team Atty Woo will be
composed of student number 11-20; and Team Law School
composed of student number 21 to 30.

Each team is to answer the assigned questions. All teams are

required to answer Q4 case problem.

Team assignment
Team Vincenzo: Q1, 1a,1b 1c
Team Atty Woo: Q2, 2a 2b
Team Law School: Q3

2. There will be no synchronous classes on Wed, Feb 22,2023 but

the class beadle may open the zoom room and breakout rooms
so that the teams can meet, strategize, plan and prepare the
group report which should not be more than 1,500 words, using
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 Century Schoolbook font style which is to be submitted via
Telegram not later than 2100 H of Tuesday Feb.28, 2023. Each
team is to assign a presenter for their team who are allotted 10
minutes each, on Wednesday, March 1,2023. There will be Q
and A after each presentation.