How best can a principal assure that the agent is not exceeding the powers conferred upon the agent by the principal?

Given the fact that changes in the doctrine of sovereign immunity in the United States would affect United States officials in other countries, are there some changes that you could think of that would place greater responsibilities on foreign officials working in the United States to follow American laws and regulations or would such changes make it more dangerous for American officials abroad?
Q2) Looking at pages 220-222, which potential international contract clause or clauses discussed do you think are most important? Why?
Q3) Without following an agent 24-7, How best can a principal assure that the agent is not exceeding the powers conferred upon the agent by the principal?
Q4) Discuss something from the Silver Nugget.
Chapter 8 & 23 Miller, R. L. (2014). Business Law Today. Texas: South Western Cengage Learning.
The Doctrine of Sovereign Immunity When certain conditions are satisfied, the doctrine of sovereign immunity immunizes foreign nations from the jurisdiction of U.S. courts. In 1976, Congress codified this rule in the Foreign Sovereign Immunities Act (FSIA).2 The FSIA exclusively governs the circumstances in which an action may be brought in the United States against a foreign nation, including attempts to attach a foreign nations property. Because the law is jurisdictional in nature, a plaintiff has the burden of showing that a defendant is not entitled to sovereign immunity.
Section 1605 of the FSIA sets forth the major exceptions to the jurisdictional immunity of a foreign state. A foreign state is not immune from the jurisdiction of U.S. courts in the following situations:
1. When the foreign state has waived its immunity either explicitly or by implication.
2. When the foreign state has engaged in commercial activity within the United States or in commercial activity outside the United States that has “a direct effect in the United States.”3
3. When the foreign state has committed a tort in the United States or has violated certain international laws.
In applying the FSIA, questions frequently arise as to whether an entity is a “foreign state” and what constitutes a “commercial activity.” Under Section 1603 of the FSIA, a foreign state includes both a political subdivision of a foreign state and an instrumentality of a foreign state. Section 1603 broadly defines a commercial activity as a commercial activity that is carried out by a foreign state within the United States, but it does not describe the particulars of what constitutes a commercial activity. Thus, the courts are left to decide whether a particular activity is governmental or commercial in nature.
Doctrine of sovereign immunity—when certain conditions are satisfied, foreign nations are immune from U.S. jurisdiction under the Foreign Sovereign Immunities Act of 1976. Exceptions are made when a foreign state (a) has waived its immunity either explicitly or by implication, (b) has engaged in commercial activity within the United States, or (c) has committed a tort within the United States.
Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. Its purpose
is to reduce tariffs and improve market access among all of the signatory nations, including
the United States. Legislatures in all seven countries have approved the CAFTA-DR, despite
significant opposition in certain nations.
The Republic of Korea–United States Free Trade Agreement
(KORUS FTA) In 2011, the United States ratified its first free trade agreement with
South Korea—the Republic of Korea–United States Free Trade Agreement (KORUS FTA).
The treatys provisions will eliminate 95 percent of each nations tariffs on industrial and
consumer exports within five years. KORUS is the largest free trade agreement the United
States has entered since NAFTA, and may boost U.S. exports by more than $10 billion a
year. It will benefit U.S. automakers, farmers, ranchers, and manufacturers by enabling
them to compete in new markets.
Also in 2011, Congress ratified free trade agreements with Colombia and Panama. The
Colombian trade agreement included a provision requiring an exchange of tax information,
and the Panama bill incorporated labor rights assurances. The Obama administration spent
years negotiating these treaties in an effort to boost U.S. exports, reduce prices for U.S.
consumers, and help our sluggish economy recover. The administration also hoped that
the agreements will provide an impetus for continuing the negotiation of the trans-Pacific
trade initiative, aimed at increasing exports to Japan and other Asian nations.
Bribing Foreign Officials
Giving cash or in-kind benefits to foreign government officials to obtain business contracts
and other favors is often considered normal practice. To reduce such bribery by representatives
of U.S. corporations, Congress enacted the Foreign Corrupt Practices Act in 1977.7
This act and its implications for American businesspersons engaged in international business
transactions were discussed in Chapter 7 on page 204.
Commercial Contracts
in an International Setting
Like all commercial contracts, an international contract should be in writing. For an example
of an actual international sales contract from Starbucks Coffee Company, refer to the
foldout exhibit at the end of Chapter 15.
Contract Clauses
Language and legal differences among nations can create special problems for parties to
international contracts when disputes arise. To avoid these problems, parties should include
special provisions in the contract that designate the language of the contract, the jurisdiction
where any disputes will be resolved, and the substantive law that will be applied in
settling any disputes. Parties to international contracts should also indicate in their contracts
what acts or events will excuse the parties from performance under the contract and
whether disputes under the contract will be arbitrated or litigated.
