Here’s How Your Business Deals Rely on Your Contracts

Contracts play a vital role in international commerce, and their significance is magnified in the context of cross-border transactions. This is reinforced by various legal norms and case laws from the United States Supreme Court, which have shaped the principles governing international contracts and agreements. You’re already aware that you need contracts; but why exactly are contracts so important in your dealings?

• Legal Norm: Choice of Law Clauses
  The U.S. Supreme Court has recognized the importance of choice of law clauses in international contracts. In the case of M/S Bremen v. Zapata Off-Shore Co. (1972), the Court upheld a forum selection clause and emphasized the need to respect parties' contractual agreements on choice of law and jurisdiction.

• Legal Norm: Enforceability of Arbitration Clauses
  The U.S. Supreme Court's decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985) highlighted the strong federal policy favoring the enforcement of international arbitration agreements. The Court held that parties should be held to their agreements to arbitrate disputes rather than litigate them.

• Legal Norm: The New York Convention
  While not a U.S. Supreme Court case, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) is a significant international treaty that the Court has acknowledged. It facilitates the recognition and enforcement of arbitral awards across different jurisdictions.

• Legal Norm: Comity and International Contracts
  The U.S. Supreme Court has recognized principles of international comity, the practice of giving deference and respect to the laws and judgments of other nations. In Société Nationale Industrielle Aérospatiale v. U.S. District Court (1984), the Court emphasized the need to balance the interests of international trade and the need for due process.

• Case Law: BG Group Plc v. Republic of Argentina
  In this 2014 case, the U.S. Supreme Court ruled on the impact of the local law requirement in international arbitration agreements. The Court held that a presumption favoring arbitrability applied even in cases involving international disputes and national laws.

• Case Law: Daimler AG v. Bauman
  The Daimler case (2014) clarified the scope of general jurisdiction over foreign corporations. The Court ruled that general jurisdiction is typically limited to a corporation's place of incorporation or principal place of business, even in international cases.

• Case Law: Atlantic Marine Construction Co. v. U.S. District Court
  In this 2013 case, the Court reinforced the importance of forum selection clauses in international contracts. The decision clarified that when parties have freely agreed to a specific forum, the plaintiff's choice of forum can be overridden, promoting international contract stability.

These legal norms and case laws underscore the critical role of contracts in international transactions. They demonstrate the courts' recognition of the sanctity of contractual agreements, the promotion of arbitration in cross-border disputes, and the need to balance international trade with individual rights. These principles collectively emphasize the significance of well-drafted and carefully considered contracts in the realm of international business. Your business can only afford the best contract drafting and review, as compliance in an increasingly globalized world grows more and more important. Click the link below to start your contract journey with TEIL Firms, LLC.