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@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
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% (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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