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8 Freedom of Contract

From: Governing Law Risks in International Business Transactions

Philip R. Wood

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 02 June 2023

Contract — Choice of law

This chapter reviews freedom of contract as an important value in the law. It discusses the range of free choice of governing law and courts and any limitations on this free choice on a comparative basis. The main indicators used for measuring freedom of contract are prohibitions on clauses restricting the assignment of receivables and bondholder democracies and other collective action by bondholders, with a particular emphasis on a comparison between English and US law. This chapter explains that legal prohibitions on clauses restricting assignments of contract rights involve a direct clash between two potent principles, and also that of the need for marketability of assets as against the fundamental concept of freedom of contract in wholesale markets. The comparison of bondholder voting, which is a financial democracy like shareholder voting and voting on insolvency plans, has to be seen in the light of the role of political democracies.

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