Dưới đây là tựa đề và tóm tắt các bài nghiên cứu về luật hợp đồng của các tác giả khác mà Ngữ vô tình thấy được bắt đầu từ ngày hôm nay (21/3/2021) và sẽ được cập nhật dần theo thời gian. Nhiều bài Ngữ cũng chỉ đọc qua tóm tắt và đưa lên đây chứ chưa kịp đọc hết. Nhấp vào tựa đề để tải trọn bài từ nguồn chính chủ. Trang này sẽ ngày càng dài nên hãy sử dụng chức năng tìm kiếm (Ctrl + F) keywords.
Nhưng trước hết là phần giới thiệu về nguồn miễn phí để tìm hiểu căn bản về luật hợp đồng của Mỹ. Cũng có thể tìm lại các ghi chép ngắn gọn của Ngữ về chủ đề này trong Archive. Mong hữu ích.
Có thể tìm hiểu cơ bản và có hệ thống về pháp luật Mỹ ở nguồn sau đây:
Dịch bệnh Covid-19 ảnh hưởng mạnh mẽ tới hoạt động sản xuất, kinh doanh của doanh nghiệp trong hầu hết các lĩnh vực, ngành nghề; gây ra những tác động, phần lớn là tiêu cực, tới việc thực hiện các hợp đồng thương mại, bao gồm hợp đồng mua bán hàng hóa và hợp đồng cung cấp dịch vụ. Việc áp dụng quy định về sự kiện bất khả kháng nhằm mục đích miễn trách nhiệm đối với bên vi phạm nghĩa vụ trong bối cảnh dịch bệnh là mối quan tâm của nhiều doanh nghiệp. Bài viết đề cập đến khái niệm, đặc điểm và cách thức áp dụng quy định về sự kiện bất khả kháng đối với các hợp đồng thương mại trong bối cảnh Covid-19.
The court summarised the general position on the three typical types of endeavours clauses:
Reasonable endeavours: if one reasonable path is taken then the obligation is discharged.
All reasonable endeavours: all reasonable paths or actions should be exhausted. Passivity or inactivity is likely to be construed as a potential breach.
Best endeavours: all reasonable paths or actions should be exhausted but you may also have to, depending on the context, sacrifice of some commercial interests.
However, as ever, the precise requirement will depend on the particular wording and context. Therefore, “all reasonable endeavours” may sometimes require subordination of commercial interests.
The court explained that a given action is a reasonable endeavour where it has a significant or substantial chance of achieving the desired result. Therefore, an overwhelming obstacle to achieving the desired result may discharge a party from using reasonable endeavours.
Good faith
Like endeavour clauses, a “good faith” obligation takes colour from the other terms of the agreement. Absent anything to the contrary, as in this case, good faith requires:
acting honestly as judged by reasonable and honest people;
observing reasonable commercial standards of fair dealing;
fidelity or faithfulness to the common or contractual purpose; and
acting consistently with the justified expectations of the parties.
In recent years, a controversy has erupted over the distinction between employees and independent contractors. Commentators have argued that in the modern gig economy, many people traditionally classified as independent contractors are as vulnerable as employees and should be granted the legal protections that employees alone normally enjoy. However, the distinction between the two categories remains inescapable, and the theoretical basis for it has not been identified. I argue that the distinction is derived from market structure. Employees are workers who, because they must make relationship-specific investments in a single firm, are subject to labor monopsony. Independent contractors do not make such relationship-specific investments, and hence normally operate in a competitive labor market. Employment and labor law may be explained as a method for protecting workers from labor monopsony; because independent contracts are not subject to labor monopsony, they do not require such protection, and in fact may impose costs on others if granted it.
This Comment assesses the past, present, and future of force majeure, impossibility, impracticability, and related doctrines under Ohio law in light of COVID-19. Section II examines the history of these doctrines in Ohio courts, as well as the history of the COVID-19 pandemic and certain law and economics principles. Section III analyzes how Ohio courts likely would apply these doctrines and interpretations (as they currently exist) to cases involving breach of contract due to COVID-19, and also how they should apply these doctrines and interpretations.”
Corporations routinely impose externalities on a broad range of non-shareholders, as illustrated by several unsuccessful lawsuits against corporations involving forced labor, human trafficking, child labor, and environmental harms in global supply chains. Lack of legal accountability subsequently translates into low legal risk for corporate misconduct, which reduces the likelihood of prevention. Corporate misconduct toward non-shareholders arises from a fundamental inconsistency within contract law regarding the status of third parties: On the one hand, we know that it takes a community to contract. Contracting parties often rely on multiple third parties—not signatories to the contract—to play important roles in facilitating exchange, such as reducing market transaction costs, improving information flows, and decreasing the risk of opportunism. On the other hand, we deny this community protection from the externalities that contracting parties impose on them. This article examines a corporation's duties to others in its role as a contracting party. Normatively, this article proposes an alternative view of contracts as an ecosystem with three attendant principles that result from this view: (a) third-party protections from negative externalities, (b) contract design obligations of contracting parties, and (c) recourse to legal remedies for third parties. On a policy level, this article proposes the following duty to contract in order to translate theory into practice: Contracting parties are required to take into account negative externalities to third parties when the contracting parties could reasonably foresee that performance of the contract would create a risk of physical harm to these third parties.
It is unlikely that the bank would allow the Seller to remit the Debt Purchase Price to the Debt Purchaser under the Debt Sale Contract through its foreign currency account.