Choice-of-Language Clause A deal struck between a U.S. company and a
company in another country normally involves two languages. Typically, many phrases in
one language are not readily translatable into another. Consequently, the complex contractual
terms involved may not be understood by one party in the other partys language.
make sure that no disputes arise out of this language problem, an international sales contract
should have a choice-of-language clause designating the official language by which
the contract will be interpreted in the event of disagreement.
Note also that some nations have mandatory language requirements. In France, for
instance, certain legal documents, such as the prospectuses used in securities offerings
(see Chapter 29), must be written in French. In addition, contracts with any departmental
or local authority in France, instruction manuals, and warranties for goods and services
offered for sale in France must also be written in French.
Forum-Selection Clause When a dispute arises, litigation may be pursued in
courts of different nations. There are no universally accepted rules as to which court has
jurisdiction over a particular subject matter or parties to a dispute. Consequently, parties
to an international transaction should always include in the contract a forum-selection
clause indicating what court, jurisdiction, or tribunal will decide any disputes arising
under the contract. It is especially important to indicate the specific court that will have
jurisdiction. The forum does not necessarily have to be within the geographic boundaries
of the home nation of either party.
Case Example 8.5 Garware Polyester, Ltd., based in Mumbai, India, made plastics
and high-tech polyester film. Intermax Trading Corporation, based in New York, acted as
Garwares North American sales agent and sold its products on a commission basis. Garware
and Intermax had executed a series of agency agreements with provisions stating that the
courts of Mumbai, India, would have exclusive jurisdiction over any disputes relating to
the agreements. When Intermax fell behind in its payments to Garware, Garware filed a
lawsuit in a U.S. court to collect the balance due, claiming that the forum-selection clause
did not apply to sales of warehoused goods. The court, however, sided with Intermax.
Because the forum-selection clause was valid and enforceable, Garware had to bring its
complaints against Intermax in a court in India.8•
Choice-of-Law Clause A contractual provision designating the applicable law—
such as the law of Germany or the United Kingdom or California—is called a choiceof-
law clause. Every international contract typically includes a choice-of-law clause. At
common law (and in European civil law systems), parties are allowed to choose the law
that will govern their contractual relationship, provided that the law chosen is the law of a
jurisdiction that has a substantial relationship to the parties and to the international business
Under Section 1–105 of the Uniform Commercial Code, parties may choose the law that
will govern the contract as long as the choice is “reasonable.” Article 6 of the United Nations
Convention on Contracts for the International Sale of Goods (discussed in Chapter 15),
however, imposes no limitation on the parties choice. Similarly, the 1986 Hague Convention
on the Law Applicable to Contracts for the International Sale of Goods—often referred to
as the Choice-of-Law Convention—allows unlimited autonomy in the choice of law. The
Hague Convention indicates that whenever a contract does not specify a choice of law, the
governing law is that of the country in which the sellers place of business is located.
Force Majeure Clause Every contract, particularly those involving international
transactions, should have a force majeure clause. Force majeure is a French term
meaning “impossible or irresistible force”—sometimes loosely identified as “an act of God.”
In international business contracts, force majeure clauses commonly stipulate that in addition
to acts of God, a number of other eventualities (such as government orders or embargoes,
for example) may excuse a party from liability for nonperformance.
Civil Dispute Resolution
International contracts frequently include arbitration clauses. By means of such clauses,
the parties agree in advance to be bound by the decision of a specified third party in the
event of a dispute, as discussed in Chapter 3. (For an example of an arbitration clause in
an international contract, refer to the foldout exhibit at the end of Chapter 15.) The United
Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (often
referred to as the New York Convention) assists in the enforcement of arbitration clauses,
as do provisions in specific treaties among nations. The New York Convention has been
implemented in nearly one hundred countries, including the United States.
If a sales contract does not include an arbitration clause, litigation may occur. If the
contract contains forum-selection and choice-of-law clauses, the lawsuit will be heard by
a court in the specified forum and decided according to that forums law. If no forum and
choice of law have been specified, however, proceedings will be more complex and legally
uncertain. For instance, litigation may take place in two or more countries, with each
country applying its own choice-of-law rules to determine the substantive law that will be
applied to the particular transactions. Even if a plaintiff wins a favorable judgment in the
plaintiffs country, there is no way to predict whether courts in the defendants country will
enforce the judgment. (For further discussion of this issue, see this chapters Beyond Our
Borders feature on page 224.)

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