It is apparent that out of the four sources of law outlined in the question, international treaties are most relevant to international business transactions generally. Treaties constitute a source of international law by reason of the lack of development in international relations of agencies analogous to the law-enacting and law-determining branches in the internal constitutional structure of states. While in every civil society or state there is always a legislative power which establishes, by express declaration, the civil law of that state, and a judicial power, which interprets that law, and applies it to individual cases, in the great society of nations there is no legislative power, and consequently there are no express laws, except those which result from the conventions which states may make with one another. (2)
Goyle, writing in the twenty first century, emphasizes the point by stating that “the only way in which international law can be made by a deliberate act, in contradistinction to custom, is that the members of the family of nations conclude treaties in which certain rules for their future conduct are stipulated.” (3) In a legislative body laws are usually enacted by a majority vote of the members, or by a number of votes less than the entire membership. Unanimity is never required. But till now there has been no such thing in the international community as rule by the majority.
States are bound only by such international conventions or other acts as they choose to agree to by signature and ratification or by other recognized methods of signifying acceptance. Thus the general practice of international conferences requires unanimous agreement for the adoption of an international act intended to bind all the members.
It would obviously be futile to rest international law upon those treaties only which have been unanimously accepted; and the same thing may be said of customary international law. There is on this point an organic weakness in the theories of those super-Positivists who insist first, that all international law must be based upon the consent of states and, secondly, that the consent must be that of the whole community of states.
It may well be that the fundamental principles of international law are so universally recognized as to be regarded as being based upon the consent of all states, but, as we have previously pointed out, those fundamental principles bind states even without their explicit consent. Such principles are rarely, if ever, the subject of express international stipulations.
To restrict the scope of international law to the rules or principles to which all nations have expressly assented would reduce the system almost to the vanishing point. This result was pointed out nearly a century and a half ago by George Frederick de Martens, professor of law in the University of Göttingen, who in 1789 wrote: “On the example of two nations, all the nations of Europe might, by common consent, make treaties to regulate their different rights; and, then, these general treaties would form a code, which might be called the positive law of nations. But there never yet existed such a general treaty, neither between all the powers of Europe, nor even between the majority of them; in this sense, then, there exists no positive law of nations, and, perhaps, none such ever will exist.” (5)
The content of international law as thus expounded by De Martens is reiterated by many modern writers. Oppenheim, who writes with the precision so helpful to the student, says that law-making treaties create law for the contracting parties solely. Their law is universal international law then only when all the members of the family of nations are parties to them. As for law-making treaties concluded by a few states only, Oppenheim says that the law which they create is particular international law; and besides universal and particular international law, Oppenheim classifies as general international law the body of principles included within the paragraph from De Martens above set out. (1)
In this class Oppenheim places law-making treaties containing general international law which have been concluded by the majority of states, including the leading powers. Such general international law has a tendency to become universal because, as Oppenheim explains, “such states as heretofore did not consent to it will in future either expressly give their consent or recognize the respective rules tacitly through custom.” (8)
An example which illustrates why international treaties are most relevant to international business transactions generally is provided by the Declaration of Paris of 1856 dealing with the law of war on the sea. Among the governments which declined to accede to that declaration at the time it was drawn up was the United States, and Spain had made a reservation to the declaration on the subject of privateering, but when these two countries were at war in 1898, both, without mentioning the declaration by name, agreed to abide by its rules, the United States referring to them as “recognized rules of international law.” (6)
It would be erroneous to attempt to draw too sharply the line of distinction between custom and treaty as sources of international law, for, as it must be emphasized that, whereas custom is the original source of international law, treaties are a source the power of which derives from custom. For the fact that treaties can stipulate rules of international conduct at all is based on the customary rule of the law of nations, that treaties are binding upon the contracting parties. (2)
Coming now to the subject-matter of treaties, not all of them can be called law-making treaties. Only such treaties may be considered as sources of international law which either stipulate new rules for future international conduct or affirm, define, or abolish existing customary or conventional rules. James Madison made a classification of treaties as a source of international law which has stood the test of criticism and received the highest form of approval by repetition. (1)
Treaties may simply repeat or affirm the general law. The best known example illustrating this kind of law is the Declaration of London of March 13, 1871, which declared that “it is an essential principle of the law of nations that no Power can liberate itself from the engagements of a treaty, or modify the stipulations thereof, unless with the consent of the contracting Powers by means of an amicable arrangement.” (7)
Another category consists of treaties making exceptions to the general law which constitutes a particular law between the parties themselves. A striking example in recent times of treaties of this character is the series of treaties concluded by the United States with a number of nations providing, in order to aid the United States in preventing liquor smuggling, for the boarding of foreign vessels by American revenue agents beyond the three-mile limit and within an hour’s sailing distance from the shore. Notwithstanding the special rights conferred by these treaties, they contain a stipulation to “uphold the principle that three marine miles extending from the coastline outwards and measured from low-water mark constitute the proper limits of territorial waters.” (5)
Folsom, Ralph H. NAFTA in a Nutshell. St. Paul, Minn.: West, 1999.
Folsom, Ralph H. and Michael W. Gordon. International Business Transactions. St. Paul: West, 1995.
Goyle, L. The Law of Trusts. New York: Harper Collins, 2001.
International Commercial Litigation. New York, N.Y.: Practising Law Institute, 1998.
McClendon, J. Stewart, ed. Survey of International Arbitration Sites. 3rd ed. New York: American Arbitration Association, 1999.
Newman, Paul. Alternative Dispute Resolution. Welwyn Garden City, Hertfordshire: CLT Professional Pub., 1999.
A Practitioner’s Guide to the International Law of Sales. Chicago, IL: American Bar Association, Section of Business Law, 1995.
Singh, Avatar. Company Law. 10th ed. Lucknow: Eastern Book, 1991.
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