Penalty clauses fix, in advance and independently of the real loss suffered, the amount of damages due by one party if it breaches a contractual obligation.
Penalty clauses are valid under Article 300 of the Commercial Law, and Article 146 of the 2014 Construction Law. They are triggered if: (1) there is a breach of contract, and (2) the penalty for breach is stated in the contract. Parties can agree on the level of penalty for breach, unless otherwise prescribed by law. In particular, the level of penalty may be subject to a limitation of 8 percent of the contract value under the Commercial Law, or 12 percent of the contract value under the 2014 Construction Law.11
Liquidated damages clauses are similar in that they allow the parties to agree in advance on a fixed sum to be paid should the contract be breached. However, they are meant to be a reasonable and proportionate estimation of the damages payable in case of breach. If liquidated damages are disproportionate, they may be unenforceable.
Although liquidated damages are often included in construction contracts as a remedy for delay, they are not expressly authorized under Vietnamese law. Pursuant to Article 304 of the Commercial Law, the party claiming damages bears the burden of proving the loss and its amount. Therefore, the efficacy of liquidated damages clauses under Vietnamese law is questionable.12
Over the last twenty years or so, the approach of the English courts to contractual interpretation has moved between a strict literal approach and a more purposive approach. From recent decisions, the courts seemed to be trending back towards the literal approach (as in the Supreme Court decision of Arnold v Britton), moving away from the contextual approach (as in the earlier Supreme Court decision of Rainy Sky SA v Kookmin Bank). However, the Supreme court has recently weighed in yet again on the question of the correct approach to contractual interpretation.
Unjust enrichment continues to fascinate and frustrate. While it is clear that unjust enrichment is a form of private law liability distinct from that found in property, contract, or tort, it remains stubbornly difficult to articulate its underlying normative basis. In this paper I suggest that some headway can be made on this problem by appealing to a distinction between principles of private right and principles of public right. Relying on Ernest Weinrib’s helpful development of this interesting Kantian idea I argue that the law of unjust enrichment may very well manifest principles reflective of public right’s requirement of systematicity. On this view unjust enrichment provides courts with supplemental decision-making principles that permit the suspension of valid principles of private law while leaving the underlying logic of those principles
This review essay assesses the detailed, authoritative and thought-provoking first three of six proposed volumes in the series on “Studies in the Contract Laws of Asia” published by Oxford University Press. Lead-edited by Mindy Chen-Wishart, these excellent volumes span remedies for breach (2016), formation of contract and third-party beneficiaries (2018), and contents of contracts and unfair terms (2020, thus extending to an important area of consumer law). The respective editors argue quite compellingly for significant functional convergence even among Asian legal systems from quite divergent legal traditions. However, such convergence arguably becomes less obvious especially by the third volume. The functional analysis also focuses primarily on what decisions would be rendered by courts in stylised fact scenarios rather than whether and how such outcomes are reflected in contracting practices or law reform processes. Closer examination of these aspects may make future volumes even more valuable for researchers, practitioners and policy-makers.
The Severe Respiratory Syndrome Coronavirus 2 (COVID-19) pandemic has dealt a universal challenge to contractual performance, but legal systems have responded differently. In this article, we focus on two jurisdictions with distinct paths of development – England and France – to examine if they have drawn from their own legal history to craft solutions to this challenge and to consider if either has bettersuited tools to address it. Notably, the UK has refrained from intervening in the area of contract law, thus relying on long-standing common law doctrines and equitable remedies, while, in France, the government has intervened with a series of ordonnances providing contracting parties with new tools tackling difficulties of performance, which add to the existing arsenal in the Code civil. The article demonstrates that the responses to the COVID-19 challenge by England and France have historic roots and illustrate important legal cultural differences vis-à vis state intervention in the area of contract in trying times. Moreover, even though, at first glance, parties contracting under French law have more tools balancing freedom of contract and fairness, a closer look reveals that over protection or under protection may lead to the same outcome for contractual relationships on both sides of the Channel. Ultimately, in both countries, parties seem better off settling their disputes themselves, away from the courts.
This article analyses and compares the rules applying to contractual penalties in Austria, Germany, France, Italy and England, as well es under the UNIDROIT Principles on International Commercial Contracts, PICC and the Principles of European Contract Law, PECL. Also, the different approaches found in these legal systems are scrutinised with regards to their practical implications for contracting parties. More specifically, some civil law regimes unduly restrict the signalling function of contractual penalties. This is quite surprising in B2B contracts and while this aims at protecting a contracting party from promising a large penalty, it also restricts the use of one of the cheapest marketing instruments available to a contracting party.
There have been innumerable force-majeure type suits brought on by COVID-19. This one might have a shot, because of one-sided cancellation provisions. Plaintiffs, Jasmine and Robert Nicholson, have filed a class action lawsuit in the Court of Common Pleas of Pennsylvania against Defendant Wurzak Hotel Group Mark LLC (Wurzak), which operates the Hilton Philadelphia City Avenue and the Sheraton Valley Forge.
But what if many transactional lawyers in the real world do not regularly read the latest cases or regulatory developments because their primary focus is on getting the deal done and not on what happens in the unlikely event the deal blows up. And what if that is especially the case when those legal developments concern an arcane topic such as conflict of laws. In that event, one might expect the drafting to fall behind current developments in the law (see here, here and here). And, other things equal, if conflict of laws is an equally arcane topic for transactional lawyers writing contracts under New York and English law, one would expect to see the problem of inattention to the latest developments in the law to be the same in both settings.
