Publication Date



In international commercial transactions, it is not
always clear which state's law will apply to govern a
particular contract. Historically, states have sought to
address this problem by means of two types of treaties.
The first aims to solve the problem by bringing about the
substantive unification of commercial law across multiple
jurisdictions;once the law is everywhere the same, then it
no longer matters which state's law applies to govern the
contract. The second aims to solve the problem in part by
empowering the transacting parties to choose the law that
will govern their contract; once these parties know that
their choice of law will be respected by national courts,
then the uncertainty as to the governing law goes away.
The conventional wisdom has long been that substantive
unification represents the better approach to solving the
problem of legal uncertainty. This Article argues that, in
fact, a choice-of-law approach may be superior. It does so,
first, by identifying weaknesses in two rationales
frequently advanced in favor of substantive commercial
law treaties-that they are uniquely able to reduce
transaction costs and that they offer law uniquely suited to
the needs of international commercial transactions. It
then explains how a choice-of-law treaty could lead to the
development of better commercial law that more
accurately captures the preferences of parties engaged in
international commerce by facilitating the development of
an international market for commercial law.