Smart contracts promise to materialize a lifelong dream as they purport to be self-executing, cost-efficient, free of human error and other inefficiencies commonly attributed to traditional contracts. Nevertheless, the fact that smart contracts originate from and embody human interactions also makes them imperfect and prone to be affected by the shortcomings of the relationships that they regulate. This chapter explores some of the most important questions raised by the idea of smart contracts, including their contours and substance, whether they should be regarded as contracts or not, their relationship with the legal system (both domestic and international) and the comparison between smart contracts and traditional contracts. The rigidity, tamper-proof nature, self-sufficiency and completeness of smart contracts are generally viewed as important features, which make them particularly attractive for international commercial transactions where language, culture, different legal standards and other differences are usually the source of tension besides raising transaction costs. Smart legal contracts, however, are not a complete replacement either for traditional contracts, or for all human involvement in commerce.
Edited by Andrew Hutchison and Franziska Myburgh
This chapter considers the challenges and opportunities that electronic communications and online contracting have provided for the traditional law of sale, one of the key legal disciplines in international commercial transactions. The manner in which electronic trading has moved from proprietary electronic data interchange to open online contracting is traversed. It is shown how organisations like the United Nations Commission on International Trade Law and the International Chamber of Commerce have successfully developed legal harmonisation instruments to augment existing law and to remove obstacles to international trading. It is shown that a legal formality such as writing can easily be accommodated by existing law; a signature, however, has presented a bigger challenge which has not yet been fully resolved in many legal systems. The chapter also analyses the functioning of newer technologies like blockchain and cryptocurrencies and the opportunities that these technologies present to solve payment and seamless documentation issues.
Building upon the existing literature, this Chapter shows that international tax law might have either positive or negative effects on the protection of the environment. First, this Chapter discusses the positive effects that international tax law could have on environmental protection if global environmental taxes were to be adopted. Second, by means of three concrete examples, this chapter analyzes three types of negative effects that international tax provisions might have on environmental protection. The international tax provisions that apply to the aviation sector are used as a first example to show that international tax law can cause a country’s tax system to be or remain disconnected from or inconsistent with its environmental policy agenda, which is problematic. Then, the case of environmental border tax adjustments is used to show how international tax provisions are sometimes used as an argument against the adoption of innovative domestic or regional tax measures that would allegedly help foster environmental protection. Finally, a third potential negative effect of international tax law on environmental protection is discussed through the example of emissions trading schemes, to highlight how double tax treaties might affect their effectiveness. This Chapter concludes that the interactions between international tax law and environmental protection need to be acknowledged and that coordination is key to ensure that international tax law does not undermine the legislator’s efforts to protect the environment.
The purpose of this chapter is to address a set of seminal questions that are currently asked about conducting serious academic research in comparative tax law, and to show different research strategies which are inspired by underlying competing theoretical “conjectures” (the critical, cosmopolitan, and evolutionary conjecture). The chapter initially discusses the descriptive dimension of comparative tax research with particular attention to the dynamic change of tax systems, and then develops the analysis of the normative dimension of comparative tax research, a dimension in which scholars, experts or policy makers recommend, advocate, or otherwise require that a certain change of existing domestic or transnational law be made on the basis of comparative analysis. The chapter goes on to describe a portfolio of arguments (the purpose-based, impact-based arguments, policy-based common-origin argument) that are used in comparative reasoning to advocate legal change. In the final part the chapter describes the legal-anthropological, functional, common core, and tax transplants strategies that can be used in comparative tax research, advances a scorecard to evaluate these different research strategies, and concludes by showing potential research patterns to identify which of them is most promising scientifically.
Juan Zornoza Pérez
This chapter examines the transformation of the international tax regime from a regime dominated by bilateral tax treaties with essentially no multilateral legal instruments into a more formal regime infused with multilateral elements. It uses the unique perspective given by the construction during the BEPS project of the so-called multilateral instrument, which is effectively the first multilateral tax treaty. The chapter concludes however that the future of multilateralism in international taxation is uncertain, not so much for technical reasons as for politics and the clinging on to notions of sovereignty and nationalism.
Andrew Hutchison and Franziska Myburgh
This introductory chapter sets out the topic of the edited collection as a whole. It also introduces the two dominant underlying themes of the mandate given to authors, namely ‘lex mercatoria’ and ‘private ordering’. The term ‘lex mercatoria’ derives from a (possibly romanticised) narrative of medieval merchant law traditions, particularly that merchant practice was the source of merchant law. The narrative is powerful and enduring: some scholars brand the modern versions of transnational commercial law a ‘new’ lex mercatoria. ‘Private ordering’, the process whereby non-State actors regulate their own affairs, has always been central to this argument. Indeed, many view this concept as fundamental to commercial contracting in general.
In this chapter, the author examines recent developments in the English approach to the interpretation of commercial contracts, using the so-called ‘restatement’ in Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896,  1 All ER 98 (HL) as the point of departure. This discussion focuses on the claim that the approach to contractual interpretation must give effect to the reasonable expectations of contracting parties if English law is to retain its popularity as a contracting regime for international commercial parties. Accepting for the sake of argument that there has been a retreat from the contextual approach reflected in the ICS restatement, the author also examines to what extent empirical studies of interpretive preferences justify such a return to textualism so that one may say that the interaction between commercial law and practice currently reveals the dynamic tradition of the (medieval) lex mercatoria. The author concludes that at most, the findings only provide support for an approach that allows commercial parties themselves to dictate which interpretive regime should be adopted by a court.
This chapter considers the role of good faith, and in particular, the duty to co-operate in long-term contracts. The position in English law, the UN Convention on the International Sale of Goods 1980 (CISG), the UNIDROIT Principles of International Commercial Contracts (PICC), and the Draft Common Frame of Reference (DCFR) are examined. Infamously English law does not have a general principle of good faith. Good faith obligations may be implied into so-called relational contracts. The chapter sets out the characteristics used by the English courts to identify such contracts and scrutinizes the content and extent of such obligations. While there is no express obligation on parties to act in accordance with good faith under the CISG, on many occasions tribunals have found the parties to have good faith duties to one another. The bases for these findings are considered, as well as the content of the express good faith obligations found in the PICC and DCFR. Despite the lack of a general good faith obligation in English law, it is often chosen as the law to govern international commercial contracts. It is argued that introducing good faith obligations by way of implied terms may mean that English law loses its competitive advantage on the global stage.
Harriët N Schelhaas
This chapter describes the main features of the most important remedies for breach of contract: specific performance, termination for breach and damages. The point of departure will be the historical concept of the medieval lex mercatoria. It will be determined if and to what extent such a law merchant existed in the area of remedies for breach of contract and whether commercial law has evolved, taking into consideration the fact that over the years commercial law has become more complicated. This landscape for remedies for breach of contract will then be sketched from a contemporary perspective. First, the chapter will focus on the remedies in the event that merchants do not design their own contractual agreements in this respect and a national law is applicable. In this context, an English perspective will be given, followed by a continental Dutch perspective. The description will reveal some contemporary issues in relation to the default rules on specific performance, termination for breach and damages, such as the question whether specific performance should be a primary remedy; whether and under what circumstances a contract may be terminated for breach; and to what extent damages may be excluded. Subsequently it will be analyzed whether there are trade usages and practices in international contract law that are often adopted by commercial parties, thereby creating a ‘new’ lex mercatoria. If so, is this different from the medieval lex mercatoria?