Abstract
LL.M. (International Commercial Law)
This minor study investigated the problem of the applicable law for whether a contract has been formally and materially been executed. The main objective was to explore how the courts and lawmakers in England, Canada and South Africa have responded to this question. It does so on the basis of desk research and analysis of cases, legislation (where applicable) and opinions of legal writers in the field. The study found that the responses to the issue appears to be resolutely fractured within and by national boundaries. It was also found that the courts of these three jurisdictions operate on the initial assumption that parties are free to choose the law applicable to their cross-border transactions. The problem becomes much trickier where parties have failed to make that choice. In that context, the study has established that all jurisdictions considered are keen to move beyond parties’ choice and to confront the problem relying on alternative techniques such as exploring the implied intentions of the parties or reliance on objective test to ascertain the proper law of the contract responsible for assessing the contractual validity issue. It appears, therefore that, while a cross border contract may be international in the sense defined in this work, the dispute to which such a contract may give rise remains governed and regulated by state law. The study further argues that within state law judicial inconsistencies exist as to how best to address the issue of formal and material validity—inconsistencies which might be cure by legislative intervention. In this study a model law is proposed for South Africa which, if adopted, could bring much-needed certainty into how best to tackle the issue. Perhaps the law in this area needs further clarification especially in the context of South Africa. In order to integrate analysis on the problem with a more detailed discussion of the law applicable to formal and material validity of international contracts, an alternative model of suggested applicable law in South Africa is presented. The intention behind the Model is to see greater clarity and certainty in the South African law applicable to these issues, and to work out a cogent solution to the problem of formal and substantive validity in the context of international contracts.