Legal and institutional framework of international trade

Legal and institutional framework of international trade


At the end of this session, learners will understand the legal and institutional framework of international trade. They will identify the challenges and specificities of the international dimension of business law. They will know the fundamental rules of international trade.

French legal system

French law is generally codified. The codes can be consulted on the officiel website

Anglo-Saxon laws are generally not codified and rely highly on the doctrine of precedent (rule of precedent), whereas under French law, case law is less important when the written rules are clear. French law regulates more strictly than Anglo-Saxon laws the powers of the judge to interpret laws.

Judicial power in France
Enforcing a court decision – 1
Enforcing a court decision – 2
Enforcing a court decision – 3

European Union legal system

European Union law is based on international treaties. European integration has led to a sui generis legal system that lies between an international organisation and a federal state.

European Union (EU) law is incorporated into French law. The national courts are the ordinary courts applying EU law: they shall apply it in any case.

Fundamental principles of EU law:

  • Principle of conferral: the EU has only the competences conferred on it by the Treaties;
  • Direct application of EU law;
  • Primacy of EU law over national law;
  • Liability of Member States for breach of EU law;
  • European citizens may bring an action for damages against a State which infringes a EU rule.

+ Read: Division of competences within the European Union (official website

Fundamental rules of EU law:

  • Fundamental rights;
  • European citizenship;
  • Equal treatment and social rights;
  • Freedom of movement of persons;
  • Free movement of goods;
  • Freedom to provide services.

Normative pyramid:

  • Regulations
  • Directives
  • Decisions
  • Recommendations
  • Opinions

+ Read: Regulations, Directives and other acts (official website

Courts of the European Union:

  • Court of Justice
  • General court

The EU Courts are based in Luxembourg.

National courts or tribunals dealing with litigations involving EU law may, and sometimes must, submit questions to the Court of Justice for a preliminary ruling. The Court of Justice gives its interpretation or reviews the legality of rules of EU law.

+ Read: Court of Justice (official website

European Convention on Human Rights

This Convention is an international treaty under which the member States of the Council of Europe undertake to secure fundamental civil and political rights, to everyone within their jurisdiction.

The European Court of Human Rights is based in Strasbourg, France.

+ Read: European Convention on Human Rights (official website

International law

Distinguishing public international law and private international law.
Sources of international law.
Internal law vs international law.

Public international law

Public international law.

Private international law

International business law: several legal systems addressing international matters.
International business law: sources of law.
Freedom vs public order.
International public order.
Conflicts between laws and between courts.

International legal system(s)

For private operators, the international legal system is not an integrated coherent body of rules, applied by specific courts. Instead, there exist several international legal systems. Some are mandatory, other are facultative.

International treaties

Article 55 of the French Constitution provides that treaties or international agreements duly ratified or approved shall, from the time of their publication, have a higher authority than laws, subject, for each treaty of agreement, to its application by the other party.

+ Read: International treaties binding France (official website

World Trade Organization (WTO)

The World Trade Organization (WTO) is based in Genève, Switzerland. It presents itself as the only global international organization dealing with the rules of trade between nations.

The WTO is mainly aimed at States rather than private operators.

+ Read: About the WTO (website

International Chamber of Commerce (ICC)

The International Chamber of Commerce (ICC) is based in Paris, France. The ICC is a private organization that presents itself as the institutional representative of more than 45 million companies in over 100 countries. ICC is a leading arbitral institution for international business matters.

+ Read: About ICC


The ICC defines the Incoterms (International Commercial Terms).

+ Read:


Based in Rome, Italy, the International Institute for the Unification of Private Law (UNIDROIT) presents itself as an independent intergovernmental Organisation which purpose is to « study needs and methods for modernising, harmonising and co-ordinating private and in particular commercial law as between States and groups of States and to formulate uniform law instruments, principles and rules to achieve those objectives ».

+ Read: About UNIDROIT (website

Lex Mercatoria

Lex mercatoria refers to the rules generally applied between merchants. It is composed of general principles of law and usages of international trade.




PRACTICAL CASE: negotiating and drafting an international business agreement

Par Franck BEAUDOIN, Avocat

Avocat, président et fondateur de la société d’avocats FB JURIS, directeur de la publication des sites juridiques et

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