The law applicable to contractual obligations in regulation 'Rome I'

Abstract

Which should be the applicable law in contracts? This is the question which has perplexed for endless times European legislators, professionals, and consumers alike. Given the increased cross-border trade in the European area, and given the diverse range of norms applicable to these transactions, the need was felt for a convention which could set in motion some sort of harmonisation of private international law in this area so as to diminish as much as possible confusion. The Rome Convention contributed greatly to this process, albeit after all this time the need is felt to modernise it and give it more teeth to bite, in each and every Member State of the European Union. In the introduction of this thesis, I shall give a background of the current state of affairs in European private international law, and will highlight the main sources from which this law derives, with particular reference to the law applying to contractual obligations. The first chapter of the thesis will give a picture of the situation prior to the Rome Convention, the events and the preparatory work that led to the Convention, the coming into being of the Convention and its effects. Various topical issues arising out of the Convention will be analysed; these mainly being the scope of the convention, the parties' autonomy to choose the applicable law, the rules applicable in the absence of a choice of law, mandatory rules, and formal validity. The specific contracts provided for in the convention, such as consumer contracts and individual employment contracts will not be tackled in this chapter, because they will form the subject of a separate chapter later on. The second chapter will set out, in some detail, the history prior to the proposal for a 'Rome I' Regulation, will explain the initiatives taken by the Commission, and will give a picture of the legal and political background, and I shall also tackle several important questions such as: What instrument should be used to modernise the Convention? The reactions of several Member States to the Green Paper presented by the Commission will also be analysed. The third chapter is a natural extension of the second chapter and in it one shall find the responses and reactions of several stakeholders in the European area, amongst which there are economic actors, banking and consumers' associations, Eurocommerce and, most importantly, the reactions of the European Parliament and the European Economic and Social Committee. The opinions of various academics are reflected in the comments made in this chapter. The fourth chapter is an analysis of the proposed regulation itself. Rather than analysing the regulation section by section, the method adopted will be to check for any amendments and differences between the Convention and the proposed regulation firstly because the Convention has already been dealt with in Chapter 1, and so one should avoid duplication, and secondly because I was mostly interested in the amendments suggested by various bodies, first amongst which there was the Council of the European Union and the European Parliament. It is these amendments and suggestions which show theway in which the Convention will be modernised to take the form of a Regulation. In this Chapter I will also analyse the role of the European Court of Justice vis-a-vis the proposed regulation, and the effects such regulation would have on the Court. The fifth and final chapter will deal with two particular contracts, to be found both in the Convention and the proposal: consumer contracts and individual employment contracts. I chose these two particular types of contracts because they are the most frequent and they are two of the contracts upon which a lot of work has been carried out by the European Union, even before the proposal, in order to produce a sufficiently good body of law, both in consumer law and labour law, through the enactment of various directives intended to protect the consumer and the employee. While one of these contracts, that is consumer contracts, has suffered a lot of amendments in the proposed regulation, the individual employment contract has remained largely untouched. The other contractual obligations arising out of the other provisions of the regulation, such as subrogation, voluntary assignment, and agency were omitted, since the scope of this thesis was not really to tackle each type of contract, but rather to analyse the core rules applicable to contractual obligations. The conclusion will discuss the consequences for the member states' private international law deriving from the communitarisation of the Rome Convention, and the developments achieved so far, and shall also suggest possible solutions to the problems that persist. These proposals, sometimes inspired by the proposals made by various actors as seen in Chapters 2 and 3, are a tool for the fine-tuning of the proposed 'Rome I' Regulation.