The modern perception of the law of international trade has been defined by Schmitthoff, who stated: “It is a remarkable fact – as remarkable as the world-wide acceptance of the rule of law and the universal acceptance of corporateness – that the law of international trade shows a striking similarity in all national legal systems.” The notable aspect of international law is that it seeks to move away from the limitations of purely domestic law to a transnational perspective of international trade law. The increasing trend towards the arbitration of disputes or the use of other nonjudicial methods has favored the application of international principles of law as opposed to nationalist legal principles2. This requires harmonization of national laws, or the convergence of national law systems, through elements such as judicial parallelism or commonality in domestic laws and rules, such as for example in the principles of contract law.
The object of harmonization is to produce a unification of the law of different countries. Different kinds of legal instruments have been used to effect harmonization, including European Community Directives, multilateral conventions embodying a uniform law and those not embodying a uniform law.4 Other examples of harmonization measures that have been traditionally applied are the 1980 United Nations Convention on Contracts for the International Sale of Goods, the UNIDROIT Factoring Convention and the English Sale of Goods Act. These are all examples of harmonization measures that may be classified as hard law.
Harmonization seeks to reduce the conflict in laws produced by different types of national laws and through the replacement of the many legal systems of different countries with a single, international legal instrument.5. But hard laws have not been effective in achieving unification in the law for a variety of reasons, including the limited scope of their application, coupled with a lack of political will to incorporate the international harmonizing measures within the scope of domestic law. Ineffective harmonization may actually increase the problems arising out of the conflicts of laws6.