But other things are not necessarily the same. Law firms on different sides of the Atlantic operate quite differently (notwithstanding the presence of global law firms in the market). One significant difference reported to us is that a number of the big English firms have practice areas that function essentially as R&D departments: expert lawyers are tasked to follow developments in the law and assist other lawyers in updating documents (for a discussion, see here). By contrast, most US firms operate on a deal-by-deal basis—doing what is needed for the particular deal. Even in the case of the global firms, there are departments that follow developments in English law but not for NY (or US) law. (In our article, ‘Investigating the Contract Production Process’, we note some other significant differences between New York and English firms that point in the same direction).
As the world of business changes at a breathtaking pace, the growing importance of knowledge and innovation has placed intellectual property (IP) assets under the spotlight and highlighted the necessity of effectively taking advantage of such assets, while minimizing the risk of infringement. To that end, IP rights holders rely on a variety of measures when cooperating with third parties for IP commercialization. One such measure is a liquidated damages clause (“LD clause”), a quick and straightforward way to determine the amount of compensation payable by a breaching party to the aggrieved party in the event of IP infringement or another contract violation. The enforceability of the LD clause in Vietnam remains a controversial topic, but some recent IP-related cases may shed some light on the applicability of such provision.
As Lord Mustill observed in relation to anticipatory breach, ‘the common law has never succeeded in finding a solution which is both theoretically sound and capable of producing sensible results in practice’. This has certainly been the case with the courts’ responses to anticipatory breach not only in Australia but also in the United Kingdom, United States and Singapore. The common law origins of the doctrine have inevitably created a sometimes convoluted and often contradictory set of legal principles in relation to the executed contracts exception, mitigation of loss and the ‘ready, willing and able’ principle. International instruments have attempted to provide clarity to this complex area of law but their effectiveness is limited by the refusal of countries such as the United Kingdom to ratify the Convention and the reluctance of contract drafters to rely on international law. The doctrine of anticipatory breach ultimately requires revision and clarification by the courts in order to provide increased certainty to this presently highly uncertain area of law.
Millions of consumers are routinely subject to non-transparent consumer contracts. Such contracts undermine fundamental contract law notions. They leave consumers uninformed and disempowered. They also encourage unethical behavior and undercut the ability of legal and meta-legal forces to discipline firms.
A recent decision by the UK’s highest court has clarified the circumstances in which a party to a commercial contract is entitled to rescind that contract on the grounds of ‘economic duress’ under English law.
As economic globalization advances further, there is need for continuous reform in equipping international traders thus the aim of this research is to examine the practicability and applicability of the provisions dealing with the risk (of loss or damage) to goods in the international sphere. In doing so, the writer presented a historical, theoretical and narrative background of the international sale of goods regime and provisions dealing with allocation of risk. It outlines the ways forward to better deal with goods sold internationally and its delivery to the final destination since most times, such sales contract will include carriage (thereby making sure a buyer gets the value for money spent).
Litigant finance is a growing and increasingly controversial industry in which financial firms advance a plaintiff money in exchange for ownership rights in the proceeds of the legal claim on a nonrecourse basis: A plaintiff must repay the advance only if compensation is ultimately received for the legal claim. The nonrecourse nature of this funding exempts it from most states’ consumer credit laws, enabling funders to charge higher interest and fees than would otherwise be permitted. When this funding involves ordinary consumers, critics of the industry contend that the uncapped interest rates exploit vulnerable litigants, while its defenders argue that the availability of these cash advances improves the welfare of consumers, especially those who have no other credit options.
This article examines the extent to which entire agreement clauses (EACs) and non-reliance clause (NRC) are enforceable to preclude actions for negligent pre-contractual misrepresentations. It is argued that courts could improve legal certainty and contractual fairness by adopting two distinct legal rules to be applied, respectively, to contracts between sophisticated parties and in adhesion contracts. First, it is suggested that in contracts between sophisticated parties only specific contractual barriers to actions should provide a complete defence against negligent misrepresentation claims. Under this rule, the exclusionary effect of EACs and NRCs would be achieved only if an express term of the contract contradicts or is inconsistent with the pre-contractual statement on which the plaintiff bases their tort claim. Second, it is proposed that in contracts of adhesion EACs and NRCs should be regarded as presumptively unconscionable and therefore not enforceable by courts to preclude tort claims for negligent misrepresentation. This presumption would preclude sophisticated parties from using EACs and NRCs as a shield against tort claims for negligence misrepresentations, thereby incentivizing them to enhance the clarity of pre-contractual communications.
The legal operation of liens has been the source of academic debates for many years. Liens are traditionally classified as enrichment liens and debtor-and-creditor liens (contractual liens). In the instance of an enrichment lien the creditor (lienholder) has a contract with a non-owner and not with the owner (debtor) himself. Consequently, the creditor can vest a lien against the owner of the thing only on the grounds of unjustified enrichment. Enrichment liens are classified as real rights. In the instance of a debtor-and-creditor lien (contractual lien) the creditor (lienholder) has a contract with the owner of the thing and the contract is the basis for the liability of the owner (debtor) towards the creditor. Debtor-and-creditor liens are generally classified as personal rights. This classification causes confusion regarding the legal operation on the one hand of an enrichment lien as a real right and on the other hand of a debtor-and-creditor lien (contractual lien) as a personal right. This paper proposes that the origin of the legal claim for which the lien serves as security (unjustified enrichment or contractual) merely determines the debt (expenses) for which a lienholder can vest his lien and does not determine the classification of a lien as either a real right or a personal right.
