CHOOSING AN APPLICABLE LAW

CHOOSING
AN APPLICABLE LAW

1



What is the applicable law?


What is the applicable law and importance of applicable law?

What is the applicable law?
Applicable law is the law governs disputes
between the parties


What is the applicable law and importance of applicable law?

 Applicable law governs the questions concerning the
validity, interpretation and performance of the contract

Public Law

Public Law


What is the applicable law and importance of applicable law?

Why is the applicable law important?
 In general, parties have the freedom to choose the

applicable law. If they fail to do so or have to chosen a
law which is prohibited for some reason, then the
applicable law shall be determined by the application
of the revelant rules of the effective jurisdictions


What is the applicable law and importance of applicable law?

 When dealing with international dispute, there may be
number of laws which may be of revelance to the parties.

A: The buyer
B: The exporter
Option 1: The buyer’s law ( the law of A’country)
Option 2: The exporter’s law ( the law of B’s country)
Option 3: A third party law ( e.g. English law, Swedish law,…)


What is the applicable law and importance of applicable law?

 E.g: The applicance law might be the law of one of the different countries in
which each party is situated or the law of the country in which performance of the
contract is required.
When applied, the law of the different countries could lead to fundamentally
outcomes while determining a dispute between the parties => The applicable law
is therefore extremely important.


Anglo-American Systems and

Continental Systems


Distinguish 2 types of applicable law

Anglo-American Systems

Continental Systems

GOAL
 Justice in the individual case

 Consistency and uniformity of
enforcement


Distinguish 2 types of applicable law

Anglo-American Systems

Continental Systems

Predictability and consistency of court decisions
 Unless mallers are carefully
regulated in the contract, the
decision of the judge is not fully
predictable
Different judges may give
widely different judgments

 Decisions in all but the most
difficult cases are predictable
with some accuracy
 Decisions are generally
consistent from court to court


Distinguish 2 types of applicable law

Anglo-American Systems

Continental Systems

Length and detail of contract
 To be clear, contracts must

 Because the law regulate

regulate many issues, so they

most problems, contracts can be

tend to be long and detailed

short and lacking in detail


Distinguish 2 types of applicable law

Anglo-American Systems

Continental Systems

Internaltional acceptance
 English and American law
have been relined over the
centuries to cope with issues
and international trade. The
principles
are
widely
understood and respected

 Continental laws do not
have the prestige of AngloAmerican
laws
in
international practice. They
tend to focus on national
rather than international
issues.


The Vienna Sales Convention


The Vienna Sales Convention

 In 1980, the United Nations Convention on
Contracts for the International Sales of Goods (the

Vienna Sales Convention)
 The Convention is gaining wider international
ratification

Vienna Sales Convention is a choice of an
applicable law


The Vienna Sales Convention

Principle

 Developing international
trade on the basis of
equality and mutual
benefit is an important
element in promoting
friendly relations among
States.


The Vienna Sales Convention

GOAL

 Adopting uniform rules which govern contracts for the
international sale of goods and take into account the
different social, economic and legal systems would
contribute to the - removal of legal barriers in
international trade and promote the development of

international trade


REVIEW & PRACTICE


REVIEW & PRACTICE

1. There are 2 important families of contract law: Continental and
Anglo-American.
2. The main difference between Continental and Anglo-American law
is the degree of codification: Continental is fully codifined while
Anglo-American law relies on cases and precedents.
3. Every contract is governed by an applicable law. If the contract
doesn’t specify an applicable law, the rules of international private
law is applied.
4. In countries that have adopted it, the Vienna sales Convention
over-rides national law such as the BGB or UCC in the event of
conflict.


REVIEW & PRACTICE

Conflicts:  "The terms of this Agreement shall control over
any conflicting terms in any referenced agreement or
document"
Xung đột: “ Những điều khoản của hợp đồng này sẽ được
ưu tiên áp dụng khi có bất cứ điều khoản xung đột nào khác
trong bất cứ văn bản hay tài liệu tham khảo nào.

REVIEW & PRACTICE

Choice of Law or Governing Law "This agreement shall
be governed by and construed in accordance with the
internal laws of the French Law, without reference to
any conflicts of law provisions".
Lựa chọn luật hay Luật điều chỉnh "Hợp đồng này sẽ chịu sự điều
chỉnh và hướng dẫn theo đúng pháp luật của luật nước Pháp, không có
dẫn chiếu tới bất cứ xung đột điều khoản pháp luật nào“.


Article 3:
(1) Contracts for the supply of goods to be manufactured
or produced are to be considered sales unless the
party who orders the goods undertakes to supply a
substantial part of the materials necessary for such
manufacture or production.
(2) This Convention does not apply to contracts in which
the preponderant part of the obligations of the party
who furnishes the goods consists in the supply of
labour or other services


REVIEW & PRACTICE

Article 3:
(1) Contracts for the supply of goods to be manufactured or produced are to be considered
sales unless the party who orders the goods undertakes to supply a substantial part of
the materials necessary for such manufacture or production.

(2) This Convention does not apply to contracts in which the preponderant part of the
obligations of the party who furnishes the goods consists in the supply of labour or
other services

Dich.


REVIEW & PRACTICE

1. How many important families of contract
law are there?
A 1
C 2
B 3

D 4


REVIEW & PRACTICE

2. Which law has a fully codification?
A

Anglo-American law

B

Continental law