20 Essex Street

This Practice Note considers Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) and explains the ability of the parties to choose the applicable law under Rome I. It looks at whether the law must be that of a state, the freedom of the parties to chose the applicable law—such choice can be express or implied—and changing the chosen applicable law. It also considers choice of law and non-derogaton as well as consent, validity and capacity.

This Practice Note considers the provisions in Article 5 of Regulation (EC) 593/2008, Rome I which provides for the determination of choice of law in relation to contracts of carriage. Article 5 addresses both the carriage of goods and carriage of passengers, but this Practice Note considers only the carriage of goods. The provisions applicable in the absence of an agreed applicable law are explained, as is the escape clause.

This Practice Note considers the general provisions in Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I). It covers the following: Overriding mandatory provisions (Article 9), Consent and material validity (Article 10), Formal Validity (Article 11), Scope of Law Applicable (Article 12), Incapacity (Article 13), Voluntary Assignment/ Contractual Subrogations (Article 14), Legal Subrogation (Article 15), Multiple Liabilities (Article 16), Set-off (Article 17), Burden of proof (Article 18), Habitual Residence (Article 19), Exclusion of Renvoi (Article 20) and Public Policy (Article 21).

This Practice Note considers the application of Regulation (EC) 593/2008 on the law applicable to contractual obligations, commonly known as Rome I, to circumstances in which the parties have not chosen the applicable law. It considers the law governing specific forms of contract such as sale of goods, provision of services and distribution contracts. It also considers the situation where contracts do not fall with the specific categories, the so called ‘escape clause’. In such cases, the following terms are of importance: ‘characteristic performance’, ‘habitual residence’ and ‘more closely connected’. This Practice Note considers each of these terms as well as how the escape clause differs under Rome I compared to its predecessor, the Rome Convention—an issue which was considered in Molton Street Capital v Shooters Hill Capital Partners.