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Resource Centre > Glossary > Rome I and Rome II

These mechanisms regulate applicable law in conflict of law situations regarding contractual (Rome I) and non-contractual (Rome II) obligations:

Rome I (Regulation (EC) No 583/2008 on the law applicable to contractual obligations):

The cornerstone of the Regulation is the principle that contractual parties ought to be able to freely choose the applicable law (this includes law of non-Member States, law of non-state or an international convention, and any possible substantive contract law adopted by the European Community – Article 2 and Recitals 11 -14).  Choice of forum by the parties may also indicate the choice of applicable law, if the latter was not chosen expressly. However, courts were given discretion to apply the law of another country if all the elements relevant to the situation are located in another country – to apply the law most closely connected with the situation. 

The general aim is to make the choice of law rules as predictable as possible. Thus, in case of absence of choice by the parties, specific types of contracts are followed with specific rules of choice of law. If the contract in question is not covered by any of these specific types which the Regulation specifies, then the law applicable is to be one of the country where the person who is to perform the contract (to “effect the characteristic performance of the contract”) has his habitual residence. If the latter cannot be done, the law applicable will be that of the country which is most closely connected with the contract. 

As far as the specific types of contracts are concerned, the Regulation contains rules for contracts of carriage, consumer contracts, insurance contracts, and individual employment contracts.

In consumer contracts (contracts concluded by a consumer with a professional, save some exceptions – Article 6.4), the law applicable will be of the country where the consumer has his habitual residence, as long as the professional pursues his professional or commercial activity in this country, or by any means directs his activities to that country or to a number of countries including that country, and the contract remains in the scope of these activities. Consumer and professional can also agree on other applicable law: provided that the protection provided to consumer under the law of his country of residence is not limited. So - under the Regulation, minimum harmonisation consumer protection rules and their use by Member States by extending the level of protection are not affected: consumers contracting with a foreign trader cannot be deprived of non-derogable rules of their home state. 

In order to accommodate the considerations of public interest within specific countries and situations, courts are given the power to derogate from the provisions of the Regulation by applying exceptions based on public policy and ‘overriding mandatory provisions’ (defined in Article 9). 

So far, the Regulation is not binding in the UK and Denmark. 

Rome II (Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations):

Applies from 11 January 2009 (to events giving rise to damage which occur after this date) in all Member States except Denmark to conflicts of law concerning non-contractual obligations in civil and commercial matters (Article 1.1). It has ‘general application’ – and thus the law which applies does not necessarily need to be one of the EU Member States’ (Article 3). 

‘Non-contractual obligations’ is a notion wider than tort/negligence: it also includes strict liability, unjust enrichment, negotiorum gestio and culpa in contrahendo (see below). 

The general rule is that the law applicable to non-contractual obligations is the law of the country where the damage occurred, irrespective of the country where the event giving rise to the damage occurred and also irrespective of the country where indirect consequences of the event occurred (Article 4.1). However, if both parties are resident in another country – the law of that country will apply (for companies this would be the place of central administration – Article 23.1). In any case, the court may apply the law of another country where it is apparent from the circumstances that the tort is manifestly closer connected with this other country. 

There are special rules for the following:

  • Product liability (Article 5: the law applicable will normally be the law of the country where the person sustaining the damage has habitual residence at the time of the damage occurring). 
  • Unfair competition or acts restricting free competition (Article 6)
  • Environmental damage (Article 7) 
  • Infringement of IP rights (Article 8) 
  • Industrial action (Article 9) 
  • Negotiorum gestio (acts which were performed with no authority on behalf of another) (Article 10)
  • Culpa in contrahendo (activities taking place prior to the conclusion of the contract) (Article 11) 
  • Actions against the insurer by the liable person (Article 18) 
  • Subrogation rights (Article 19) 

There are also a number of exclusions from the scope of the Regulation (such as, for instance, liability of the state, family relationships, etc.). 

Parties can also normally choose the law to govern their non-contractual obligations: either before the event (this is only possible between commercial parties and the agreement must be freely negotiated) or after (Article 14).  

The Regulation also contains rules on burden of proof (Article 22) – which so far has always been a forum-specific issue.