Principle

No. XV.3 - Rule of validation/Lex validitatis

If a contract has contacts to more than one jurisdiction and the parties have not agreed on the applicable law, it is in the presumed interest of the parties to apply the law, both as to form and to substance, that validates the contract ("favor negotii"; "lex validitatis"; "rule of validation").

Commentary

References

Contract Clauses

Commentary

1 The rule is based on the presumed common intention of the parties that the validity of their contract should be upheld. If the validity of the contract is maintained by one law but denied by another and the contract has a connection to both legal systems, the law should be applied that does not render the contract illegal or void.

2 If, however, the parties have chosen a specific law to be applied to their contract, that choice must be respected, irrespective of whether that law invalidates the contract.

Please cite as: "Commentary to Trans-Lex Principle XV.3 - Rule of validation/Lex validitatis, https://www.trans-lex.org/972000"

References

Doctrine

Abend, Martin, Die lex validitatis im internationalen Vertragsrecht, Heidelberg 1994

Black, Henry Campell, Black's Law Dictionary, 6th ed., St. Paul 1990

Derains, Yves, note to ICC Award No. 4996, Clunet 1986, at 1134 et seq.

Kropholler, Jan, Internationales Privatrecht, 2nd ed., Tübingen 1991

Sayed, La présomption de validité des contrats dans l‘arbitrage commercial international, in ASA Bulletin 2002, at 623 et seq.

Tweeddale, Andrew, The Validation Principle and Arbitration Agreements: Difficult Cases Make Bad Law, in Stavros Brekoulakis (ed), Arbitration: The International Journal of Arbitration, Mediation and Dispute Management, at 240 et seq.

National Legislation

Civil Code Québec 1991

German EGBGB

Arbitral Awards

ICC Award No. 4145 (Second Interim Award), YCA 1987, at 97 et seq. (also published in: Clunet 1985, at 985 et seq.)

ICC Award No. 4996, Clunet 1986, at 1132 et seq.