Dispense with …excluding its conflict of laws provisions

Choice-of-law clauses regularly contain the phrase excluding its conflict of laws provisions. It is used so often and yet so useless, that a clarification seems desirable.

When used, the phrase excluding its conflict of laws provisions is invariably an extension of a choice-of-law clause. Obviously, it attempts to exclude the private international law principles of the law chosen under that same choice-of-law clause. (Private international law is the area covering conflict of laws, which deals with determining the applicable law, as may be done by means of a choice-of-law clause.) The phrase excluding its conflict of laws provisions is meaningful only if the private international law rules of the chosen law would ‘refer’ the same matter to another law. This is only possible under the (private international law) concept of ‘renvoi‘.
Many (or most?) systems of private international law reject renvoi. Understandably, because renvoi is a source of legal uncertainty, potentially leading to circular or endless referrals. Moreover, renvoi would not necessarily provide a solution, which is by definition unequivocally acceptable. Finally, many legal systems reject renvoi because it may introduce inefficiencies in the case at hand. Countries that do accept renvoi, normally reduce its scope to a very minimum. Areas that are typically excluded from the working sphere of renvoi are contractual obligations and areas that permit broad party autonomy (ius dispositivum). So the applicability of renvoi in the case of a choice-of-law clause, and hence of the phrase excluding its conflict of laws provisions, seems rather exceptional.

In order for the words excluding its conflict of laws provisions to be somehow meaningful, the chosen law should cumulatively meet the following criteria:

(a)     the private international law rules of the chosen law and the lex fori (i.e., the law of the country where the court is located) must have adopted renvoi (i.e., it should be possible that the chosen law or the lex fori refers a contractual issue to foreign law). If the private international law rules of the lex fori anyhow reject renvoi, the court would first of all apply its own private international law rules and since these rules do not allow renvoi, it would have no reason to investigate whether the chosen law could nevertheless refer the contractual matter; and
(b)     the private international law rules of the chosen law should not permit contracting parties to choose the applicable contract law themselves because if it does, the choice-of-law clause would already be effective; and
(c)     if the previous two criteria are met, the court must not determine that the parties actually intended to apply the chosen law (e.g., because they wrote this down) and had whatever legally valid justification for doing so.

Do you see how highly exceptional if not completely hypothetical the facts of a particular contract must be in order for the words excluding its conflict of laws provisions to make any sense? It would probably be capable of being useful in a country where internet does not exist.

Related Articles

Terms of Use

I hereby accept (or reconfirm my acceptance of) Weagree’ Terms of use, in which: