BOOK REVIEWS
CHRONIQUE BIBLIOGRAPHIQUE
Gil R6millard, Lefgddralisme canadien. Montr6al: Qu6bec-Am6rique, 1983.
Pp. 734 [49.95$]. Reviewed by Edward McWhinney, Q.C.*
On the Pending Renewal of the “Quebec Fact” in Canadian Federalism
On opening Professor R6millard’s new text on Canadian federalism
and examining, first of all, its detailed Table of Contents, I was reminded
of something I said back in 1967 regarding the existing “two solitudes” in
Canadian legal education:
[B]y and large, Canadian constitutional law, as taught in the English-speak-
ing provinces, takes for granted a pre-existing constitutional order with a rel-
atively stable, if not exactly static, pattern of institutional relationships between
the different ethnic-cultural groups making up the society that the constitutional
order is supposed to reflect. Otherwise the scientific legal emphasis upon the
judicial process –
specifically, upon the judicial process as developed in the
section 91/section 92 B.N.A. Act dichotomy –
becomes largely meaningless.
I do not believe, however, that it can continue very much longer to be a viable
political or intellectual legal approach in this society, where the very founda-
tions of the constitutional order are under continuing re-examination and ques-
tioning as the fabric of constitutional society itself sometimes threatens to tear
apart under the impact of biculturalism.’
My comments2 were inspired by a semester of teaching Constitutional Law
as Visiting Professor at the Faculty of Law of Laval University in the spring
of 1967. I was intrigued to discover, at that time, how radically different
the conception and scope of constitutional law courses were between Eng-
lish-speaking and French-speaking law schools in Canada.
The Anglo-Canadian approach to Constitutional Law was largely moulded
in the 1950’s and 1960’s by Professor Bora Laskin’s monumental casebook,
Canadian Constitutional Law.3 Professor Laskin taught Constitutional Law
at the University of Toronto from 1949 until his appointment to the Ontario
Court of Appeal in 1965, and, for most of that time, he taught it alone. It
was only in 1963 that increased enrolment at the University of Toronto
Law School and increased government funding permitted the dividing of
the course between two different professors.4 The casebook approach, which
Laskin’s method typified, was borrowed from the United States where, after
* Professor of Constitutional Law, Simon Fraser University.
‘E. McWhinney, “The Nature of a Bicultural Constitutionalism” in Ontario Advisory Coln-
mittee on Confederation: Background Papers and Reports, vol. 2 (1970) 50 at 51.
2 These comments were originally made at a joint meeting of the Canadian Association of
Comparative Law and the Association of Canadian Law Teachers as part of the Canadian
Centennial Celebrations of 1967.
3 B. Laskin, Canadian Constitutional Law: Cases and Text on Distribution of Legislative
Power, 1st ed. (1951).
4 Professor Laskin and, as it turned out, myself.
McGill Law Journal 1984
Revue de droit de McGill
1984]
BOOK REVIEWS
having been pioneered by Dean Langdell at Harvard in the 1890’s, it came
to dominate legal education in the 1920’s. The casebook approach and the
accompanying system of class instruction were organised around a collection
of reported judicial decisions. The course materials provided bibliographic
notes, but, by conscious editorial design, did not include any commentary
or interpretation. The method of teaching was deliberately non-speculative
and non-philosophical, in marked contrast to the older system of grand,
magisterial lectures which it had displaced. Such an approach was typified
by Laskin’s immediate predecessor, the eloquent, Irish-born, and long-time
Professor and Dean at the University of Toronto, W.P.M. Kennedy.
