Rome I—parties fail to choose the applicable law
Produced in partnership with Angharad Parry of 20 Essex Street
Rome I—parties fail to choose the applicable law

The following Dispute Resolution guidance note Produced in partnership with Angharad Parry of 20 Essex Street provides comprehensive and up to date legal information covering:

  • Rome I—parties fail to choose the applicable law
  • Law governing specific forms of contract (art 4(1))
  • Sale of goods (Article 4(1)(a))
  • Provision of Services (Article 4(1)(b))
  • Relating to a right in rem in immovable property or a tenancy to immovable property (art 4(1)(c) and (d))
  • Franchise contract (art 4(1)(e))
  • Distribution contract (article 4(1)(f))
  • Sale of goods by auction (article 4(1)(g))
  • A contract concluded within a multilateral system which brings together, or facilitates the bringing together of, multiple third-party buying and selling interests in financial instruments, as defined by Rome I, art 4(1), point (17) of Directive 2004/39/EC, in accordance with non-discretionary rules and governed by a single law (article 4(1)(h))
  • Other forms of contract (Rome I, art 4(2))
  • more

Brexit: The UK's departure from the EU on exit day, ie Friday 31 January 2020, has implications for practitioners considering applicable law. For guidance, see: Cross border considerations—checklist—Applicable law—Brexit specific.

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.

Rome I provides both for situations in which parties choose the applicable law, see Practice Note: Rome I—applicable law chosen by the parties and also for where they fail to choose any applicable law.

Regulation (EC) 593/2008, Rome I provides a series of straight forward rules to govern the situation where the parties have failed to choose an applicable law; the provisions are found