Q&As

Is the Sale of Goods Act 1979 applicable to international contracts?

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Published on LexisPSL on 14/02/2019

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Is the Sale of Goods Act 1979 applicable to international contracts?
  • International contracts
  • Applicable (or governing) law of the contract
  • Application of the SGA 1979 to international contracts

International contracts

A contract may be considered international if the parties are based, or hold significant assets, in different jurisdictions, or if any of the parties' obligations are to be performed in different jurisdictions. International contracts will require consideration of further issues in addition to general commercial contract considerations.

One major issue is that of the governing law of a contract (also known as the applicable law). For all commercial contracts concluded on or after 17 December 2009, courts in UK will apply 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) to determine the law applicable to contractual obligations. For information on the impact of Brexit on Rome I, see Practice Note: Brexit—applicable law [Archived].

Applicable (or governing) law of the contract

As freedom is a fundamental cornerstone of the system of conflict of laws for contractual obligation, parties in international contracts have the freedom to choose the applicable law to govern their contract. Any law may be chosen, even one that may have no apparent connection with the underlying contract at all. Parties can change the applicable law after entering into the contract but it cannot affect the rights of third parties or the validity of the contract.

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