This Regulation applies to contractual obligations in civil and commercial matters in the event of a conflict of laws. It does not apply to revenue, customs or administrative matters, or to evidence and procedure. Any law indicated in this Regulation should be applied, even if it is not that of a Member State.

The law this Regulation determines as applicable to a contract will regulate interpretation, performance, penalties for breaching obligations, assessment of damages, termination of obligations, instructions for actions, and penalties for invalid contracts. The Community law that establishes conflict-of-law rules for contractual obligations relating to particular matters takes precedence over this Regulation, except in the case of insurance contracts.

The Commission will submit a report on the application of this Regulation to the European Parliament, the Council and the European Economic and Social Committee by 17 June 2013. The Regulation will apply to contracts that are concluded as from 17 December 2009.

Pursuant to its Article 1, the Rome I Regulation applies to:

1) contractual obligations

2) in civil and commercial matters

 3) when they involve a conflict of laws.

As in the preceding Rome Convention, the notion “contractual obligation” is understood autonomously and independently from any national concept in order to assure uniform application of the Regulation provisions. It has to be interpreted consistently with the same notion found in the Brussels I Regulation and it should not overlap with the scope of the Rome II Regulation because contractual obligations and non-contractual obligations are strict alternatives.

The reference to civil and commercial matters indicates that the Regulation does not apply to public law matters, in particular, to revenue, customs or administrative matters. Some civil obligations are still outside the Regulation’s scope such as those related to family matters and matrimonial property regime, wills and successions, involving the status and legal capacity of natural or legal persons, arising under certain insurance contracts, certain negotiable instruments and trusts as well as pre-contractual obligations, arbitration and choice of court agreements and the issue whether agent may bind principle.

Final condition for the Regulation’s applicability is a cross-border element of the case which is the reason for the issue of applicable law to arise in the first place.


The parties to a contract are to choose the governing law.  It may be applied to only a part or the whole of the contract. Provided that all the parties agree, the applicable law may be changed at any time. If the law chosen is that of a country other than that relating most closely to the contract, the provisions of the latter law need to be respected.  If the contract relates to one or more Member States, the applicable law chosen, other than that of a Member State, must not contradict the provisions of Community law.


Where the parties have not chosen the applicable law for contracts for the sale of goods, provision of services, franchises or distribution, it will be determined based on the country of residence of the principal actor carrying out the contract. For contracts concerning immovable property, the law of the country where the property is located is applied, except in the cases of temporary and private tenancy (maximum six consecutive months).  In such cases the applicable law is that of the landlord’s country of residence. In the case of sale of goods by auction, the law of the country of the auction will apply.  With regard to certain financial instruments governed by a single law, the applicable law will be that law.

If none, or more than one of the above rules apply to a contract, the applicable law will be determined based on the country of residence of the principal actor carrying out the contract. If, however, the contract is related more closely to another country than provided by these rules, the law of that country will be applied. The same applies when no applicable law can be determined.


For the following types of contract, the Regulation lays down options for the selection of applicable law and determines the law to be applied in the absence of choice:

·contracts for the carriage of goods– in the absence of choice, the applicable law will be that of the country of residence of the carrier, provided that this is also the place of receipt or delivery, or the residence of the consignor. Otherwise, the law of the country to which the delivery will be made will apply;

·contracts for the carriage of passengers– the applicable law may be chosen from either the country of residence of the passenger or carrier, the country where the central administration of the carrier is located, or the country of departure or destination. In the absence of choice, the law of the country of residence of the passenger will apply, provided that it is also the place of departure or destination. Yet, if the contract is more closely related to another country, then the law of that country will apply;

·consumer contracts between consumers and professionals – the applicable law is that of the country of residence of the consumer, provided that this is also the country where the professional carries out his/her activities or to which his/her activities are directed. The parties may also, based on freedom of choice, apply another law, as long as it provides the same level of protection to the consumer as that of his/her country of residence;

·insurance contracts– in the absence of choice, the applicable law will be that of the country of residence of the insurer. However, if the contract is more closely related to another country, that country’s law will apply;

·individual employment contracts– the applicable law may be determined on the basis of the freedom of choice principle, provided that the level of protection granted to the employee remains the same as with the applicable law in the absence of choice. In the latter case, the law governing the contract will be that of the country where, or from where, the employee carries out his/her tasks. If this cannot be determined, the applicable law will be that of the country where the place of business is located. However, if the contract is more closely related to another country, that country’s law will apply.


