Party autonomy under assimilated Rome I
Governing law in England is dominated by party autonomy. The Rome I Regulation (593/2008) was retained after Brexit and, from 1 January 2024, is referred to as assimilated Rome I - a change of terminology only, with no change of substance. Under Article 3, parties may choose any country's law to govern their contract, even one with no connection to the transaction, and the English courts will respect that choice.
So the starting point is freedom: pick the law you want, and say so clearly. The work is in the limits and the exceptions.
The law must be a national legal system: Beximco
The chosen law must be the law of a country, not a body of religious or transnational principles. In Beximco Pharmaceuticals Ltd v Shamil Bank of Bahrain EC [2004] EWCA Civ 19, a clause submitting the contract to the principles of the Glorious Sharia'a alongside English law was not given effect as a choice of governing law - Sharia was not a national legal system, and a single contract is governed by one national law.
If you want Sharia principles, the UNIDROIT Principles, or lex mercatoria concepts to matter, incorporate them as contractual standards or obligations within a national governing law - do not try to make them the governing law itself.
What happens without an express choice
Leave governing law out and it is decided for you. Article 4 of assimilated Rome I applies fixed connecting factors for specified contract types (such as sale of goods, services, franchise, and distribution), typically the habitual residence of the party who effects the characteristic performance. An escape clause allows a different law only where the contract is manifestly more closely connected with another country - a deliberately high threshold.
The characteristic-performance test can produce unexpected results in complex or multi-party transactions. Never leave governing law to implication; the default may not be the law you would have chosen.
Mandatory rules and public policy
Party autonomy is not unlimited. Overriding mandatory provisions and public policy (Articles 9 and 21) mark the outer boundary: an English court must apply certain domestic mandatory rules - for example under the Unfair Contract Terms Act 1977, the Consumer Rights Act 2015, and employment legislation - regardless of the chosen governing law.
So a foreign governing law will not switch off protective rules the forum treats as mandatory. Factor that in where the contract touches consumers, employees, or other protected interests.
Drafting and reviewing the clause
Draft a clean, express choice of a single national law, and keep the dispute mechanism separate - governing law is not the same decision as jurisdiction or arbitration. Where you want non-national standards to apply, incorporate them by reference as contractual terms, not as the governing law.
In review, check that the governing law is national and unambiguous, that it has not been left to implication, and that the mandatory rules of any likely forum have been considered - particularly for consumer, employment, or regulated contracts.
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Practical checklist
- Choose a single national law expressly (assimilated Rome I, Art 3) - do not leave it to implication.
- Make sure the chosen law is a national legal system, not Sharia or lex mercatoria (Beximco v Shamil Bank [2004] EWCA Civ 19).
- To use non-national standards, incorporate them as contractual terms within a national governing law.
- Remember that without a choice, Article 4 decides - often by the characteristic performer's habitual residence.
- Account for overriding mandatory rules and public policy (UCTA, Consumer Rights Act 2015, employment law) of any likely forum.
- Keep the governing-law choice separate from the jurisdiction or arbitration choice.
This guide is informational only and is not legal advice. It does not replace advice from licensed counsel on the facts of a specific transaction.
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