The division of labor is limited by the extent of the law

The present paper starts from the observation that there is still no analysis of private law as a basis for international trade, i. e. private transactions between noncompatriots (cf. Schmidt-Trenz 1990). Although authors like Buchanan, Hayek, Williamson, Böhm and Eucken have talked about the significance of a system of private law for the coordination of private transactions, they left out of their analysis the domain of protective state activity in international private business transactions vis-à-vis the multitude of legal orders and national enforcement organs. p ]It is the intention of this paper to focus upon the problems of the coordination of private foreign trade activities in the shadow of the territoriality of law. Specifically, it is asked: What are the causes for the fragmentation of private law in the world, and what are the consequences of the territoriality of law for the coordination of decisions concerning transactions between non-compatriots? The paper also deals with the question of how international coordination-efficiency can be fostered by international constitutional policy. Copyright George Mason University 1990