Pub Date : 2018-04-13DOI: 10.4337/9781788111300.00009
V. Mak
This chapter aims to give an overview of the contractual issues that have arisen in relation to the use of data. Since the use of data has far-reaching consequences for consumer markets, the chapter focuses on issues that have arisen in those markets and the regulatory responses that have emerged, or are emerging, in consumer law. It considers in particular what effects the use of data has on the autonomy of contracting parties and on the balance of contractual fairness, and examines three more specific issues for consumer contract law, namely transparency, payment with data, and the question whether the ‘consumer’ concept needs adjusting. The focus of this chapter is mainly on the EU, with occasional references to the US, seeing that Europe has developed a fairly coherent regime of harmonised consumer contract law that in many aspects already applies to data-related contracts.
{"title":"Contract and Consumer Law","authors":"V. Mak","doi":"10.4337/9781788111300.00009","DOIUrl":"https://doi.org/10.4337/9781788111300.00009","url":null,"abstract":"This chapter aims to give an overview of the contractual issues that have arisen in relation to the use of data. Since the use of data has far-reaching consequences for consumer markets, the chapter focuses on issues that have arisen in those markets and the regulatory responses that have emerged, or are emerging, in consumer law. It considers in particular what effects the use of data has on the autonomy of contracting parties and on the balance of contractual fairness, and examines three more specific issues for consumer contract law, namely transparency, payment with data, and the question whether the ‘consumer’ concept needs adjusting. The focus of this chapter is mainly on the EU, with occasional references to the US, seeing that Europe has developed a fairly coherent regime of harmonised consumer contract law that in many aspects already applies to data-related contracts.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"54 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116779727","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Contract and Commercial Law Act 2017 redrafts and consolidates 11 Acts governing contract and commercial law in New Zealand. It represents a significant change to the statute book, having repealed and replaced such important legislation as the Sale of Goods Act 1908, Contracts (Privity) Act 1982, and Electronic Transactions Act 2002. The Act is the first prepared using the “revision powers” created by the Legislation Act 2012, and aims therefore to improve the accessibility of the law. This essay assesses whether the Act achieves this aim. It is noted that the modernised drafting of the Act is likely to improve the clarity of the legislation for some users. However, the paper primarily addresses the decision to consolidate the 11 statutes into a single Act structure. Particular focus is placed on the range of significant and relevant legislation that was not included in the revision, especially the Fair Trading Act 1986 and Consumer Guarantees Act 1993. It is ultimately concluded that the effort to increase the accessibility of New Zealand’s contract and commercial legislation through a revision Act in this wide-ranging area of law created more problems than it solved.
{"title":"Making the Law More Accessible? The Contract and Commercial Law Act 2017","authors":"Maddy Nash","doi":"10.2139/ssrn.3156096","DOIUrl":"https://doi.org/10.2139/ssrn.3156096","url":null,"abstract":"The Contract and Commercial Law Act 2017 redrafts and consolidates 11 Acts governing contract and commercial law in New Zealand. It represents a significant change to the statute book, having repealed and replaced such important legislation as the Sale of Goods Act 1908, Contracts (Privity) Act 1982, and Electronic Transactions Act 2002. The Act is the first prepared using the “revision powers” created by the Legislation Act 2012, and aims therefore to improve the accessibility of the law. This essay assesses whether the Act achieves this aim. It is noted that the modernised drafting of the Act is likely to improve the clarity of the legislation for some users. However, the paper primarily addresses the decision to consolidate the 11 statutes into a single Act structure. Particular focus is placed on the range of significant and relevant legislation that was not included in the revision, especially the Fair Trading Act 1986 and Consumer Guarantees Act 1993. It is ultimately concluded that the effort to increase the accessibility of New Zealand’s contract and commercial legislation through a revision Act in this wide-ranging area of law created more problems than it solved.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124879468","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Intercontinental Lagos Hotel has been rechristened “Lagos Continental Hotel”. The renaming of the 358-room five-star hotel followed the termination of a six-year Hotel Management Agreement (“HMA”) between the hotel owners, Milan Industries Ltd (Milan) and multinational hotels company, Intercontinental Hotels Group (“IHG”). On 3 January 2018 IHG issued a notice of termination of the HMA with effect from 18 January 2018. IHG alleged non-cooperation by Milan’s receiver/manager in ensuring that the hotel avoided a material breach of the HMA and maintained its operating licence. IHG further alleged Milan owed IHG NGN995,223,818 in fees. The financial woes of Milan came into limelight in May 2017 when a Federal High Court ordered the takeover of the hotel by a receiver/manager appointed by Skye Bank Plc. Court processes showed that Skye Bank granted Milan loan facilities of US$29.8million and NGN3.8billion and an overdraft facility of NGN500million. The facilities were to finance the construction of the hotel. The loans were secured by a deed of legal mortgage which covered the hotel. Milan reportedly defaulted resulting in the appointment of the receiver/manager.
