What is the purpose of the Choice of Law in international contracts?

The purpose of Choice of Law in international contracts is to establish which law governs the contract. In cross-border transactions, there may be multiple legal systems that could potentially apply due to the parties being in different jurisdictions. By clearly specifying which jurisdiction's laws will apply to the contract, parties can reduce uncertainty and potential legal conflict. This clarity helps in understanding the rights and obligations of each party as interpreted under the chosen legal framework.

Choosing the applicable law is essential for ensuring that the contract is enforceable and that any legal disputes can be resolved effectively. It can influence various aspects, such as contract interpretation, performance obligations, and remedies for breach.

While determining jurisdiction for disputes is related to the topic, it focuses more on where disputes will be resolved rather than which laws will apply. Specifying currency is more about the practical aspects of transactions and does not govern the legal interpretations in the event of a disagreement. Lastly, identifying the contracting parties, while important for contract validity, does not address the legal framework guiding the contract's execution and enforcement.