THE APPLICABLE LAW International Business Law

I- The Rome Convention A- Presentation of the Rome convention B- Who must apply it ?

B- Which relations does it regulate ? 1) Contract 2) International

II- The choice of the applicable law A- The autonomy principle –Free choice

–3) Advantages et inconvenient - Advantages –Parties’ will –Efficiency Inconvenient –Fraud –Absence of choice

B- The Rome Convention –1) Form of the choice No needed formality Separate contract or contract term –2) Moment of the choice Any moment –3) Law chosen - Need to chose a law ? Only one ? - Link with the contract ?

C- Limits to the power to chose –1) International contract –2) Fraud Example : Contract for the sale of cannabis applying Columbian law. –3) Public order Example : Surrogate mother contract between two English people living in France.

III- Absence of choice Rome Convention Art 4 A) Close connection

B) Presumption : Characteristic performance –Definition : What a party receives in exchange of a payment Example : A sells 10 computers to B for Euros

C) Exceptions –- Immovable Property –- Carriage of goods –- Closer connection Example : A Belgian company, settled in France, sells computers produced in Belgium to a Belgian client settled in Belgium. The computers are delivered in Belgium and paid on the seller’s Belgian bank account.

IV- Competing principles Definition

A- Rules of protection –1) Labour contract - Absence of choice –Art 6 : habitual place of performance –If not single, place through which the employee was hired –Example : German employee hired by the French factory of a Japanese company’s French factory as a commercial agent for the Belgium and Luxemburg markets. - Choice of the parties –Example: The parties chose American law in the contract

–2) Consumer contracts - Absence of choice –Example : A French Company sends an offer to a Greek consumer to sell him a MP3 player for 50 euros. The Greek consumer claims that the MP3 player is defective. - Choice of the parties –Example : The contract applies French law. French law imposes to have a lawyer to go to court (what Greek law does not) and gives the consumer 2 years to claim for hidden defects (whereas Greek law gives only 1 year to do this).

B- Public policy rules –1) Rationale

–2) Public policy rules - Applicable law public policy rules –Example : A Belgian seller sells cigarettes to a French buyer. The parties chose to apply French law. (allowed in Belgian law but illegal in French law) - Forum (judge) public policy rules (art 16) –Example : A Belgian seller sells cigarettes to a French buyer. The parties chose Belgian law (or the contract is silent). The Buyer does not pay - Other public policy rules –Example : A French seller sells cigarettes to a Belgian buyer. The parties chose Belgian law and the seller does not deliver.