Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio
I. Concept and notion
1. Formal requirements of private law
Modern private law is built upon the principle of private autonomy. This principle is not least the result of a process of de-formalization of law which can be observed especially in contract law. While, historically, contracts were binding due to the fulfilment of formalities, in modern law their binding nature is due to the will of the parties as expressed in their ‘promises’ or ‘consensus’. Within the civil law systems, codifications today either explicitly provide that a contract does not need to be formalized in order to be binding (s 883 Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch of 1 June 1811, JGS No 946/1181, as amended) and art 11(1) Swiss (Bundesgesetz betreffend die Ergänzung des Schweizerischen Zivilgesetzbuches (Fünfter Teil: Obligationenrecht) of 30 March 1911, SR 220)) or find this principle self-evident and, thus, remain silent on the point (German Civil Code (Bürgerliches Gesetzbuch of 2 January 2002, BGBl. I 42, as amended, henceforth German CC) and French Civil Code (Code Civil of 21 March 1804, henceforth French CC)). In the common law world, the old law of formal contracts (‘sealed instruments’) still exists alongside the law of informal contracts covering all promises which are made for consideration.
Nevertheless, formal requirements still play an important role in modern private law and even in the world of ‘informal’ contracts. Rules of common and statutory law often provide for requirements of form with respect to specific contracts. Such requirements may either prescribe solemn forms, making the validity of the contract depend on the fulfilment of a formal requirement, or evidentiary forms, permitting a certain type of transaction to be evidenced only by specific means. Equally, parties to a contract may agree to be bound only when certain formalities are observed (contractual requirements of form).
While informal transactions have become the general rule and requirements of form are the exception, a kind of ‘renaissance’ of formal requirements occurred in the 20th century. In the area of consumer protection in particular, a large number of fairly complex formal requirements have been introduced into European and national legislation. Some of these requirements must be satisfied for a consumer transaction to be valid, whereas others provide for specific sanctions other than, or as an alternative to, rendering the transaction void. For instance, § 494 German CC provides sanctions for failure to comply with the formal requirements of consumer loans. Depending on the gravity and type of the failure, a consumer loan may either be rendered entirely void or determined as valid, but modified in its contents. The latter is the case, eg, when a contractual document states an interest rate which is too low. In such a case, the consumer will only have to pay the interest rate as stated in the document. Equally, a consumer will not owe costs which are not mentioned in the contractual document, etc. Moreover, where the consumer does not receive proper documentation of the contract, the period granted to the consumer for withdrawal will not commence and, thus, the withdrawal right is prolonged. This demonstrates that there is a rich variety of sanctions to be found for failures to comply with formal requirements.
In other areas of private law, formal requirements are mainly a condition for the validity of the transaction. This applies to transfers of title, eg formal requirements for conveyances of land or chattel and for the assignment of claims, if any (see eg the requirement of writing in art 165(1) Swiss Code of Obligations). Equally, the validity of status contracts, such as a →marriage contract, and wills usually depends on the fulfilment of certain requirements of form.
2. Requirements of form and validity in conflict of laws
Conflict of laws concerns issues of form in two main ways. First, rules of conflict of laws will sometimes provide formal requirements for jurisdiction and choice-of-law agreements. Second, conflict of laws must deal with the question as to which law governs the formal validity of a substantive transaction, eg a contract.
II. p. 784Purpose and function
With regard to formal requirements, conflict of laws usually follows the policy of validating contracts or other legal acts, such as wills. In so doing, conflict-of-law rules operate in favorem validitatis. This is why, today, the law applicable to formal requirements and validity usually does not only follow the law applicable to the transaction, but also alternatively the lex loci actus, ie the place where the legal act is executed. This may lead to a validation of transactions even in cases where the law governing the underlying (contractual or other) transaction would render it void. Arguably, conflict of laws in such cases fulfils the expectation of parties having complied with local requirements of form.
There is, however, another policy, which looks at the individual purpose of a formal requirement of the proper law of the transaction and attempts to enforce it. This is the case in particular where consumer protection or public interests are concerned. In such cases, the validity of the transaction will not be favoured by means of conflict of laws.
