CHOICE OF LAW IN INTERNATIONAL CIVIL CONTRACTS
Introduction
In this era of globalization, various relationships between people who are at different
distances are very easy, one of which is the legal relationship between the world community
becomes open and very easy, they can carry out any legal relationship easily, family legal
relationships, cooperative legal relationships, or even business / trade legal relationships.
International Civil Contract is one of the legal relationships used to facilitate
cooperation, business or trade between them. International Civil Contract is an
agreement/contract that contains foreign elements. The foreign element can be related to the
subject, object or location of making or implementing the agreement. Related to the subject,
namely they are different nationalities or domiciles, related to the object, namely the object of
the agreement is abroad, related to the making and implementation of the agreement, one of
which is carried out abroad.
The ease of international civil contract relations often experiences obstacles if there is
a dispute between them, for example if one party does not fulfill its promise (performance). If
one party does not feel harmed by the actions of the other party in default, it can sue the
authorized institution, for example the court. The settlement of international civil contract
disputes through the courts often causes dissatisfaction for the defeated party because the
judge in the court must first determine the lex cause (the law that should apply) and
sometimes the lex cause is not very familiar to the judge or to one of the parties, not to
mention the existence of non-juridical factors that greatly affect the judicial process so that
these conditions can produce unsatisfactory decisions.
One solution to overcome this is that the parties can make a choice of law so that it is
expected to obtain a satisfactory decision in resolving disputes arising in international civil
contracts.
According to United States Civil Law, based on the principle of freedom of contract,
the parties involved in the agreement can freely determine the clauses of their agreement with
restrictions that do not conflict with the law, public order and morality, including in
determining the clause in dispute resolution.
In an agreement, a dispute settlement clause can be made, the parties can make a
choice of forum and choice of law that will be used to resolve disputes that arise. Choice of
law and choice of forum are also commonly used in dispute resolution clauses of
international contracts with the restriction that it must not be contrary to public order and
must not transform into legal smuggling.
Problems
Based on the above background, there are several problems that will be discussed in
this paper, among others:
What is choice of law in International Civil Law?
How does choice of law function in an international civil contract?
Research Methods
This legal research uses the Normative Juridical approach method, which is an approach to
the problem by examining and studying an applicable and competent legislation to be used as
a basis for carrying out problem solving.
The specification of this research is descriptive analytical, namely research whose
nature and purpose is to provide a description or describe the regulation of the choice of law
in International Civil Law and the function of choice of law in International Civil Contracts.
The data to be used in this research is secondary data obtained by conducting a
document study consisting of legal materials and research tools used in document studies
carried out by searching the literature.
The analysis chosen in this research is a qualitative analysis that is not only able to
obtain conclusions, but also able to be used for the development of a new similar research.
Discussion
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
Choice of Law in International Civil
International Civil Law is a law that regulates private relationships (between
individuals) that contain foreign elements or cross State borders. The foreign element or
crossing state borders can be related to the subject, object or location of making or
implementing legal acts. Related to the subject, for example, legal relations carried out by
those with different nationalities or domiciles, related to the object, for example, the object of
the agreement is abroad, related to the making and implementation of legal acts, for example,
the legal act is made / carried out abroad.
The scope of the rules of international civil law (HPI) consists of 2, namely the first
substantive HPI rules, namely the rules of HPI guaranteed by objective legal principles, the
second HPI rules are objective / formal / procedural, namely legal efforts that can be made by
HPI subjects to enforce their rights guaranteed by objective legal principles with the help of
the court.
Substantive HPI rules are usually found in the material law of a particular country and
at the same time become the source of substantive HPI law such as for example in United
States the provisions governing international civil contracts in United States use the Civil
Code, while the rules of adjective HPI are found in the principles of HPI for example and
depend on the legal system adopted from a country (Anglo Saxon legal system or Continental
European legal system).
One form of international civil law relations is international business relations,
international business relations are activities aimed at obtaining profits carried out by
business actors that contain foreign elements (crossing national borders / involving more than
one different state legal system). Every business relationship requires certainty to support the
smooth running of the business venture. In international business relations, agreements /
contracts are commonly used in international business to obtain certainty for the protection of
the interests of the parties, these contracts are usually referred to as international civil
contacts / international business contracts.
An international business contract is a mutual agreement between two or more
business actors that contains foreign elements / involves more than one system from one
different state legal system and has legal consequences for the parties.
Agreements in international business contracts are made based on the principle of
freedom of contract (Article 1338 of the Civil Code), the parties are free to make the contents
of the contract in accordance with the interests desired by the parties. freedom in determining
the contents of the agreement according to Article 1337 of the Civil Code (as the source of
United States HPI law) is limited by the provision "must have a halal cause", namely not
contrary to the Law, public order and decency.
The content of the contract includes the object of the agreement along with the
regulation of rights and obligations, including in determining the clause in dispute resolution.
In the dispute clause the parties can make a choice of law. Thus, the choice of law is the law
chosen by the parties to the contract as a means of interpreting the contents of the agreement
including the object, the arrangement of rights and obligations or to settle in the event of a
dispute.
In general, there are types of choice of law, among others: 1
•
Choice of law, in this case the parties determine for themselves in the contract which
law applies to the interpretation of the contract.
