International Law's Role in Contractual Agreements: Balancing Autonomy and Accountability

Can a restaurant or business choose whom to serve? Can an employer completely and freely determine the hourly wage of their employees? Or do these cases undermine other values and principles that deserve protection? In these situations, how far can individuals go in exercising their contractual freedom before it clashes with other legal obligations?

What Is Contractual Autonomy?

Contractual autonomy is the exercise of the “freedom of contract”, as defined by the Vienna Convention (CIGS). It is the right of individuals or entities to freely determine the terms of their contracts and regulate their private legal arrangements.

This right enables parties to decide not only the specific content of their arrangements but also choose whom to contract with: it allows each party to choose whether to enter into a contract, with whom to engage, or whether to refrain from contracting altogether.

Limits to Contractual Autonomy in International Law

Although contractual autonomy can be vast in terms of content and scope, it is not without limits. Most legal systems impose restrictions on this freedom through national principles, norms, and international law regulations and directives.

These limitations are necessary to safeguard other rights and values that are equally, if not more, deserving of protection under the law. For instance, issues such as privacy, human dignity, and the prohibition of discrimination are considered fundamental values. The importance of these values justifies the restriction of certain aspects of contractual autonomy.

Privacy rights, for instance, are regulated by the General Data Protection Regulation (GDPR), which limits contractual freedom by requiring that any contract involving personal data processing must comply with principles such as lawfulness, fairness, purpose limitation, and data minimization. Companies cannot contractually waive privacy rights or impose terms that override GDPR protections, ensuring that individuals retain control over their personal data.

The Universal Declaration of Human Rights (UDHR) reinforces the prohibition of discrimination in contractual matters. Article 7 states that all individuals are equal before the law, establishing that private contracts cannot be used to exclude people based on race, gender, religion, or other protected traits. Contractual autonomy, therefore, cannot justify agreements that violate the principle of equality or result in unjustified discrimination.

Similarly, labor protections ensure that contractual freedom does not come at the expense of workers’ rights. The International Labor Organization (ILO) Convention No. 111 on Discrimination (Employment and Occupation), prohibits employment discrimination based on race, color, sex, religion, political opinion, or national extraction. Employers cannot use contractual autonomy to justify discriminatory hiring practices or unfair working conditions. Labor laws uphold human dignity, fair pay, and freedom of association, preventing contracts that undermine fundamental labor protections.

Conclusions

While contractual autonomy includes choosing the contractual content and the receiver party of a legal agreement, it is not absolute. Therefore, a restaurant can choose to establish a members-only access through a contract, restricting access to non-members; moreover, its policies can include the possibility to deny service to individuals causing public disturbance. However, businesses can’t restrict the access to people on the basis of their gender or political orientation, religious belief or race. Employers can determine the retribution to their employees but they still have to respect human dignity and national or international legal provisions on the matter.

This balance ensures that while individuals and businesses can freely negotiate terms, the legal system also provides a safety net to uphold values that protect the common good.

References and Further Reading

“General Data Protection Regulation” (GDPR)

“International Labor Organization (ILO) Convention No. 111 on Discrimination” (Employment and Occupation)

“Universal Declaration of Human Rights” (UDHR)

“Vienna Convention on Contracts for the International Sale of Goods” (CISG)