|
Along with the integration of world economy and the globalization of trade, the international trade of goods has become more complicated than ever, and the risks associated are also escalating. As a measure to manage and control risks, the parties to a contract for international sale of goods will usually incorporate an exemption clause into the contract, with the intention to limit the liabilities, and so to control the risks. However, the use of exemption clauses in the contract for international sale of goods is not unlimited, and its interpretation and effects are subject to many factors, simply because, in an international context, different countries and legal systems adopt different attitudes and approaches towards exemption clauses. Therefore, for a participant in international trade of goods, a deep and thorough understanding of the laws and the practice of courts in different countries about the interpretation and application of exemption clauses are important, which would help devise an effective exemption clauses and avoid huge loss.By using English law as a model, with references to various cases, this paper tries to analyze and summarize the general rules applicable to the interpretation and application of exemption clauses, and then, by using the“Force Majeure”clause, the most typical exemption clause in a contract for international sale of goods, as an example, to vividly demonstrate the various obstacles when citing an exemption clause, so to provide some general reference for those contracting parties to a contract for international sale of goods. This paper tries to discover the boundary between an“effective”exemption clause and an“ineffective”exemption clause, with the hope to explore its potentials in risks management and control.Due to that contracting parties to a contract of international sale of goods enjoy the freedom to choose the applicable laws and methods of dispute resolution, as well as the substantive aspects to be employed in contract clauses, and“Autonomy of Private Law”and“Freedom of Contract”has been widely accepted as the fundamental rules when contracting international sale of goods, this paper considers that, when determining the effects of an exemption clause, as a general rule, based on the rule of“Autonomy of Private Law”and rule of“Freedom of Contract”, every agreed exemption clause should be respected and deemed as valid, unless proved otherwise.This paper considers that, in a contract for international sale of goods, if an exemption clause is vague, against the key interests of the contract, or lazily drafted, the exemption clause will fail the expectation of the clause drafters. Further, an exemption will also fail to function if it is against a compulsory law, an express guarantee, of dishonesty or misrepresentation, or severely negatively affected by ill-will of the party who cites the exemption clause, even though the exemption clause has been carefully drafted and in line with the key interests of the contract. Therefore, in order to devise a good exemption clause, one needs to pay attention to the rules and logics discussed in this paper.
|