[Hague-jur-commercial-law] Non-negotiated contracts about to get tough global enforcement support in Hague treaty negotiations

[James Love]

* Non-negotiated contracts about to get tough global enforcement support
in Hague treaty negotiations

Right now delegates from dozens of countries are meeting in the Hague,
trying to finish the final text of a new treaty called the “Hague
Convention on Jurisdiction and Recognition of Foreign Judgments.”

The effort to create a global treaty on jurisdiction for cross border
civil litigation has always been stuck between the older pre-Internet
thinking about jurisdiction, and the current reality of hyperactive
globalization of knowledge goods and services.

The treaty as currently formulated has been shrunk to one concerning the
choice of court provisions in contracts, and the enforcement of
judgments that stem from those contact disputes.

Over and over again the delegates talk about the need to enforce
agreements freely negotiated between willing parties.   But the biggest
issue in the treaty is the issue of non-negotiated contracts.

At this point the US government and the European Union, lead by Tony
Blair’s UK delegation, are pushing relentlessly to give non-negotiated
contracts the same status in the Convention as contacts that are
actually negotiated between parties.   The highly ideological UK
delegation is pushing its “freedom on contract” position, and the US
government position appears to be controlled by a handful of giant
software and publishing entities that want to use take-it-or-leave-it
contracts to write their own intellectual property rules, eliminating
traditional limitations and exceptions to rights in patent or copyright
laws, and also extending rights to materials in the public domain or
owned by others.   Beyond this, the strict enforcement of non-negotiated
contracts will apply to a plethora of other transactions – basically
anything where the seller may want to bind the buyer, through a contract
of adhesion.

Officially, the treaty excludes contracts involving personal household
use.  But virtually any contract involving a non-profit organization, a
library, school, small business, software developers, or about anything
you would buy in connection with your job, would be covered.

By tying together both negotiated and non-negotiated contracts, the
treaty is likely to be controversial, and some countries will probably
not sign on this issue alone.  While the basic approach to the treaty is
similar to the Brussels Convention, which addresses similar issues in
Europe, this new treaty is open to any country to sign  ---- giving
sellers huge opportunities to forum shop.  This means people will be
automatically subject to litigation in jurisdictions that have nothing
to do with the business transaction, simply because the seller likes the
local courts.    While this might make some sense for cases where
contracts are actually negotiated, it is a terrible policy for
non-negotiated contracts.

Is the Convention fixable?  Of course, if delegates wanted to.  They
simply have to exclude contract for which both parties do not have a
reasonable opportunity to propose substantive terms.  This would ensure
that truly negotiated contracts would benefit from the greater certainty
of enforcement, but eliminate the highly predictable abuses that will
happen when non-negotiated contracts are covered.    Right now, things
look bleak, as the US/EU lead by the UK, are pressuring Australia an
other negotiators to go alone with their plans to cover all contracts,
negotiated or not,.  Some think this will a doom an otherwise useful treaty.


-- 
James Love, Consumer Project on Technology, http://www.cptech.org,
mailto:love@cptech.org

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