III. Historical development
The historical analysis of conflict rules on formal requirements primarily involves a search for the reasons behind the eminent role still played by the lex loci actus, despite the fact that, in many jurisdictions, it plays no role, or no major role, in determining other requirements of validity, such as the legality of a contract or its compliance with bonos mores.
Studies into the origins of the lex loci actus rule indicate that the underlying reasons originate from medieval times, but did not form part of ancient Roman law. Apparently, in medieval days, contracts were commonly concluded in court. Each court had its own requirements as to form. By applying the lex loci actus to questions of form, parties were allowed to conclude their contracts wherever they were and irrespective of the proper law of the contract. This led the lex loci actus rule to become recognized as a principle of customary conflict of laws. Many countries later went on to codify this principle.
IV. Legal sources
National conflict-of-law rules usually provide for a special connection for issues concerning formal validity. Many civil law jurisdictions provide for rules on the formal validity of transactions in the general part of conflict of laws, for instance art 11 Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 21 September 1994, BGBl. I 2494, as amended, henceforth EGBGB) and s 8 Austrian PILA (Austrian Federal Code on Private International Law (Bundesgesetz über das internationale Privatrecht of 15 June 1978, BGBl. No 304/1978, as amended, henceforth Austrian PILA)). In countries, where no such general rule has been enacted by statute, authors nevertheless argue that the lex loci actus applies as a general principle (see, eg, for →France: Pierre Mayer and Vincent Heuzé, Droit International Privé (11th edn, LGDJ 2014) para 794). A similar position is taken in respect of English common law rules (see, eg, Lord Collins of Mapesbury and others (eds), Dicey, Morris and Collins on the Conflict of Laws, vol 1 (15th edn, Sweet & Maxwell 2012; henceforth Dicey, Morris and Collins on the Conflict of Laws) paras 32–128 f relating to formal requirements of contracts). The US American Restatement (Second) of Conflict of Laws does not provide a general rule, but requires an application of the lex loci actus, eg where contracts, wills and marriages are concerned (see §§ 199, 223, 239, 244, 263, 283 Restatement (Second) of Conflict of Laws (American Law Institute, Restatement of the Law, Second: Conflict of Laws 2d, St. Paul 1971)).
Formal requirements relating to wills are subject to the ‘Uniform Law on the Form of an International Will’ as provided by a UNIDROIT Convention concluded in 1973 in Washington DC (UNIDROIT Convention of 26 October 1973 Providing a Uniform Law on the Form of an International Will (available at <www.unidroit.org/instruments/succession>)). Accordingly and within the scope of application of the Convention, a will complying with the formal requirements as laid down in the Uniform Law will be recognized in all of the contracting states. The Convention is currently in force in 21 countries (see <www.unidroit.org/status-successions>).
Among the international sources of private international law dealing with conflict-of-law issues relating to formal requirements, the Hague Testamentary Dispositions Convention (Hague Convention of 5 October 1961 on the conflicts of laws relating to the form of testamentary p. 785dispositions, 510 UNTS 175) should be highlighted. Today, the Convention is in force in 41 countries, making it a particularly successful Hague Convention (see <www.hcch.net/index_de.php?act=conventions.status&cid=40>).
3. EU law
EU law provides examples of formal requirements for jurisdiction and choice-of-law clauses. Jurisdiction clauses are subject to formal requirements, eg under art 25 of the Brussels I Regulation (recast) (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast),  OJ L 351/1; →Brussels I (Convention and Regulation)), art 5 of the Succession Regulation (Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession,  OJ L 201/107; →Rome IV Regulation) and art 4(2) of the Maintenance Regulation (Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations,  OJ L 7/1). Choice-of-law clauses are made subject to formal requirements under art 22(2) of the Succession Regulation.
Conflict rules dealing with the law applicable to formal requirements are found in art 11 of the Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I),  OJ L 177/6; →Rome Convention and Rome I Regulation), art 21 of the →Rome II Regulation (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II),  OJ L 199/40) and arts 27 and 28 of the Succession Regulation.
