principal

| January 13, 2016

principal
Present a report summarizing what you have learned as a result of the week’s activities and what lessons you feel will be valuable for you either presently or in the future. It is helpful but not required to add whatever personal notes and other comments you wish. Unless in grossly improper form, no points will be deducted for any criticism directed at the instructor. It is a useful tool to shape further interaction and course work.
Chapter book Notes:
Making changes in sovereign immunity will affect the official of United States working in other countries. Making changes for officials working in foreign countries will place the American official working in other countries in great danger. All contracts are put in writing and changing any law can alter the original agreement. In case of dispute legal and language differences creates problem among states. Making changes can lead to legal dispute that can lead to closure of agreement between United States and other states. In this case, the American officials may be returned back to their home country (Miller, 2014).
The most important clauses are forum selection clause and choice of law clause. The two clauses are important because they protect parties involved in an international agreement or business. The choice of law is important because the parties involved are given opportunity to select the type of law that will govern the agreement. The transaction is governed with a law that is favorable and from the country of the involved parties. The forum selection clause allows litigation to take place in different nations in case of a dispute. The clause allows flexibility as a case can be filed anywhere convenient (Miller, 2014).
The principal can assure that the agent is not exceeding his or her powers conferred by the principal through ensuring the duties of an agent a clearly stated in the agreement. The agent should perform five duties of notification, loyalty, accounting, obedience and performance. When an agent is not complying with those rules he or she contradicts the agreement (Miller, 2014).
In the discussion Silver Nugget, claimed that international law does not exist among states. Law can only be promulgated by societies and countries with participatory or representative democracy. In the principal-agent relationship, principles mostly, are apprehended by individual seeking to learn about them. In agreement the agent and principal should have rules and guidelines governing their relationship (Miller, 2014).
Notes Nuggets-
This week’s reading appear to be a rather eclectic mixture–international law and the principal-agent relationship. There is, however, at least one reason why these topics appear together this week. Let’s look at international law first. The first thing you need to know about international law is that it is a misnomer. There is no such thing as “international law”, at least not between countries.

Now, after that bold assertion, you may be asking yourself why the chapter was assigned in the first place. In order to answer that question, I have to back up what I said in the previous paragraph. How can there be no such thing as international law? Well, what is “law”? To my way of thinking, a “law” codifies a societal consensus on a given subject as interpreted by, at least, a majority of those individuals elected by society to represent their interests. In addition, a “law” must be enforceable–violations of “laws” should result in a range of sanctions, also representing a societal consensus therein.

What are the implications of that definition of “law”? The main conclusion that I draw is that “laws” can only be promulgated by countries or societies that have some form of representative or participatory democracy. Only then can it be said that “laws” represent any type of societal consensus because there are consequences for lawmakers who ignore such societal opinion. You might ask, what about countries like China that have assemblies that pass laws? Well, that’s not really the case. In any country in which there is not representative or participatory democracy, members of an “assembly” are not beholden to the voters. Rather, they are beholden to, usually, those in control of the mechanism of government, particularly including the military. In those societies, the main function of “legislative” bodies is to rubber-stamp the wishes of those in control of the societies, often, ironically, to try to maintain a veneer of apparent democracy. So I call “laws” promulgated in those types of societies “decrees” or something that denotes a lack of popular participation.

If you are with me so far, you understand that “laws”, as we know it here in the United States, do not exist in many parts of the world. But let’s let that go right now. Let’s turn to the second part of the definition: “laws” must be enforceable and violations of “laws” must result in sanctions. It is here that we get to the “international” part of “international law”. Even if we disregard how “laws” are promulgated, the concerns of certain groups in American society notwithstanding, there is no enforcement mechanism that is universally accepted.

Take the United Nations. For our purposes, the United Nations is comprised of two main bodies–the General Assembly and the Security Council. The General Assembly can pass resolutions. Such resolutions can call upon member nations to do, stop doing, or refrain from doing whatever. But the resolutions are not binding and, except for moral opprobrium or actions taken by individual nations on their own, the General Assembly has no way of enforcing its resolutions. On the other hand, the Security Council does have that power–as long as the member nations agree to enforce whatever sanction is imposed by the Council. There is no such thing–again, some fringe anti-governmental groups notwithstanding–as a “United Nations Armed Forces” with primary allegiance to the United Nations. (This sensitivity was understood at the very inception of the United Nations by giving veto power to the five permanent members of the Security Council, including the United States.)

Adding up where we are, we find that, in many parts of the world, there is no such thing as “laws”. Further, even if we stretch the definition to include resolutions passed by international bodies, there is no enforcement mechanism short of actions taken by individual member nations. So what are we talking about when we say “international law”? Take a look (or another look) at the principles and doctrines set forth in the textbook (pages 220-222). What do they have in common? None of them include enforcement provisions. The best example, of course, is the doctrine of comity–dependent upon such concepts as courtesy and international harmony–important concepts to be sure, but not something that can be counted on or enforced.

As with last week, why the long prologue? In law school, I took what I thought was International Law–it was called International Law and was taught by one of the most learned individuals on that subject in the world. Yet, I was vaguely dissatisfied because there were no real “black-letter law” principles that law students dearly love. Instead, what I found was that “international law” is all a matter of voluntary acquiescence to some principles and rules, an acquiescence that could be abrogated, largely without penalty, at any time.

So I was apprehensive when I was asked to teach International Law here at UIU some years back. Well, it turned out that what I was teaching was International Business Law–essentially the substance of Chapter 8. Or, to put it another way, “private” international law. The course I had taken in law school was “public” international law. I still contend that there is no such thing as “public” international law, nothing that you can hang your hat on, for example, to prevent expropriation of a foreign subsidiary by the country in which it exists. However, foreign countries have their own laws and regulations and it is necessary to understand those laws and regulations in order to be able to do business according to those laws and regulations (in addition to American laws and regulations pertaining thereto). In the realm of “international law”, things are not always what they seem. That maxim is ignored at financial and, sometimes, bodily peril. Nothing should be assumed. That is why the information in Chapter 8 needs to be absorbed, especially if the allure of international business–and there are great potential benefits to be had if done properly–is something that attracts you, or might attract you somewhere down the road.

It is the same–albeit in an attenuated sense–with the principal-agent relationship. Most principles in what is called agency law (for any principals out there, I have an idea why you lost out and why it is not referred to as “principal” law; but it does seem unfair) are easily apprehended by those seeking to learn about them. The one principle where that is not true seems to be “apparent authority” (also called “ostensible authority”). That principle can be confusing. Both principals and those dealing with agents have different pitfalls to avoid. Apparent authority can only be created by the principal and not by an agent. A third party must be careful in accepting the representations of an agent without some context that reasonably gives rise to a belief by the third party that the principal has conferred upon the agent the authority claimed by the agent. If not, the principal is not liable (and the agent is usually not collectible) if the third party acts in such a way that its interests are damaged by the misplaced reliance on the agent. A principal, however, cannot act so carelessly as to confer what appears to be the authority in question upon the agent. The standard of proof is not uniform but, in general, it could be said that if it is reasonable for a third party to come to that conclusion, the principal cannot legally deny the effects. From either perspective, things are not always what they seem. In business, you might find yourselves in the position of a third party at one time, in the position of an agent at another and in the position of a principal at yet another. Most of us–I’ve raised my hand–do not pay much attention to the nuances of agency law. But it is surprising to consider how frequently we find ourselves in one of the positions of the agency triad. I urge you all to pay close attention to the types of authority an agent may possess (pages 601-604) and ask questions in the Participation Topics sub-tab if the textbook is unclear, I am unclear, or both.

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