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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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Chapter 4:Internationally mandatory rules of the lex fori 105


Chapter 4: Internationally mandatory rules of the lex fori 105 Chapter 4 Internationally mandatory rules of the lex fori It is a well established rule in the private international law of all the countries under investigation that the internationally mandatory rules of the lex fori apply, regardless of the legal system that governs the transaction according to the normal conflict rules.1 It has also been accepted that the application of directly applicable or overriding statutes is an exception to the general rule that a statute does not normally apply unless it is a procedural rule of the lex fori or unless it forms part of the proper law.2 The reason for the application of the directly applicable rules of the forum state is the simple fact that a judge cannot, by relying upon party autonomy or the objective choice of law rules, disregard mandatory rules that are applicable to the situation in question and are intended to override the normal choice of law rules. The judge is bound by his sovereign.3 The reservation of the internationally mandatory rules of the forum is embodied in art 7 (2) of the Rome Convention and art 18 of the Swiss IPRG, provisions that no more than accept the pre-existing law. Under pre-existing law, however, the applicability of these internationally mandatory rules was based upon different structural or methodological reasoning. A discussion of these approaches follows. I Methodological approaches Under pre-existing law the application of the forum’s internationally mandatory rules, despite a foreign proper...

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