Applicable law

The importance of stipulating, in advance, the law that is applicable to the contract, cannot be emphasized enough. A dangerous situation is created when the applicable law is not stipulated in the contract: its absence may not only complicate the settlement of disputes, but it may sometimes lead to a new dispute arising over what law is applicable. As soon as there occurs any unforeseen situation not covered by the contractual terms, or when the contractual terms need to be interpreted, the gaps in the contract will have to be filled in order to determine the extent of the parties’ obligations on the basis of the applicable law. When the dispute is brought before an arbitral tribunal, parties will first have to convince the arbitral tribunal as to the law they consider applicable, before they can start arguing their case in full on the merits. Obviously, failure to stipulate in a contract what law is applicable will cause delays and mounting costs.

Sustainable Development Goals:

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions