(a) International nature

In order for a choice-of-law clause to be effective, a contract must be ‘international'. If a contract is not ‘international', the effect of the choice-of-law clause is that only the supplementary law (ius dispositivum) from the local law of the contracting parties is replaced by the chosen law; the mandatory law of the contracting parties' jurisdiction cannot be contracted away.

A contract is ‘international' if there is an element of some significance in the agreement that points to a jurisdiction other than the law which would otherwise be assumed to apply in the usual course of things. This is most obvious if the two parties are established in different jurisdictions but also when both contracting parties are from the same jurisdiction and delivery of the goods takes place abroad; a sales contract is generally considered to be ‘international'. It is not clear in all jurisdictions when a contract becomes ‘international' but the prevailing opinion is that the criteria are relatively easily met.