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In a dispute over an international contractfor the sale of goods (movable property) between Chinese enterprises and foreign enterprises, if both parties fail to agree on the law applicable to the dispute and the dispute does not meet the applicable conditions of the UNCCISG, how should the court determine the applicable law -- Answers to Several Difficult Issues Concerning Foreign-related Commercial Trials (Part Two) (6)

by the Ningbo Intermediate Court

· Laws and Regulations,Lawyer,Transnational Commerce

Answer: According to Article 41 of the Lawof the Republic of China on the Application of Law in Foreign Related Civil Relations, the parties may agree to choose the law applicable to the contract.
If the parties have no choice, the law of the party's habitual residence or other law closely related to the contract that best reflects the characteristics of the contract shall apply. According to this provision, the key lies in understanding how to "fulfill obligations that best reflect the characteristics of the contract" and "have the closest connection to the contract". In a contract for the sale of movable property, the seller's obligation to deliver goods best reflects the characteristics of the contract, so the law of the seller's habitual residence can be used as the applicable law for resolving disputes. The connection point of "having the closest connection to the contract" may include the place where the contract is signed, the place where the delivery obligation is fulfilled, etc. The court should determine the corresponding connection point and applicable law based on the specific case. If the principle of the closest connection refers to the applicable law of the buyer's habitual residence, the court may use either the law of the seller's habitual residence as the applicable law or
the buyer's habitual residence as the applicable law.

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