Laskin’s casebook and his ninety hours of lectures on Constitutional
Law each academic year were primarily organized around sections 91 and
92 of the British North America Act of 1867, with only fleeting reference
to other sections, such as section 132. The essence of the Laskin teaching
approach was the logical exegesis of sections 91 and 92, as viewed through
the interstices of the authoritative judicial decisions of the Privy Council
and Supreme Court of Canada. It was all very intensive and concentrated,
and, in comparison with the standards of other Anglo-Canadian law pro-
fessors who also employed the American-derived Socratic teaching method,
it was superbly executed. But it was, at the same time, an intellectually
narrow, even artificial, exercise, for it never questioned the basic Grundnorm
of Canadian federalism and the Canadian constitutional polity as a whole.
This was unexceptionable in the politically blander era of Canadian fed-
eralism which endured through to the end of the 1950’s. The Laskin ap-
proach was almost exclusively preoccupied with constitutional legal technique
and legal logic at the expense of constitutional policies; as a result, it carried
the seeds of the political problems and constitutional “near-disasters” that
plagued both Quebec and English Canada through the years of the “Quiet
Revolution”.
As Professor Jacques-Yvan Morin politely suggested to students at the
University of Toronto Law School during debates on the constitution and
federalism in the 1960’s, for anglophone jurists to pose the question “What
does Quebec want?” is itself an admission of failure. The art of constitutional
problem-solving is to offer timely solutions, providing remedies before a
situation has become pathological and politically out-of-hand. The thrust
of Professor Morin’s implied criticism of Anglo-Canadian constitutional
attitudes and expectations was that a politically sophisticated system of
constitutional law instruction should be sufficiently broad in its intellectual
range and sympathies to have foreseen and comprehended Quebec’s emerg-
ing discontent with Canadian federalism. Such a system of instruction would
have brought forward, by the apoge of the Quiet Revolution and while
there was still time to canvass alternative constitutional solutions, Anglo-
Canadian paradigms or models for a peaceful and consensual restructuring
REVUE DE DROIT DE McGILL
[Vol. 30
of the principal institutions, processes and substantive ideas of Canadian
federalism. This would have enabled civilised French-English dialogue and
reciprocal exchange of views on the constitution before the end of the 1960’s.
Furthermore, a broader constitutional perspective might have prevented the
pathological experience of Quebec’s attempted secession and the ultimate
acceptance of a flawed and incomplete constitutional solution which was
achieved only at the cost of some deep, and probably lasting, political wounds.
These latter-day, mildy revisionist thoughts are prompted by an ex-
amination of Professor Remillard’s Table of Contents. Undoubtedly influ-
enced by his great teacher and one of the seminal thinkers on Quebec’s r6le
in the Canadian polity, the late Professor Bonenfant of Laval University,
Professor R6millard’s conceptual framework and design are ambitious and
imaginative. The intellectual openings and sympathies are richly eclectic
and rooted in comparative law readings. Part I, Chapter 1, is an extended
scholarly excursus on the historical origins of Canadian federalism. Profes-
sor R~millard addresses the various alternative projects for union or as-
sociation before 1867, several foreign examples of federalism extant in 1867
(principally the Constitution of the United States and the pre-1874 Swiss
model), and various doctrinal theories of federalism that were intellectually
in vogue, or at least in circulation at the time.
I was a little disappointed with Part I, not so much in its actual exe-
cution as in my unfulfilled expectations. Theories of what the Founding
Fathers of Canadian federalism intended in 1867 are at the core of the Anglo-
Canadian critique of the Privy Council’s “Provincial Rights”-oriented inter-
pretation of the legislative competences under sections 91 and 92. Generally,
the thesis of the dominant Anglo-Canadian scholars of the 1920’s through
to the 1950’s – W.P.M. Kennedy, H.A. Smith, Vincent MacDonald, F.R.
Scott, Raphael Tuck, Bora Laskin – posited that the Privy Council, under
the intellectual leadership of Lord Watson and Lord Haldane from 1896 to
the beginning of the 1930’s, reached a “result which the historian knows to
be untrue”. 5 Is this generally accepted Anglo-Canadian indictment of the
Privy Council still scientifically valid in the light of contemporary access
to historical source materials? Or is it, more simply, something that is quite
incapable of serious historical verification and doomed, therefore, to remain
at the level of legal folklore as an element of legal faith and not of reason?
