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Party Autonomy in Contractual and Non-Contractual Obligations

A European and Anglo-Common Law perspective on the freedom of choice of law in the Rome I Regulation on the law applicable to contractual obligations and the Rome II Regulation on the law applicable to non-contractual obligations

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Maya Mandery

This study presents a comprehensive examination of party autonomy as provided for in the European Rome I Regulation and the Rome II Regulation. It follows an integrated method of analysis, whereby the principle of party autonomy as provided for in the Regulations is first compared with the pre-regulation position in Germany and England. This provides the basis for the subsequent critical reflection on the position of party autonomy in the Anglo-common law jurisdictions of Australia, New Zealand, Canada and Singapore. The study proposes that these European developments make an important contribution to the call for reform of the common law position concerning party autonomy in contractual, and more significantly, in non-contractual obligations.
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Part 1: Freedom of choice of law under the Rome I Regulation on the Law Applicable to contractual obligations

Extract

Freedom of choice or party autonomy is an internationally accepted principle in the area of contract choice of law.29 The justifications normally given for party autonomy are: freedom of contract, certainty and economic efficiency.30 Where parties are given the freedom to enter into any contract they wish and to choose and design the legal aspects of their relationship, it necessarily follows that the parties should have the liberty to choose the law by reference to which their contract will be construed. Hence, when the choice of the parties is respected, the legitimate expectations or interests of the parties will be protected.31 In addition, all contracts whether international or domestic require certainty and economic efficiency,32 both achieved by enabling the parties to know their rights and liabilities under the contract in advance.33 In most contractual cross-border disputes, no difficulty will arise as a court will simply be required to give effect to the parties’ expressed choice of law. However, problems arise ← 25 | 26 →when the existence of a valid choice of law to govern the contract is denied or when the contended choice of law is unclear. In such a situation, a court will be required to determine the parties’ choice of law in contract, analysing consent and agreement and possibly draw on divergent national practices in doing so. The European unification of choice of law in contracts provides courts with a systematic and congruent conflicts system in order to resolve such issues. The 2008 European Regulation on the Law...

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