Applicable law—common law (contract)


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Dispute Resolution expert
Practice notes

Applicable law—common law (contract)


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Dispute Resolution expert

Practice notes
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This Practice Note considers when the Common law of England and Wales is applied to determine the Law applicable to Contract claims. It sets out the process by which the courts of England and Wales will apply the common law to determine which law is applicable to the issues in dispute between the parties.

For an overview of considerations when dealing with Applicable law, see Practice Note: Applicable law—a guide for dispute resolution practitioners.

For guidance on determining the applicable law of an arbitration agreement, see Practice Note: Law of the arbitration agreement (England and Wales).

Why is the applicable law important?

When determining a contractual dispute, it is important to know the substantive law of the country that is to be applied by the courts to determine that dispute. This is known as the applicable law, governing law or proper law.

The rationale for disputes to be determined by application of the substantive law was explained in the dictum of Lord Diplock in Amin Rasheed v Kuwait Insurance as follows:

‘My Lords, contracts are incapable of existing in

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United Kingdom
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Key definition:
Applicable law definition
What does Applicable law mean?

governing law is the law stipulated in a contract to determine a dispute. Where there is no valid governing law clause, the law to be applied, the applicable law, will be determined in accordance with the relevant regulation, convention, legislation or common law rules.

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