Part I, Chapters 2 and 3, complete the depiction of the development
and formative influences of Canadian federalism by taking us into the stuff
of the Grundnorm –
the political-societal principles upon which the con-
stitutional system is posited and in the light of which its norm-making is
5 H.A. Smith, “Interpretation in English and Continental Law” (1927) 9 J. Comp. Leg. &
Int’l L. 153 at 160.
1984]
CHRONIQUE BIBLIOGRAPHIQUE
carried out. Professor R6millard discusses the military conquest of 1759-60
and the Royal Proclamation of 1763, the Quebec Act of 1774 and the Con-
stitutional Act of 1791, and the political troubles of 1837-8 followed by the
Union of 1840-1. This discussion sets the context for the debate concerning
the legal nature and characterisation of the B.N.A. Act of 1867. Is it a
compact (treaty) or a statute? If a compact, is it a compact between two
Peoples (or Nations), or a contract between four parties (not being Peoples
or Nations)? As either compact or simple statute, is the arrangement federal
or only quasi-federal? All of this high theory must be related either to verified
historical fact or to present-day sociological reality.6
I would have liked more analysis of the historical origins of “Deux
Nations”. Is this, as Professor Morin seems to suggest in his writings of the
1960’s, a comparatively recent constitutional postulate dating from Henri
Bourassa and the opening of the present century? If this is so, its political
authority or its claims to innate political reasonableness as a constitutional
premise of contemporary Canadian federalism would not necessarily be
impaired. It would, however, undoubtedly facilitate more rational and une-
motional debate between Anglo-Canadians as to the practical implications
of “Deux Nations” for the restructuring of the federal constitution, either
by way of direct constitutional amendment or by administrative practice.
The first one hundred seventy-seven pages of Professor R6millard’s
book, or roughly one-third of the author’s analytical text, are devoted to
philosophical questions such as these. Such questions are at the core of the
debate on the future of Canadian federalism which is currently taking place
among francophone Quebecers: the “federalist” (federal Liberal) Quebecers
who went to Ottawa with Mr. Trudeau; the “provincialist” (provincial Lib-
eral) federalists under Jean Lesage, Robert Bourassa, Claude Ryan and, once
again, Robert Bourassa; the older “provincialist”, conservative (Union
nationale) federalists, under Daniel Johnson and Jean-Jacques Bertrand;
and the present-day rassemblement or ralliement of disparate political forces
conservative, liberal, social democrat – under the Parti qubtcois ban-
–
ner. We are now perhaps sufficiently removed, in point of time, from the
internecine conflicts among these wholly francophone political and intel-
lectual forces to render historically detached and politically generous judg-
ments. I once referred to the politically bloody exchanges of the late 1960’s
and early 1970’s between francophone Quebecers in Ottawa and franco-
phone Quebecers in Quebec City, as a modern, Canadian version of the
French children’s romance, La guerre des boutons. However, one of these
francophone Quebecers in Ottawa suggested sagely that the better metaphor
might be a Balkan War, fought without mercy or quarter on either side.
6 And why not, since the Grundnorm in Kelsen’s own thinking did not have to be static and
unchanging, and jelled, once and for all time, at a certain point in history?
McGILL LAW JOURNAL
[Vol. 30
Looking back, however, one finds much more magnanimity, pragma-
tism, and political give-and-take than was publicly evident at the time those
stormy political events were unfolding. There was a species of de facto
accommodation, or peaceful coexistence between, for example, federal (bil-
ingual) language policies and Quebec (“primacy of the French fact”) lan-
guage policies. Unnecessarily heavy-handed, bureaucratic approaches at both
levels were replaced by an increasingly flexible administration of policies,
thereby facilitating the accommodation. In addition, this softened the con-
frpntational aspects of the “battle in the Courts” which, incidentally, never
at any stage involved a direct, frontal assault by the Trudeau federal forces
against the core of either Bourassa’s Bill 22 or Lkvesque’s Bill 101.
