Rome I Regulation

Contractual Freedom

The framework establishes the primary principle that parties are free to choose the law that governs their contract. This choice must be expressed or clearly demonstrated by the terms of the agreement or the circumstances of the case. This freedom allows venture capital firms to use familiar legal systems.

Default Provision

Where the parties have not selected an applicable law, the regulation provides clear default rules based on the type of contract. For instance, contracts for the sale of goods are governed by the law of the country where the seller has their habitual residence. This fallback prevents legal uncertainty during dispute resolution.

Regulatory Exclusion

Certain mandatory rules of the forum state can override the chosen law to protect weaker parties. These exclusions apply to consumer contracts, employment agreements, and insurance policies. This protective boundary prevents companies from using choice of law clauses to bypass domestic protections.