Contract interpretation is one of the most important topics in commercial law. Unfortunately, the law of interpretation is extraordinarily convoluted. In essentially every American state, the jurisprudence is riddled with inconsistency and ambiguity. This causes multiple problems. Contracting parties are forced to expend additional resources when negotiating and drafting agreements. Disputes over contractual meaning are more likely to end up in litigation. And courts make a greater number of errors in the interpretive process. Together, these impacts result in significant unfairness and undermine economic efficiency. Efforts to remedy the doctrinal incoherence are thus warranted. The goal of this Article is to clarify various legal concepts and principles that play a critical role in the interpretation caselaw and secondary literature. By untying some of the knots that entangle contract interpretation and the parol evidence rule, the Article will aid judges, lawyers, and professors in addressing interpretive issues in the contexts of adjudication, contract drafting, scholarship, and teaching. This Article addresses the following seven issues: (1) the two types of latent ambiguity; (2) the many definitions of “parol evidence”; (3) the stages of contract interpretation; (4) determining whether a court is using textualism or contextualism; (5) contextualism and the ambiguity determination; (6) the circumstances in which contract interpretation raises a jury question; and (7) contextualism and the parol evidence rule.
This UN Convention on Contracts for the International Sale of Goods (CISG) has been U.S. law for a generation and requires that it be interpreted ‘to promote uniformity in its application’. This article argues that uniform interpretation is impractical because 1) it is written in six official languages which do not always mean the same thing; 2) with more than 90 countries’ courts and arbitrators applying CISG, each in its own language, some of which do not regularly print their opinions, it is difficult to access all opinions on a single point; 3) since Civil Law countries consider the writings of distinguished professors to be sources of law, those writings must also be accessed; 4) there is no official authority interpreting CISG, though the unofficial CISG Advisory Council issues its interpretations from time to time; 4) CISG interpretations are to be autonomous, not analogous to comparable provisions of domestic law, which means that many opinions interpreting CISG must be disregarded because they are self-declared as analogous.
This chapter on Arthur Linton Corbin will appear in the forthcoming collection, Scholars of Contract Law. The chapter provides a brief summary of Corbin’s life, then discusses five topics: Corbin’s Socratic approach to the classroom and his introduction of the caselaw method at Yale; Corbin’s analytic approach, which was inspired by Hohfeld and is illustrated by Corbin’s definitions of ‘contract’ and ‘consideration’; Corbin’s evolutionary theory of the common law, his understanding of the relationship between law and social mores, and his insistence that legal rules always be treated as mere ‘working rules’; Corbin’s occasional appeal, despite his general aversion to high theory, to the reliance theory of contract; and Corbin’s account of contract interpretation, where one sees the reliance theory at work, together with a surprisingly narrow conception of meaning.
Contract boilerplate generates many benefits for contract users. It also generates costs. In the past, reformers have attempted to mitigate these costs by drafting model contract language and urging contract users to incorporate this language into their agreements. This brief Essay argues in support of a different approach. It calls for replacing several standard pieces of contract boilerplate with codes that the Essay dubs ‘Boilerterms’. Instead of writing a standard choice-of-law clause into an agreement, for example, the parties would write ‘Boilerterm COL – Broad (New York)’. An authoritative guide prepared by experts would clearly define the meaning of the code, thereby making it easier for litigators and judges to interpret it. The widespread adoption of Boilerterms, the Essay argues, would mitigate the costs generated by contract boilerplate more effectively than model contract language while preserving the many benefits conferred by that same boilerplate.
Cases about liquidated damages are, it transpires, like London buses: you wait ages for one to turn up and then two come along together.
Hot on the heels of the Supreme Court’s decision in Triple Point, which has restored good sense to the law concerning the recoverability of liquidated damages after termination, O’Farrell J has handed down a judgment which deals with two of the other classic debates in the law relating to liquidated damages. Her decision in Eco World – Ballymore Embassy Gardens Co Ltd v Dobler UK Ltd deals first with the law concerning the application of the penalty doctrine to the liquidated damages clause where partial possession has been taken and, secondly, with the debate about whether such a clause operates to limit the contractor’s liability for losses resulting from delay even where it has found to be void and inoperable.
The sanctity of contracts, a guiding principle of contract law in civil law systems, requires that both or all contracting parties be expected to meet their contractual obligations, thereby ensuring efficacy and efficiency of private ordering. Under extraordinary circumstances, however, legal systems provide for mechanisms, which may excuse contractual performance or lead to adaption or termination of contractual obligations. Since the coronavirus pandemic, these mechanisms have clearly gained traction. Drawing on five important civil law jurisdictions (Germany, Austria, Switzerland, France, Italy), this article elaborates on adaption or termination of contractual obligations. The article aims to address the fundamental question, whether institutions on adaption or termination still serve their purpose in times of pandemic or whether and to what extent a codification of such institutions is needed in European Contract Law. A functional and comparative approach is used to unfold and analyse this timeless question from a contemporary perspective.
