State Breaches of Contracts with Aliens and International Law

Abstract

It has not been established with sufficient clarity and certainty whether a state commits a breach of international law by breaking a contract made by it with an alien. The question needs an answer. It is not one of an entirely theoretical nature. On the answer to it will depend many important consequences. There are four of special significance. First, if the breach of contract is characterized as a breach of international law, the final arbiter of the question whether there had been a breach of contract and of the extent of that breach would be an international court whether as a court of last resort or otherwise. This is the natural consequence of the fact that it is the organs of enforcement of international society that have the power of finally determining questions relating to the breach of legal norms belonging to that society. Municipal courts would not have the final decision. Secondly, the norms applicable by an international court in making such a decision would be the norms of international law and not necessarily the rules of a municipal system of law. International rules should, of course, be applied in determining whether there has been a breach of international law. Thirdly, questions of evidence and procedure relating to the contract would be governed by international law.