Categorical Exemptions in Party Autonomy in Private International Law

Abstract

While history records resistance, choice-of-law and choice-of-forum clauses enjoy widespread enforcement in the United States and Europe today as a recognition of the value of party autonomy in transactions increases. Yet not all such clauses can be enforced -- imagine a murder-for-hire contract that attempted to circumvent strong forum policy against murder through a choice-of-law clause. The methods by which the United States and Europe determine whether such clauses should be unenforceable differ, and their substantive results are also diverging. As a general matter, European courts will not enforce a party's choice to evade so-called "mandatory rules," to deprive a consumer of the benefit of his home state's laws, or to deprive an employee of his home state's protections. Historically, American courts recognized similar exceptions but eschewed categorical exceptions in favor of a flexible and case-by-case "public policy" exception. Today, American courts are increasingly willing to enforce clauses even if they fall within what could be termed categorical exceptions to party autonomy in Europe.