In American law schools, first-year students learn about the basic obligations of private law through two required classes: contracts and torts. For the most part, those students do not learn about a third source of obligation: unjust enrichment. This obligation rests on a simple premise — that “[a] person who is unjustly enriched at the expense of another is subject to liability in restitution.” While money damages in tort actions seek to make plaintiffs whole for losses suffered as the result of a defendant’s wrongdoing, restitution for unjust enrichment imposes liability based on the defendant’s gain — regardless of a defendant’s blameworthiness.3 These principles are relatively straightforward on their face. But unjust enrichment has struggled to establish a consistent place for itself within American legal thought. This is a missed opportunity for judges, practitioners, and litigants, for whom taking unjust enrichment seriously could have dramatic consequences. In this edition of Developments in the Law, we make a case for reviving this forgotten principle, both as a worthy subject of legal scholarship and as a valuable addition to the advocate’s toolkit.
This Chapter charts the intellectual history of unjust enrichment, showing that many legal systems in the Western tradition identify unjust enrichment as a source of personal obligation separate from contract or tort. In the United States, unjust enrichment developed in law and equity, suffered through a period of instability in the post-fusion legal landscape, and has experienced a recent resurgence. The idea of “unjust enrichment” researched for this Chapter includes any treatment of an unequal transfer of value that operates as a source of obligation separate from obligations arising from consent or wrongdoing. This separate source of obligation can be identified as far back as the Roman Empire. The definition of “unjust enrichment” that seems to best fit this source of obligation is that of the Third Restatement: any unequal transfer of value without an adequate legal basis.
It is trite that only parties to a contract are entitled to bring a claim where there has been a breach of contract. Identifying parties to the contract is therefore important. One would think that this is a straightforward exercise. Perhaps not. Middlemen are often involved in brokering deals between two contracting parties. An agent may sign the contract, without qualification, on behalf of his (undisclosed) principal. In such a case, who are the proper parties to the contract? In Gregor Fisken Limited v Bernard Carl [2021] EWCA Civ 792, the UK Court of Appeal discussed this question.
Harry Dyson discusses what appears to be the first judgment at Circuit Judge level in relation to what monies can be retained or claimed by wedding venues when the contract has been frustrated by Covid-19 regulations….In the recent appeal of Willis v Offley Place Hotel HHJ Clarke allowed the venue to retain two thirds of its expenses incurred. The judge’s methodology in reaching that figure is of great significance. It was held that such expenses should be calculated by considering the entirety of the costs of running the venue including overhead expenses divided by the number of weddings.
Once again the court looks at the vexed question of the distinction between a guarantee and an indemnity. The main dispute arose under a cost-sharing agreement and was referred to arbitration. This was the trial of a number preliminary issues about the surety obligations under the agreement. I am going to look just one of those. The court reminded us of the distinction between the two types of surety obligation:
[1] under a guarantee the liability of the guarantor is always ancillary, or secondary, to that of the principal, who remains primarily liable to the creditor. There is no liability on the guarantor unless and until the principal has failed to perform their obligation;
[2] an indemnity is an independent primary obligation to pay under the circumstances specified.
Ths. TRẦN CHÍ THÀNH (Giảng viên Khoa Luật Dân sự, Trường Đại học Luật, Đại học Huế) - Trong bài viết này, tác giả đưa ra một số quan điểm, bình luận về cách thức áp dụng các quy phạm pháp luật điều chỉnh vấn đề “thực hiện hợp đồng trong hoàn cảnh thay đổi cơ bản” để giải quyết một số tranh chấp thường gặp hiện nay.
In late 2017, the #MeToo moment began as one woman after another breached a contract requiring her to remain silent about sexual harassment, assault, or rape. The news reports began in October 2017, when numerous women said that Hollywood mogul Harvey Weinstein had sexually harassed, assaulted, or raped them over the course of many years. As women began speaking out about experiencing harassment, assault, and rape in entertainment, journalism, politics, sports, and business, it became clear that many were victims of serial predators and their experiences followed a pattern. It also became clear that contractual settlements of harassment that required victims to keep silent were a part of the problem.
The coronavirus (COVID-19) pandemic has taken a toll on people all across the world in various aspects. The severe consequences of this pandemic can be seen in international trade and commercial contracts. The underlying principle of contract law is that the parties are bound by the promises given under an agreement; however, events such as COVID-19 affect the parties’ performance of contractual duties. The harsh measures, such as prohibition on importation and exportation of goods or travel bans, have seriously affected the parties’ performances. In such situations, force majeure clauses, which serve as an exemption from non-performance, come into play. This article aims to reveal how COVID-19 will be assessed in terms of force majeure and the possible attitudes of arbitral tribunals towards these cases. This assessment is undertaken in light of force majeure clauses laid under the Convention on Contracts for the International Sales of Goods, the UNIDROIT Principles of International Commercial Contracts, and the International Chamber of Commerce’s 2020 Force Majeure Clause.
(18/6/2021)
The Moral Obligation to Perform Contracts [I particularly noticed this sentence in one of the paper’s footnotes: ‘Where “obedience” means acting in a certain way because the law says so, while “compliance” means acting as a legal rule prescribes, but motivated by reasons other than the rule.’]
There is a well-established literature about whether, when, or to what extent citizens have a moral obligation to obey the law. That discussion looks at various possible justifications for a prima facie moral obligation to obey; the best-known proffered justifications range across argument based on consequences, consent, gratitude, fair play/reciprocity, and the role of government in distributing benefits and burdens across society. The literature regarding the moral obligation to obey particular categories of obligations is significantly less well developed. The present article considers whether and when there might be a moral obligation to perform one’s contractual obligations. Part of the complexity of the analysis will come from the fact that these questions arise in particular social and relational contexts, and the background justice or injustice seems relevant to the existence of a moral obligation to keep a contract, or its absence.
