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January 20243

Inter-American Juridical Committee approves report on party autonomy

Inter-American Juridical Committee approves report on party autonomy

At its Fourth Special Session – held in virtual format on December 12, 2023 – the Inter-American Juridical Committee (CJI) adopted a report entitled “Party autonomy in international commercial contracts with a weak bargaining party: inherent challenges and possible solutions,” document CJI/doc.683/23 rev. 3, prepared by Dr. Cecilia Fresnedo as rapporteur.

The CJI report focuses on various forms of accession contracts, entered into between merchants at the international level in a context involving one of the parties lacking bargaining power in terms of choice of law or judge. It provides information on the relevant regulations, practice, and domestic and international jurisprudence, and identifies similarities and differences among the OAS member states. The report notes, furthermore, that there are no developments or comments on the matter of party autonomy in conflict of laws in asymmetrical contracts, given that the regulations deal with contracts under which all parties have an equivalent bargaining power.

In its recommendations and best practices, the Committee urges legislators and judges to ensure that contracts are balanced, in a context in which private international law is called upon to protect the contractually weaker party, avoiding abuses. This proposal offers a variety of formulas for contracts that exclude the autonomy regime, notably:

• Regulation of unfair competition;
• Respect for public order and the principle of equality of the parties before the law;
• Exclusion of abusive clauses or clauses that are not freely consented to by all parties;
• Application of the UNIDROIT principles.

The hope is that the report will be useful in a wide range of international contracts in which any party, even if a merchant, lacks bargaining power, such as in contracts for the carriage of goods, distribution, banking, construction, and mining. In addition, it would cover contracts to consumer- and labor-related contracts, which generally include specific provisions governing protection.

In preparing the study, the rapporteur was assisted by local and international experts, which enabled a thorough review of the latest developments in the field.

At the invitation of the Government of Panama, the Inter-American Juridical Committee will hold its next regular session from March 11 to 15, 2024, in Panama City.

As part of the Secretariat for Legal Affairs, the Department of International Law serves as the CJI’s Technical Secretariat and provides it with technical support.

The CJI is the advisory body to the OAS on juridical matters. Its purpose is to promote the progressive development and codification of international law.

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