What is the law applicable to international contracts?

international sale lawyer

It is increasingly common for companies to subscribe international contracts. It is essential to determine what the applicable law in the event of conflict.

The question of the applicable law is simplified with Regulation 593/2008 European Parliament and Council, known as Rome-I Regulation. Cases that can not be resolved with the Rome-I Regulation, must be revised in response to Article 10.5 Civil Code. If it is an international sale of goods between companies of the two states Vienna Convention 1980, This application may be.

The Rome-I Regulation

The Rome-I Regulation establishes the first criteria to establish the applicable law party autonomy: The parties may choose the law applicable to their contract.

In the absence of this determination, apply the law of the habitual residence or central administration of the party who is responsible for the characteristic performance of the contract. Special rules are established eight types of contracts, four who are applying the general rule (contracts of sale of goods, services, franchise and distribution) and four whose applicable law is determined by the link with the subject of the contract (interests in land, leasing of real estate, auction sale and financial instruments on regulated markets).

Besides establishing a special rules for transport contracts, consumption, insurance and labor.

In contracts transport, can distinguish the goods and people. In freight contracts applies the general rule of free choice by the parties of the law applicable, and the absence of this, apply:

1.- The law of the country of habitual residence of the carrier, always match the place of receipt or delivery of goods or the sender's residence.

2.- In the absence of the above criteria will apply the law of the place in which the parties agreed to make the delivery.

If it is people, freedom of choice is limited to the place of origin or destination, permanent residence of the passenger or shipper and carrier headquarters. In the absence of this, apply the law of the habitual residence of the passenger if it matches the source or destination or otherwise, the law of the country of habitual residence of the carrier.

Regarding contracts insurance, the absence of agreement on the law applicable, governed by the law of the domicile of the insured. It also established a set of rules to facilitate the demand for the insured, while the insurer may sue the previous one in the home of this.

In individual contracts work the general rule is the law agreed by the parties, while setting mechanisms worker protection. Namely, agreed by the parties can not deprive the employee of the protection that would have given more favorable provisions. In the absence of choice by the parties, applies the law of the country in which the employee habitually perform their duties, and if the above does not apply, the law of the country where you place the establishment of the company that he was engaged. If the contract is more closely connected with another country, apply the law of that.

Article 10.5 Civil Code

After Rome-I Regulation, the 10.5 C.C. has come to be applied residually, only in cases that can not apply the first. The 10.5 CC is based on recognizing the autonomy provided you choose the applicable law expressly and have some connection with the business in question. Failing, national law common to the parties; the absence thereof, the common habitual residence, and, ultimate, the law of the place of the contract.

In addition there are two special rules, one for buildings and one for the purchases of personal property in commercial establishments. In both cases the absence of express choice, apply the law where radiquen.

Finally, we discuss the Vienna Convention on the International Sale of Goods of 1980, which is applicable in Spain and in the other 75 states that have adopted: The rules contained in Articles 2 a 5 if the parties are from different states and both are states to the convention or if the rules of private international law provide for the enforcement of a state that is party to the Convention.

Ultimately, is a very complex issue and we recommend that in case of conflict seek professional advice.

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