Legal Question in Business Law in California
contracts
There is a contract involving a US company and a Swedish Company. Is there any way of getting out of a contract? In the contract Swedish laws are in effect because it was stated in the contract. What are the jurisdictions? How hard does this clause stick and, if possible, what are their laws and what is the procedure?
1 Answer from Attorneys
Re: contracts
First, as to "getting out of" a contract. There are two broad categories of possibility: (1) to find a defense to its validity, e.g. fraud, lack of capacity, etc. and (2) breach the contract and pay damages. Sometimes #2 works to the advantage of a party stuck in a losing deal, but watch out for contracts (real estate, etc.) that can be specifically enforced.
A contract provision specifying the laws of a particular jurisdiction is usually enforced by U.S. courts. An exception might be if the U.S. court felt a U.S. citizen would be deprived of fundamental rights by the foreign court's exercise of jurisdiction. Since Sweden is a democracy with a long tradition of justice in its courts, the U.S. courts would not assume jurisdiction contrary to the language of the contract or the other rules for determining jurisdiction.
These other rules include where the parties are, their nationality, where the effects of the conduct of the parties is felt, where the subject matter of the dispute is, where the witnesses, etc. are, where performance was to occur, etc.
Swedish law and procedure with respect to contracts affecting international trade do not differ all that greatly from U.S. law. Somewhat uniform law is essential to today's level of world trade. If you provide me some details of your situation I may be able to give you a more complete reading.
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