Principle

No. IV.1.1 - Freedom of contract

The parties are free to enter into contracts and to determine their contents (principle of party autonomy).

Commentary

1 Together with the Principle of sanctity of contracts this Principle of party autonomy constitutes a core pillar of transnational contract law. The parties' freedom relates to both their decision whether and with whom to enter into a contract ("positive" and "negative" party autonomy) and how the contents of that contract should be. It is this later aspect of party autonomy which allows the parties to create - always within the boundaries of boni mores and the Principle on unfair standard terms - their own contractual framework, tailor made to the specificities of their commercial transaction.

2 There may also be mandatory provisions of domestic law, which must be applied irrespective of which law governs the contract ("lois d'application immédiate", "lois de police", "Eingriffsnormen") and which may set limits to the party's freedom to determine the contents of their contractual relationship.

3 The Principle of good faith is not subject to the Principle of freedom of contract, i.e. the parties may not contractually exclude or limit it. Such an agreement would itself be void because it is against boni mores.

Please cite as: "Commentary to Trans-Lex Principle IV.1.1 - Freedom of contract, https://www.trans-lex.org/918000"

References

Court Decisions

Barkhuizen v Napier, Constitutional Court of South Africa, 2007 (5) SA 323 (CC)

Lochner vs. New York (No. 292), 198 U.S. 45 (1905)

Doctrine

Bianca, C. Massimo/ Bonell, Michael Joachim, Commentary On The International Sales Law, Art. 7, Milan 1987

Domingo, Ortega, Rodriguez-Antolin, Zambrana, Principios de Derecho Global, Navarra, 2006

Ferrari, Franco, Das Verhältnis zwischen den Unidroit-Grundsätzen und den allgemeinen Grundsätzen internationaler Einheitsprivatrechtskonventionen, JZ 1998, at 9 et seq.

Herber, Rolf/ Czerwenka, Beate, Internationales Kaufrecht, Munich 1991

Horn, Norbert, Das Recht der internationalen Anleihen, Frankfurt a.M. 1972

Hutchison, Dale (Ed.) / Pretorius, Chris (Ed.), The Law of Contract in South Africa, Oxford University Press Southern Africa, 2018

Lando, Ole, CISG and Its Followers: A Proposal to Adopt Some International Principles of Contract Law, in: American Journal of Comparative Law 53, Berkley 2005.

Schmitthoff, Clive, Das neue Recht des Welthandels, 28 RabelsZ 1964, at 47 et seq.

National Legislation

Bürgerliches Gesetzbuch - German Civil Code

Contract Law of the People's Republic of China

French Civil Code 2016

GIW DDR

Russian Civil Code

The Indian Contract Act, 1872 (Act no. 9 of 1872)

Model Laws

Code Européen des Contrats - European Contract Code

Principles of Latin American Contract Law (PLACL)

International Legislation

Fontaine, Marcel, OHADA Uniform Act On Contract Law Preliminary Draft

UNIDROIT Convention on International Factoring (Ottawa, 28 May 1988).

UNIDROIT Convention on International Financial Leasing (Ottawa, 20 May 1988).

United Nations Convention on Contracts for the International Sale of Goods (CISG)

Principles / Restatements

OHADAC principles on international commercial contracts

Principles of European Contract Law - PECL

UNIDROIT Principles of International Commercial Contracts 2016