In an historical-dialectical sense, these Quebec francophone factions,
despite widely diverging interpretations of the course of Quebec history,
were pursuing many of the same long-range goals with respect to the pres-
ervation and furtherance of the “French fact”. Indeed, there were many
different roads to Rome as became apparent with the unfolding of the “Quiet
Revolution”; however, the common cultural heritage of all the political elites
spawned by the “Quiet Revolution” remains an intellectually unifying fac-
tor.7 This common bond has endured through to the present, new era of
transition in Canadian constitutionalism inaugurated by the September,
1984, federal elections. A Quebec compromise regarding its rble in a newly-
defined Canadian federalism is timely; however, political events in Canada
are unlikely to wait indefinitely for Quebec political leaders to make up
their minds and produce a sufficient Quebec societal consensus. In any
event, it is clear that the Supreme Court of Canada’s ruling in the so-called
Quebec “veto” case 8 is not the last political word, and does not foreclose
any of Quebec’s constitutional options within the larger federal polity. In
retrospect, the Supreme Court ruling seems to have been both politically
mischievous in its practical consequences and legally otiose or unnecessary.
Supreme Courts in other federal systems, having more continuous political
exposure and experience than our own, would almost certainly have applied
canons of judicial self-restraint and declined to rule altogether on the basis
that the issue involved had become moot with the enactment of the Con-
stitution Act of 1982.
The balance of Professor Rmillard’s analytical text covers material
more familiar and available to Anglo-Canadian constitutional law students:
the evolution of the B.N.A. Act of 1867 under the judicial interpretation of
7 As Gerard Pelletier elegantly demonstrates in his superb study of the philosophically fecund
decade of the 1950’s;Les annees d’impatience, 1950-1960 (1983).
8 ReA.G. Quebec andA.G. Canada (1982), [1982] 2 S.C.R. 793, 140 D.L.R. (3d) 385.
1984]
BOOK REVIEWS
the Privy Council and also by the Supreme Court of Canada; 9 the formal
rules of constitutional-statutory construction applied by those tribunals, es-
pecially in regard to sections 91 and 92; and some problems of constitutional
competences that are of past, present and potentially future interest to Quebec
political leaders, namely natural resources and communications (principally
radio, television and cinema). Professor R6millard writes with political and
intellectual detachment, perhaps even too much so. As a consequence, this
part of his work, unlike the Quebec constitutional writing of the 1960’s,
lacks some colour and does not provide the general propositions that seek
to unify otherwise disparate facts and point the way to the future.10 It is a
commentary upon Professor R6millard’s scholarly detachment that he
maintains throughout a coolly scientific approach; but I would hope that
in any future editions he would feel encouraged to venture some more
critical, neo-Realist evaluations of the quality of intellectual performance
involved in the decision-making, judicial and otherwise, under our federal
constitution. What Professor R6millard has done is to produce a superb
collection and synthesis of the two, often artificially separated, historical-
cultural and logical-analytical strands in Canadian constitutional interpre-
tation. Since Professor R6millard is, together with G6rald Beaudoin, an
unequivocal “federalist” among the current class of outstanding franco-
phone Quebec thinkers on the constitution, his work takes on a special
importance for anglophone constitutionalists and constitutional law stu-
dents concerned with the imaginative up-dating and rationalisation of our
federal system. The significance of this undertaking should not be ignored
by our new political leaders at the federal level, anglophone and francophone
alike.
9 Professor R6millard’s text examines the judicial treatment of the B.N.A. Act both before
and after 1949, the year of the abolition of appeals to the Privy Council.
10 Quebec constitutional writers, such as Jacques-Yvan Morin, Claude Morin and Jacques
Brossard were active and vocal in the 1960’s.
