Topic 3: Choice of Law for Contractual Obligations
Recommended Reading
▪ Crawford and Carruthers, Chapter 15 paras 15.01- 15.27 are available in digitised version on
Moodle for private study.
Introduction
▪ What determines the applicable law to a contract when a foreign element/aspect is present?
The question comes down to this: even if you choose your forum, there is an assumption that
the rules of the forum will apply but not always so. In the interests of the parties, if you bring
a case to the Scottish court, you will have Scots law that will apply. However, that is not always
appropriate or fair or commercially consistent. Therefore, moving away from jurisdiction, you
need to think about if the Scottish courts have jurisdiction, then does Scots law apply or does
another law apply instead.
▪ Lex fori
▪ Lex loci contractus
▪ Lex loci solutionis
▪ Proper law
▪ Common Law: - Choice with limits/Proper Objective Law
EC 593/2008 ROME I REGULATION
▪ 1980-2009: the international convention known as Rome Convention 1980, full title:
Convention on the Law applicable to contractual obligations, implemented by the Contracts
(Applicable Law) Act 1990 with Official Guiliano and Lagarde Report to assist in interpretation
of the Convention
▪ 2007 Reform: Green Paper on the Conversion of the Rome Convention on the Law applicable
to contractual obligations into a community instrument and its modernization, COM (2002)
654 (01) 14th January 2003
▪ 2009: Rome I Regulation finalised and adopted in 2008- Regulation 593/2008. Applies to
questions of applicable law to contracts concluded from December 17, 2009 in states where
the Regulation applies, irrespective of the law chosen by the parties
▪ UK/EU relationship in EU Justice and Home Affairs: UK exercised its right to opt out, but
subsequently opted back into the Regulation- see SSI 2009/410
Post Exit Day …
▪ Following Exit Day (31/01/20), The Law Applicable to Contractual and Non-Contractual
Obligations (Amendment etc) (EU Exit) Regulations 2019, SI 2019/834 seek to ensure existing
EU rules (in the Rome I/ II Regs) continue to operate in UK law.
, ▪ ‘retained EU Law’ under the EU (Withdrawal) Act 2018.
▪ Minor changes by Regs s 8(1) of 2018 Act eg Art 3(4) Rome I
▪ See https://www.legislation.gov.uk/uksi/2019/834/made and students should read brief
Explanatory Memorandum, available at
https://www.legislation.gov.uk/uksi/2019/834/memorandum/contents
▪ See also ongoing consultation on Retained EU Law/ Lower Courts re binding nature of existing
CJEU case-law, Available at https://commonslibrary.parliament.uk/brexit/retained-eu-law-
and-lower-courts-government-consultation/
Rome I Regulation - Structure
▪ [2008] OJ L 177/6
▪ Same basic structure as Rome Convention 1980 that applied to contracts until 16.12.2009:
▪ Arts 1 and 2 re scope - universal application
▪ Note – Regulation and therefore preliminary ruling process to CJEU was previously
applicable before Exit Day/Now: CJEU decisions pre-Exit Day still valid
▪ Uniform scope: it is an EU instrument but any law that is identified under it can apply.
Not restricted to the laws of EU member states. If the EU rules apply (as they do in
Scotland) and the parties contract is chosen and they specify the choice of law is the
law of Cuba, then that would be valid under the Rome regulation, even though the
applicable law is not the law of an EU member state because on a question of choice
of law if the matter is brought to a Scottish court then the Scottish court look to apply
the Rome I Regulation.
▪ Article 3- choice of law, freedom of choice
▪ Article 4- applicable law in absence of choice - reformed with particular provision for certain
types of contract
▪ Article 6- protected consumer contracts
▪ Article 22- re States with more than one legal system
▪ Article 28 – Rome I Regulation applies to contracts after 17.12.2009 and still applies
throughout UK post Exit Day.
Rome 1 Regulation: Scope
▪ The Regulation has worldwide scope (Art 2) – meaning wherever the Regulation applies, any
law applicable by the Regulation will be valid, subject to exclusions as follows:
▪ status/legal capacity
▪ succession/matrimonial property/maintenance
▪ negotiable instruments
Recommended Reading
▪ Crawford and Carruthers, Chapter 15 paras 15.01- 15.27 are available in digitised version on
Moodle for private study.
