The choice of law contract

Abstract

The party autonomy rule embodies the freedom enjoyed by parties to a cross-border legal relationship to choose the law applicable to that relationship. It is firmly established in the area of contract and is also increasingly being relied upon in non-contractual relationships. This thesis argues that there has been insufficient analysis of the mechanism behind the rule, the choice of law agreement, and that a better understanding of the agreement’s functions is crucial to the effective operation of the party autonomy paradigm.

Rejecting the argument that choice of law agreements are of merely factual relevance in the determination of the applicable law, the thesis proposes a contractual framework for the regulation of party autonomy. By fusing principles of choice of law and contract, this framework provides guidance on the proper scope of party autonomy, as well as on the conditions that ought to be imposed on the enforcement of choice of law contracts. In particular, it demonstrates that the scope of party autonomy must be evaluated by reference to objective choice of law; that the existence and validity of the choice of law contract must be established before it is given effect; and that the law of contract is not always sufficient to achieve this task and must be supplemented by rules that are specific to the choice of law contract, termed modal choice of law rules.

Championing party autonomy without also considering the attendant normative questions that define the purpose, the meaning and the limits of that power ignores the parties' right to freedom from contract and undermines the very purpose of party autonomy. The thesis concludes, therefore, that existing rules of party autonomy ought to be interpreted in a way that gives effect to the contractual nature of the choice of law agreement, and that reforms are needed to expand the use of modal choice of law rules.