The Parties' Choice of Neutral Law in International Commercial Sales Contracts

A. The Importance of Making the 'Right' Choice of LawWhen negotiating an international contract, it is important to make the 'right' choice of law.' Why, one might ask, should emphasis be placed on which law governs the contract if most conflict of laws rules entitle the parties to draw up their agreement as they wish?The answer is that it is practically impossible for the parties to individually negotiate every point that may arise under a contract.In fact, the parties will usually only settle the main questions.The essential points in a contract for the sale and purchase of goods are the specification of the kind and quantity of the purchased goods, as well as their price.By including an INCOTERM 2 or another international trade term, the parties may settle further aspects which do not directly affect the reciprocal terms of the contract, such as the terms of delivery, passing of risk, insurance obligations, etc.However, the parties will usually not regulate every contingency.