As you can see in the examples, the clauses of the current law are quite short and precise, but can still have some customization and variety. The general rule under Rome II is that the law applicable to non-contractual obligations is the law of the country in which the damage/loss in question occurs. There are a number of circumstances in which this general rule is not applied.9 The most important situation related to the terms of the applicable law is that, in accordance with Article 14 Rome II, the parties may agree to “submit their non-contractual obligations to the law of their choice”. With regard to the right to make this choice, the following points must be respected: All aspects of a contract are enshrined in one or more legal systems. The parties are free to choose one or more jurisdictions applicable to their contract. You can also choose different laws for different aspects of the contract. The applicable law of the contract determines the legal requirements such as the conclusion, execution and termination of the contract. Rome II is a Community regulation8 which lays down the rules governing the law applicable to non-contractual obligations in “civil and commercial matters”. The Regulation entered into force on 11 January 2009 and is applied by the courts of all Member States except Denmark.
Finally, the parties must choose the applicable law in the same State in which claims under the contract are claimed. This ensures that the courts that interpret and apply the terms of the contract have experience in applying the law chosen by the parties. The courts will review the applicable law selected in your agreement, and then after a connection between that location and either: The applicable law clause, sometimes referred to as the choice of law clause, determines which state laws are used to interpret the contract and which jurisdiction oversees the performance of its terms. In the absence of a clause on the applicable law, the courts seek an implied intention on the part of the parties to choose the applicable law. The courts have found virtually unlimited grounds for which they can “conclude” circumstances, acts or the absence thereof which applicable law the parties “intend”. This creates greater uncertainty as to the applicable law and makes it even more important for the parties to use a clause of the applicable law to express their intention. In Section 18.1, Zendesk breaks down each of its Services and provides basic information, including a mailing address, information from the Contracting Party, and information about applicable law. Therefore, when drafting the applicable law clause, it is worth considering whether it should be limited to the agreement itself or extended to include other non-contractual obligations in relation to the contract.7 At present, there is no clear power as to whether such a clause would be effective in English law to determine the law: which is subject to the non-contractual obligations of the parties.
In the light of Rome II, this position has now changed. The purpose of the applicable legal clauses gives contractual certainty in relation to the laws that will be applied when a legal problem arises. If a party resides in another state or country, the applicable legal provisions ensure that the parties agree on the codes that apply to the agreement. Some commentators argue that the model clauses of the broad and narrow applicable law are too easily interpreted as sub-complete or too comprehensive, or that could undermine the control of the applicable law that aims to create an applicable legal clause. With this in mind, Ken Adams proposed an alternative to the standard clause for applicable law. In general, however, the acceptance of a clause under the above conditions can only increase the prospect that the non-contractual obligations of the parties will be subject to the law referred to in the applicable law clause. This, in turn, will allow the parties to analyze their legal relationships with greater certainty and hopefully avoid the risk of spending time and money arguing over the law that applies. Here`s an example of a very comprehensive applicable legal clause that works well for a large international company or SaaS application with users around the world. The same concept applies regardless of the country you are in. The parties to a contract may also choose a place where legal proceedings would take place if necessary. It also determines the place of mediation or arbitration.
When choosing an applicable law, first consider the nature of the transaction in question. Jurisdiction refers to the court or judicial system before which your case is physically heard. For example, a jurisdiction may be something like “New York State Courts,” while the applicable law will be something like “New York State Laws.” In Beximco Pharmaceuticals Ltd -v- Shamil Bank of Bahrain EC5, the applicable law clause provided that “subject to the principles of glorious Sharia, this Agreement shall be governed by and construed in accordance with the laws of England”. The Court of Appeal ruled that the only applicable law was the law of England. Another very concise and direct clause on the applicable law can be found in MakerBot`s General Terms and Conditions of Sale. .
