Rules of Conduct

In the Convention on Law Applicable to Products Liability: Article 9

This article is directed to the situation where the State where the product was introduced into the market is not the State whose internal law is made applicable by reason of articles 4-6. In such a situation, this article empowers, but does not require, the court to give consideration to the rules of conduct and safety prevailing in the State where the product was introduced
into the market as well as to the similar rules of the State whose internal law is made applicable by the Convention.

A hypothetical situation may make clearer the reach of this article. Suppose that an automobile, which was manufactured in State X by a manufacturer whose principal place of business is in X, is first introduced into the market in State Y and is then taken to State Z, where it is purchased by one A, whose habitual residence is in Z. Suppose further that A is injured in an accident in
State Z and that this injury would not have occurred if the brakes of the car had met the safety standards on power or construction of Z. The automobile, however, was not equipped with such powerful brakes as this was not required by the Y rules of conduct and safety.

The contrary is true, however, of the rules of Z which is the State whose internal law is made applicable by the Convention. By virtue of this article, the court would be free to apply either the rules of conduct and safety of Y or the similar rules of Z. The court would be free, in other words, to find for the manufacturer by application of the Y rules or to find for A by application of the rules of Z.

It goes without saying that this article, only has significance in situations where the State where the product was introduced into the market is not also the State whose internal law is made applicable by the Convention.

The word ‘rule’ should be interpreted in a broad sense to include not only statutes and decisional rules but also municipal ordinances.

The words ‘conduct and safety’ should also be interpreted in a broad sense to include all regulations having any relation to the safety of a product. They would therefore include regulations concerned with the manufacture, inspection and repair of the product and with
any safety device with which the product is required to be equipped. By way of example, these words would include rules limiting the number of hours that an employee can work in a factory provided that these rules were designed, at least in part, to promote the safety of the product. [1]

For further information, see also the Law Applicable to Products Liability.

Market Conduct and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Market Conduct: In a particular industry or market, refers to practices which, individually or in combination, shape the market performance characteristics that are the objective of competition policy. Market conduct is affected by the market structure of the industry, and is reflected in sellers’ and buyers’ pricing policies and practices, overt ~ and tacit interfirm cooperation, product line and advertising strategies, R&D commitments and innovation, legal tactics –in enforcing patent rights, for example — and investment in production facilities.

Resources

Notes and References

1. Explanatory Report by W.L.M. Reese, Actes et Documents, Douzième session (1972) Tome I, Institute of International Law

See Also