In the determination of whether the activities being performed by the Foreign State are commercial or not, it is required by the FSIA that courts should be looking at the nature possessed by the act itself, instead of the purpose behind the engagement of foreign sovereign within the act for which 28 U.S.C 1603(d) is considered. In an intentional manner, the definition related to commercial activity has been left ambiguous by the FSIA.
It has been drafted by Congress that it is considered as the guideline with flexibility for the determination of the status related to the activities being performed by the foreign state. It is believed by the Congress that it would be both unwise and unnecessary for trying a definition that is excessively precise related to commercial activity (Vollmer, 2001). Hence, there is a number of shortcomings in drafting and lack of clarity. However, the courts have been struggling for interpreting with variations in the degrees of success and consistency with the nebulous language. For overcoming the immunity of federal sovereign, several claims can be availed by the two parties involved within the case provided.
As in the clause of contract provided by the Constitution, there is a requirement that no law shall be passed by the State with respect to the impairment in obligating the contracts. With respect to the terms in the clause of contract, also by interpreting it by a number of courts, it is applied to the local and state governments but is not applied to the federal government (Rule 28 U.S.C. § 1605). In fact, it has been noted by the Supreme Court that the obligations of contract amongst the individuals and the nations are bound to the limit of the conscience of the sovereign and thus, there is no creation for the independent right towards an action.
This can be interpreted as a matter of fact that it is appropriate for the prevention of the states from giving a discharge for the obligation of contract by other laws such as the debtor relief laws (Vollmer, 2001). Even though the application of the clause of contract can only be done to the local and states government, another clause has been amended by the clauses for Takings and Due Process. The vested rights of contract may constitute the protection of property that cannot be claimed in the absence of just compensation.