Leon E. Trakman, The Law Merchant: The Evolution of Commercial Law.
Littleton, Colorado: Fred B. Rothman & Co., 1983. Pp. xi, 195 [35$ US].
Reviewed by John Swan.*
Much recent scholarship on the topic of contracts has suggested that
traditional rules have little relevance and are even antithetical to modern
commercial arrangements.’ Professor Trakman’s book can, in one sense, be
seen as a denial of this hypothesis. He argues that the development of
modem commercial law and, in particular, the development of excuses for
nonperformance, has undercut the sanctity of freedom of contract. He con-
tends that the growth in the common law of an extended law of excuses for
nonperformance is evidence of an increasing divergence between law and
commercial needs. Professor Trakman believes that the law should develop
to allow the original goals of the law merchant –
a truly international law
merchant –
to become once again the touchstone for decisions regarding
international contracts. In his opinion, the present law no longer enforces
the agreements of the parties.
The book begins with a brief outline of the medieval law merchant’s
development and reception into the common law and other modern legal
systems. This is followed by a short description of the modem international
law merchant. The first chapter concludes:
The life of commercial law lies in the experience of merchants themselves.
Commercial law is not an end in itself; rather, it is a means towards an end.
It is the way towards continuous commerce in accordance with the design of
the international community of merchants. The fact that merchants develop
dissimilar practices and usages in their respective domestic trades does not
prevent them from devising uniform practices in their international affairs.
After all, their “contract”, construed in the light of international practice, con-
stitutes their common language and their own chosen means towards self-
regulation. It embodies their mutual understandings, their consensus ad idem,
and their expectations of one another. In this sense, the “law” of international
trade is guided by a single unifying force –
the agreement ofthe parties. This
unifying force was the most dominant attribute of the medieval Law Merchant.
This same unifying force should guide the international Law Merchant of the
modem day.2
Professor Trakman develops his thesis through an analysis of inter-
national oil contracts. A questionnaire3 was submitted to legal counsel em-
ployed by thirty-three major oil companies. The results of the questionnaire4
*Of the Faculty of Law, University of Toronto.
‘See I. Macneil, The New Social Contract: An Inquiry into Modern Contractual Relations
2L.E. Trakman, The Law Merchant: The Evolution of Commercial Law (1983) at 44.
3Professor Trakman provides a copy of the questionnaire, but no extensive statistical analysis
of the results; see Appendix E, ibid. at 131.
4There is some evidence that the response rate was low; see Appendix F, ibid. at 135.
(1980).
McGill Law Journal 1984
Revue de droit de McGill
1984]
CHRONIQUE BIBLIOGRAPHIQUE
disclosed that most contracts caused no problems in performance, and, of
those that did, the majority were resolved without recourse to any kind of
dispute resolution process. Of the disputes requiring formal resolution, 41
per cent were settled by arbitration while 59 per cent were resolved by a
judicial body. Responses to the questionnaire disclosed that the resolution
of disputes over non-performance 5 was affected by a number of variables,
including the nature of the market and the respective market power of the
seller and buyer. These responses also disclosed other concerns of the oil
companies surveyed: choice of law, choice of forum, arbitration clauses and
the use of standard forms of agreement. The final chapters of the book
examine the performance of the common law courts in protecting freedom
of contract and in developing a modern law merchant. Professor Trakman
feels that the courts’ performance in this respect has been less than satis-
factory. He writes:
Freedom from legal interference is a necessary feature of international
business where contracts are freely concluded, expertly negotiated and skillfully
drafted. For common law courts to do otherwise is to interfere with the au-
tonomy of agreements. It is also to risk losing judicial business to other juris-
dictions, to foreign courts and to arbitration associations. 6
Any effort to investigate the relation between commercial practice and
legal rules should be warmly encouraged. Unfortunately, Professor Trak-
man’s attempt is curiously limited and artificial. It is limited by its focus
on the approach of the common law courts (principally the English courts)
to the problem of interpretation, especially as it applies to the issue of
frustration. It is artificial because, as the above quotation indicates, Professor
Trakman regards as a basis for concern the fact that the common law courts
(again, the English courts?) might risk losing business to the courts and
arbitration associations of other jurisdictions. Two questions are relevant
to this concern. Why should the (English?) taxpayer provide a forum for
the international trading community? Why should one assume that courts
are more effective than arbitration tribunals in developing a modern law
merchant? There is evidence, occasionally referred to by Professor Trakman,
that arbitration is, in fact, preferred by international traders.
