Choice of Law

Abstract Parties to international transactions may choose the law they want to govern certain aspects of their deal, including both the dispute resolution clause and the substantive provisions of their contract. The parties’ choice of law is a consequential but often particularly difficult aspect of cross-border transactions, particularly because the rules of enforceability of such clauses differ from one jurisdiction to another, and thus the parties’ choice may or may not be honored by a domestic court or other tribunal ultimately faced with the question. Moreover, no single agreed international approach or practice exists, much less any explicit rule or agreement, to guide a determination by a domestic court faced with deciding the validity of the parties’ choice or, in the absence of such a choice, under its “conflicts of law” rules. This chapter reviews differing domestic approaches in this area of “private international law,” the existing regional rules (e.g., within the EU and the Inter-American system), and the various emerging “soft law” instruments on “party autonomy.” We describe the U.S. rules on choice of law and conflict of laws in some detail because they are both complicated and often unfamiliar to foreign counsel.