INTERNATIONAL BUSINESS LAW

INTERNATIONAL BUSINESS TRANSACTIONS

Professor Lan Cao

Office Room 413

[email protected]

Office Hours, Mondays Wednesdays 9 to 10:15 or by appointment

​ Syllabus

​Fall Term 2014

Readings will be assigned each week from the following required texts:

1.​Folsom, Gordon & Spanogle, Fitzgerald, Van Alstine, International Business Transactions (11th edition) (the "Casebook").

2.​ Documents Supplement to casebook

Course Description

This is a three-credit survey course designed to acquaint students with some of the issues involved in the conduct of international business transactions. We will examine the various methods of doing business abroad, moving from relatively simple to progressively more involved transactions -- for example, beginning with a basic sale and financing of goods across national borders to the establishment of a productive operation abroad through foreign franchisees, technology licensing arrangements and finally, direct investment in foreign enterprises. The last part of the course will focus on the resolution of international commercial disputes.

PLEASE NOTE THAT FOR MOST OF YOU, THE COURSE WILL INTRODUCE YOU TO A RADICALLY DIFFERENT APPROACH TO THE PRACTICE OF LAW: THE TRANSACTIONAL RATHER THAN THE LITIGATION APPROACH. THIS REQUIRES A DIFFERENT WAY OF THINKING ABOUT CLIENT REPRESENTATION (FOR EXAMPLE, THINKING ABOUT HOW TO STRUCTURE A TRANSACTION RATHER THAN HOW TO LITIGATE).

We will study these transactions in a variety of political and economic settings -- economically developed nations,developing-country markets and non-market economies in transition.

Even though there will be some discussion of national controls and international regulation of trade, for example, the World Trade Organization and the North American Free Trade Agreement, the primary focus of the course is on private international business law (sales contracts, trademark licenses, intellectual property infringements, investment contracts, etc.).

We will touch on an extensive range of substantive laws, such as the law of corporations, commercial transactions and the uniform commercial code, antitrust, intellectual property (copyright, trademark, patent), conflict of laws, civil procedure, contracts, international trade as well as public international law. Any knowledge or background in some of these areas will be helpful. However, there are no prerequisites for this course.

Program Learning Objectives

​

The learning objectives for the law school curriculum generally involve client representation, legal analysis, and legal writing.

Course Learning Objectives

This course supports both the legal analysis and the client representation objectives, but in a transactional, deal-planning context. Therefore, although we will read cases that address substantive legal issues arising from international business, such as letters of credit, intellectual property, international litigation, you will learn to read those cases in order to plan a transaction in ways that best represent your client’s interests or minimize the possibility of conflict between the parties in the future.

To do this, you will of course need to know the substantive laws that govern the transaction. As noted above, this includes a wide range of substantive laws such as contract (sales of goods contract, transportation contract, financing contract, for example), corporations, conflicts of law, intellectual property, investment laws, international dispute resolution. After the course, you will be able demonstrate an understanding of these myriad areas of law. Students will learn to utilize legal rules and policy principles underlying these substantive laws to resolve international business issues, and thereby strengthen their skills in legal analysis, reasoning, and argumentation.

In addition, students will explore all the issues identified above in an international setting and in a transactional setting. With respect to the former, the parties to transactions studied in the course will be from different countries; thus, business principles and business law will be examined in this context. For example, we will look at a trademark licensing contract between parties from the same country and we will also study how this contract should be modified when the licensor and licensee are from different countries. Students will learn to think in the transactional, rather than only litigation context, and will learn to draft clauses that take international business issues into account.

In sum, the primary objectives of the course are: legal analysis, client representation, (which for this course encompasses transactional planning and practice) and skills training, particularly drafting skills. These objectives will be undertaken in an international or transnational context.

Course Requirements:

1.​Class attendance. In accordance with the university’s policy, you must sign your name on the sign-in sheet. Excessive absence will result in your being dropped from the course. Signing-in for another person, or for a day you were not in class, is subject to disciplinary actions by the Law School.

​If there is a discrepancy on the sign-in sheet between your actual attendance for a particular class and what appears on the Sheet, please contact Ms. Maria Sanchez to correct the discrepancy.

2.​Class preparation and participation. Class preparation means reading the materials and being prepared to discuss the materials. This might mean rereading the assignment if needed.