V. Current regulation
1. International law
The Hague Testamentary Dispositions Convention provides for a long list of alternative connections (see art 1(1)). In addition to the lex loci actus, it refers to the →nationality, domicile and habitual residence of the testator (→Domicile, habitual residence and establishment). The relevant time for these alternative connections is both the time at which the legal act was created and the time of death of the testator. Finally, insofar as the will concerns immovable property (→Property and proprietary rights), the lex rei sitae will provide yet another alternative. Thus, a testamentary disposition will be valid if it complies with the formal requirements of one of these laws.
(a) Rome I Regulation
Formal requirements are commonly subject to specific choice-of-law rules. These conflict rules usually provide the law governing the legal act and the lex loci actus as alternatives. They provide a substantive rule according to which the legal act will be held valid if it complies with the formal requirements of either law.
More specifically, art 11(1) of the Rome I Regulation considers a contract to be valid if it complies with the formal requirements of either the law which applies to the substance of the contract in accordance with this Regulation or the law of the state in which the contract is concluded. The same applies, mutatis mutandis, to unilateral legal acts relating to a contract, such as a cancellation (art 11(3) of the Rome I Regulation; see also the parallel rule in art 21 of the Rome II Regulation concerning unilateral acts relating to non-contractual obligations). If a contract is concluded between parties (or their agents) while they are in different states, the place of conclusion of the contract is replaced by two alternatives, each of which embodies two further alternatives. Under art 11(2) of the Rome I Regulation, the contract will also be held valid if it complies with the formal requirements of either law of the states where the parties are at the time of contracting or of either law of the states where the parties have their habitual residence. This pushes the alternative use of laws in favorem validitatis even further. At the same time, the rule relieves the court of having to determine the place of contracting in cases of distance contracting.
There are, however, exceptions to the rule and, thus, the favor validitatis. The first exception involves consumer contracts falling within the scope of art 6 of the Rome I Regulation. p. 786Under this provision, formal requirements protecting consumers are subject to the law of the state in which the consumer is habitually resident (art 11(4) of the Rome I Regulation). In such cases, the interests in protecting the consumer outweigh the reasons for favouring the validity of the contract.
The exception in favour of consumers is reinforced further by the conflict rules set out in Directives. Pursuant to art 23, these will prevail over art 11 of the Rome I Regulation. EU Directives frequently employ requirements of form as a means of consumer protection. Since Directives harmonize the national laws of the Member States, their formal requirements will apply as long as the law of a Member State applies, but irrespective of whether or not a consumer contract falls within the scope of art 6 of the Rome I Regulation. However, if a consumer contract is not covered by art 6 of the Rome I Regulation, parties may freely choose the law applicable under art 3 of the Rome I Regulation. If parties choose the law of a third state, compliance with the formal requirements of that state will render the consumer contract valid in accordance with art 11 of the Rome I Regulation. Since third countries are not bound by EU Directives, the level of consumer protection provided might be substantially lower than within the EU. In order to avoid such a result, several Directives provide for conflict rules preventing a lowering of consumer standards by such choice if there is a close connection between the consumer contract and the territory of a Member State (art 22(4) of Consumer Credit Directive (Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC,  OJ L 133/66); art 12(2) of Directive on distance marketing of consumer financial services (Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC,  OJ L 271/16); art 7(2) of Consumer Sales Directive (Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees,  OJ L 171/12); art 12(2) of Distance Selling Directive (Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance selling,  OJ L144/19); art 6(2) of Unfair Terms Directive (Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts,  OJ L 95/29)). With regard to formal requirements, this restriction on a choice of law will not inhibit other methods of circumventing the consumer standards set out in the Directives. If, for instance, the consumer contract is concluded in a third country, the contract will be valid if it fulfils the formal requirements of the lex loci actus. Exceptionally, however, art 12(2) of Directive 2008/122/EC (Directive 2008/122/EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts,  OJ L 33/10) goes beyond a mere restriction on choice of law and requires the mandatory application of the protection provided by the Directive if certain requirements are met.
