Admittedly, the question of which country’s law governs when entering into a contract seems about as interesting as, well, flossing your teeth. We lawyers, however, not only get excited by such legal arcane, but feel it’s our job to impress upon you why you should be excited, too.In true legal tradition, here I go.

You probably think that the answer to this question depends on what’s written at the end of a contract in that clause entitled “governing law,” assuming that you managed to read that far before falling asleep. And mainly, you would be right. In the new EU Regulation of 17 June 2008 on the law applicable to contractual obligations, freedom of choice in electing which law governs is declared to be a “cornerstone” of contracts law.

Where the new Regulation sets some boundaries on freedom of choice in governing laws are with respect to consumer contracts, insurance contracts, or employment contracts. You have some time to get used to these new rules as the Regulation does not come into force until 17 December 2009.

Let’s say that I order a jazz CD from an Irish internet site. Under the consumer contracts rules of the Regulation, the contract for the sale of that CD would probably be governed by Polish law, regardless of what law might be mentioned in the small print of the order form. The Regulation requires that the law of the country where the consumer has a “habitual presence” (in my case, I live in Poland) applies if the business selling that CD either has operations in that country or “directs” its activities to that country. The question of whether activities are “directed” at a country is the subject of a whole another EU Regulation, but merely having the website in Polish or allowing payment in PLN is not enough.

With the exception of large-risk policies, insurance contracts may either be governed by the laws of the country where the policy-holder is a “habitual resident”, where the risk is located or, in the case of life insurance, of which the policy-holder is a citizen.

As to employment contracts, under the Regulation, a Polish employer and a Polish employee could, for example, choose to have that contract governed by the laws of Ireland. However, despite the choice of law, the Regulation holds that the basic protections of Polish labor law nevertheless to apply, in this example.

A big thanks to my colleague, Grzegorz Kott, for bringing the Regulation to my attention.

--Judi 

Even with this government’s self-proclaimed program of "small steps" (to borrow from the catch-phrase that Secretary of State Michał Boni likes to use), we were all beginning to wonder when we might see some real reforms.  Lo and behold, the reported two-week limitation on ministerial summer vacations seems to have prompted some action. 

Minister of Justice Zbigniew Ćwiąkalski appears to be particularly active and not afraid to jump into the fray.  Although one of his thornier problems is probably only of interest to lawyers and law students, he’s announced a new reform plan for the legal qualifications process.  Whether the plan has merits or not, one thing is sure: this issue has been debated ad nauseam. Although I usually eschew unnecessary use of Latin phrases, this turn of phrase best suits my sentiments. 

On fronts of more general interest, Minister Ćwiąkalski has also mentioned a couple white-collar crime procedural reforms. On one hand, he’s addressed the blatant over-use of the provisional arrest provisions. On the other, he’s talking about toughing up measures on those who violate capital markets rules.

Not to be outdone, the various administrative authorities looking into building permit procedures and the “big box” construction limitations have also not been sleeping. But as this is Paul’s favorite subject, I’ll let him expound.

Judi

Greetings from your Legal Eye team (the fairer half of it).  In our on-line version, the Warsaw Blawg, we intend to comment on the legal perspective of events that affect doing business in Poland.  Of course, for that matter, we are not shy about putting in our two-cents on any other issue that may be on our minds, legal or otherwise.  Stay tuned.

--Judi