​There may be occasions when you feel you are not fully prepared because of extenuating circumstances. In such instances, please sign your name on the notepad I will have at the podium. I will not call on students who have signed this notepad. No explanation is necessary. Just put your name and the word "Pass." You have three “free passes” for the semester. After that, I will need an explanation if you are unprepared and your final grade might be affected. If you did not sign your name and yet are unprepared to discuss the materials when called on, I consider this a serious infraction.

3.​You will have one or two collaborative group project. Each project will be worth 10% of your final grade. I will assign problems in the casebook. You and your group will work together to represent a client and solve the client’s problems. When the project is assigned, you will have the week off so you can use class time to prepare for the problem and write the memo.

​The grade will be only pass/fail. You will get a pass if you and your group do the project, write up your legal analysis and recommendation in a memo form. In class, I will go over the different approaches after the memos have been turned in.

4.​Final exam. Take home. 48 hours.

5.​I reserve the right to give you a grade boost (by half a grade) for class participation. For example, if your final exam grade is a B, you may get a B plus to take into account class participation.

Information Concerning Use of Computers and Cell Phones

(This Policy Will be Strictly Enforced)

Students in the course may use their computers during the class period for -- and only for -- course-related purposes. This includes taking notes, using existing notes, and looking up materials that specifically relate to the course. It does not include such uses as checking email, sending messages, or viewing any web site other than those specifically instructed by me during class time. Violation of this rule may result in the loss of permission to use your computer during class hours and other sanctions, including grade reduction, at my discretion.

Cell phones must be turned off or put on silent during class period. No texting is allowed.

Last, private conversation between students is not allowed during class time. If I see you talking during class, I will ask you to stop.

Disability Accommodations

In compliance with ADA guidelines, students who have any condition, either permanent or temporary, that may affect their ability to perform in this class are encouraged to contact Associate Dean of Student Affairs and Administration Jayne Kacer or the University Disability Services Office. Dean Kacer is located in the law school Dean's Suite and can be reached at [email protected] or 714-628-2641. You also may contact the Office of Disability Services at 714-516-4520 or www.chapman.edu/disabilities . If your request for an accommodation is granted, please discuss with your professor only those accommodations that relate to classroom learning, e.g., the need to sit in a special location, audio taping, etc. Because exam grading is anonymous, please do not discuss with your professors any accommodations related to exams. These accommodations will be handled by the Registrar's Office. The granting of any accommodation will not be retroactive and cannot jeopardize the academic standards or integrity of the course.

​Syllabus

The syllabus may be subject to revision -- materials may be added or deleted dependent on how the course progresses. If you are absent, it is your responsibility to check with a colleague to see if the reading assignment has been revised.

Readings will be assigned from the following required texts:

1. Folsom, Gordon & Spanogle, International Business Transactions

(the "Casebook").

2. Documents Supplement to Folsom, Gordon & Spanogle, International Business Transactions Copies of the Supplement will be on reserve. You may opt to consult the reserve copies or photocopy the entire statute or relevant portions assigned instead of purchasing the Supplement. These documents are also readily available online.

3. As a general rule, make sure you always read the problem at the beginning of each assignment, and the "Questions and Comments" (Q&C) sections – even though the Q&C sections tend to be at the end of the problem and thus might not be assigned when I assign the first part of an assignment. At times the Q&C will provide you with the information and clues necessary to evaluate the problem. Even if it only raises questions more than provide answers, it will help you shape the framework through which to conceptualize the topic and the problem to be addressed.

Keep in mind that I have at times divided each problem into two parts for purposes of assigning your reading per class (so that the reading is not Aexcessive.@) The Q&C tends to be at the end of, or occasionally, the middle of the problem. This means that when you are reading the first part of the assignment, this part might not contain the pages that the Q&C are on. You need to read the Q&C nonetheless to give you greater overview of the problem.

​TOPICS AND READING ASSIGNMENTS

I.​FORMS OF DOING BUSINESS: INTERNATIONAL TRADING OF GOODS

A.​The Basic Transaction: Toys to Greece​

1.​Casebook, Read 28-40. Focus on Forms 1 through 6 and Form 11 and chart on p. 52 (yes, chart on page 52 although you’re not assigned to READ beyond page 40 for this first assignment)

2.​Casebook, Read 41-58. Focus on Form 13. Note that the two main terms you are expected to know, FOB and CIF (Incoterm) are fully set forth on pp 95-97; these pages are in a problem that is not assigned. But so that you understand FOB and CIF, we will go through those specific pages even though we will not be doing that problem.