{"title":"Intercontinental Hotel Group's Exit from Nigeria: Analysis of a Receiver/Manager's Discretion to Repudiate Pre-Receivership Contracts","authors":"Dr Kubi Udofia","doi":"10.2139/ssrn.3135804","DOIUrl":"https://doi.org/10.2139/ssrn.3135804","url":null,"abstract":"Intercontinental Lagos Hotel has been rechristened “Lagos Continental Hotel”. The renaming of the 358-room five-star hotel followed the termination of a six-year Hotel Management Agreement (“HMA”) between the hotel owners, Milan Industries Ltd (Milan) and multinational hotels company, Intercontinental Hotels Group (“IHG”). On 3 January 2018 IHG issued a notice of termination of the HMA with effect from 18 January 2018. IHG alleged non-cooperation by Milan’s receiver/manager in ensuring that the hotel avoided a material breach of the HMA and maintained its operating licence. IHG further alleged Milan owed IHG NGN995,223,818 in fees. The financial woes of Milan came into limelight in May 2017 when a Federal High Court ordered the takeover of the hotel by a receiver/manager appointed by Skye Bank Plc. Court processes showed that Skye Bank granted Milan loan facilities of US$29.8million and NGN3.8billion and an overdraft facility of NGN500million. The facilities were to finance the construction of the hotel. The loans were secured by a deed of legal mortgage which covered the hotel. Milan reportedly defaulted resulting in the appointment of the receiver/manager.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129657049","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Restrepo-Amariles, Eva Mouial Bassilana, M. Winkler
This article examines the concept of “significant imbalance” (SI) under French law and its impact on international business transactions. “Significant imbalance” is a legal standard meant to assess whether a contractual clause is unfair (abusive). Although initially restricted to consumer law, it has been extended to general contract law with the implementation of a reform entered into force on 1st October 2016. Previously, the Commercial Court of Paris in the ruling Ministry of Economy et al. v. Expedia, Inc. et al. (2015) had qualified SI as an “overriding mandatory provision” (loi de police) under EU Regulation No. 593/2008 on the applicable law to contractual obligations (Rome I). As a consequence, SI became operative in respect of international contracts despite an express choice of a foreign governing law made by the parties to the transaction. This article argues that, as a result of Expedia and the 2016 reform, French courts can interfere with international business transactions by striking down contractual terms that they deem unfair according to the SI standard. The analysis focuses on two key issues. On the one hand, notwithstanding recent judicial precedents, SI still fails to provide a reliable test for predicting which clauses or contracts are at risk of being deemed unfair. On the other hand, the legal arsenal supporting French legislator’s disapproval of SI allocates great power to French courts and the French government to pursue tort lawsuits against foreign companies allegedly oppressing their commercial partners with SI clauses. Empirical evidence shows that these actions are highly successful compared to those commenced by private actors. The article concludes that all these aspects, together with SI’s turbulent case-law throughout the years, will sprout uncertainty in international business transactions and may eventually disparage France in the global competition in such a field.
