The Public Policy and Mandatory Rules of Third Countries in International Contracts

• Main Author: CHONG, Adeline
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Contracts; International Law; Public Affairs, Public Policy and Public Administration
• Online Access: https://ink.library.smu.edu.sg/sol_research/881; https://ink.library.smu.edu.sg/context/sol_research/article/1880/viewcontent/Public_Policy_Mandatory_Rules_Third_Countries_Contracts.pdf
• Institution: Singapore Management University

While party autonomy has risen in the field of contract, this autonomy is not unfettered. Parties are allowed to choose the governing law of the contract but limitations on party choice can be seen through the operation of public policy and mandatory rules. The public policy and mandatory rules of three laws may be imposed onto the contract: that of the lex fori, the governing law of the contract and the law of a third country with a connection to the contract. It is generally accepted that the public policy and mandatory rules of the forum have a legitimate role to play in the regulation of the contract. Some continental, particularly German, theorists are more equivocal about whether the public policy and mandatory rules of the governing law of the contract have a similar legitimacy. Nevertheless, the most controversial issue with regard to restrictions on party autonomy is whether the law of a third country is or should be given effect. This issue is the focus of this article.