Introduction
▪ What determines the applicable law to a contract when a foreign element/aspect is present?
The question comes down to this: even if you choose your forum, there is an assumption that
the rules of the forum will apply but not always so. In the interests of the parties, if you bring
a case to the Scottish court, you will have Scots law that will apply. However, that is not always
appropriate or fair or commercially consistent. Therefore, moving away from jurisdiction, you
need to think about if the Scottish courts have jurisdiction, then does Scots law apply or does
another law apply instead.
▪ Lex fori
▪ Lex loci contractus
▪ Lex loci solutionis
▪ Proper law
▪ Common Law: - Choice with limits/Proper Objective Law
EC 593/2008 ROME I REGULATION
▪ 1980-2009: the international convention known as Rome Convention 1980, full title:
Convention on the Law applicable to contractual obligations, implemented by the Contracts
(Applicable Law) Act 1990 with Official Guiliano and Lagarde Report to assist in interpretation
of the Convention
▪ 2007 Reform: Green Paper on the Conversion of the Rome Convention on the Law applicable
to contractual obligations into a community instrument and its modernization, COM (2002)
654 (01) 14th January 2003
▪ 2009: Rome I Regulation finalised and adopted in 2008- Regulation 593/2008. Applies to
questions of applicable law to contracts concluded from December 17, 2009 in states where
the Regulation applies, irrespective of the law chosen by the parties
▪ UK/EU relationship in EU Justice and Home Affairs: UK exercised its right to opt out, but
subsequently opted back into the Regulation- see SSI 2009/410
Post Exit Day …
▪ Following Exit Day (31/01/20), The Law Applicable to Contractual and Non-Contractual
Obligations (Amendment etc) (EU Exit) Regulations 2019, SI 2019/834 seek to ensure existing
EU rules (in the Rome I/ II Regs) continue to operate in UK law.
, ▪ ‘retained EU Law’ under the EU (Withdrawal) Act 2018.
▪ Minor changes by Regs s 8(1) of 2018 Act eg Art 3(4) Rome I
▪ See https://www.legislation.gov.uk/uksi/2019/834/made and students should read brief
Explanatory Memorandum, available at
https://www.legislation.gov.uk/uksi/2019/834/memorandum/contents
▪ See also ongoing consultation on Retained EU Law/ Lower Courts re binding nature of existing
CJEU case-law, Available at https://commonslibrary.parliament.uk/brexit/retained-eu-law-
and-lower-courts-government-consultation/
Rome I Regulation - Structure
▪ [2008] OJ L 177/6
▪ Same basic structure as Rome Convention 1980 that applied to contracts until 16.12.2009:
▪ Arts 1 and 2 re scope - universal application
▪ Note – Regulation and therefore preliminary ruling process to CJEU was previously
applicable before Exit Day/Now: CJEU decisions pre-Exit Day still valid
▪ Uniform scope: it is an EU instrument but any law that is identified under it can apply.
Not restricted to the laws of EU member states. If the EU rules apply (as they do in
Scotland) and the parties contract is chosen and they specify the choice of law is the
law of Cuba, then that would be valid under the Rome regulation, even though the
applicable law is not the law of an EU member state because on a question of choice
of law if the matter is brought to a Scottish court then the Scottish court look to apply
the Rome I Regulation.
▪ Article 3- choice of law, freedom of choice
▪ Article 4- applicable law in absence of choice - reformed with particular provision for certain
types of contract
▪ Article 6- protected consumer contracts
▪ Article 22- re States with more than one legal system
▪ Article 28 – Rome I Regulation applies to contracts after 17.12.2009 and still applies
throughout UK post Exit Day.
Rome 1 Regulation: Scope
▪ The Regulation has worldwide scope (Art 2) – meaning wherever the Regulation applies, any
law applicable by the Regulation will be valid, subject to exclusions as follows:
▪ status/legal capacity
▪ succession/matrimonial property/maintenance
▪ negotiable instruments