Preserving the basic principle of the Rome Convention that contractual parties may choose the law governing their transaction (lex voluntatis), the Rome I Regulation introduces structural changes in the default rules. According to Article 3, the autonomy of the parties is quite wide: the choice of applicable law may be express or tacit, –the latter if demonstrated with reasonable certainty by the circumstances of the case, such as the choice of court clause, reference to the specific national legal instrument, use of the form contract typical of certain national legal system, use of terms typical for certain national legal system, etc.

Furthermore, the lex voluntatis may capture the whole or only a part of the contract and it may occur or be altered at any time. However, subsequent choice of another applicable law may not adversely affect formal validity of the contract or third party‟ rights.

Additionally, the parties‟ choice of law to govern their contract, which at the time the choice was made was solely connected to a single country (intra-state situations), does not operate as a choice of law (Ger. kollisionsrechtliche Verweisung), but merely as a choice of contract terms.

This means that legal provisions in the country of sole connection, which are not derogable by agreement (ius cogens), always apply. Transferred to the EU level, this principle dictates that in case where all other elements relevant to the situation at the time of the choice are located in one or more Member States without any connection to a non-Member State (intra-Union situations), the choice of a non-Member State law does not prevent the application of mandatory provisions (ius cogens) of the EU law.

In Article 4, the Regulation also determines which law applies if there is no agreement between the parties. While inspired by the general objective of the Regulation – legal certainty, the default provisions vary depending on characteristics of the parties or on the object of transaction. For contracts other than the mentioned ones or those covered by more than one of the mentioned relationships, the applicable law is determined by reference to the country where the party required to effect the characteristic performance has his or her habitual residence (Article 4(2)).

This entails answers to two questions in a specific case before the court:

·which party affects the characteristic performance and

·where the habitual residence of that party is.

Ascertaining the characteristic performance is based on the assessment of the socio-economic function of the contract in a certain legal system in order to identify the contractual obligation distinguishing that contract from other contracts.

As for the habitual residence, there are helpful definitions in the Rome I Regulation.

·Thus, for a natural person acting in the course of his or her business activity, the connecting factor “habitual residence” is understood as his or her principal place of business, while for a legal person that would be the place of its central administration. However, where a contract is concluded in the course of the operations of a branch, agency or any other establishment, or if the contract performance is the responsibility of such a branch, agency or establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence (Article19).

·Conversely, the notion of the “habitual residence” for natural person acting outside his or her business activity is not explicitly defined in the Regulation; it is to be autonomously interpreted by the courts.


An escape mechanism is available if it is clear from all the circumstances of the case that the contract is manifestly more closely connected with a country other than the country to which any of the above allocations refers to, be it under the provisions for the specifically named contracts or the general provision for all other contracts. The escape clause allows the court to depart from the applicable law determined on the basis of the presumptions set out in the above-mentioned provisions and to eventually apply the law of more closely connected country, but the wording of the provision suggests that it is to be used in exceptional cases only.

Finally, where the law applicable cannot be determined applying the former provisions (such as in the case of a barter contract or a cross-licence contract where obligations are the same, or a joint venture contract where the obligations might be diverse and complimentary so that it is impossible to determine the characteristic performance), the law of the country with which the contract is the most closely connected applies. Assessment under this provision is done, first by establishing all the relevant territorial connections for an actual legal relationship (such as parties‟ habitual residences, place of the conclusion of the contract, places of the performance of the contractual obligations, etc.), and then by weighing those connections to decide towards which country they prevail.

Rome II regulation


As defined in Article 1 of the Rome II Regulation, it applies to:

1) non-contractual obligations

2) in civil and commercial matters

3) involving conflict of laws.

