1.2 THE LAW AND THE LANGUAGE OF THE CONTRACT
We will see in Part III the importance of the
governing law of the contract.
But briefly, the governing (or sometimes the ‘proper’ law) of the contract is the
body of law according to which the rights and liabilities of the parties are to be
determined.
In determining these rights and liabilities the words of the contract must of
course be interpreted, and this interpretation depends on the law governing
the contract. So the words in clause 4.1 of the FIDIC contracts, for example,
requiring the Contractor to design, execute and complete the works so that
when completed they are ‘
fit for the purposes for which the Works are intended
as defined in the Contract
’, need to be understood or interpreted in accordance
with the governing law of the contract.
Clause 1.4 provides for the contract to be governed by the law of the coun-
try stated in the Appendix to Tender (Yellow Book) or the Particular
Conditions (Silver Book). For example, the contract might be governed by
English law, or French law.
Also of great practical importance is the
ruling language of the contract.
The parties might be using versions of the contract or parts of it in more than
one language, but the ruling or prevailing language will (again depending on the
Book) be that stated in the Appendix to Tender or Particular Conditions.
The language for day-to-day communications might be different from the
ruling language but it is probably a good idea to avoid this. If none is stated
then it is to be the same as the ruling language.