CISG - Related Consulting Services
Drafting of Agency & Distributorship Contract
In an agency or distributorship agreement, it is presumed that the parties intend to develop an enduring relationship. This kind of contracts are regarded as long-term, relational contracts, which arguably require the contractual parties to display a higher behaviour standard towards the other party. For example, increased duties of acting in good faith, such as duty to notify, duty to cooperate, and duty to inquire, may be imposed on them. As the precise content of the principle of good faith has never been universally recognized and the standard of behaviour set by it is difficult to determine, drafting of agency and distributorship contracts usually needs to seek help from legal specialists. It is particularly true in international sphere because a general duty of acting in good faith may be variously interpreted by courts in a manner according to their own legal and cultural backgrounds.
In the past few decades, international commercial law has broken out from its fragmentary, national jurisprudence grounded characteristics to become a more solution-orientated law that is not merely transnational but truly global. The CISG and PICC (Unidroit Principles of International Commercial Contracts) have been generally recognized as the two “major achievements” in the history of unification of contract law in the field of international commerce. It is apparent that adoption of these ‘new’ unified laws is becoming more widespread. In the modern practice of international commercial arbitration, the CISG may be considered as customary rules in international trade law while the PICC are frequently applied as a source of international trade usages. Some of the substantive principles and rules contained in these two instruments are referred to by courts and tribunals as prima facie evidence of the current state of the general principles of international contract law.
It can be envisaged that in the future courts and tribunals will be apt to apply the neutral and transnational rules contained in the CISG and PICC in resolving international trade disputes. An ideal international agency or distributorship contract should apply the CISG with an added clause for gaps to be filled by the PICC. We have profound experience in advising on formation and interpretation of international commercial contracts. We welcome the opportunities of helping companies to apply the CISG and PICC to build up a sound, long-term, and neutral law-based business relationship with their agents and distributors all around the world.