A sensible principle, but it led to some unexpected consequences in Kingspan Environmental Ltd v Borealis A/S,  EWHC 1147 (Comm). Borealis, a Danish company, and its UK subsidiary sold a polymer to Kingspan, issuing invoices which were stated to be governed by general terms and conditions. The Ts & Cs provided that the law of Borealis’ domicile governed and excluded warranties of quality and fitness for purpose. Kingspan alleged that the polymer was unfit for its intended purpose. It made claims for breach of contract and misrepresentation, arguing that it had contracted with the UK sub and that English law governed.
The English Commercial Court concluded on the facts that the contract was with the Danish parent and that the proper law of the contract was therefore that of Denmark. The evidence did not support a claim that the polymer was unfit for Kingspan’s purpose. As for the tort claim, given its close connection to the contractual claim, it made sense that Danish law should also govern. The kicker: Danish law does not recognise the doctrines of misrepresentation or negligent misstatement, so Kingspan was out of luck here too. The court rejected the argument that it was unfair to deprive Kingspan of the protections of English tort law and UK legislation on unfair contract terms; Kingspan was a sophisticated party and should have considered what its position might be under Danish law.
[Link available here].