Tacit choice of law in the Hague Principles on Choice of Law in International Contracts

Abstract

This article contains the submission in respect of tacit choice of law made to the working group tasked with the drafting of the Hague Principles on Choice of Law in International Contracts. The different criteria for tacit choice of law in various international instruments and national laws are considered. A strict test for the existence of tacit or implied agreements is supported to prevent legal uncertainty and so as not to undermine the conflicts rule that applies in the absence of a choice of law. The procedural element which appears in this regard in various codes, must be avoided in the appropriate choice of law context. The possible sources for a tacit choice of law are discussed and it appears that contractual terms as well as the circumstances of the case may play a part in this regard. The authors submit that the choice of a forum does not as such constitute a tacit choice of law. In view of this analysis, certain recommendations are made for the proper formulation of the test for a tacit choice of law. The changes made by the working group and the formulation provisionally agreed on, are mentioned. The proposed rule is as follows: “A contract is governed by the law or rules of law chosen by the parties. The choice or any modification thereof must be made expressly or appear clearly from the provisions of the contract or the circumstances. An agreement between the parties to confer jurisdiction on a court or an arbitral tribunal in a given state to determine disputes under the contract, is not in itself equivalent to a choice of the law of that state.”