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Contracts For the International Sale of Minerals

Robert B. von Mehren, David W. Rivkin, Mine to Market: The Legal Issues (1985)

A. Choice of Law Clause

Negotiations of an international contract for the sale of minerals, as with most contracts, generally focus on the business aspects of the deal: price, delivery, payment terms, and the like. The emphasis is on achieving a business deal satisfactory both to the buyer and the seller. Contractual provisions regarding arbitration, choice of law, force majeure, and other “legal” concerns are generally given less attention, and parties are more willing to concede points on such issues if necessary to consummate the deal.

This tendency is understandable but may lead to future difficulties, for such provisions may be critical to the eventual resolution of disputes arising in the course of the business dealings. The choice-of-law clause, for example, affects every other contractual provision, including the business terms so carefully negotiated. The rights and obligations of the parties to the contract will be determined according to the law specified in that clause. Business terms which are fundamental to the performance of the contract — for example, the terms of delivery specified in the contract — may be viewed differently depending upon the applicable law. Thus, failure to deliver may constitute a breach of the contract under New York law but not under German law.

Such clauses may therefore be of decisive importance if disputes a