Governing Law of Contracts signed with a Romanian party

by Vlad Cuc

As the Romanian Civil Code allows the parties to establish the content of a contract, it is obvious that in the case of an international contract, they could choose the applicable law in the contract.
The Law stipulates the applicable law must be expressly mentioned or result in a clear manner from its content or circumstances. There are two methods for the parties to express their will: an explicit choice (through the actual mentioning of this information in the contract or annex) or a tacit choice. The elements used for deducting an eventual tacit choice of the parties are the following:

• using legal notions or institutions specific only to a certain Legal System.
• reference to a procedure used only in a certain country can place the contract in that Legal System;
• signing the Contract in a certain language can indicate a choice of the parties, however this is not regarded as highly relevant;
• choosing a specific Court of Law in a state is not regarded as highly relevant.

If the parties have not expressly or tacitly designated an applicable jurisdiction governing the contract, the Court will have to make a decision in this sense, based on objective criteria.

The main criteria is applying the law of the state which the contract has stronger ties with. This is a more recent solution, an influence of the Anglo-Saxon law (the notion regarded as “proper law”). For example, a contract is stronger related to the law of the state where the debtor has – on the date the contract is enforced – his/her/its legal domicile/headquarters.

The secondary criteria will be applying the law of the location where the contract is signed. In the case the contract is signed by parties through correspondence, it is considered to be signed in the state of the party which has initiated the offer to contract, offer which was accepted.