No, national laws apply when they say they apply and a party to a contract is subject to their jurisdiction. You can't decide that laws apply to you by making a contract with someone agreeing that they don't apply to you.

You can agree that the contract counter-party won't use their rights under a relevant nation's laws against you for the purposes of the subject matter of the contract. But you can't decide that a relevant nation's financial or tax regulations (etc) don't apply to you.

So if a relevant nation's laws applied, and those laws restrict use of future receivables from serving as collateral, the parties to the contract could agree that neither of them would attempt to claim any other substance of value in a contractual dispute. This wouldn't work if the relevant nation required that there be in existence (and perhaps within that nation) a specific amount of property to serve as collateral.

Dear Frank,

if I correctly understood your question: the parties cannot choose only the Convention, since the contract has to be regulated by an existing law (furthermore the Convention does not cover every aspect of contract law), but they can use the clauses of the Convention into their contract as long as they are not in conflict with mandatory rules and public order of the applicable law. They can "insert" the Convention as part of the contract.

James, the banks do just what I am asking about in thousands of letters of credit every day. Although in the US, for example, L/Cs are regulated by UCC Article 5, respectively the state level implementation of the UCC, commercial banks will almost always subject their L/Cs to the UCP600 instead. And the US Government and most other governments around the world where the situation is the same, respect that as part of the freedom of contract between merchants. Different rules apply only for consumer transactions (sometimes) and if an occasional rule is declared mandatory as part of the ordre public. So I think Chiara is right and the banks could either write the provisions of the Convention into their financing agreements or even adopt them via general contract terms like they do with the UCP600 and other uniform rules for commercial banking like the URDG758 or the URC522. Something else would only be true if rules about what can serve as collateral would be mandatory, in the sense of "ordre public", which is precisely what I am trying to find out. Not likely but that is the question...

Well, and while I am at it, of course it is wrong to say that "national laws apply when they say they apply and a party to a contract is subject to their jurisdiction. You can't decide that laws apply to you by making a contract with someone agreeing that they don't apply to you". If things were so black and white, what would all the lawyers do... You should read my publications, for example the draft chapters of my forthcoming IBT textbook before writing categorical statements in areas you don't really know much about...

I think you're misunderstanding what I wrote, because it's essentially what Chiara wrote, but longer.

But I also focused on the real question, which was at the end of your comment. There you asked whether you can "stipulate the applicability of the Convention by agreement and override any national law that would otherwise apply".

The answer is still no, you can't use a contract to override national law that would otherwise apply. In the absence of a relevant law or regulation, you can use whatever you want as a source of terms for a contract.

This is the equivalent of saying legal entities "can use the clauses of the Convention into their contract as long as they are not in conflict with mandatory rules and public order of the applicable law." I merely framed the response in a "you can't" format rather than a "you can" format, because the truly important part is that you can't do what you want to do, which is override any national law that would otherwise apply by using the terms of the Convention or any other terms contained in a contract.

And yes, you can certainly argue with a governmental entity whether the law they are seeking to apply to you is applicable. Perhaps my initial statement was overly broad, and didn't start off with this possibility. This is what lawyers do, and it isn't black and white. However, this is a general ability with regard to laws, and you asked about contract law. If your basis for arguing that a law doesn't apply to you is that you made a contract with a third party that says that the law doesn't apply to you, you won't win that case.

As for commercial banks, they are subject to hundreds of regulations depending on what activity they are performing. Banks are a major source of entering contracts that are not in accordance with these regulations. These agreements don't relieve the banks from the application of anti-trust regulations, which was popular a few years ago.* They also don't relieve the contracting parties from laws derived from fiduciary duties. The major insurance brokerage firms in the US found themselves in a very difficult situation for making contracts that did this in the early to mid 2000s. Securities regulations apply regardless of what your contract says. And so do regulations dealing with forms of collateral required in various transactions. Your contract terms will not help you escape regulations. You can't contract your way out of tax regulations, which would be extremely popular if possible.

This is what it truly means to have the power to use contracts to "override national law that would otherwise apply". It means "can I use a contract to break the law without penalty?"

I am a lawyer, and I mostly deal with litigation. Often with litigation resulting from the use of contracts that violate applicable laws, especially anti-trust regulations and regulations derived from fiduciary duties. Sometimes both at once. Perhaps this is why my answer was framed in the negative sense - I'm used to dealing with what happens when contracts go wrong. In my experience, contracts with terms that evidence an intent to violate regulations (aka "override national law that would otherwise apply") are much more expensive than contracts that are breached by one party or another.

* And yes, contracts that are in conflict with anti-trust regulations are very popular with other kinds of businesses. Parts suppliers for automakers have been receiving the largest fines ever given outside of the finance industry in the US, Japan, and EU for price-fixing just about every part of a vehicle.