A principal criticism of the book stems from Professor Trakman’s fail-
ure to present a complete analysis of the problem he has set for himself.
He starts from the proposition that:
As a legal concept, freedom to contract has signified the dominance of the
libertarian notion of laissez-faire over government interventions in business.
Evolving out of the economic theory of perfect competition and philosophical
51t is not clear if the term is an euphemism for breach or if it refers only to arguments based
on frustration.
6Trakman, supra, note 2 at 102.
McGILL LAW JOURNAL
[Vol. 30
conceptions of free will, the sanctification of the business process has matured
into a central tenet of the law governing international trade. Merchants engaged
in world trade are to be free to transact business across national boundaries
with their own trade design.7
As a governing principle, laissez-faire, or freedom of contract, presents two
significant problems. First, it provides no guidance for the interpretation of
a contract. One can admit that parties should be free to make arrangements
as they see fit; but adherence to this principle leaves one without any guid-
ance as to the actual content of the agreement. Second, freedom of contract
can never be fully accepted once it is realized that freedom for one side
may mean anything but freedom for the other side. This unconscionability
aspect may be comparatively unimportant in agreements between large,’
sophisticated, commercial parties; but, once those parties resort to the courts
of a jurisdiction to resolve their differences, they will inevitably be subject
to that jurisdiction’s views of the permissible limits of freedom to contract.
Anti-trust or restraint of trade laws are obvious examples of such limits.
With respect to the first of these problems, Professor Trakman states:
Any attempt by courts of law to relieve merchants from assumed com-
mitments infringes upon the expressed terms of business agreements. Any
disregard of the negotiating and drafting abilities of contractors displaces the
sanctity of their voluntary undertakings. The contract represents the manifes-
tation of their mutual will. The expressed terms of the agreement reflect their
nonperformance design. To excuse merchants from performance by mandate
of law in such circumstances is to “unmake their contract”. It is to impose the
risk of nonperformance upon an unwitting promisee. It is to cause the “…
breakdown of our faith in contract itself.”8
I find it hard to believe that anyone still accepts the argument that con-
tractual obligations are absolute. Surely, it is possible to argue that a con-
tractual agreement does not allocate all risks, foreseeable and unforeseeable,
to one side or the other. It would have been useful if Professor Trakman
had supplied examples of where the courts have improperly provided one
side with an excuse for nonperformance. Furthermore, it is unhelpful to
find the argument put in terms of the will theory of contracts. The argument
would have been more convincing if Professor Trakman had shown that
the reasonable expectations of one side had been defeated, or ignored by a
court’s decision to provide the other side with an excuse for nonperformance.
The second threat to the achievement of the goal of freedom of contract
also requires much more careful analysis. Professor Trakman’s choice of
the oil business as the example to illustrate his thesis that the modem law
merchant fails to achieve the goal of freedom of contract is unfortunate.
7Ibid. at ix.
slbid. at 70.
