Applicable law is the law that governs a dispute between the parties

国际货物买卖合同法律适用

Applicable law is the law that governs a dispute between the parties. Generally, parties have the freedom to chose the applicable law. However, where they have failed to do so or have chosen a law which is prohibited for some reason then the applicable law will be determined by the application of the relevant directive, convention or common law rules. A common used convention here is the Convention on the Law Applicable to Contracts for international sale of goods.

China, like many other countries, has a law of application of law. Before we decide what law should be applicable to the contract, it is also important to clarify the applicable law to the civil capacity of the parties.

According to Chinese law, the civil capacity of a nature person is bond to the law of his habitual residence. If a nature person is incompetent in his habitual residence but competent in the place where he takes the action, then his is regarded as competent.

As to legal person, the civil capacity is bond to the law of its register location. If the register location is different to the place of business, the law in his place of business could be applicable. In China, the governing law of the involved contract is restricted to Chinese law by legislation in certain circumstance below,

1. The parties intend to avoid mandatory provisions in Chinese law.

2. The application of foreign law would do harms to the public interest of China.

3. Certain kinds of contract that are performed within Chinese territory(like exploiting nature resources

with foreign company)

In other situation when the parties could have chosen the applicable law yet they haven’t. The law that apply to the certain contract shall be decide by the location where the parties who are best involved with the feature of the contract have his place of business, or other places which is best involved with the contract.

As for the sales of goods bought for personal, family or household use, the applicable law is the law of the consumer’s habitual residence in common situation.

But the consumer could choose the law where seller has his place of business. Also, when the seller don’t have a place of business in the consumer’s country, the applicable will be the law of seller’s country (where seller has his place of business)

ARTICLE 8 of the CONVENTION ON THE LAW APPLICABLE TO CONTRACTSFOR THE INTERNATIONAL SALE OF GOODS, THE HAGUE 1986

To the extent that the law applicable to a contract of sale has not been chosen by the parties in accordance with Article 7, the contract is governed by the law of the State where the seller has his place of business at the time of conclusion of the contract.

However, the contract is governed by the law of the State where the buyer has his place of business at the time of conclusion of the contract, if:

negotiations were conducted, and the contract concluded by and in the presence of the parties, in that State; or

the contract provides expressly that the seller must perform his obligation to deliver the goods in that State; or

the contract was concluded on terms determined mainly by the buyer and in response to an invitation directed by the buyer to persons invited to bid (a call for tenders).