Proper law
Encyclopedia
The Doctrine of the Proper Law is applied in the choice of law
stage of a lawsuit
involving the conflict of laws
.
s will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are substantive differences, the choice of which law to apply will produce a different judgment. Each state therefore produces a set of rules to guide the choice of law, and one of the most significant rules is that the law to be applied in any given situation will be the proper law. This is the law which seems to have the closest and most real connection to the facts of the case, and so has the best claim to be applied.
All laws, to a greater or lesser extent, are reflections of the public policies
of the state that enacted them. The more important the policy to the society
, the greater the claim of the relevant law to be applied. Thus, if laws exist to protect citizens, the law of the place where loss or damage is sustained might have a strong claim to apply: e.g. in a traffic accident, two cars collide because of faulty maintenance and both drivers are injured the local laws exist to provide some degree of protection for all those who use the roads in that state, setting minimum standards for the design and maintenance of vehicles, specifying what levels of insurance
should be carried, setting the minimum age and qualifications for the right to drive, etc.
But the problem with accepting the claim of any one state to have its law apply is that the result may be somewhat arbitrary. So, in the example given, if neither driver had a residence in the state, and the cars were both maintained outside the state, the laws of other states may have an equal or better claim to apply. The advantage of the proper law approach is that it builds in flexibility rather than offering a mechanical rule. Suppose that there is a contract
between an Italian
company and an English
partnership
for the sale of goods made in Greece
to be shipped from Belgium
on a ship flying the flag of Panama
to a Swedish
port. Adopting a rule such as the lex loci contractus
, i.e. apply the law of the place where the contract was made, might actually select a law having no other connection with the substance of the bargain made by the parties. Similarly, picking the lex loci solutionis
, i.e. the law of the place where the contract is to be performed, may prove to be equally irrelevant, assuming that there is only one place where performance is to occur: in the example, there is manufacture in Greece, delivery to Belgium, loading in Belgium, carriage on the high seas, and unloading in Sweden. So, if the contract does not make an express selection of the law to apply (see choice of law clause
), the parties are deemed to have chosen to be bound by the law with which the contract has the closest and most real connection.
). So, the process of legal analysis undertaken by the courts in each case identifies all the facts that have a specific geographical connection, e.g. where the parties reside or their businesses operate, where any agreement was made, where relevant actions were performed, etc. Once all the relevant connecting factors have been identified, the law of the state that has the greatest number of connections will be the proper law. In the event of a tie, the connecting factors which relate to performance will be given a greater weight than the connecting factors affect form. In most cases, this weighting will produce a clear winner.
Choice of law
Choice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary to reconcile the differences between the laws of different legal jurisdictions, such as sovereign states, federated states , or provinces...
stage of a lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
involving the conflict of laws
Conflict of laws
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute...
.
Explanation
In a conflicts lawsuit, one or more state lawLaw
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
s will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are substantive differences, the choice of which law to apply will produce a different judgment. Each state therefore produces a set of rules to guide the choice of law, and one of the most significant rules is that the law to be applied in any given situation will be the proper law. This is the law which seems to have the closest and most real connection to the facts of the case, and so has the best claim to be applied.
All laws, to a greater or lesser extent, are reflections of the public policies
Public policy (law)
In private international law, the public policy doctrine or ordre public concerns the body of principles that underpin the operation of legal systems in each state. This addresses the social, moral and economic values that tie a society together: values that vary in different cultures and change...
of the state that enacted them. The more important the policy to the society
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...
, the greater the claim of the relevant law to be applied. Thus, if laws exist to protect citizens, the law of the place where loss or damage is sustained might have a strong claim to apply: e.g. in a traffic accident, two cars collide because of faulty maintenance and both drivers are injured the local laws exist to provide some degree of protection for all those who use the roads in that state, setting minimum standards for the design and maintenance of vehicles, specifying what levels of insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
should be carried, setting the minimum age and qualifications for the right to drive, etc.
But the problem with accepting the claim of any one state to have its law apply is that the result may be somewhat arbitrary. So, in the example given, if neither driver had a residence in the state, and the cars were both maintained outside the state, the laws of other states may have an equal or better claim to apply. The advantage of the proper law approach is that it builds in flexibility rather than offering a mechanical rule. Suppose that there is a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
between an Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
company and an English
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
for the sale of goods made in Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
to be shipped from Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
on a ship flying the flag of Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
to a Swedish
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
port. Adopting a rule such as the lex loci contractus
Lex loci contractus
In the conflict of laws, the lex loci contractus is the Latin term for "law of the place where the contract is made".-Explanation:When a case comes before a court and all the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to decide the case...
, i.e. apply the law of the place where the contract was made, might actually select a law having no other connection with the substance of the bargain made by the parties. Similarly, picking the lex loci solutionis
Lex loci solutionis
The lex loci solutionis is the Latin term for "law of the place where relevant performance occurs" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...
, i.e. the law of the place where the contract is to be performed, may prove to be equally irrelevant, assuming that there is only one place where performance is to occur: in the example, there is manufacture in Greece, delivery to Belgium, loading in Belgium, carriage on the high seas, and unloading in Sweden. So, if the contract does not make an express selection of the law to apply (see choice of law clause
Choice of law clause
A choice of law clause or proper law clause is a term of a contract in which the parties specify that any dispute arising under the contract shall be determined in accordance with the law of a particular jurisdiction.-Explanation:...
), the parties are deemed to have chosen to be bound by the law with which the contract has the closest and most real connection.
Conclusion
The general rule is that the proper law is the primary system of law which governs most aspects of the factual situation giving rise to the dispute. This does not imply that all the aspects of the factual circumstances are necessarily governed by the same system of law, but there is a strong presumption that this will be the case (see characterisationCharacterisation (conflict)
In conflict of laws, characterisation is the second stage in the procedure to resolve a lawsuit involving a foreign law element. This process is described in English law as classification and as qualification in French law...
). So, the process of legal analysis undertaken by the courts in each case identifies all the facts that have a specific geographical connection, e.g. where the parties reside or their businesses operate, where any agreement was made, where relevant actions were performed, etc. Once all the relevant connecting factors have been identified, the law of the state that has the greatest number of connections will be the proper law. In the event of a tie, the connecting factors which relate to performance will be given a greater weight than the connecting factors affect form. In most cases, this weighting will produce a clear winner.