Article by Dennis Solomon
The private international law of contracts in Europe is less in a state of revolution than in a state of careful advancement of the approach adopted in the Rome Convention of 1980. The European Commission's Proposal of 2005 for a Regulation on the Law Applicable to Contractual Obligations did, however, suggest individual changes which might aptly be labelled “revolutionary.” Yet, most of these changes have been retracted or attenuated in the current version of December 2007.
A characteristic trait of the present European choice-of-law rules for contracts is an attempt to differentiate between “private” interests and “public” policies. This approach partly explains the greater emphasis on the habitual residence of the party rendering the characteristic performance and the relatively minor importance of the place of performance in cases where the parties have not chosen the applicable law. In such cases, the Commission's original proposal to abolish the “escape clause” was abandoned again in 2007.
With regard to party autonomy and its limits, there exists a differentiated system to deal with “mandatory rules.” First, the basic liberal approach to party choice of law in Europe is, as a general principle, limited only for purely “domestic” cases. However, the notion of a sufficient relationship requirement for choice-of-law clauses has recently been introduced for insurance contracts and contracts of carriage. Second, regarding private interests, European law seeks to protect the supposedly weaker party, particularly consumers and employees. The traditional method to achieve this result is to apply the mandatory provisions of the normally applicable law regardless of a choice-of-law clause. The Commission's proposal to abolish this curious double protection with regard to consumer contracts was abandoned in 2007 in favor of the traditional approach. Third, the focus of the general choice-of-law rules on “private” interests makes it both possible and necessary to develop a special regime for rules implementing “public” policies. The traditional exception of ordre public apart, this is achieved by the special treatment given to “overriding mandatory provisions.” While the underlying public-private distinction may sometimes prove too simplistic, it does provide a useful point of departure for a differentiated policy-oriented analysis of the applicability of mandatory rules.
About the Author
Dennis Solomon. Professor of Law, University of Passau. First State Exam 1991, Habilitation 2004, Second State Exam 1994, Dr. jur. 2003, University of Passau; LL.M. 1995, University of California, Berkeley.
Citation
82 Tul. L. Rev. 1709 (2008)