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ACCA Applied Skills · Corporate and Business Law (Global) · International trade, international legal regulation and conflict of laws

A contract between a seller in Country X and a buyer in Country Y contains no governing law clause. A dispute arises and is brought before a court in Country X. Which approach will that court normally take to decide which law applies?

The court will apply its own conflict of laws rules to identify the governing law. Where parties have not chosen a law, the forum uses its private international law rules, often looking at the closest connection, rather than refusing jurisdiction or using irrelevant factors.

  1. AApply its own conflict of laws rules to identify the applicable lawCorrect
  2. BApply the law of the country where the claimant was born
  3. CApply the law of whichever country has the larger economy
  4. DRefuse to hear the case because no governing law was chosen

Explanation

Each court applies its own (forum's) conflict of laws rules to determine the applicable law where the parties made no choice. Absence of a choice does not stop the court hearing the case, and the other criteria have no legal basis.

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