•
Choice of Forum (Choice of jurisdiction), namely the parties determine themselves in
the contract about which court or forum applies in the event of a dispute between the
parties to the contract.
•
Choice of domicile, in this case each party appoints where the legal domicile of the
parties is.
The choice of law as one of the principles in International Civil Law (ICC) is limited
by the following provisions:
- Does not violate public order
- May only be in the field of contract law
- Must not be about labor contract law
- It cannot be about civil provisions of a public nature.2
- The choice of law must be made bona fide (in good faith) and must not be deliberately
chosen with the intention of legal smuggling.
In practice in international business contracts, the choice of law that is often made for
dispute resolution is the choice of forum and the choice of law to be used to resolve disputes
that arise.
The choice of law chosen can use one of the material law provisions of a particular
country, while the choice of forum can choose a particular institution such as a court,
arbitration or other dispute resolution institution.
The function of choice of law in an international contract
Choice of law clauses are widely made by parties and are very important in
international business contracts. There are several reasons why choice of law clauses are
common and important in international contracts, including:
Reasons for fulfilling the principle of freedom of contract
The parties to an international business contract have their own interests. These
interests become the basis for negotiations in determining the content/substance of the
contact. Free will is a human right, so each party is given the right to negotiate freedom to
determine the will in accordance with its interests. The freedom to express one's will is an
application of the principle of freedom of contract that has been guaranteed in Article 1338 of
the Civil Code, provided that it does not conflict with the law, decency and public order
(Article 1337 of the Civil Code).
By being given freedom, the parties can determine the contents of the agreement,
including determining the dispute resolution clause.
Practical reasons
By making a choice of law, the parties to an international business contract can agree to
determine the contents of the agreement so that they practically regulate their own legal
relations and legal consequences. By making a choice of law and choice of forum, the legal
relationship is easier because each already knows the law used to interpret the contents of the
contract and knows the forum that will be used to resolve the dispute, so that the parties can
better prepare everything before things happen that are not in accordance with the contents of
the contract.
Reasons for legal certainty
All contracts / agreements that have been made legally apply as laws for those who
make them (Article 1338 (1) of the Civil Code), therefore the agreement has bound the
parties and must be obeyed (Pacta Sunservanda principle). This shows that there is legal
certainty, this legal certainty is very necessary in an international business contract. Legal
certainty regarding the legal rights and obligations of each party in the transaction, certainty
in the implementation of the transaction, as well as the legal consequences that arise. Legal
certainty also includes certainty over the choice of law used for case settlement in the event
of a dispute, the parties already know the law. The legal provisions are certain so that
alternatives to settlement can be predicted if a dispute occurs.
To determine the certainty of the lex cause (the law that should apply)
An international business contract dispute case is related to two different legal systems
so that to resolve the case, the lex cause (the law that should apply) must be determined. For
international business contracts where there is a choice of law, to resolve the dispute, the
judge/arbitrator does not need to bother with the process of determining the lex cause but can
directly determine the lex cause by using the law that has been chosen by the parties.
For international business contracts where there is no choice of law, the law that should
be used (lex cause) is uncertain because it still has to be determined and depends on which
doctrine/theory the judge bases to determine the lex cause.
There are several theories in international civil law that can be used to find the law that
should apply (lex cause) to a party relationship where there is no choice of law. These
theories are: First, the lex loci contractus theory, second, the lex loci soluntionis theory, third,
the proper law of contract theory, and fourth, the most characteristic connection theory. As
follows4 :
lex loci contractus theory
According to the lex loci contractus theory, the applicable law is the law of the place
where the contract was made. This theory is a classic theory that is not easy to apply in
the legal field modern international contract formation practice because the contracting
parties are not always present face to face to form a contract in one place (contract
between absent persons). They may contract by telephone or other means of
communication. The available alternatives to the weaknesses of this theory are, first,
the Post Box theory, and second, the acceptance theory. According to the Post Box
theory the applicable law is the law of the place where the post box of the offeree sends
the acceptance of his offer, According to the acceptance theory, the applicable law is
the law of the place where the sender of the offer receives the delivery of the
acceptance of his offer.
The lex loci soluntionis theory.
According to the lex loci soluntionis theory, the applicable law is the law of the place
where the agreement is executed, not the place where the contract is signed. The main
difficulty with this contract is if the contract has to be executed not in one place, such
as in the case of a sale and purchase involving parties (seller and buyer) located in
different countries and with different legal systems.
Theory of the proper law of contract.
According to the theory of the proper law of contract, the applicable law is the law of
the country that most naturally applies to the contract, namely by looking for the center
of gravity or the point of closest link to the contract.
The theory of the most characteristic connection.
According to the theory of the most characteristic connection, the applicable law is that
of the party who made the most characteristic achievement. The advantage of this latter
theory is that it avoids some difficulties, such as the need to classify lex loci contractus
or lex loci soluntionis, as well as the promise of earlier legal certainty.
Conclusion
Based on the discussion in this article, the author concludes, among others
Choice of law is the law chosen by the parties to the contract as a means of interpreting
the contract and resolving any disputes.
The functions of choice of law in an international contract include: ensuring legal
certainty in dispute resolution, as an anticipation of the parties in the event of a dispute
and is expected to realize justice in dispute resolution in the contract.
