Teaching International Business Transactions

July 6, 2020

academic law, Author Articles, Textbook, textbooks

Aaron Fellmeth blogs on the multiple challenges of teaching International Business Transactions (IBT).

Teaching any law course requires meeting a multiplicity of challenges. Conveying the substance of laws, regulations, and precedents is the least of them. Law faculty also need to introduce students to a whole new vocabulary, some of it in Latin and medieval French, as well as a set of interpretive and enforcement systems. Then there is the legal method, with its idiosyncratic research tools and forms of reasoning and evaluation of evidence. Most law faculty in the United States also integrate policy analysis into their courses, which requires getting students in the habit of thinking about the social consequences of different legal outcomes. Ethics, psychology, economics, culture, and political theory may come into play. Most formidable of all is the challenge of weaning students from lifelong habits of emotional thinking, assumption, reliance on intuition, and unexamined beliefs.

For law faculty who feel insufficiently taxed by the normal curriculum, there is International Business Transactions (IBT). Aside from its abbreviation sounding like an unpleasant medical condition, IBT demands skills and efforts unnecessary in almost any other law course. The first idiosyncrasy arises from its nature as a survey course. Anyone teaching the full range of international business law is covering material in at least fifteen distinct fields of law, depending on how you group them. Some of these fields interact considerably, but some are at most loosely related to others. For example, a project finance lawyer and a customs lawyer are unlikely to have any knowledge whatsoever of what is involved in each other’s practices. This is not a unique difficulty. For example, courses in Public International Law (which I also teach) have the same issue. But Public International Law at least has a relatively unified methodology that IBT lacks. Multinational intellectual property registration shares almost nothing in common with international commercial agreements drafting.

Some of the subjects in the IBT field probably cannot be learned in any other law school course, such as trade remedies, export compliance, and customs regulation. Other subjects will receive more intense scrutiny from an international angle than they would in courses that focus on the domestic law of the subject, such as Immigration Law or Antitrust Law. Students will consequently be exposed to an imposing new universe of legal regimes, many of which are only loosely related, in a very short semester.

The challenges do not end there. To really understand IBT, students should have a basic background in contract law, commercial law, and business organizations law. It also helps to know the fundamentals of intellectual property law and public international law. If all of these courses are not prerequisites to IBT, and they virtually never are, students will have to learn some of the principles of each during the course. This adds to an already crowded plate of subjects.

Finally, the decisions that business firms make, and consequently their needs for legal representation, arise primarily from economic forces. It is simply impossible to understand much legal regulation of international business without familiarity with such economic concepts as risk, supply and demand, the time-value of money, opportunity cost, and currency exchange. Law students do not necessarily have any background in economics, which means that teaching IBT also requires introducing students to some unfamiliar concepts entirely outside the field of law.

With its intensive focus on knowledge acquisition, IBT is not the best class for practicing Socratic reasoning. Much of IBT is statutory and regulatory rather than based on judicial precedents. The need to fill classroom time without the time-consuming Socratic method may seem baffling. Few law faculty relish the idea of drily reciting statutory and regulatory rules. The “problem method” has been a popular way to facilitate learning without hours of straight lecture.

The problem method confronts students with a hypothetic business situation for which they must advise or assist the client. It has the advantage of helping students remember the relevant law by applying it. Of course, it requires students to come to class prepared, because they cannot apply rules they haven’t learned ahead of time. But this, too, is an advantage. If students realize they will only benefit from a class for which they are fully prepared, they are more likely to put in the work beforehand. This may explain why most IBT textbooks adopt the problem method.

The difficulty with the problem method, as adopted in IBT books, is that they usually begin with a problem to be analyzed and teach toward the solution. This is not a productive way to learn the subject. International business problems are inevitably narrow and specific, whereas students in an IBT course need to learn about the range of legal problems involved in international business and the general methods for resolving them. As a result, students in a problem-oriented course are confronted at the outset with an inevitably limited yet (for them) unfamiliar and confusing set of facts, which they are taught to solve in a way that is unlikely to generalize to other problems even in the same field.

The solution, and one I adopt in my book, is to start with the most general principles, such as public policy goals and treaty regimes, because it is through these that student minds can be prepared to understand the reasons for the legal doctrines they will need to learn. Students can then be introduced to those doctrines, shown examples of how they are applied through cases or case studies, and conclude with a practice problems that students are by then actually equipped to solve. Putting the problems at the end of each chapter gives students the best of both worlds. That does not mean class time also needs to relegate problems to the end, though. There is no reason why, after a brief introduction, the instructor cannot plunge directly into problems for students to solve.

Another thing law faculty can do to make IBT more relatable, and at the same time more entertaining, is to tie it to popular culture. In my IBT book, I try to do that through cartoons, photographs, humorous essays, and news stories and op-eds. But a surprising number of major motion pictures significantly involve, if they do not entirely turn on, international business law. I describe several in the Teacher’s Manual to my book, but here are a few:

The Firm (Paramount Pictures, 1993)
Blood Diamond (Warner Bros., 2006)
The Laundromat (Netflix, 2019)

Despite the many challenges of teaching IBT, it is rewarding for many reasons. One is that it deals with subjects that are in the daily news. Another is a great course to prepare students for actual practice. It also presents opportunities for discussions of public policy as well as legal doctrine. And for some, the very challenge of teaching the course is itself highly rewarding.