According to Wilderspin (2008), the Rome I Regulation is specifically referred to as the Regulation (EC) No. 593/2008 of the European Parliament and of the Council. Accordingly, it replaced the Rome Convention and is commonly applicable to contractual obligations relating to individuals in the European Union. The primary objective of the regulation is to ensure that a higher level of uniformity is achieved in terms of the various business transactions that individuals participate in through contractual agreements. Uniformity in the interpretation of law, especially the rules relating to contractual agreements, is important to business decision-making. The reason is that uniformity enhances the homogeneity of laws from different jurisdictions, reduces transactions costs in the course of decision-making, and improves the speed of business administration among individuals from different countries.
Critical Examination of the Extent to Which the Rome I Regulation Achieves Uniformity
The extent to which the Rome I Regulation achieves uniformity is commendable in the view of enhancing contractual relationships among members from different countries in the European Union. For instance, it achieves uniformity through its application to various laws that might not be applicable to a member state. Tang (2008) affirms that one of the key laws that it amends in the attainment of the uniformity is the freedom of choice. The phenomenon implies that parties to the contract have maximum freedom to choose any law as long as it matches the blanket community regulation relating to contracts. Therefore, they are able to engage in transactions without any form of contradiction to the applicable law.
More so, the extent of uniformity is commendable as illustrated by the clear specification of various rules that should be applied to the different types of contracts. For instance, Gillie (2007) explains that in the case of the contract for the carriage of goods, the Rome I Regulation gives directions on situations when the law of the carrier's country could apply, and cases when the legal rules of country of the delivery apply. Moreover, it provides overall rules that guide individual employment contracts. The framework on individual employment contract could be European Union or the country-specific law as long as it grants the required level of protection to the employees.
The wider scope that the regulation provides in terms of interpretation, performance of the contract, penalties for the breach of contract, determination of damages, penalties for void contracts, and termination of obligations is also reflective of the commendable level of uniformity. Its emphasis on the contractual aspects makes it easier for citizens of different countries to come together and engage in contractual agreements because of the understanding that they are covered by the Rome I Regulation.
Nevertheless, the extent to which the Rome I Regulation achieves uniformity is limited in some areas including revenue, customs, administrative matters, and relevant procedures. Wilderspin (2008) is of the view that the exclusion of the aforementioned aspects tends to hamper its effective operation within the region. The level of consistency in the attainment of uniformity is affected by the aspects not regulated by new agreement. It would have been more reasonable and complete in the provision of uniformity in the European Union countries with the accommodation of revenue, customs, and administrative matters. It is difficult to find a middle ground to some contractual situations such as carriage of goods contract when the revenue element is not covered in the regulation.
The Importance of Uniformity in Business Decision-Making
Uniformity is highly relevant and important to business decision-making. Firstly, it has an effect on business operations because it enhances the homogeneity of laws from different jurisdictions, hence allowing for common business decision-making among parties to the contract. Lahlou and Matousekova (2007) opine that unification ensures that the freedom of choice is respected, which enables parties of the contract to readily make decisions without having to contradict on the application of varying laws. The homogeneity of laws brought about by uniformity makes the whole process of decision-making easier because business terms are agreed upon between the parties to the contract. Additionally, parties find it easier to identify the penalties they might face in cases when they fail to adhere to the standard rules of the contract and the business. Therefore, the uniformity is important to business decision-making because of its ability to make laws similar and easily understandable for both parties.
Secondly, uniformity is important to business decision-making because it ensures that transaction costs are reduced significantly. Accordingly, uniformity plays an instrumental role in the reduction of difficulties and expenses associated with operations in the international market. Briggs (2009) explains that business decisions are made at cheaper costs because the parties of the contract are aware of the legal framework that they are supposed to follow. They do not have to commit to unfamiliar procedures in the formulation of business decisions because of the existing framework put in place by the Rome I Regulation. The reduced transaction costs are instrumental in leading to more constructive and reasonable communication among individuals from different countries. It also leads to the subsequent fulfilment of all the conditions relating to the making of the commercial decisions as the parties do not have to worry about costs attached to them.
Thirdly, the uniformity is highly critical in business decision-making because it boosts the speed of contractual agreements among individuals and states. Everyone looks forward to a perfect international market where decisions on contracts could be made as fast as possible. The system of uniformity ensures that decisions are made in the quickest manner with required certainty about the laws within the country and those in the other party's country. In the views of Lahlou and Matousekova (2007), business decisions are made faster because individuals are not scared about losing their products, as they are fully covered by the rules stated in the Rome I Regulation. The higher level of trust among business individuals ensures that they enter valid contracts that could be easily reinforced in the future in cases of non-performance or other forms of breach.
In conclusion, the Rome I Regulation's extent of uniformity is commendable for the time being. It has tried to provide uniform contract laws in the EU region, which has been widely helpful in the facilitation of contractual relations. The specific indicators of the extent of the uniformity include the introduction of laws that are not necessarily applicable to a particular member state in the region. The only thing that parties to the contract need is to agree between themselves and move forward in their formulation of the contract. It only needs to cover aspects such as revenue and customs in order to offer the desirable level of full uniformity. On the overall scale, the homogeneity in laws between different countries has been advantageous to the process of decision-making, which could only improve with additions to the uniformity.