Contemporary Challenges and Continuing Relevance
Edited by Franco Ferrari and Diego P. Fernández Arroyo
Chapter 4: The scope and limits of party autonomy in international contracts: a comparative analysis
Party autonomy – that is, the notion that parties to a multistate contract should be allowed, within certain parameters and limitations, to agree in advance on which state’s law will govern their contract – is now a universal principle; it is accepted in at least 150 countries. However, this virtual unanimity at the level of general principle comes with significant variations in the specifics. Party autonomy is neither conceived nor implemented in the same way in most countries. The most significant differences involve the scope of this principle and the limitations to which it is subject. For example, various legal systems differ on which contracts and for which contractual or non-contractual issues the parties may choose the applicable law; or whether they may choose rules that straddle the line between substance and procedure, or rules promulgated by non-state entities. Likewise, differences exist not only in defining the appropriate public policy threshold for policing party autonomy, but also on which country’s threshold should perform this role – that is, whether it should be forum state as such, the state whose law would have been applicable in the absence of party choice or some combination of the two solutions. An awareness of these often overlooked differences is essential not only for lawyers who draft multistate contracts, but also for teachers and students of private international law or conflicts law. This chapter offers a comprehensive documentation and comparative analysis of these differences.
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