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

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  1. Introduction.
  2. The scope of the convention.
  3. 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.
  4. Conclusion.
  5. Bibliography.

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.?

[...] Article of the Convention states that ?Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where there are mandatory rules irrespective of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract? The Giuliano Lagarde Report gives some examples of such mandatory rules, ?notably rules on cartels, competition and restrictive practices, consumer protection and certain rules concerning carriage.?[48] This appears to many lawyers as a restriction on the freedom of choice as the explanation given in the country appears as a restricted list. [...]

[...] A restriction on the freedom of parties is however contained in Art which provides that the choice of a foreign law shall not prejudice the application of mandatory rules.[11] The Giuliano Lagarde Report[12] points out the importance of such a provision: prohibiting parties from choosing to apply a law only to avoid mandatory rules of one of the legal system with which the contract is connected. While the purpose of this provision might be justified, there is however an important problem.[13] judge of the forum must determine whether all the elements relevant to the situation are connected with only one country, and a significant element of appraisal is present in determining whether an element is or is not ?relevant'.?[14] This problem could be avoided if another terminology had been used by the Convention. [...]

[...] British law being based on common law, mandatory rules is difficult to find as they are spread in case law; as a consequence ?example are likely to be very rare because of the difficulty in identifying such rules.?[50] English mandatory rules will be identify without any problem only when they are embodied in statutes. It has been accepted that when a court refused to apply a foreign law and instead apply English law on the grounds of public policy, it should be regarded as involving a mandatory rule of the forum. [...]

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