19841
BOOK REVIEWS
The events of the last ten years or so have demonstrated that oil is far too
important to be left to the oil companies. Not only is the sale of much of
the world’s oil governed by the OPEC cartel, but many oil companies are
state owned and, like Petro-Canada, are explicitly regarded as instruments
of state policy. There are other more suitable areas of international trade
that could have been explored. Charter-parties, for example, are likely to
provide better examples of laissez-faire contracting, contracting largely un-
affected by national concerns. 9
Professor Trakman is caught in a dilemma. The real lesson of his an-
aylsis is that no particular rule or theory of law has much to do with the
actual practices of oil companies. On the basis of his survey, 88 per cent of
all contracts raise no disputes over performance. Approximately 9 per cent
of all contracts are resolved by informal settlement.10 These figures mean
that more than 97 per cent of all agreements are never submitted to any
formal dispute resolution process. Only 1.8 per cent go to court, while the
rest go to arbitrators.
Unless it can be shown that a successful means of resolving this tiny
proportion of cases will provide a firm, predictable and usable basis for
settling the 12 per cent of all contracts that lead to disputes, then any analysis
of what courts do is almost entirely irrelevant to the industry. Such an
analysis may be useful in some carefully circumscribed areas of commercial
activity. The approach is, however, particularly unsuitable in the case of
frustration where decisions are highly dependent upon the facts of the in-
dividual case.
We would have a better basis for assessing the significance of what
courts do if we knew the answers to some other questions. What, for ex-
ample, is the role played by arbitrators? Professor Trakman observes that
arbitration is often chosen by the parties. An arbitrator is usually chosen
on the basis of his expertise and his intimate knowledge of the dispute. In
this sense, an arbitrator functions very much like the old-style merchant
adjudicator under the medieval law merchant, praised by Professor Trak-
man in Chapter 1 of the book. There are too few reports of litigated oil
contracts to draw any conclusions about the scope for judicial fact-finding
in such cases. However, in cases involving international charter-parties (in-
cluding contracts for the carriage of oil), recent litigation before the House
of Lords has, when the dispute concerns the two parties to the agreement,
in every case but one,I I been preceded by arbitration. The role of a court
9See, e.g., Shipping Act, 1916, 46 U.S.C. 801, Shipping Conferences Exemption Act, S.C.
1978-79, c. 15.
‘The discrepancy in the figures, arising from problems in the questionnaire, is acknowledged.
“This conclusion is based on a review of all decisions of the House of Lords reported in
A.C. [1970]-[1982].
REVUE DE DROIT DE McGILL
[Vol. 30
after arbitration is quite different from its role when there has been no prior
arbitration. Consequently, the experience in the House of Lords is partic-
ularly relevant for Professor Trakman’s purpose, since the English courts
offer a forum for most international contracts. Professor Trakman focuses
principally on the common law in the English courts referring only briefly
to American decisions. However, if Paris, Rome, Tokyo or Hamburg offer
as generous or popular an international forum, he should have considered
the way in which those courts treat international contracts.
Another important question concerns the kinds of disputes that go to
court. A decision as to whether or not a contract is frustrated by a certain
event or has a particular meaning in a certain context is of limited general
use. As a precedent, it provides a poor basis for prediction in cases involving
different contracts and different circumstances. However, a decision as to
whether or not a clause in general use in a particular industry or trade has
a specific effect in a common factual situation is of far greater importance.
For example, the judgment of Lord Diplock in Federal Commerce and
Navigation Co. Ltd v. Tradax Export S.A.’ 2 regarding the “Baltimore berth
grain charter”, can be seen as establishing a reliable interpretation of a
standard clause in that agreement. It is important, therefore, in assessing
the significance of a legal decision to be aware of its nature and commercial
importance. The mere fact that a court is engaged in a process of interpre-
tation does not guarantee that the judgment will be significant.
A further issue arising from this question concerns the significance of
other variables in the resolution of disputes over nonperformance. The
nature of the market and the respective market power of the parties are two
variables that were disclosed in comments received pursuant to the ques-
tionnaire, and they are referred to by Professor Trakman in his book. These
variables would, of’course, be precisely those which one might expect to
determine the outcome of any dispute. It might make a difference to the
outcome of a dispute if, for example, one of the parties is Exxon Corporation
and the oil market is in a state of upheaval. Again, it would have been
helpful had Professor Trakman investigated the nature and background of
the disputes. A correlation can be shown between large and rapid changes
in ocean freight rates and disputes over charter-parties –
a finding that is
no more remarkable than the correlation between the incidence of litigation
over real estate deals and sharp changes in the price of real estate.
