A commercial contract defines the conditions under which the contracting parties carry out their business activities. However, the interpretation and effect of these concepts can vary considerably depending on the legislation of the country governing them. An existing legal clause is intended to express the parties` decision as to what the law should be. In the case of a transaction without a foreign element, it is generally not necessary to specify the legal system that governs the transaction or the courts that are supposed to be competent in the event of a dispute. However, if there are international aspects of the transaction, it is useful to define in the treaty both the legislation and the jurisdiction in force – that is, the laws of the country governing the contractual conditions and the country in which the country`s courts will decide definitively. Rome II offers trading partners the opportunity to enhance economic security by allowing them to contractually agree on a regulatory clause covering both the contractual and non-contractual obligations of the parties. With respect to drafting requirements, section 14 does not provide for specific formalities. It merely provides that the parties` decision on their non-contractual obligations “must be expressed or proven with sufficient certainty by the circumstances of the case.” In beximco Pharmaceuticals Ltd -v- Shamil Bank of Bahrain EC,5 the provisions of the current law provide that “subject to the principles of glorious Sharia A, this agreement is submitted and interpreted in accordance with the laws of England.” The Court of Appeal held that the only relevant right was England`s law. In practice, the choice of the law of the parties can often be simple, on the basis of the practice of the market or the law with which they are familiar. However, we have outlined a few points in the choice of existing legislation: the ICC has adopted this second approach in several of its model contracts, providing optional legal choice clauses that refer to the “principles of law generally recognized in international trade” in conjunction with the principles of Unidroit. Current legislation, also known as the “choice of law,” is a fundamental element of an international treaty.
Here are ten points that are considered some of the most important points of comparison – in fact, there are dozens, and many lawyers will have their own list. The weighting and importance that market participants place on either factor will vary.