This instrument establishes general principles for the choice of rights in international trade agreements. They reaffirm the principle of party autonomy, with limited exceptions. I.1 Where the parties enter into a contract that has links with more than one State, the question necessarily arises as to which law applies to the transaction. The answer to this question is obviously important for a court or arbitral tribunal that has to resolve a dispute between the parties, but it is also important that the parties themselves know the rules governing their obligations when planning the transaction and performing the contract. I.2 The determination of the law applicable to a treaty, without taking into account the express will of the contracting parties, may create unnecessary uncertainty due to different solutions from one State to another. This is the reason why, among other things, the concept of “party autonomy” has developed and flourished in determining the applicable law. I.3 Party autonomy, which relates to the power of the parties to choose the law governing this Treaty, increases certainty and predictability in the context of the parties` main contractual agreement and recognizes that the parties are best placed to determine the most appropriate legal principles for their transaction. Many States have come to this conclusion and, therefore, the effect of party autonomy is now the dominant view. However, this approach is not yet applied everywhere. I.4 The Hague Conference on Private International Law (“Hague Conference”) considers that the benefits of party autonomy are considerable and encourages the dissemination of this concept to States that have not yet adopted it or that have adopted it with significant restrictions, as well as the development and refinement of the approach, where it is already accepted. I.5 Accordingly, the Hague Conference proclaimed the Hague Principles of Legal Choice in International Commercial Treaties (“the Principles”).
The principles can be seen both as an example of how to put in place a comprehensive legal choice regime to establish party autonomy and as a guide to “best practices” in setting up and refining such a regime. Choice agreement of law I.6 The choice of law of the parties must be distinguished from the provisions of the main contractual agreement of the parties (“main contract”). The main contract could be, for example, a sales contract, a service contract or a credit agreement. The parties may either choose the applicable law in their main contract or enter into a separate choice of law agreement (hereinafter referred to as “choice of law agreement”). I.7 Choice of law agreements should also be distinguished from “jurisdiction clauses” (or agreements), “forum selection clauses” (or agreements) or “attribute clauses” (or agreements), all of which are synonymous with the agreement between the parties on the forum (usually a court) that rules on their dispute. . . .