Symeonides on comparative choice of law in contracts

Much of American commercial law is based on a paradox:  commercial transactions are so complex that it is impossible to develop detailed rules in advance, yet after the fact the correct resolution of a dispute is so plainly obvious that any reasonable judge will inevitably come to the correct decision as to what the parties “really” intended.  European commercial law has tended to be less deferential to the wisdom of judges and more sanguine about a prior rules.

These different approaches play out in differeing approaches to choice-of-law problems, as Symeon Symeonides (Willamette) discusses in a new paper, Party Autonomy in Rome I and IΙ from a Comparative Perspective, forthcoming in the book Convergence and Divergence in Private International Law — Liber Amicorum (K. Boele-Woelki, T. Einhorn, D. Girsberger, & S. Symeonides, eds., 2010).  In it, he takes a comparative look at U.S. law and the Rome Convention on the Law Applicable to Contractual Obligations.  The paper is available on SSRN (link above).  Here’s the abstract:

This essay discusses the modalities and limitations of party autonomy under the Rome I Regulation on the Law Applicable to Contractual Obligations (and secondarily Rome II) on the one hand, and the Second Conflicts Restatement, on the other hand. The comparison reveals the differences between the legal cultures from which these documents originate and which they are designed to serve.

The Restatement opts for under-regulation, reflecting a typically American skepticism toward a priori rules and a high degree of confidence in the courts’ ability to develop appropriate solutions on a case-by-case basis. That confidence finds its justification in the fact that American state and federal judges share the same legal training and tradition and have long experience in working with malleable “approaches”. The drafters had hoped – but could not mandate – that, over time, judges would develop similar solutions and thus eventually provide a modicum of consistency and predictability. Four decades later, the extent to which that hope has materialized remains debatable.

In contrast, Rome I reflects the rich continental experience in crafting a priori rules and a reluctance to entrust courts with too much discretion. This reluctance finds additional justification in the fact that Rome I is designed to serve a plurilegal and multiethnic Union, one that brings together uneven legal traditions. As a result, Rome I consists of many detailed black-letter rules, subject to few narrow escapes according little judicial flexibility, and aims at greater consistency and predictability.

At the same time, the drafters of Rome I deserve praise for having the political courage and legal acumen to devise a series of specific rules explicitly designed to protect consumers, employees, passengers, and insureds. As the discussion in this essay illustrates, however, these rules work quite well in the case of consumers and employees, but not so well in the case of passengers, insureds, and other presumptively weak parties, such as franchisees. Even so, one might well conclude that it is preferable to have rules protecting weak parties in most cases (even if those rules do not work well in some cases), rather than not having any such rules, as is the case with the Restatement and American conflicts law in general.

FGS