An exception is also made where public policy is concerned. The formal requirements of the lex rei sitae of →immovable property will exclusively be applied to contracts of sale of land and other contracts the subject of which is a property right in immovable property or rents. However, this applies only where such national formal requirements cannot be derogated by the parties and are considered to be applicable by the lex rei sitae, irrespective of the proper law of contract (art 11(5) of the Rome I Regulation).
(b) Succession Regulation
Under art 75(2) of the Succession Regulation, contracting states to the Hague Testamentary Dispositions Convention will continue to apply the conflict rules of the Convention.
Other Member States have to apply art 27 of the Succession Regulation where written dispositions are concerned. Oral dispositions are not covered by the Regulation and, thus, subject to national conflict rules (see art 1(2)(f) of the Succession Regulation).
p. 787In addition to the lex loci actus, a list of alternative connections is provided referring to the nationality, domicile and habitual residence (→Domicile, habitual residence and establishment) of the testator or either one of the contracting parties, as the case may be. The relevant time for these alternative connections is both the time at which the legal act was created and the time of death of the deceased. Finally, insofar as the will concerns immovable property, the lex rei sitae will provide yet another alternative. These alternatives largely replicate art 1(1) of the Hague Testamentary Dispositions Convention.
As far as contracts are concerned, § 199 Restatement (Second) of Conflict of Laws applies an alternative connection favouring the validity and enforceability of a contract. Under subsection (1), a contract has to comply with the formal requirements of the law governing such contract. This law will apply irrespective of whether the formal requirement is a prerequisite to the validity of a contract (solemn forms including requirements of a seal where contracts without consideration are concerned) or to its enforceability only (eg statutes of fraud; see Comment (d) on § 199 Restatement (Second) of Conflict of Laws). The law governing the formal requirements will also determine their contents, ie whether the contract must be signed, whether witnesses are required or whether the contract must be concluded before a public notary (see Restatement (Second) of Conflict of Laws, § 199 Comment (b)). However, pursuant to § 199(2) Restatement (Second) of Conflict of Laws, a contract will usually be upheld if it complies with the formal requirements of the law at the place of execution. Comment (c) on § 199 Restatement (Second) of Conflict of Laws states the rationale for such alternative connection: parties would, insofar as they even think about the law governing formal requirements at all, ‘undoubtedly try to comply with the requirements of this state and would expect that the contract would be held valid with respect to formalities if the requirements of this state had been complied with’. Thus, the alternative connection provided for in § 199 Restatement (Second) of Conflict of Laws intends to protect the expectations of the parties.
The alternative connection to the place of execution of the contract is only provided for ‘usual’ cases. Comment (c) on § 199 Restatement (Second) of Conflict of Laws exempts particular formal requirements, not least when applying to consumer contracts, labour contracts or loans, in particular where such contracts bear no real relation to the place of execution. Illustration no 3 in Comment (c) on § 199 Restatement (Second) of Conflict of Laws demonstrates such an exception. A policyholder concludes a contract of insurance with an insurance company seated in the home state of the customer but during a holiday stay in another state. An insured event occurs and the insurer relies on a policy provision printed in fine print. Such fine print would be acceptable in the state where the policyholder has concluded the contract during the holiday but not in his and the insurer’s home state. In such a case, the clause should be held void.
Moreover, when the contract is executed by the parties in two different states, it will have to comply with both laws in order to be valid or enforceable, as the case may be. If it does not comply with both requirements as to form, the contract will be upheld if it complies with the form requirements of the law governing the contract (Comment (c) on § 199 Restatement (Second) of Conflict of Laws, at the end).
