Extract

Chapter 7: General aspects of international contracts 139 6. Choice of law provision Some legal systems consider international a contract whose only contact with a foreign country originates in the existence of a choice of law provision. Therefore, the contract becomes international when the parties subject the contract to a foreign law (that is the case of the Convention on the Law Applicable to Contractual Obligations (1980) – Rome Convention – Article 3.3).411 Before that moment the contract is only connected with one legal system and, thus, is domestic. However, other legal systems (Argentina, for example) and international conventions (such as the Convention on the Law Applicable to International Sales of Goods and the Convention on the Law Applicable to Contracts for the International Sale of Goods) do not accept that a domestic contract is internationalized by the sole inclusion of a choice of law clause.412 B. The laws governing substance and form A contract is composed of substance and form. Substance is the content of a contract, the parties´ agreement. Form is how an agreement is externalized, the medium through which the agreement is formalized (on paper, in an electronic document, verbally). Substance and form may be governed by different laws. Therefore, in an international contract there are two laws to be determined: the applicable law to the contract and the law establishing the formal requirements of the contract.413 However, the fact that it is necessary to locate the applicable law to the contract and the law that will govern...