Lessons for the USA from the Hague Principles

Abstract

In this article, Professor Silberman offers a review of US choice of law approaches that address party autonomy in international commercial contracts. She explains that choice of law rules in the United States are the province of state, not federal law, and to that end gives examples from two states that have codified choice of law and identifies several states that have an absolute autonomy rule for situations when the parties choose forum law. However, the focus is on the provision in the Restatement (Second) of Conflict of Laws dealing with party autonomy in contracts because most states in the United States have adopted that approach. Professor Silberman criticizes the existing Restatement rule for its failure to distinguish between interstate and international contracts and observes that several US. Supreme Court decisions would seem to support broader autonomy for parties to an international contract to choose the applicable law to govern the contract. Professor Silberman also explains that there is an ongoing American Law Institute project to revise the Restatement (Second) – the Restatement (Third) – and she suggests that the recent Hague Principles offer several features that might be included in a revision of the Restatement provision on party autonomy in contracts. In particular, she points to elimination of the requirement that there be a geographical connection to the applicable law chosen and distinguishing between commercial and other types of contracts. Professor Silberman then compares the Hague Principles and the present Restatement provisions in their treatment of other limitations on the parties’ ability to choose the applicable law in an international commercial contract. She criticizes several of the specific options offered in the Hague Principles and concludes that the present Restatement approach in this area is more desirable for courts in the United States.