ACCA Applied Skills · Corporate and Business Law (Global)
International Trade, International Legal Regulation and Conflict of Laws
This LW chapter covers where international law comes from, how cross-border sales are structured using Incoterms, which bodies regulate trade, and how courts decide which country's court and law apply to a dispute. Learn the definitions and the tests, then apply them to short scenarios.
What this chapter covers
This chapter looks at law when a business operates across borders. It starts with the sources of international law and how legal systems differ, such as common law and civil law. It then moves to the practical side of trade: how goods are sold internationally and how Incoterms allocate cost, risk and delivery duties between buyer and seller.
Next it covers the regulation of trade and the bodies involved, and finally conflict of laws. Conflict of laws asks two questions: which court has jurisdiction, and which country's law governs the dispute or contract.
The chapter links to contract law, sale of goods and dispute resolution elsewhere in the paper. An exam scenario may combine them, for example a contract between companies in two countries with a clause naming the governing law. If you know the contract basics well, this chapter is mostly about adding the cross-border layer.
LW is a two-hour exam of objective questions, and each question is all or nothing, so you need precise knowledge. This chapter is largely definitions, lists and short tests, which suits objective questions well. Candidates who learn the terms exactly can pick up marks quickly. Those who only skim lose marks on close options, especially on Incoterms and on jurisdiction versus governing law.
International trade, international legal regulation and conflict of laws: topics in the order to study them
- 1Sources of International Law and Legal SystemsStart here because it gives the vocabulary (treaties, custom, legal systems) that the rest of the chapter relies on.
- 2International Trade and IncotermsNext, learn how cross-border sales work and who bears cost and risk, which is practical and easy to test with scenarios.
- 3Regulation of International Trade and Trade BodiesOnce you understand the transactions, learn who regulates them and what each body does.
- 4Conflict of Laws: Jurisdiction and Governing LawStudy this last because it applies the earlier ideas to disputes and needs a clear grasp of contracts and legal systems.
How to prepare International trade, international legal regulation and conflict of laws
Aim to know the terms exactly and to apply them to short scenarios. Do this in small, repeated sessions.
- Read each topic once in the study order and write a one-line definition for every key term.
- Make a table-style list in your notes of each trade body or source of law and its main role, then test yourself from memory.
- Learn Incoterms by what they decide: delivery point, who pays carriage and insurance, and where risk passes. Compare terms in pairs to see the differences.
- Separate jurisdiction (which court) from governing law (which country's rules) and practise labelling facts as one or the other.
- Do objective questions after each topic. For every wrong answer, write why the correct option fits and yours does not.
- Revisit the chapter two or three days later with a mixed set of questions, then use the quick revision points before the exam.
Common mistakes in International trade, international legal regulation and conflict of laws
Confusing jurisdiction with governing law
Fix: Ask yourself: is the question about which court hears the case, or which law is applied? Label it before choosing an answer.
Assuming Incoterms cover ownership and every contract term
Fix: Remember they deal with delivery, costs and risk. Transfer of title and other terms are dealt with elsewhere in the contract.
Mixing up Incoterms by their names
Fix: Learn each by its delivery point and risk transfer, and compare similar terms side by side.
Memorising trade body names without their roles
Fix: Write one sentence on what each body does and test yourself using the function as the prompt.
Treating all legal systems as working in the same way
Fix: Learn the main features of each system the syllabus names, especially how law is made and applied.
Choosing an answer that is partly right
Fix: Read all four options in full and check each condition before you select.
Last-day revision: International trade, international legal regulation and conflict of laws
- 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.
International trade, international legal regulation and conflict of laws practice questions
- Country A is a WTO member and grants a low tariff on imported machinery from Country B, also a member. Under the most-favoured-nation princi…
- A WTO member believes another member's measure breaches WTO rules. Consultations fail, and a panel finds against the respondent, which does …
- Which of the following is the usual role of judicial decisions and academic writings in the sources of international law?
- For decades, coastal states have consistently refused to stop foreign vessels from passing peacefully through their territorial waters, and …
- A contract between a seller in Country X and a buyer in Country Y contains no governing law clause. A dispute arises and is brought before a…
- Veldia and Marnor, two sovereign states, sign a written agreement governed by international law setting out their rights over a shared river…
- Marlow Co and Tisdale Co, in different countries, sign a supply contract stating: 'This contract is governed by the law of Country C.' Neith…
- Valdor Ltd and Rennick Ltd have a contract with no governing law clause. A court must decide the applicable law. Which approach reflects the…
International trade, international legal regulation and conflict of laws in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
International trade, international legal regulation and conflict of laws: frequently asked questions
Is this chapter hard for the LW exam?
It is mostly definitions and short tests, so it is manageable with regular practice. The difficulty is precision, particularly between similar terms. Practise objective questions to build it.
Do I need to memorise every Incoterm?
Learn the terms your syllabus and study material cover, and know what each says about delivery, cost and risk. Understanding the differences is more useful than memorising code letters alone.
What is the difference between jurisdiction and governing law?
Jurisdiction decides which court may hear a dispute. Governing law decides which country's rules are applied to decide it. They can point to different countries.
How should I revise this chapter in the last days?
Use short notes on terms, bodies and tests, then do a mixed set of objective questions. Review every mistake and re-read the quick revision points the day before.