As the keynote speaker of the Spring 2019 CISG Conference, Harry M. Flechtner, Professor Emeritus, University of Pittsburgh School of Law, candidly shares his perspectives on the development and progress of the Convention on the International Sale of Goods (CISG) through the years. He begins with his initial introduction to the convention and then reflects upon several important issues and challenges facing the CISG, particularly involving uniform international law initiatives. Professor Flecther looks hard at what's working and what's not and with a critical eye he draws attention to crucial matters yet to be resolved. While his perspective is light on optimism, he holds strong to hope.
Our prior work in these pages examined how a muddle of doctrines that form a sovereign shield can be exploited by contractors and the executive branch to evade civil liability and regulatory oversight. It tied the expansion of this sovereign shield to the relative empowerment of the federal government at the expense of the states, the executive branch at the expense of the legislative branch, and the private sector at the expense of consumers. In developing a doctrinal response to the risks identified, this Article draws on the insights of scholars who have studied federal–state relations, contractor–agency relations, and business–consumer relations, and it bridges the gaps between these literatures into which the sovereign-shield phenomenon falls.
It is generally understood that the CISG is to be interpreted “autonomously” rather than through the lens of domestic law. Autonomous interpretation is required by the mandate of Article 7(1) that tribunals have regard for uniformity in the CISG’s application. There is, however, disagreement about the extent to which reference to domestic law can be consistent with autonomous interpretation. Some tribunals and commentators adopt a “weak” version that permits consideration of domestic law for limited purposes, while others adopt a “strong” version that rejects any use of domestic law to elucidate the meaning of the CISG’s provisions. In this article, we contend that reference to domestic law is consistent with autonomous interpretation to the extent that such reference enhances rather than detracts from uniform interpretation and thereby satisfies the objective of Article 7(1). We then illustrate the circumstances under which domestic law promotes uniform interpretation. We then address the issue of whether the CISG can be used to interpret domestic law. Using the Uniform Commercial Code as an example, we contend that, although there are numerous caveats that limit the utility of the CISG as a source for interpreting domestic law, there are typically no theoretical or doctrinal objections to the practice. We then explain the circumstances and conditions under which the CISG could clarify and improve interpretations of domestic law.
Equity remains a significant part of our legal system, but the different meanings of "equity" often cause confusion. This essay distinguishes three meanings of the term: the distinctive treatment of an exceptional case, a moral reading of the law, and the doctrines and remedies developed in the Court of Chancery. By distinguishing these meanings, carefully and without an excess of technicality, this essay illuminates a difficult but important part of law in the United States.
Adjudicating business and commercial disputes often requires judges to interpret complex and intersecting specialized bodies of law. In the United States, for example, such disputes often involve intersecting provisions of the Uniform Commercial Code (“UCC”) and the Bankruptcy Code. Given human limitations, courts sometimes err in deciding these disputes. This essay presents conspicuous examples of these errors, focusing on the UCC and the Bankruptcy Code. The essay also cautions parties to be aware of this heightened potential for judicial error and suggests a possible remedy: to further develop specialized business courts, which should be able to adjudicate these types of disputes much better than general jurisdiction courts.
This Article clarifies the two-step approach used by the courts to analyze contract interpretation issues and introduces the concept of the ‘Battle of the Two Reasonable Meanings’. The academic debate which centers around whether the textualist approach (plain meaning and four corners of the document approach) or contextualist approach (use of outside evidence) is better is a false dichotomy, both approaches are used, albeit in different steps (textualist at Step 1 and contextualist at Step 2) in the contract interpretation analysis. The courts use a two-step process using both and are unlikely to embrace either as advocated by various authors. This two-step approach reduces attempts to obtain nonbargainedfor benefits in contract interpretation litigation. The purpose of contract ambiguity (Step Two or ‘battle of the two reasonable meanings’) law should be to prevent one party from obtaining a nonbargained-for benefit just because the contract is ambiguous. Since ambiguity is present in all language interactions, preventing one party from obtaining a nonbargained-for benefit because of ambiguity promotes the formation of contracts. This is because of underlying economic principles which would encourage the rational (maximizing) party to litigate to obtain a nonbargained-for benefit.
Over the last twenty years or so, the approach of the English courts to contractual interpretation has moved between a strict literal approach and a more purposive approach. From recent decisions, the courts seemed to be trending back towards the literal approach (as in the Supreme Court decision of Arnold v Britton), moving away from the contextual approach (as in the earlier Supreme Court decision of Rainy Sky SA v Kookmin Bank). However, the Supreme court has recently weighed in yet again on the question of the correct approach to contractual interpretation.
In summary, [the Supreme Court’s] analysis is as follows: the court’s task is to ascertain the objective meaning of the language chosen by the parties to express their agreement. This is not a literalist exercise focussed solely on a syntactic analysis of the wording of the clause in question but instead the court has to look at the contract as a whole and, depending on the nature, formality and quality of the drafting of the contract, apportion weight to elements of the wider context. Interpretation is a unitary exercise – where there are rival interpretations, these should be checked against the contractual provisions and the commercial consequences of each rival interpretation should be investigated. It does not matter whether the court starts with a close analysis of language or with the factual background and implications of the rival constructions, so long as the court balances the indications of each. In doing so, the court should consider the quality of the drafting, be alive to the possibility that one side may have agreed something which (in hindsight) did not serve its interests, and not lose sight of that a provision may be a negotiated compromise or that negotiators were unable to agree more precise terms.
