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

Valdor Ltd and Rennick Ltd have a contract with no governing law clause. A court must decide the applicable law. Which approach reflects the common 'proper law' or closest connection test?

The court applies the law of the country most closely connected with the contract, weighing factors such as place of performance, where the parties are located and where the contract was made. The claimant's preference or where documents were printed is irrelevant.

  1. AApply the law of the country with which the contract is most closely connected, considering factors such as place of performance and parties' locationsCorrect
  2. BApply the law of the country that the claimant prefers
  3. CApply the law of the country where the contract was printed

Explanation

Where no law is chosen, courts commonly look for the legal system most closely connected to the contract, weighing factors such as where it is performed, where the parties are based and where it was made. The claimant's preference or the place of printing is not the test.

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