This is the third and last in a series of posts comparing the new Hague Principles on Choice of Law in International Commercial Contracts and the Restatement (Second) of Conflict of Laws. Before digging in, I want to give you the analysis of the two texts by my co-author, Jonathan Levin. His lengthy and detailed table was the genesis of the whole project, so I recommend it to you.
In the first post we compared the scope of application of the Restatement and the Principles. In the second post, we looked at the freedom of choice each text provided. Now we will look at the idea of non-national “rules of law.”
The Restatement embodies the common lawyer’s traditional dislike and distrust of the idea of non-national rules of law. We are the intellectual heirs to “the insular and arcane learning of the small band of lawyers who argued cases in a corner of Westminster Hall,” as John Baker wrote. For them, the forms of action, defined by the forms of the king’s writs, were the law. Nothing in the Restatement even contemplates non-national law. And the Restatement requires a “reasonable basis” for the parties’ choice of law. The Restatement’s clearest example? The parties have a reasonable basis for a choice of a state’s law when the state has a relationship to the contract or the parties. When the parties are from different states, the Restatement acknowledges it may be reasonable for them to choose the law of a third state, but I emphasize the word “state” here.
The Principles are très français. They expressly disclaim any requirement of a relationship between the chosen law and the contract or the parties. And they expressly allow the parties to choose non-national “rules of law,” as long as they are “generally accepted as a neutral and balanced set of rules,” and as long as they are not merely the creation of the parties or an industry standard.
I could get into some high-minded reasons to question transnational rules of law, write about Kelsen and Hart, etc. But I mostly look at this from the perspective of a practicing lawyer. When I write a contract I want certainty and predictability. For a common lawyer, that comes from having a lot of precedents applying the law. So even if there was a body of transnational principles of law that looked comprehensive on paper, could I really choose it given the lack of precedent? But don’t take my word for this. The Principles are highly sophisticated and reflect not just a European view, but a view that the common-law participants in the project were ready to join in.
I hope these reflections on the Principles and the Restatement, and Jonathan’s excellent table, spark your interest in the Principles, and maybe rekindle an interest in the Restatement. I’ll be on the look-out for the Principles in practice, and if you see any examples, please send them along.