Essay on the Rome Convention on the law applicable to contractual obligations

Emmanuelle B.

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Essay on the Rome Convention on the law applicable to contractual obligations

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Lecture
Résumé
Sommaire
Extraits

Résumé du document

The Rome Convention on the Law applicable to contractual obligations “applies to contractual obligations in any situation involving a choice between the laws of different countries.” The scope of the Convention is therefore clear; its aim is to regulate contractual relations between parties from different countries. The Rome Convention was drawn up by the Member States of the EEC in1980; their aim was to ensure the application of a common law of contract in the case of an international dispute. There was a need of uniform choice of law rules which would governed both the Member States' relations inter se and relations with non-community countries. This need for uniformity was felt to be necessary as well in order to avoid existing divergencies becoming more marked because of reforms likely to be introduced in the internal law of some Member States. The need of an harmonisation is even more justified as there is a growth of private law relationships across frontiers. The Convention provides a list of rules to avoid any conflict of laws in international contracts. Its ratification is reserved to Member States of the EEC; but the Convention is ‘worldwide in effect' . This means that “it will replace the contract choice of law rules in the Member State in which it is implemented not just for cases with an EEC connection (…) but whenever a choice of law arises.”

Sommaire

Introduction.
The scope of the convention.
The core of the convention.
1. The law is chosen by the parties.
2. Implied terms.
3. Absence of choice of the parties: Art 4, its new concept, and its criticisms.
4. The characteristic peformance.
5. When the basic presumption cannot apply.
6. Special provisions for special contracts.
7. Mandatory rules.
8. Material and formal validity: Articles 8 and 9 of the Convention.
Conclusion.
Bibliography.

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Extraits

[...] In order to limit this insecurity the Convention provides that the choice must be proved with ‘reasonable certainty'. This notion means that judges have to ascertain to the real intention of the parties. The choice of the parties can be inferred from the terms of the contract and from the context of the contract. The idea of the terms of the contract is vague; to which terms do judges refer to in order to identify the implied choice of the parties? [...]

[...] Conclusion The Convention has thirty three articles in total. This essay has only dealt with the articles which constitute its core as it is the core itself which has been criticised. The core of the Convention has being analysed through a critical point of view. Some matters have been identified as not being provided for in the Convention and other provisions seem to be difficult to apply. It has however to be taken into account that the comprehension of the Convention is improved if accompanied by the reading of the Giuliano Lagarde Report which provides an explanation of the purpose of each article of the Convention. [...]

[...] These guidelines are based on factual situations and can be summarised as follows: if there is one business activity, the place of this business will determine the law applicable to the contract; if there are two businesses activities, the place of the business of the party whose obligation is not the payment of money. However in such a situation if one business controls the other, the place of the business which controls will determine the law applicable to the contract. In the case of a unilateral contract, the performance of the donor is the characteristic one. If there are two performances consisting in the payment of money (i. e. a loan of money) the extent to which one party supports a risk will be taken into account. [...]

[...] The criticisms addressed to the use of mandatory rules are mostly based on the difficulty of its application. It appears nonetheless that the restriction of freedom these provisions provide, aim to ensure a protection against the parties who would intend to avoid mandatory rules contained in the legal system by which the contract should be governed: this could not be criticised. To apply all the provisions previously studied the validity of the contract has to be proved; as will be studied, article 8 deal with material validity and article 9 with formal validity. [...]

[...] The European Contract Convention - The Rome Convention on the Choice of law for Contracts 1991 Sweet & Maxwell) at 108 Collins, L., ‘Contractual obligations The EEC Preliminary Draft Conventions on Private International Law' in ( 1976) 25 ICLQ 35 Ibid. The Giuliano Lagarde Report at 22 North, P.M. and Fawcett, J.J., Cheshire and North's Private International Law (13th Edn Butterworths) at 573 The Giuliano Lagarde Report at 22 See p 2 of this essay Lando, O., EEC Convention on the law applicable to contractual obligations', in(1987) 24 CMLR 159 Ibid. Ibid. Ibid. North, P., Essays in Private International Law (1993 Clarendon Press Oxford) at 44 Ibid. [...]

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