The consequence of this argument is that we can obtain very little
information about the true role of the modern law merchant through the
study of cases, especially cases going before courts. There is some evidence
12(1977), [1978] A.C. 1, (1977] 2 All E.R. Rep. 849 [hereinafter Federal Commerce, cited to
A.C.I.
.1984]
CHRONIQUE BIBLIOGRAPHIQUE
that arbitrators 3 are treating international contracts as “unlocalized” or
“de-localized”, arising against an international background and not a national
one.’ 4 One important issue left unexamined by Professor Trakman is the
extent of, and the method for, the localization of international contracts.
The traditional function of the conffict of laws has been to provide such a
localizing device. To the extent that contracts are truly international and
unlocalized, the traditional aim of the law merchant is realized. An instruc-
tion such as that found in 6 of Restatement II, Conflicts is an attempt to
treat international (and even inter-state) contracts as unlocalized. The un-
localized contract is not simply a notion that one might find expressed in
a judgment of a court or an award of an arbitrator; instead, it is likely to
be a notion which permeates the whole process of contracting in interna-
tional trade. There is some evidence that nothing really turns on where a
contract dispute is litigated; choice of law issues are conspicuously absent
from many of the House of Lords cases referred to above. The rules, tests
or standards for decision, at least for issues of interpretation or construction
(including frustration), are likely to be the same throughout the world. Pro-
fessor Trakman offers no support for the statement that “interdisciplinary
studies highlight the divergent expectations of American, Japanese and Rus-
sian traders”. 15 Such a statement is, I believe, implausible. Modem inter-
national trade is sufficiently extensive that the expectations of all traders
must be the same, or so similar as to be indistinguishable, at least on the
basis of the nationality of the trader.16 Professor Trakman may be justified
in stating that trade cannot occur if expectations are divergent. However,
he must, at the very least, provide cogent evidence of systematic and long-
term divergence. There is no evidence that the common law process or
approach to international contracts is wholly antithetical to the goal of
minimizing divergent expectations. There are, in fact, judicial statements1 7
in the common law tradition that strongly support Professor Trakman’s
argument that “in promoting a modem law merchant, there is a need to
sublimate national law biases in favour of multi-national interests”.’ 8 I do
not believe that his criticism of the common law judges’ 9 is borne out in
an examination of the cases, notwithstanding what such an examination
may disclose about a modem law merchant.
13These are often arbitrators acting under the rules of the International Chamber of Commerce.
14A recent case, Amin Rasheed Shipping Corp. v. Kuwait Insurance Co. (1983), [1983] 3
W.L.R. 241, [1983] 2 All E.R. Rep. 884 (H.L.) has some interesting comments on this issue
and, incidentally, on the willingness of the English courts to resolve international trading
disputes.
15Trakman, supra, note 2 at 103.
16What are the expectations of multi-national firms like Exxon, Shell or British Petroleum?
17See Federal Commerce, supra, note 12 at 7-8, per Lord Diplock.
18Trakman, supra, note 2 at 102.
19Ibid. at 103.
170
McGILL LAW JOURNAL
[Vol. 30
Professor Trakman’s book is an interesting study of a very important
problem. His approach to the problem is flawed, however, by his decision
to examine a particularly volatile industry and by his assumptions con-
cerning the role of the law and the courts. We are left with the inference
that the law of contracts, at least as it is traditionally understood, has little
to say that is relevant to the international oil business. However, we are
given no hard evidence to confirm or deny the validity of the hypothesis
that is, at bottom, the principal issue in Professor Trakman’s enquiry.
