The Sky is Falling (or is it?): International Contracts and the Y2K Problem

Y2K problems at this point in time are reasonably foreseeable due to the amount of attention given the subject. Contracting parties should examine potential Y2K problems arising internally and address them before January 1, 2000. Yet the extent of Y2K problems, be they widespread or solitary occurrences, remains unforeseeable and unpredictable. Even those parties having adequately addressed internal Y2K problems can experience difficulties due to external parties having failed to become Y2K-compliant. This second tier of unforeseeability supports the use of excused performance, but the first tier foreseeability that Y2K problems potentially exist prevent viable use of the defense. In this sense, this Article suggests that Y2K problems are both foreseeable and unforeseeable and that a defense more suitable than contractual excuse be available to those parties acting to prevent Y2K difficulties. In the same vein, this Article recognizes the plight of those parties that have acted in a timely and prudent manner to avert Y2K difficulties. Due to the interactive and interdependent nature of the domestic and global economy, such parties remain at the mercy of numerous third parties. This vulnerability is a necessary element of intranational and international relations, but it may prove imminently debilitating should contract performance depend on those numerous third parties. Because such a web of interrelationships has developed over the centuries, and because the interrelationships prove vital to performance of many contracts, the focus of Y2K issues should be societal, not individual. Contract law\u27s foundation is on autonomous individual[s] while tort law acknowledges those situations where accidents result from interactive activities. Y2K complications may disrupt numerous facets of commercial and societal intercourse, many of which are utterly outside the realm of a contracting party\u27s control. This realization demands that Y2K losses be considered in light of tort law as opposed to contract law

Debt/Equity Swaps and Mexican Law: The Interplay between Law and Regulation

Undeniably, one of the most significant current economic issues is the role of Direct Foreign Investment ( DFI ) in the continued development of all nations, rich and poor. History has shown that successful DFI requires a delicate balance between the investor and host country. The emerging view (and one supported by the plethora of recently enacted or modified Foreign Investment Codes) is to seek only those investments from abroad which might be characterized as beneficial to the host country. The United States of Mexico has addressed the question of Direct Foreign Investment for many years. In doing so, Mexican policy regarding foreign investment has ranged from very receptive to extremely negative, depending upon the administration in power and the state of the Mexican economy. Debt/Equity swaps are the latest vehicle for achieving Mexican political and economic goals. At present, the ultimate success of the program remains to be determined. However, this latest plan again points out the juxtaposition of law and its administration in the everyday world. Mexican law may often be far removed from the reality of its application. As a result, stated governmental goals and outside investment targets often miss their mark. This Article attempts to explain how the interplay between law and its administration in Mexico has had a significant impact on the country and its outside investors, particularly in the case of debt/equity swaps

Debt/Equity Swaps and Mexican Law: The Interplay between Law and Regulation

Undeniably, one of the most significant current economic issues is the role of Direct Foreign Investment ( DFI ) in the continued development of all nations, rich and poor. History has shown that successful DFI requires a delicate balance between the investor and host country. The emerging view (and one supported by the plethora of recently enacted or modified Foreign Investment Codes) is to seek only those investments from abroad which might be characterized as beneficial to the host country. The United States of Mexico has addressed the question of Direct Foreign Investment for many years. In doing so, Mexican policy regarding foreign investment has ranged from very receptive to extremely negative, depending upon the administration in power and the state of the Mexican economy. Debt/Equity swaps are the latest vehicle for achieving Mexican political and economic goals. At present, the ultimate success of the program remains to be determined. However, this latest plan again points out the juxtaposition of law and its administration in the everyday world. Mexican law may often be far removed from the reality of its application. As a result, stated governmental goals and outside investment targets often miss their mark. This Article attempts to explain how the interplay between law and its administration in Mexico has had a significant impact on the country and its outside investors, particularly in the case of debt/equity swaps