本文考察了法国法律下的“重大不平衡”概念及其对国际商业交易的影响。“重大不平衡”是一个法律标准，旨在评估合同条款是否不公平(滥用)。虽然最初仅限于消费者法，但随着2016年10月1日生效的一项改革的实施，它已扩展到一般合同法。此前，在2015年的经济部等人诉Expedia等人案中，巴黎商事法庭根据欧盟关于合同义务适用法律的第593/2008号法规(罗马法规1)，将SI认定为“凌驾性强制性条款”(loi de police)。因此，尽管交易各方明确选择了外国管辖法律，但SI在国际合同中仍然有效。本文认为，由于Expedia和2016年的改革，法国法院可以通过推翻他们认为根据SI标准不公平的合同条款来干预国际商业交易。分析集中在两个关键问题上。一方面，尽管最近有司法先例，SI仍然无法提供可靠的测试来预测哪些条款或合同有被认为不公平的风险。另一方面，支持法国立法者反对SI的法律军火库将巨大的权力分配给法国法院和法国政府，以对据称用SI条款压迫其商业伙伴的外国公司提起侵权诉讼。经验证据表明，与私人行为者发起的行动相比，这些行动非常成功。文章的结论是，所有这些方面，加上SI多年来动荡的判例法，将在国际商业交易中产生不确定性，并可能最终在这一领域的全球竞争中贬低法国。
{"title":"The Impact of the French Doctrine of Significant Imbalance on International Business Transactions","authors":"D. Restrepo-Amariles, Eva Mouial Bassilana, M. Winkler","doi":"10.2139/ssrn.3186447","DOIUrl":"https://doi.org/10.2139/ssrn.3186447","url":null,"abstract":"This article examines the concept of “significant imbalance” (SI) under French law and its impact on international business transactions. “Significant imbalance” is a legal standard meant to assess whether a contractual clause is unfair (abusive). Although initially restricted to consumer law, it has been extended to general contract law with the implementation of a reform entered into force on 1st October 2016. Previously, the Commercial Court of Paris in the ruling Ministry of Economy et al. v. Expedia, Inc. et al. (2015) had qualified SI as an “overriding mandatory provision” (loi de police) under EU Regulation No. 593/2008 on the applicable law to contractual obligations (Rome I). As a consequence, SI became operative in respect of international contracts despite an express choice of a foreign governing law made by the parties to the transaction. This article argues that, as a result of Expedia and the 2016 reform, French courts can interfere with international business transactions by striking down contractual terms that they deem unfair according to the SI standard. The analysis focuses on two key issues. On the one hand, notwithstanding recent judicial precedents, SI still fails to provide a reliable test for predicting which clauses or contracts are at risk of being deemed unfair. On the other hand, the legal arsenal supporting French legislator’s disapproval of SI allocates great power to French courts and the French government to pursue tort lawsuits against foreign companies allegedly oppressing their commercial partners with SI clauses. Empirical evidence shows that these actions are highly successful compared to those commenced by private actors. The article concludes that all these aspects, together with SI’s turbulent case-law throughout the years, will sprout uncertainty in international business transactions and may eventually disparage France in the global competition in such a field.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125897612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-10-24DOI: 10.16980/JITC.13.5.201710.51
Jung Sun Lee, Eunsook Huh
The ICC (International Chamber of Commerce) has attempted to replace the current FOB (Free On Board) terms with FCA (Free Carrier) since Incoterms 1990. As the delivery of goods in se almoaborne container cargos is completed inland and not on board the vessel, problems can occur regarding the point at which the risk and delivery pass from a seller to a buyer. Therefore, the Incoterms 2010 recommend FCA instead of FOB for container cargos because the containers are delivered regularly in one place of inland or the container terminal in a port. However, all trade parties use FOB instead of FCA in practice. Hence, it is a pertinent time to analyze FCA, which is the appropriate term to replace FOB, as the latter is currently popular in global export transactions even though it is not a right term. Further, the need exists to create some countermeasures to reduce disputes and misconduct, as there could be multiple delivery locations in the export country under FCA. Therefore, this study suggests standard FCA types by considering delivery points such as FCA Factory, FCA Station, FCA ICD (Inland Container Depot), and FCA CT (Container Terminal) in order to make trade parties use FCA terms easier.
{"title":"A Study on Standard Types of Free Carrier (FCA) on Incoterms for Seaborne Container Goods Transportation: Korean Trade Companies’ Perspective","authors":"Jung Sun Lee, Eunsook Huh","doi":"10.16980/JITC.13.5.201710.51","DOIUrl":"https://doi.org/10.16980/JITC.13.5.201710.51","url":null,"abstract":"The ICC (International Chamber of Commerce) has attempted to replace the current FOB (Free On Board) terms with FCA (Free Carrier) since Incoterms 1990. As the delivery of goods in se almoaborne container cargos is completed inland and not on board the vessel, problems can occur regarding the point at which the risk and delivery pass from a seller to a buyer. Therefore, the Incoterms 2010 recommend FCA instead of FOB for container cargos because the containers are delivered regularly in one place of inland or the container terminal in a port. However, all trade parties use FOB instead of FCA in practice. Hence, it is a pertinent time to analyze FCA, which is the appropriate term to replace FOB, as the latter is currently popular in global export transactions even though it is not a right term. Further, the need exists to create some countermeasures to reduce disputes and misconduct, as there could be multiple delivery locations in the export country under FCA. Therefore, this study suggests standard FCA types by considering delivery points such as FCA Factory, FCA Station, FCA ICD (Inland Container Depot), and FCA CT (Container Terminal) in order to make trade parties use FCA terms easier.