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EFFECT OF VITAMINS C AND E INTAKE ON BLOOD ... - EuroJournals

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International Research Journal of Finance and Economics – Volume 2, Number I (2006)<br />

The way ahead: the continuing search for a flexible choice-of-law rule<br />

Having decided that no single proper law (no matter how broadly based)can solve every potential point<br />

of dispute between the parties, a few comments seem necessary on the utility of the proper law doctrine<br />

especially in those cases where the parties have failed to select the law govern their contract. It has<br />

been said , and not without reason, that one of the major defects of the proper law doctrine, given the<br />

absence of a choice of law, is that the lack of specificity in the now accepted “closest connection” test<br />

may require a House of Lords decision to determine what law governs the disputed contract.<br />

Principles of party autonomy<br />

(a) Choice of the Proper Law<br />

As stated above, the choice of law may be express or tacit i.e. implied. An express agreement may be<br />

oral or written, usually in the form of a choice-of-law clause in a contract. In the case of an implied or<br />

tacit choice of law, this may be inferred from the terms of the contract (Wolfe, 2002: 427) and the<br />

circumstances surrounding the conclusion of the contract (Edwards 1989: 362). In certain commercial<br />

contracts several indicia may establish an inferred or implied choice of law such as for example a<br />

jurisdiction or arbitration clause from which a strong inference may be drawn that the domestic law of<br />

the chosen forum or arbitrator should apply as the proper law of the contract. Other examples of indicia<br />

are the form of the document used, the use of business jargon or concepts peculiar to the business<br />

activity, a choice-of-law clause in previous dealings even a reference to the rules of a particular legal<br />

system (Collier 1998:187). It may even be inferred from the choice of law applicable to a particular<br />

aspect of the contract that the same legal system applied to the whole contract. (Wolfe, 2002: 427).<br />

Whether the choice of law is an express one or an implied one, the intention of the parties as to their<br />

choice is determinative (Wolfe, 2002: 418).<br />

(b) Application of the Proper Law<br />

Once the proper law of the contract has been determined either by an express choice or an inferred one,<br />

and then the contract is governed by all the provisions of the legal system to which the proper law<br />

belongs (Wolfe, 2002: 416). The proper law of the contract governs most of the contractual issues such<br />

as the nature, effect and interpretation of the contract, the ascertainment and extent as well as the<br />

discharge of the parties’ obligations, essential validity, and mode of performance and the nonenforceability<br />

of the contract by reason of illegality (Edwards, 1990: 360). However, contractual issues<br />

such as legality, formal validity and contractual capacity are governed by the otherwise applicable law<br />

as determined by a court of law or arbitral tribunal (Edwards, 1990:360).<br />

Where there are changes in the law after the parties had agreed on their choice of law, the<br />

contract is subject to such changes in the application of the common law. But, in the case of statutory<br />

rules that the parties have agreed shall apply to their contract, the interpretation and application of the<br />

rules will be as they were at the time of the agreement (Wolfe, 2002: 423).<br />

(c) Substitution of a previously chosen law<br />

Another principle of party autonomy is that the parties may substitute a new legal system for the one<br />

previously chosen provided that the new choice is bona fide and legal. The validity of the new choice<br />

of law is determined by the application of the previously chosen law (Plendar, 2002: 98).<br />

(d) Depecage or Scission of the Contract<br />

Depecage or picking and choosing of a contract is a principle of party autonomy whereby the parties to<br />

a contract may divide a contract into several separate issues and agree that they may be governed by<br />

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