Electronic business in the Internet has become an important driver for economic growth. The provisioning of commercially offered electronic services in the Internet — e.g., content, news, or social networking services — requires the conclusion of an international contract in case the respective service is provided across borders. In international contracts, two contractual parameters are of key importance: jurisdiction and applicable law. Jurisdiction indicates which state’s courts are authorized to hear and decide on a potential contract conflict, while applicable law indicates under which state’s law a court decision shall be found.
The way jurisdiction and applicable law choices are made in international service contracts today is often not compliant with the relevant provisions of Private International Law (PIL). Jurisdiction and applicable law terms are usually present in terms of choices made, but these choices may be illegitimate. Illegitimate choices are voided (and replaced by PIL-compliant terms) should a dispute arise and a contract claim be deposited in a court.
Given this risk and the imminent uncertainty outlined, service providers and customers alike need support in forming international service contracts. In particular, they need to know about jurisdiction and applicable law choices they can rely on. To date, however, there is no alternative available to the static, PIL-ignorant way adopted currently. This lack is perceived as a major hurdle to foster adoption of (international) electronic business.
Hence, in a pioneering effort to support service providers and service customers in international service contracting, a decision support system is developed. This system — named De- RISC (Dispute rEsolution Recommender for International Service Contracts) — produces a list of recommended jurisdictions and/or applicable laws during contract formation phase. Recommendations are determined in an automated and compliant manner according to the PIL-driven contract- and service-specific set of connecting factors.
This implies a number of challenges to be addressed, as there is considerable complexity in selecting the right PIL(s), modeling the accordingly relevant provisions, and implementing modeled laws in terms of a decision support system to produce jurisdiction and applicable law recommendations. In order to reflect and integrate different notions originating from different jurisdictions and their laws, a common information model basis is built. In the light of a method lacking to identify, select, and formally model the relevant legal basis, such a method is developed. In consideration of both, modeling method and information model, an implementation method is determined. Finally, an automated determination of jurisdiction recommendations is shown feasible and fully operational for the example of the main European PIL regulation modeled and implemented. The respective obtained results of an information model basis, a common modeling technique, and the implementation method constitute a cornerstone to facilitate increased predictability, legal certainty, and accurate risk assessment along the complete service and contract life-cycle for both contract parties.