Introduction

In the previous chapter, we said that the basic principle of contract law is to give effect to the intention of the parties. There is, however, another principle. In certain circumstances, the law rejects what the parties agreed on, or it insists that the contract should be subject to terms they did not agree on. This is because the law pursues policy aims, and it pursues these aims (in many cases) even against the will of the parties. The policies can have many objectives: political (for example, sanctions against a foreign country); economic (exchange controls); cultural (prohibiting the export of works of art) and social (anti-discrimination legislation). In many cases, the justification for imposing legal rules on the parties is that the interests of society outweigh those of the individual; in others, it is simply the desire to help parties regarded as being in a weak bargaining position (for example, consumers). In all situations, however, the result is the same: what the parties agreed on is overridden by the law.

If freedom of contract is restricted in the domestic context in order to achieve these objectives, it would be surprising if the same did not apply in the international context. The freedom of the parties to choose the applicable law should not permit them to evade legal policies regarded as overriding. However, different considerations might apply in the international context, so that some rules that cannot be derogated from in the domestic context may be subject to derogation in the international context.