There is no clear and explicit definition of “points of concern”; rather, the term is generally used to describe the lack of trust and assurance between the parties to an international sales contract. In addition to trust and assurance, eliminating such points of concern is considered one of the obligations arising from the principle of good faith.
The obligation to eliminate points of concern in international business transactions stems directly from the principle of good faith in international trade. The essence of eliminating points of concern is built upon mutual trust and assurance between the parties to an international sales contract. Indeed, such mutual trust and assurance are fundamental and essential pillars in the realm of international commerce. The ability of the parties to international business transactions to fulfill their obligations in good faith is based on this mutual trust. If one party fails to perform its duties and obligations, this inevitably leads to the erosion of trust and assurance. Therefore, each party must act in good faith to eliminate points of concern that may hinder the performance and execution of an international sales contract.
If one of the parties perceives that the other lacks seriousness in fulfilling their contractual obligations, or is incapable of doing so, then the other party has the right to suspend the performance of the contract or request additional guarantees to ensure the proper execution of the agreement in good faith.
Accordingly, we may propose a definition of “points of concern” as: “any act committed by one party to a commercial transaction that undermines trust and eliminates assurance for the other party.”
It is noteworthy that the principle of good faith in transactions is one of the fundamental principles recognized by law. It has been established as a legal maxim stipulating that no act may be carried out in contradiction to good faith. The law obliges parties to a commercial transaction to perform their obligations in accordance with the principle of good faith, whether or not such a principle is explicitly stated in their agreement.
Good faith is defined as an act, or an omission, that may result in the non-formation or non-performance of a contract. The Iraqi legislator has enshrined the principle of good faith in the Iraqi Civil Code No. 40 of 1951 (as amended). Article (150) provides: “A contract must be executed in accordance with its contents and in a manner consistent with the requirements of good faith.”
Furthermore, the UNIDROIT Principles of International Commercial Contracts also stipulate the principle of good faith and fair dealing in Article 1.7:
Each party must act in accordance with good faith and fair dealing in international trade.
The parties may not exclude or limit this duty.
Dr. Thamer Abdul-Jabbar Al-Saidi
Al-Mustaqbal University, the top private university in Iraq