Applicable law

Which law applies?

When a dispute arises between parties from different countries, it is essential to determine under which legal system the dispute falls.

Contract

Rome I Regulation: this Regulation determines the law applicable to contracts in the Netherlands and other EU member states (except Denmark).

Choice of law?

• Choice of law made: if the parties have made a choice of law, that law will be applied.
• No choice of law: if no choice is made, the law of the party providing the most characteristic performance (e.g. the law of the country of the seller or service provider) usually applies.

Protective provisions

For some contracts there are specific rules that protect weaker parties, such as:

• Shipping contract
• Consumer contract
• Insurance contract
• Employment contract

Example: a Dutch employee who works for a German employer but usually works in the Netherlands always enjoys the protection of Dutch dismissal law. A Dutch consumer who buys an item online in Spain is protected by Dutch consumer law.

Exception: international sales contract

An international sales contract is governed by the Convention on the International Sale of Goods (also known as the Vienna Sales Convention). The Vienna Sales Convention takes precedence over the Rome I Regulation. The Vienna Sales Convention applies to international sales contracts between professional parties (i.e. not consumers) with regard to movable goods e.g. face masks. The Netherlands and almost all major trading partners such as Germany, the United States, China, France and Japan are parties to the CISG, the United Kingdom being a major exception. The CISG differs from Dutch law on essential points, such as the obligation to investigate and complain, the moment of transfer of risk and the question of when there is a shortcoming.

No contract?

For non-contractual obligations, such as tort, undue payment, unjust enrichment, negotiorum gestio and abandoned negotiations, the Rome II Regulation determines the applicable law. This Regulation also applies to all EU member states except Denmark. The law of the country where the loss occurs usually applies. This regulation does not apply to product liability, for which the Hague Convention of the Law Applicable to Products Liability applies.