A much-debated question in contract law scholarship is what the optimal measure of damages for breach should be. The casebook answer, drawing from the theory of efficient breach, is expectation damages [“damages at the amount that puts the jilted party in as good of a position as she would have been in had the contract been performed”]…To shed an empirical perspective on the question, we look at data on what types of damages provisions parties contract for themselves in international debt contracts. Specifically. we examine issuer call provisions, which are economically equivalent to damages for prepayment, yet not viewed as legally problematic in the manner an actual liquidated provision might be. We find little evidence of a preference for the expectations damages measure.
In 1936, Lon Fuller and William Perdue famously asked the question of why the law favored expectation damages over the alternatives, reliance and restitution, setting up a debate over the optimal measure of damages that has continued to this day.
Our research illuminates the stark contrast between the situation in Japan and the modern principles of secured transactions law embodied in the UNCITRAL Model Law [on Secured Transactions], which is designed to enhance access to credit through ABL [asset-based lending]. Finally, the article identifies important new insights for secured transactions law reforms, not only in Japan but in other jurisdictions. These insights are illuminating as well for future business law reforms more generally. In particular, the article explains the value and utility of qualitative empirical research such as the JBCP for the process of law reform.
New empirical evidence shows that noncompetes have harmful effects on job mobility, wages, competition, entrepreneurship, and equality. Yet noncompetes are widely included in employment contracts. And inconsistent state rules on noncompetes (and their enforcement) have led to employee confusion and disputes among state courts. A tough, consistent federal strategy to eliminate noncompetes is needed. Several recent federal and state initiatives addressing noncompetes have created momentum that the new administration can build on to rapidly address this issue.
The frustration (or ‘frustration of purpose’) doctrine excuses a party from its contractual obligations when an extraordinary event completely undermines its principal purpose in making the deal. Historically, the doctrine has played a marginal role in contract law, as parties very rarely invoked it—and almost always without success. Courts are understandably reluctant to relieve parties from their contracts and will only do so in very unusual cases. Thus, frustration has long been an obscure doctrine, taught in law schools but infrequently litigated in court.
All that changed in 2020, as the COVID-19 pandemic—and government orders to contain it—is precisely the type of extraordinary event that frustration was designed to address. Over the past year, the courts were inundated by a wave of colorable frustration claims, including numerous high-profile and high-stakes lawsuits. Victoria’s Secret, for instance, sued its landlord to avoid paying its monthly rent of $1 million on the ground that the pandemic and related stay-at-home orders frustrated its purpose in leasing space in Manhattan’s Herald Square.
One recurring issue in these suits is whether a force majeure clause—which excuses a party from liability when an uncontrollable event listed in the clause makes a contract’s performance impossible—overrides the common-law frustration doctrine. Because force majeure clauses are prevalent in almost all commercial contracts, if a force majeure clause were to supersede the frustration doctrine, then practically all frustration claims would be rejected, even if they were otherwise meritorious.
Amazon has sought to avoid liability for dangerous and defective third party goods sold on its platform on the basis that it does not hold title to the goods in question. In yesterday’s blog post, I pushed back on Amazon’s title argument. Here, I want to make the following super-legal observation: “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.” Amazon looks like a seller, acts like a seller, and convinces buyers it is a seller. Amazon probably is a seller and should be estopped from arguing otherwise.
The paper deals with contract law in Japan in the perspective of law and literature in order to better understand some basic concepts that actually are not a translation of western concept like good faith.
This essay explains the “crisis” of online contracts, the legal fiction that consumers have assented to online contract terms when we have ample empirical evidence that they didn’t really mean to assent. The essay describes the crisis, and some possible solutions, using 10 Internet memes. The essay concludes that the crisis of online contracts may be the least-worst option among the alternatives.
On Tuesday, [a judge] issued this opinion in Denson v. Donald J. Trump for President, Inc. (the Campaign) which challenged the enforceability of the non-disclosure agreements (NDAs) that campaign workers were required to enter into. [The judge] declared the NDA non-enforceable as to her…
People who work for the Trump Campaign were required to promise not to disclose any "confidential information," broadly defined to include anything Mr. Trump wanted to be remain private or confidential, relating to "Mr. Trump, any Family Member, any Trump Company or any Family Member Company." All these terms were defined to be as inclusive as possible. The NDA provides for a range of remedies for violations and, of course, includes a provision mandating arbitration in the state of New York.
On the merits, [the judge] applied the Ashland standard and inquired into whether the NDA's non-disclosure provisions were “reasonable in time and area, necessary to protect the employer’s legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee." He concluded that it failed each prong of the Ashland test. The scope of the NDA was, as a practical matter, unlimited. While the Campaign has legitimate interests in protecting itself against certain disclosures, the NDA effectively prohibits campaign workers from discussing anything relating to the campaign and leaves them no way of knowing what actions would count as a violation.