Difference in relation to the Rome I Regulation scope concerns the first element. The interpretation of the concept of “non-contractual obligations” has to be carried out autonomously from any national legal system.

Article 2 of the Rome II Regulation states that it includes both the obligations arising out of a tort or delict, and those resulting from unjust enrichment, negotiorum gestio (agency without authority) or culpa in contrahendo (pre-contractual liability).

The Regulation also covers non-contractual obligations that are likely to arise. The concept should be complementary to the substantive scope of the Rome I Regulation so that an obligation cannot at the same time be contractual and non-contractual in nature. Furthermore, it has to be coherent with autonomous interpretations of respective terms in the Brussels I Regulation.

 In the settled judicial practise of the EU Court of Justice, a negative definition of non-contractual obligation is adopted so that it covers all (civil and commercial) obligations not covered by the notion of “contractual obligations”. To be precise, the phrase “tort, delict or quasi-delict” in the Brussels I Regulation is to be understood as covering a situation in which there is no obligation freely assumed by one party towards another

Further reference is thus made to the materials dealing with the Brussels I Regulation. The notions of “civil and commercial matters” signify that the Rome II Regulation does not apply to public law matters, including revenue, tax and administrative matters or acta iure imperii (Article 1).

Besides, the Regulation‟s scope does not cover non-contractual obligations arising out of certain private matters including family relationships, matrimonial property regimes, negotiable instruments,  company status, trusts, nuclear damage as well as privacy and personality rights.

The last condition for applicability of the Regulation ratione materiae relates to the requirement that there must be a cross-border implication of the case. Otherwise, no conflict between two or more laws would arise.


By its conflicts provisions the Rome II Regulation intends to accommodate two often opposing interests: the requirement of legal certainty and the need to do justice in individual cases. To contribute to legal certainty and to respect the contemporary trends of widening the reach of the parties‟ autonomy in the conflict of laws, Article 14 of the Regulation primarily allows limited option of choosing the applicable law. As under the Rome I Regulation, the choice may be expressed or tacit.

The limitation specific to non-contractual obligations concerns the time of choice and is intended to guarantee protection to the weaker parties. A choice of law agreement may be entered into only after the event giving rise to the damage occurred, save when all the parties are pursuing a commercial activity when also an earlier agreement will be valid. Another limitation assures that it may not prejudice the rights of third parties.  Furthermore, the mandatory rules (ius cogens) operate as a limitation to the choice of the law of a certain country in cases where all the elements relevant  to the situation at the time when the event giving rise to the damage occurs are located in a country other than the country whose law has been chosen (intra-state situations).  This principle transferred to the EU level is expressed in a provision that ensures the application of the EU mandatory rules in cases where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in one or more of the Member States (intra-Union situations) yet the law chosen is of a non-Member State.  In addition to these restrictions to the party autonomy, there are overriding mandatory provisions which affect also the law determined on the basis of objective connecting factors (see ad. 3.6 below). Some other limitations are dependant of the type of the non-contractual relationship; the exclusion of party autonomy covers unfair competition, restrain of free competition and intellectual property rights. In cases where the parties did not choose the governing law for a non-contractual obligation arising out of a tort or delict, Article 4 designates the law of the country in which direct damage occurred (lex loci damni directi/lex loci laesionis)This connecting factor is an expression of the belief in the compensatory function of noncontractual liability. The situation in which direct damage arises in more than one country is subject to as many laws as there are places where the direct damage occurred; these laws distributively apply to the respective portions of the non-contractual relationship (mosaic approach). However, this connecting factor does not apply where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs. In such a case the law of common habitual residence governs the relationship (lex firme habitationis communis).

Mentioned fixed provisions are softened by means of the general escape clause which nables displacement of the lex loci damni directi or lex firme habitationis communis with the law which is manifestly more closely connected with the tort or delict in question.  As an example of the circumstances in which the escape clause may operate, the Regulation refers to the pre-existing relationship between the parties.  For instance, if there is a non-contractual claim on the basis of non-existing contract, the law that would govern this contract may be deemed manifestly more closely related to the claim.