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Application of Mandatory Rules in the Private International Law of Contracts

A Critical Analysis of Approaches in Selected Continental and Common Law Jurisdictions, with a View to the Development of South African Law

Kerstin Ann Susann Schäfer

The application of mandatory rules in private international law of contracts is a controversial topic of growing international concern. Legislatures are increasingly intervening in private contracts in order to protect the economic interests of state, or the interests of vulnerable groups, such as consumers or employees. This thesis addresses two major contexts in which the application of mandatory rules arises, namely the restriction of party autonomy by the application of certain mandatory rules of a law, other than the chosen law, and the application of internationally mandatory rules of the forum, the proper law and, most controversially, of a third country.
Approaches of academic writing, case law, legislature, and treaties in England, Germany and Switzerland are compared and critically analysed. Paying also attention to the legal situation in South Africa, the analysis results to provide guidelines for the application of mandatory rules in private international law of contracts.

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9 Table of Contents Chapter 1: Introduction and preliminary matters 21 I The Problem: Application of mandatory rules in the conflict setting 21 II Historical background: From Savigny and the ‘liberal state’ to the modern welfare state of the 20th century 22 III Party autonomy and mandatory rules 26 IV Recent legislative approaches 27 V Definition of different kinds of mandatory rules 30 1 Mandatory rules in a domestic sense or international sense 31 2 The country of origin 32 3 Private law or public law 32 4 Application as law or consideration as fact 33 VI Determination and limitation of the scope of examination 33 1 A comparative study 33 2 The choice of countries 35 3 The contexts of application of mandatory rules in the private international law of contracts 41 VII Structure of this study 42 10 Table of Contents Chapter 2: Party autonomy and mandatory rules 45 I Party autonomy and its limitations by the application of mandatory rules under the Rome Convention 46 1 Art 3 (3) of the Rome Convention: Purely domestic contracts 47 a International contracts versus purely domestic contracts 48 b Requirements for purely domestic contracts 49 c Mandatory rules in the sense of art 3 (3) of the Rome Convention 50 d Art 3 (3) Rome Convention as a multilateral conflict rule 51 2 Limitation of the parties’ choice in order to protect the weaker contracting party 51 a Background and purpose of articles 5 and 6 of the Rome Convention...

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