Equity as Meta-Law [heavily theoretically oriented but rich in historical and systematic information on equity]
With the merger of law and equity almost complete, the idea of equity as a special part of our legal system or a mode of decisionmaking has fallen out of view. This Article argues that much of equity is best understood as performing a vital function. Equity and related parts of the law solve complex and uncertain problems—including interdependent behavior and misuses of legal rules by opportunists—and do so in a characteristic fashion: as meta-law. From unconscionability to injunctions, equity makes reference to, supplements, and sometimes overrides the result that law would otherwise produce, while primary law operates without reference to equity. Equity operates on a domain of fraud, accident, and mistake, and employs triggers such as bad faith and disproportionate hardship to toggle into a “meta”-mode of more open-ended scrutiny. This Article provides a theoretical account of how a hybrid law, consisting of relatively simple and general primary-level law and relatively intense and directed second-order equity can regulate behavior better through these specialized modes than would homogeneous law alone. The Article tests this theory on the ostensibly most unpromising aspects of equity, the traditional equitable maxims, as well as equitable fraud, defenses, and remedies. Equity as meta-law sheds light on how the fusion of law and equity spawned multifactor balancing tests, polarized interpretation, and led to the confusion of equity with standards, discretion, purely public law, and “mere” remedies. Viewing equity as meta-law also improves on the tradeoff between formalism and contextualism and ultimately promotes the rule of law.
“Black Swan” is a term coined by Lebanese author and former NYU professor Nassim Taleb to describe an event with extreme impact that defies regular expectations, but that is, in hindsight, rationalised as predictable rather than an outlier. [….] COVID-19 is perhaps better viewed through legal lenses as a force majeure event. Notwithstanding the lack of definition of force majeure under most common law jurisdictions, COVID-19 could fall within standard force majeure provisions in commercial contracts.
[F]irms often terminate their relationship with consumers without explanation, which is socially undesirable. First, if firms fail to explain to consumers the cause for termination, a hasty, unfounded, and erroneous termination is more likely to occur. Second, erroneous contract termination, fueled by lack of explanation, may generate significant costs [sunk investments, emotional costs, and switching costs] to consumers. Third, termination without explanation may be based on discriminatory, yet non-transparent factors. [….] Given these risks and costs, this Article […] examines the contractual termination mechanisms of 500 sign-in-wrap contracts of the most popular websites in the United States. The results of our study show, inter alia, that the vast majority of these contracts are non-transparent termination without explanation contracts. We therefore propose to impose a duty to explain on firms. We also present a transparency index that captures key aggravating factors and can help tackle the issue from a holistic approach.
MAE provisions have been a feature in loan agreements for many years. […] MAE clauses in loan agreements arise in various places, but the key ones are: [1] MAE as a qualifier – many representations and undertakings provided by the borrower will be qualified by MAE, meaning that they are only breached if the MAE threshold is attained; [2] MAE as an Event of Default – almost all loan agreements (in addition to including MAE as a threshold against which to test the impact of particular representations and covenants) will also include a specific standalone MAE Event of Default which does not attach to a particular action, but applies on a generic basis to the business of the borrower. Where MAE is triggered, the lenders can usually accelerate and start enforcement action if they choose to.
Yet, although the mortgage transaction has changed, mortgage law has not. Property law rules that once balanced the rights of mortgagors and mortgagees now completely fail to furnish aggrieved mortgagors with meaningful relief when faced with wrongs that stem from the complexities of the securitization of mortgage loans and the acts of intermediaries. The result is that consumers suffer wrongs at the hands of mortgage creditors and their contractors but have no remedies to right them. This is particularly true in light of the economic fallout from the COVID-19 pandemic and the threat of a coming wave of foreclosures that, if the 2008 financial crisis is any indication, promise to leave households vulnerable and completely at the mercy of the mortgage finance machine. This Article shows why an overhaul to mortgage law’s most basic doctrines is long overdue.
This paper will present a basic overview of the doctrine of frustration in New Zealand. It will explore New Zealand and English case law to show how the courts may react to a claim that a contract has been frustrated and what factors are relevant for determining if the contract has indeed been frustrated. The paper will show that while there a number of factors that will be considered by the courts, the element of risk-allocation within the contract itself is of especial importance and is the most useful the starting point for any analysis.
Freedom of Contract and Paternalistic regulatory interventions
Freedom of contract is a fundamental principle of modern contract law. However, never as today has freedom of contract been more objectified. Consumption has become a defining feature of our lives and very impactful in the environment. This short paper discusses the legitimacy of paternalistic regulatory interventions and the efficacy of nudges in promoting sustainable consumption practices.
The doctrine of public policy is a channel through which public law enters private law and bars it from actualizing its normal legal consequences. Although public policy is an old doctrine in common law and other legal systems, it is not clear which aspects of public law can enter the arena of contract (private) law and make it unenforceable. The phrase public policy is used and pled in various national and international tribunals on a daily basis. Despite its importance, the literature surrounding the doctrine of public policy is extremely limited. This Article first briefly traces the genealogy and paradigm shifts of the doctrine of public policy in the history of common law. Subsequently, it scrutinizes the ramifications emanating from developments of legal theory as well as the emergence of the welfare state in transformation of the notion of public policy. It then explains the doctrine of public policy from the law and economics perspective and shows its shortcomings. In the last section, the Article argues that the concept of public policy is a not a single concept but consists of three distinct strands—public interest, public morality, public security—each with a separate pedigree and logic requiring a separate method for its analysis.
This Article offers a unified theory that explains why courts, despite the compelling argument for deterrence, should not apply the no-effect rule of illegal contracts uniformly and why they should vary the type of relief according to the factual setting. It posits that a graduated relief structure will maximize efficient deterrence. An efficient deterrence scheme will preserve limited personal, judicial and societal resources without burdening legitimate transactions.
