ABSTRACT

In ordinary domestic commercial transactions, there are reasonably simple, well-prescribed means of recourse in the event of nonpayment or other causes of disagreement between parties. For example, the courts can be used to reclaim goods when buyers refuse to pay or are unable to pay. The situation is substantially more complex with international commercial transactions,which by necessity involve more than one legal jurisdiction. In addition, a seller might not receive payment, not because the buyer does not want to pay, but because, for example, the buyer’s country has an insurrection, revolution, war, or civil unrest and decides or is forced to make its currency inconvertible into foreign exchange. In order to handle these and other difficulties faced in international transactions, a number of practices and institutional arrangements have been developed, and these are explained in this chapter.