The Restatement (Second) of Conflict of Laws treats wills differently. Wills of movables are subject to § 263 Restatement (Second) of Conflict of Laws, which refers to the law which ‘would be applied by the courts of the state where the testator was domiciled at the time of his death’. It is held in Comment (c) on § 263 Restatement (Second) of Conflict of Laws that many states have statutory conflict rules applying the law of the domicile of the testator or, alternatively, with other laws, such as of the state in which the will was executed or the testator was domiciled at the time of execution. Wills of land are governed by § 239 Restatement (Second) of Conflict of Laws, which requires the application of the law which would be applied by the courts of the situs. Again, Comment (e) on § 239 Restatement (Second) of Conflict of Laws refers to statutory rules in state law providing for an alternative connection to the law of the situs, the law of the state in which the will was executed, the law of the state in which the testator was domiciled when testating or the law of the domicile of the testator at the time of his death.
Very similar rules apply to an inter vivos conveyancing of land (see § 223 Restatement (Second) of Conflict of Laws) and movables (see § 244 Restatement (Second) of Conflict of Laws).
Similarly, § 283 Restatement (Second) of Conflict of Laws provides for an alternative connection for the formal requirements applying to →marriage. Under subsection (1), the law governing the marriage will also govern its validity, including formal validity. Subsection p. 788(2) provides the alternative application of the law of the place where the marriage was contracted, unless ‘it violates the strong public policy of another state which had the most significant relationship’ at the time of the marriage. This also applies to so-called ‘common law marriages’, ie marriages without a formal ceremony (see Comment (g) on § 283 Restatement (Second) of Conflict of Laws).
With regard to contracts, the Rome I Regulation is directly applicable in England. In addition to art 11 on formal requirements, art 18(2) of the Regulation is of particular relevance. This provision reads: ‘A contract or an act intended to have legal effect may be proved by any mode of proof recognised by the law of the forum or by any of the laws referred to in art 11 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.’ The provision largely abandons the rule laid down in Leroux v Brown  12 CB 801 which had considered formal requirements of the Statute of Frauds to be of procedural nature and, thus, follow the lex fori only (see Dicey, Morris and Collins on the Conflict of Laws, para 7-030 (as to the effect of art 18(2) of the Rome I Regulation) and paras 7-026 ff (as to Leroux v Brown  12 CB 801)).
Wills are subject to the Wills Act 1963 (c 44), which transposes inter alia the Hague Testamentary Disposition Convention.
A marriage is governed by the lex loci celebrationis (in detail, see Dicey, Morris and Collins on the Conflict of Laws, paras 17-004 ff). When use of the local form is impossible for the parties, celebration of the marriage in accordance with English common law will suffice (in detail see Dicey, Morris and Collins on the Conflict of Laws, paras 17-022 ff). Other exceptions relate to military personnel in situations of war and alike, to Her Majesty’s Forces serving abroad as well as marriages under the Foreign Marriage Act 1892 (c 23) where at least one party is a UK national (see Dicey, Morris and Collins on the Conflict of Laws, paras 17-028 ff, 17-031 and 17-032 ff respectively)
German conflict of laws as codified in the EGBGB provides a general rule applicable to any formal requirement of private law in art 11. This rule provides for an alternative connection and, thus, holds a legal transaction to be formally valid if it complies either with the law governing the transaction or the lex loci actus (similar to s 8 of the Austrian PILA; see →Austria). The rule follows art 9 of the Rome Convention 1980 (Rome Convention on the law applicable to contractual obligations (consolidated version),  OJ C 27/34). It has largely been abandoned especially by EU law, most notably by the Rome I Regulation. Apart from that, specific rules apply in certain areas (eg art 13(3) EGBGB as far as marriages are concerned; art 26 EGBGB as far as dispositions on death are concerned follows the rules of the Hague Testamentary Dispositions Convention).
France follows similar principles. Private international law provides for an alternative connection which is considered in legal literature to be a general rule governing all transactions. There are, however, not only two but even three alternatives: next to the law governing the transaction and the lex loci actus the law of the nationality of the parties involved will be considered at least in matters relating to status as well as in family matters.
The third option has been abandoned by the Rome Convention and the Rome I Regulation in contractual matters. In family and other status-related areas the general rule, providing for an alternative connection, is largely replaced by special rules on formal validity, providing eg for a mandatory application of the local form requirements at the place of marriage.
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