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Legal Terms - Calvo clause
A contractual provision stipulating that the parties involved in the agreement mutually consent to exclusively resort to domestic legal measures in case of any disagreement. The inclusion of such a provision in a contract was initially an effort by Latin American nations to prevent diplomatic interference in the event of a disagreement with a foreign citizen. By including this provision, it was claimed that the foreign citizen had waived the protection of their government. The clause, known as the Carlos Calvo clause, is generally unnecessary for two main reasons. Firstly, diplomatic intervention is a prerogative of the state and cannot be waived by an individual. Secondly, the requirement to exhaust local remedies before seeking diplomatic intervention is always considered a prerequisite. Since the 1930s, similar clauses have ceased to be employed in international disputes.
A contractual provision stipulating that the parties involved in the agreement mutually consent to exclusively resort to domestic legal measures in case of any disagreement. The inclusion of such a provision in a contract was initially an effort by Latin American nations to prevent diplomatic interference in the event of a disagreement with a foreign citizen. By including this provision, it was claimed that the foreign citizen had waived the protection of their government. The clause, known as the Carlos Calvo clause, is generally unnecessary for two main reasons. Firstly, diplomatic intervention is a prerogative of the state and cannot be waived by an individual. Secondly, the requirement to exhaust local remedies before seeking diplomatic intervention is always considered a prerequisite. Since the 1930s, similar clauses have ceased to be employed in international disputes.
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