Choice of law in electronic contracting

Abstract

Development of Internet choice of law Once a court has competence to hear the case, in the absence of a choice of law by the parties, the next step is for the court to determine which law will govern the dispute. When a contract has a foreign factor, the laws of several different countries may all be related to the contract or dispute. However, the determination of the appropriate applicable law becomes complicated. With the ever increasing number of cross-border electronic commercial transactions, courts may have even more difficulties in devising suitable substantive law rules that respond to the global nature of the e-commerce market. The problem with choice of law in electronic commerce cases is that parties from different states often have competing interests in desiring the application of their own substantive law. The tendency of delocalising transactions over the internet will pose questions at the choice of law level. To avoid problems with regard to the applicable law, it is suggested that parties should include a choice of law clause in the contract. However, some electronic contracts do not have any choice of law provisions, thus creating uncertainty about which country's law applies to disputes. A greater clarity about the choice of law would certainly contribute to an increased trust in the use of international e-commerce. Confronting the unpredictability of the application of relevant laws, scholars and legislators are searching for uniform rules for the use of electronic communications in international contracts.