1.2 THE LAW AND THE LANGUAGE OF THE CONTRACT

4.1.2 The law and the language of the contract: Clause 1.4

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.