ACCA Applied Skills · Corporate and Business Law (Global)

International trade, international legal regulation and conflict of laws: formula sheet

Full chapter guide

Key formulas

Primary sources of international law: Treaties + Customary international law + General principles of law; These are the three sources usually listed in Article 38 of the ICJ Statute. Learn them as a set.
Subsidiary means: Judicial decisions + Writings of qualified scholars; They help identify the law. They do not create it.
Customary international law: Custom = State practice + Opinio juris; Both elements are needed. Practice without a sense of legal obligation is only habit or courtesy.
Treaty binding effect: A treaty binds the states that are party to it; Generally a treaty does not bind non-parties. Parties are expected to perform in good faith (pacta sunt servanda).
Monism: International law + national law = one legal system; International law can be applied domestically without separate legislation.
Dualism: International law ≠ national law (two separate systems); International law applies domestically only if national law adopts it, often by legislation.
Incoterms status: Incoterms apply only if incorporated into the contract; They are ICC contract terms, not legislation. Name the term, the place and the version.
Delivery = risk point: Risk passes from seller to buyer when the seller has delivered under the chosen term; Costs may still be borne by the seller beyond that point (for example, CIF freight).
FOB: FOB: delivery and risk when goods are on board the vessel at the named port of shipment; Buyer arranges and pays main carriage. Sea and inland waterway only.
CIF: CIF: delivery and risk on board at the port of shipment; seller pays freight and insurance to destination port; Risk passes at shipment even though the seller pays carriage. Insurance is minimum cover under 2020 rules.
EXW: EXW: delivery when goods are made available at the seller's premises; buyer bears all other costs and risk; Minimum obligation for the seller.
DDP: DDP: seller delivers to the named destination, import-cleared, duty paid; seller bears all costs and risk until then; Maximum obligation for the seller.
Scope limit: Incoterms do not govern price, payment, transfer of ownership or remedies; These matters rest on the contract and applicable law.
Tariff: Tariff = tax charged on imported goods; Raises the price of imports and protects local producers.
Quota: Quota = limit on quantity or value of imports; A non-tariff barrier. Limits volume rather than taxing it.
Most-favoured-nation (MFN): Advantage given to one member → must be given to all members; Non-discrimination between trading partners. Exceptions exist, such as regional agreements.
National treatment: Imported goods = local goods (once past the border); Prevents discrimination through internal taxes and regulations.
Levels of integration: Free trade area → customs union → common market; Customs union adds a common external tariff. Common market adds free movement of factors.
WTO dispute process: Consultation → panel → appeal → adoption → compliance or retaliation; Disputes are between member states, not private companies.
Jurisdiction: Jurisdiction = which court or tribunal hears the dispute; Question words: where, which court, forum. Usually set by a jurisdiction clause or an arbitration clause.
Governing law: Governing law = which country's rules decide the dispute; Question words: which law, proper law, applicable law. Set by a choice of law clause.
Party autonomy: Chosen court + chosen law are normally respected, unless public policy or mandatory rules override them; State the exception whenever you state the rule.
No choice made: No clause → court applies the law with the closest connection (place of contracting, performance, parties' location); Exact test varies by country. Describe it in general terms.
Foreign judgment: Judgment has no automatic effect abroad → must be recognised and enforced by a court where the assets are; Depends on local law and any treaty or reciprocity. Refusal grounds include lack of jurisdiction, unfair process, fraud and public policy.
Arbitral award: New York Convention 1958: contracting states recognise and enforce awards made in other contracting states, refusing only on limited listed grounds; The court does not review the merits of the award.

Quick revision

Sources of international law include treaties, custom and general principles; know the difference between them.
Common law systems rely heavily on case precedent; civil law systems rely mainly on codes.
An Incoterm is a standard trade term setting delivery, cost and risk between buyer and seller.
Incoterms do not transfer ownership of goods and do not cover everything in the contract.
Check where risk passes and who pays carriage and insurance for each Incoterm.
Match each trade body to its function rather than learning names alone.
Jurisdiction asks which court can hear the dispute.
Governing law asks which country's law decides the issues.
A contract may state the governing law and the court the parties choose; read the clause carefully.
Read every option in full: objective questions are all or nothing, with no partial marks.

Common mistakes

Treating court decisions and scholarly writings as primary sources. Fix: Remember that they are subsidiary means. They help identify the law but do not create it.
Saying custom needs only state practice. Fix: Always state both parts: state practice and opinio juris.
Thinking CIF means the seller bears risk until the goods reach the destination port. Fix: Under CIF, risk passes on loading at the port of shipment. Cost and risk split at different points.
Treating Incoterms as law that applies automatically. Fix: Say they apply only if the parties incorporate them into the contract.
Saying a private company can bring a case to the WTO. Fix: Remember that only member states are parties. A business must ask its government to act, or use contract remedies such as arbitration.
Confusing a free trade area with a customs union. Fix: Ask whether there is a common external tariff. If yes, it is a customs union. If each state sets its own, it is a free trade area.
Treating jurisdiction and governing law as the same thing. Fix: Ask two separate questions: which court, and which law. Write them as two separate points in your answer.
Saying a foreign judgment is automatically enforceable in any country. Fix: State that a judgment must be recognised by a court in the country where enforcement is sought, under local law or a treaty.

Exam tips

Learn the three primary sources as a list and be ready to name them in any order.
In custom questions, state both elements: state practice and opinio juris. Examiners reward the pair.
Read option wording carefully in objective questions. Distractors often call a subsidiary means a primary source.
For monism and dualism, give one line on each and say what happens to a treaty in a dualist state.
Link to other topics. Sources feed into how conflict of laws and trade regulation work in practice.
Always link the term to the delivery point first. Most questions are answered once you know where delivery happens.
In FOB versus CIF questions, the trap is usually that cost and risk are split. Risk passes at loading for both; only CIF has the seller paying freight and insurance.
Look for the words "sea" and "container" in a scenario. They may signal that a sea-only term is unsuitable.