Introduction
Living in a world where globalization plays a vital role in commercial relationships, the law side of the problem may never be avoided. It is crucial to remember that dealing with international commerce, conflicts of laws take place. The conflicts may be considered not only using the case law but also using the national statutes and international conventions. Party autonomy system allows international parties in commerce relations to create the contracts both sides are to be satisfied with. Party autonomy is the core notion in the conflicts solving in the commercial activity in the globalized economy.
Significance
It is crucial to notice that “party autonomy in private relationships has become a cornerstone of modern private international law”. In other words, party autonomy is considered to be the core rule according to which international conflicts are solved and it is the “basic principle for international contracts”. According to Zhang (2006), party autonomy is “a choice of law doctrine that permits parties to choose the law of a particular country or sovereignty to govern their contract that involves two or more jurisdictions”. It is crucial for a globalized economy as various countries have different legal foundations and the regulation of the relations in the sphere should be provided based on one law to avoid conflicts.
American and European differences and converging
It is universally known that party autonomy or choice of law theories have been different in the United States of America and Europe in the 20th century. The main difference is seen in the fact that the United States has chosen the novel approaches to conflict solving, while Europe “has decided to adhere to the classical concept of choice of law invented by Carl Friedrich von Savigny”. Europe used the Rome Convention adopted in 1980 to solve the conflicts. This convention allowed free choice of the law that should regulate commercial relations. Apart from it, the United States of America used another method and implemented the Restatement, which denied any freedom of choice for the law.
The case Trans Meridian Trading Inc. v. Empresa Nacional de Comerzialicion de Insumos may be a good example of the differences in European and American systems of international commercial relations. The absence of high attention to the party autonomy led two companies to the court where one was left dissatisfied. In the case of a contract signed based on the party’s autonomy, the conflict could have been avoided.
There are several reasons why European and American laws in the relation to commercial laws surrounding party autonomy have been converging in the past years. One of the main reasons is the presence of too many limitations in those systems, which had to be united in one to become effective. Thus, the Param PetroleumCorporation v. Commerce & Industry Insurance Co. law case may be an example of an inefficient choice of law system that was present in American commerce and allowed the business partners to create the contracts that violated the interests of one of the parties.
The fact that the party autonomy system was created as the “dominant instrument in the private international law of both Europe and the United States” pushed European and the USA laws to collaborate and converge in the question of the free choice of law for contracts in the international commerce. Thus, the Americans, as well as Europeans, seem to be reading from the same script in recent years.
References
Beale, J. H., 2008. A treatise on the conflict of laws. Harvard: Harvard university press.
Brand, R.A., 2005. Balancing Sovereignty and Party Autonomy in Private International Law: Regression at the European Court of Justice. University of Pittsburgh School of Law, [Online], 25, pp. 1-30. Web.
Hesselink, M., 2002. The new European private law: essays on the future of private law in Europe. Amsterdam: Kluwer Law International.
Meeusen, J., 2004. Enforcement of international contracts in the European Union: convergence between Brussels I and Rome I. New York: Intersentia.
Ruhl, G., 2007. Party Autonomy in the Private International Law of Contracts: Transatlantic Convergence and Economic Efficiency. CLPE Research Paper, [Online]. 3(1). Web.
Verhagen, H.L.E., 2002, The Tension between Party Autonomy and European Union Law: Some Observations on Ingmar GB Ltd v Eaton Leonard Technologies Inc. The International and Comparative Law Quarterly, 51(1), pp. 35-154.
Watt, H.M., & di Brozolo, L.R., 2004. Party Autonomy and Mandatory Rules in a Global World. International Law FORUM du Droit International, 6(2), pp. 90-96.
Zhang, M. (2006). Party autonomy and beyond: an international perspective of contractual choice of law. Emory International Law Review, 20(2), pp. 511-561.