Soft Law in International Trade Finance

A Comparative Analysis of the Harmonizing Effect of the UCP National Report – Sweden

Abstract

It is generally acknowledged that several areas of commercial law are not comprehensively regulated by law in a strict, state-centered, sense. Instead, national legislators have to a large extent relied upon the parties’ right to use the freedom of contract and courts to exercise their power to decide cases. There are numerous more or less comprehensive frameworks emanating from non-state institutions, such as standard contracts, model contracts, collections of general principles etc., aimed at producing rules or regulatory frames related to various kinds of legal situations. Some of these instruments, which are not an effect of national legislators or state authorities, are often described as soft law. Soft law in this sense can affect the relationship between parties to commercial contracts in various ways. The parties might, for example, expressly incorporate a particular instrument into their contract and thereby, by exercising their freedom of contract, make it applicable in their legal relationship. Moreover, such instruments might influence the legislators and courts in various jurisdictions and might then affect the law. Furthermore such soft law instruments may become usage then being of a kind that courts will have to follow.