International Contracts - Choice of Law and Jurisdiction

The benefits of international commerce are obvious. The draw-backs are not. If a dispute forces you to litigate, your first question maybe:

  • Can I sue before an Irish Court, and if I can, what law applies?

The Brussels and Rome Conventions provide certain rules for international contracts to determine which country has jurisdiction to hear a dispute and to decide on the applicable law. While these conventions ensure legal consistency, they do not necessarily ensure that your practical concerns are addressed.

In order to avoid problems, the contract should provide in which countries the parties are to sue and under which law an action is to be brought. To ensure that this choice is valid, the following rules should be followed:-

  • Ensure, if possible, that the choice is contained in a separate document signed by both parties.
  • If you reply on written general conditions of sale, (which include a choice of jurisdiction/law) these must be sent to the other party (and not simply referred to, for example, on the face of a standard order for, before the contract is concluded).
  • Where you contract orally and secure the other party's agreement to your general conditions of sale, (which provide for jurisdiction and law), written confirmation is essential.
  • Watch for subsequent documents e.g. an invoice that seeks to introduce a different jurisdiction and/or law clause, and make clear it is not acceptable.
  • Get advice early on in a dispute - if there are a number of possible jurisdictions, the location of the first action will often determine matters.

Bear in mind that the choice of the Irish Courts and Irish law may not necessarily be the best choice for you, even though you may be more comfortable with disputes on home territory. Better options in other jurisdictions may be available. These should be carefully considered in each case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.