My IBT Final Exam and a Few Comments on Teaching IBT

In case anyone is interested, here is the text of my Fall 2008 final exam in International Business Transactions.  (It’s over at my much neglected home blog.)  I don’t think this was my greatest exam drafting exercise – I’ve done better in past years.  Actually, to be perfectly frank, I think it is not very good at all; I liked this one from a couple of years ago much better.  The current one is a little bit too much – well, a lot too much – stuffing issues in willy-nilly, without having pulled it together as a clever single thing based around a discrete set of parties.  This is done as a take home in which students have the full two weeks of exam period to do it, but a page limit of ten double spaced pages.  

My IBT class is purely transactional – it moves briefly through a series of transactions ranging from cross border sale of goods to cross border services to cross border payment mechanisms such as LC to debt financing of these transactions to project finance to … finally, joint venture and then exit strategy.  All private transactions – no public capital markets, also nothing related to international trade as such, which is unusual for IBT courses even now.  We use Vagts’s book, supplemented greatly by a series of photocopied contracts from my own work in international business transactions over the years.

I keep the course at an introductory, survey level, in order to make it accessible to students in law school who have not studied economics or business before, as well as accessible to the foreign LLMs who typically make up half the 90 student class.  I used to think that the survey approach was purely an accommodation to students without a business background, but I have since come to see that a survey approach allows you to do something different from in depth courses – the survey course allows you to introduce a whole range of financial and business and transactional tools, line them up side by side, and help students see how these seemingly disparate things – legally quite different – fit together to make a transaction work.  That is, sale of goods might well be intertwined with some provision of services or joint venture; you also need financing for this, involving you in debt instruments; you also need a payment mechanism.  There’s a useful skill, one that has nothing to do with the course being an introduction, in being able to summon up the whole range of financial tools, even if you don’t go into any one of them in depth in the course.

I’ve had discussions with folks over the years as to whether IBT should gradually disappear in the law school curriculum, and instead have its transactions picked up by the particular classes that cover those topics domestically as well as comparatively and cross border.  I thought this was the right approach for a while, but I’ve since swung back to the view that there will remain a place for a survey course that sets out the full array of cross border transactional tools and emphasizes how you use them together rather than always confined discretely to the speciality classes.  I realize that IBT started out, and for many schools remains, a course designed to satisfy some nonspecific need for an “international” business class in an otherwise traditional and domestic law curriculum, and in that sense it seems anomalous in a globalizing curriculum.  But I have come round to think that actually it has greater importance in a curriculum in which the comparative and cross border aspects of business law are absorbed into the domestic law course.

The final is usually based around something related to my pro bono practice that year with a nonprofit private equity fund that invests in independent media worldwide; this year I instead went back to a problem in housing finance involving a South African housing agency, a problem dating back to work I was involved in during the 1990s for a while.