How to subject an international contract to Spanish law?
What is an international contract?
An international contract is an agreement between parties from different countries that establishes binding rights and obligations.
This type of contract has unique characteristics, as it is influenced by the regulations of the countries involved.
If applicable law is not clearly established, conflicts or legal uncertainty may arise.
That is why subjecting an international contract to a specific legislation , such as Spanish law, provides greater legal certainty.
This allows the parties to have clarity regarding the rules that regulate the contract and the judicial system that will resolve possible conflicts.
Below, we explain the steps and key aspects to ensure your contract is governed by Spanish law.
How to subject an international contract to Spanish law
The Rome I Regulation , applicable in the European Union, allows the parties to a contract to choose the law that governs their relationship.
This principle of contractual autonomy is the basis for subjecting an international contract to Spanish law.
To do this, an applicable law clause must be included , which can take the following forms:
- Express clause: This is the most recommended form, as it explicitly establishes the legislation that will govern the contract. An example would be: "This contract will be governed by Spanish law.".
- Tacit clause:Although less common, in some cases the applicable law can be inferred from the content of the contract, such as the residence of the parties, the language used, the place of performance or the goods subject to the contract.
Furthermore, to ensure that any dispute is resolved by the courts of Spain, a jurisdictional submission clause must be included , stating that the parties agree to submit to the Spanish courts and tribunals.
For example: “The parties agree that any dispute arising from this contract will be resolved by the courts of [city in Spain]”.
What happens if a governing law clause is not included?
If you do not specify the applicable law or courts, the Rome I Regulation provides that the contract will be subject to the law of the country that has the closest connection with the agreement.
For example:
- Contracts for the sale of goods: The law of the country where the seller resides will apply.
- Provision of services: The law of the country where the service provider resides.
- Leasing of real estate: The law of the country where the property is located.
- Franchises: The law of the country where the franchisee resides.
- Distribution: The law of the country where the distributor resides.
- Transport contracts:
- Goods: Law of the country of residence of the carrier if delivery occurs there.
- Passengers: Law of the country where the passenger resides if the destination is in that country.
- Consumer contracts: The law of the consumer's country of residence, provided that the professional carries out commercial activities in that country.
- Insurance: The law of the country where the insurer is domiciled.
- Employment contracts: The law of the country where the worker provides his services.
Essential clauses in an international contract
In addition to the legislation and jurisdiction clauses, there are other provisions that must be considered to ensure a sound and clear international contract.
Among the most important are:
- Legal capacity of the parties: Confirm that all parties have the legal authority to sign the contract under their local law.
- Territory of application: Define the territorial scope of the rights and obligations of the contract.
- Confidentiality: Include provisions to protect sensitive information shared between the parties.
- Duration and renewal: Clearly establish the period of validity of the contract and the conditions for its renewal.
- Consequences of non-compliance: Detail what happens if one of the parties fails to comply with its obligations, including possible compensation or termination of the contract.
- Conflict resolution methods: Include alternative mechanisms such as mediation or arbitration, before resorting to the courts.
Advantages of submitting an international contract to Spanish law
Choosing Spanish law to govern an international contract offers several advantages:
- Legal securitySpanish legislation is clear and aligned with the principles of European law, which provides greater predictability.
- Specialized courtsSpanish courts have experience in resolving international disputes, especially in commercial and civil matters.
- International recognition: Spain is a party to multiple international treaties and agreements, facilitating the execution of judicial and arbitration decisions in other countries.
Applicable legislation
The main regulation governing international contracts in the European Union is Regulation (EC) No 593/2008 , known as Rome I , applicable in all Member States except Denmark.
This regulation establishes the rules to determine the law applicable to contractual obligations, ensuring uniformity and predictability.
In addition, depending on the type of contract, other regulations may be relevant, such as the Vienna Convention on Contracts for the International Sale of Goods or specific bilateral agreements between countries.
RRYP Global . International Contract Lawyers.
Frequently Asked Questions. FAQs
This means including a clause in the contract stating that it will be governed by Spanish law, to avoid conflicts and provide legal security for the parties.
Because if it isn't clearly established, disputes can arise over which law should apply. Choosing specific legislation, such as Spain's, reduces legal uncertainty.
Including an express clause such as: “This contract shall be governed by Spanish law” . It is also advisable to add a jurisdiction clause so that any dispute is resolved in Spanish courts.
In that case, the law of the country with the closest connection to the contract will apply, depending on the type of relationship: for example, the law of the seller's country, the service provider's country, or the place where the contract is performed.
Yes. The Rome I Regulation allows the parties to freely choose the applicable law, provided they both agree and it is reflected in the contract.
