Rome II
If you've ever despaired at the pernicketiness of Governing law clauses such as this:
- This agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
Then you have the Rome II Regulation to blame. It was published on 31 July 2007 and applies to all EU Member States (except Denmark) . It aims to harmonise the conflict of laws rules applied by Member States when dealing with disputes involving non-contractual obligations and means that one rule for choice of law in such disputes applies across all Member States.
Non-contractual obligations
In this context “non-contractual obligations” includes claims based on tort such as negligence, breach of competition law and breach of statutory duty. But, brilliantly, it does not apply to non-contractual obligations arising under bills of exchange, cheques and promissory notes and other negotiable instruments which arise out of their negotiable character.
Rome II doesn't apply to company law defamation either. Though it's kind of hard to see how you could have a contractual obligation to defame someone.
but point to note here: the main thing is to ensure any claims in contract and tort are governed by the same forum. Of most interest in cross border cases where parties are in different jurisdictions and that wouldn't follow as a matter of course.
Of course, the sensible thing would be to expressly exclude tortious claims under the contract. But for those not prescient enough to do that, there's always this magic incantation.
Jurisdiction: you choose!
Parties can agree to submit non-contractual obligations to the law of their choice. Previously English courts haven't been sure as to whether this is cricket. Rome II confirms that it is:
- Where the agreement was made after the event giving rise to the damage; or
- Where all parties are pursuing a commercial activity, if freely negotiated before the event giving rise to the damage occurred.