In previous articles and speeches, I have addressed you on international issues such as the relationship of the sales representative with foreign principals; contractual terms regarding international arbitration; and cultural and legal differences between “agent” and “representative.” Commercial globalization, however, is a metamorphosis, and as it evolves, it causes the business community, and at times our legal and business framework, to undergo its own changes. Unfortunately, the more at ease we are with it, the more lax we become about some of the rules that govern international trade, and we may miss changes that it brings to our domestic rules. Some of these results are of concern legally. Thus, this article is intended to draw attention to two such areas: (1) the international sale of goods and (2) an effect that the availability of a global workforce has brought upon U.S. employers’ hiring rules.
International Sale of Goods
Despite being in effect since 1988, the United Nations Convention on Contracts for the International Sale of Goods still evades the attention of sellers. The Convention is an international treaty to which the United States and numerous other countries are parties (“Contracting States”). It automatically applies whenever a seller in one Contracting State sells goods to a buyer located in another. As part of this metamorphosis, sales reps, in some cases, have begun acting as international distributors of the goods they represent. Their sales may become subject to the Convention, just as do sales by manufacturers.
Generally, if no written contract exists, or if only a purchase order and/or confirmation exists, then the provisions of the Convention become the default contractual framework of a qualifying sale; or, if a written contract exists, the terms of the Convention are automatically embodied as part of that contract.
This article does not allow for a full discussion of the Convention, but suffice it to say that, among many other things, it provides for how and when a contract is formed; the risks and benefits of the description and delivery of goods; and the existence of warranties, express or implied. The Convention itself provides, however, that the parties to the sale may agree to exclude any or even all of its terms from the transaction.
Before anyone simply completely disavows its application, a complete understanding of the benefits its terms may bring to the transaction is essential. A buyer might want the convention’s implied warranties to apply; or a seller might wish to benefit from the Convention’s recitals as to the “formation of the contract” when seeking to enforce a simple order in a country where rigid documentary evidence is otherwise required for enforcement. Further, whenever the non-U.S. party demands its application, familiarity with the Convention becomes essential.
It should be noted that a treaty becomes a part of our laws if the U.S. is a Contracting Party and must be respected and enforced by our courts. Thus, one does not eliminate its application when the contract provides only that “the laws of the State of Texas shall apply…” since the convention is considered as a part of the law of Texas.
Employment Rules — Employment Eligibility Verification
This evolution also has entered our employment practices. Whereas before, an employer felt legally compliant with obtaining W-4 forms from employees, today more responsibilities in hiring have been imposed, due in great part to immigration issues. All employers, sales representatives and manufacturers alike, and whether or not they knowingly hire foreign employees, must, in connection with their hiring practices, comply with employment verification rules.
This requires an awareness and review of your company’s employment eligibility verification policies and practices to ensure that all employees are afforded the opportunity to present proper documentation of their eligibility to work in the U.S. The Department of Homeland Security Form I-9 Employment Eligibility Verification Form is what must be used in this regard. It must be completed within three days of the date that the employee commences work.
The employer is not obligated to review documents presented by the employee until he/she has been hired. At the time of hire, the employee may submit a document, or a combination of documents of his election, to verify employment eligibility. However, the choice of documents must come from List A, or from a combination of List B and List C on the reverse side of the I-9 form.
The Employee must complete the first section of the form personally. This section confirms the employee’s eligibility to work for the employer by selecting one of the four choices which indicate the employee’s basis for U.S. employment eligibility. Careful attention must be given to the choice he/she indicates, as it could affect the documentation required to confirm the employee’s identity and work authorization in Section 2. When inspecting the documents presented by the employee the employer must review the original documents — not photocopies. After the employee has completed or provided the information requested in this section, he or she must personally sign and date the form.
When verifying employment eligibility, an employer cannot request an employee to present more or different documents than are required. An employer must honor documents which on their face reasonably appear to be genuine and relate to the person presenting them. The Forms I-9 must be retained by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later.
We recognize that this article touches only on two very important subjects. It is not intended nor should it be taken as specific legal advice. Therefore, seek advice from legal counsel when contracting internationally. With regard to the I-9 forms, consult an attorney for the need to audit same as well as to review your employment practices. Enforcement in this area is becoming more visible.