B.​Formation of An International Transaction: Insulation to Germany (Problem 4.1)

1.​Casebook, Read 58-73. You will need to study UCC 2-207 (in the supplement), or get the same from some other source (online) if you choose not to get the supplement. Also, read UCC 2-314 to 2-316. It is very important that you focus on statutory sections assigned for this problem.

​2.​Read pp 73- 79 (up to Perillo article) ; p 81(Unidroit Principles, esp. article 2.22). You need to study the UN Convention on Contracts for the International Sale of Goods, in the Supplement, Arts 1, 6, 18, 19, 35, 36 (Focus on Article 1 and Article 19) (or get the Convention some other way).

Read Q&A, pp 84-90

C.​Wars and Other Frustrations: Oil from Araby(Problem 4.3)

1.​Casebook, Read 125-137; 138-140

2.​Read 149-157.

II.​FINANCING THE INTERNATIONAL SALE OF GOODS

A.​Intro: Letters of Credit

The Letter of Credit and Electronic Communication: Gold Watch Pens for France

(Problem 5.1)

1.​Casebook, Read 224-242

2.​Casebook p 243-268

Docs Supp, Read UCC 5-107; 5-108

B.​Enjoining Payment of Letters of Credit for Fraud: VCRs from China (Problem 5.2)

1.​Casebook 268-289; 298-301. You need to read UCC-5-109

III.​FORMS OF DOING BUSINESS: LICENSING, THEFT AND PROTECTION OF INTELLECTUAL PROPERTY

A.​Franchising & Trademark Licensing: Colonel Chicken Goes Abroad (Problem 9.1)

1.​Casebook 752-765 (intro to international IP treaties); 765-770 (intro to franchising); 778-779(Q&C)

2.​Casebook 783-799 (antitrust issues in the U.S. and E.U. and Q&C); 770-778 (franchising contract)​

B.​Protection of I.P: Piracy & Gray Market Rockers Tapes & CDs (Problem 9.2)

1.​Read Casebook 799-813;816-817

You need to look at Section 526 of the Tariff Act of 1930 (document supplement, 19 U.S.C.A. section 1526(a))

2.​Casebook 817-824 (focus on K mart case); 826-829; 832-836

C.​Protection of Intellectual Property: Section 337 Proceedings, Special 301 Procedures, TRIPS and Pharmaceuticals from Thailand (Problem 9.3)

1.​Read Casebook 836-857

Class discussion for this part will focus on the Q&C on pp 1013-1014. Please read the Q&C carefully and apply the issues raised to the problem laid out in the fact pattern.

Docs Supp., Read Section 337 of the Tariff Act of 1930. Focus on ​section 337(a) through (d).

2.​Casebook 857-868

Class discussion will focus on the Q&C on pp 1026-27. Please read the Q&C

carefully and apply the issues raised to the problem laid out in the fact pattern.

Also Docs Supp., Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) Articles 27-31.

IV. FORMS OF DOING BUSINESS: FOREIGN INVESTMENT

A. ​Introduction 10.0 The Decision and Ways to Invest Abroad B Domestic Goods in France

1.​Read Casebook 900-912 ; 913-919 (introduction to basic issues to consider)

Joint Venture Contract (handout)

PLEASE BRING THE HANDOUT JOINT VENTURE CONTRACT TO EVERY CLASS FROM NOW UNTIL THE END OF CLASS. WE WILL MAKE CONTINUING REFERENCES TO IT AS RELEVANT

1.​Casebook 954-966 (currency controls)

2.​Casebook 966-972 (transfer pricing). We will not address transnational insolvency

C.​The Taking of an Investment By a Third World Nation; Obstacles to Recovery; and Lump Sum Settlements, Claims Commissions, and Insurance: Fishing Rods in Marnesia (Problem 10.6)

1.​Casebook 1075-1089 (up to sovereign immunity)

2.​Casebook 1089 (sovereign immunity) -1098 (focus on Banco Nacional v. Sabbatino); 1101-1106

You need to read from Doc. Supp, Foreign Sovereign Immunities Act of 1976 (Focus on section 1605(a)(1) through (a)(6 )

V. TRANSNATIONAL DISPUTE RESOLUTIONS

​A.​Resolution of International Disputes: Televisions Everywhere: Choice of Forum and Jurisdiction​(Problem 11.1)

1.​Casebook 1152-1162 (forum)

B.​International Enforcement of Foreign Arbitral Awards: Cars from Malaysia (Problem 11.5)

1.​Casebook 1277-1297, 1303-1307