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"266 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116420896","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Portuguese Abstract: Este trabalho tem como tema a relação entre franqueador e franqueado. Nosso objetivo é explorar as cláusulas de não concorrência para revelar como estão sendo utilizadas e aplicadas pelos principais franqueadores no Brasil; identificar seus limites. Em que pese a maturidade do sistema, estamos há mais de 20 anos convivendo com o marco legal do franchising. Do ponto de vista jurídico e de qualidade técnica dos contratos de franquia, ainda precisamos evoluir. O estudo e o desenvolvimento das cláusulas de não concorrência podem contribuir para o aprimoramento do sistema de franchising. Nesse universo, os franqueadores são os protagonistas dos negócios e desenvolvedores dos contratos e das cláusulas de não concorrência que, às vezes, são abusivas, genéricas e sujeitas à relativização pelo julgador, gerando insegurança nas relações comerciais entre as partes. A função da cláusula não concorrencial é proteger o franqueador, responsável pela criação e desenvolvimento do negócio, o know-how, as técnicas de produção e modelos de gestão que devem ser resguardados, sobretudo de interessados em tirar proveito e obter tal expertise, após breve relação com o franqueador. A relação franqueador/franqueado é rica e propícia à facilitação ao empresário franqueado – às vezes, inexperiente naquela atividade – do acesso ao know-how da atividade desenvolvida e dos meios de organização comercial específicos do negócio, objeto da franquia. Vale ressaltar que a transferência do know-how é elemento imaterial, essencial ao desenvolvimento da atividade da franquia empresarial. Neste trabalho, nosso questionamento se volta para a possibilidade do impedimento da utilização do know-how e da atividade desenvolvida pelo ex-franqueado ao término da relação contratual em contextos complexos e específicos. A análise dos dez contratos de franquia que representam cinquenta por cento dos atuais segmentos do setor é reveladora. Todas as cláusulas de não concorrência possuem preocupantes deficiências técnicas. Constatamos a ausência de requisitos essenciais, estratégicos e de eficiência, o que pode significar a relativização ou nulidade das cláusulas de não concorrência e, consequentemente, insegurança jurídica. Como soluções práticas apresentamos a proposta de modulação das cláusulas de não concorrência por meio dos requisitos essenciais, estratégicos e de eficiência, criando duas classes distintas como forma de proporcionar segurança jurídica aos contratos de franquia. Propomos a revisão do marco legal do franchising. English Abstract: The topic of this paper is the relationship between the franchiser and the franchisee. Our goal is to explore the non-compete clauses to unveil how they are being adopted and applied by main franchisors in Brazil; finding its thresholds. Despite the system's maturity, we are living with the legal franchising framework for more than 20 years. From a legal point of view and technical quality of the franchise agreements,
{"title":"Cláusula De Não Concorrência Nos Contratos De Franquia (Non-Compete Clause in Franchise Contracts)","authors":"A. Santos","doi":"10.2139/ssrn.3025844","DOIUrl":"https://doi.org/10.2139/ssrn.3025844","url":null,"abstract":"<b>Portuguese Abstract:</b> Este trabalho tem como tema a relação entre franqueador e franqueado. Nosso objetivo é explorar as cláusulas de não concorrência para revelar como estão sendo utilizadas e aplicadas pelos principais franqueadores no Brasil; identificar seus limites. Em que pese a maturidade do sistema, estamos há mais de 20 anos convivendo com o marco legal do franchising. Do ponto de vista jurídico e de qualidade técnica dos contratos de franquia, ainda precisamos evoluir. O estudo e o desenvolvimento das cláusulas de não concorrência podem contribuir para o aprimoramento do sistema de franchising. Nesse universo, os franqueadores são os protagonistas dos negócios e desenvolvedores dos contratos e das cláusulas de não concorrência que, às vezes, são abusivas, genéricas e sujeitas à relativização pelo julgador, gerando insegurança nas relações comerciais entre as partes. A função da cláusula não concorrencial é proteger o franqueador, responsável pela criação e desenvolvimento do negócio, o know-how, as técnicas de produção e modelos de gestão que devem ser resguardados, sobretudo de interessados em tirar proveito e obter tal expertise, após breve relação com o franqueador. A relação franqueador/franqueado é rica e propícia à facilitação ao empresário franqueado – às vezes, inexperiente naquela atividade – do acesso ao know-how da atividade desenvolvida e dos meios de organização comercial específicos do negócio, objeto da franquia. Vale ressaltar que a transferência do know-how é elemento imaterial, essencial ao desenvolvimento da atividade da franquia empresarial. Neste trabalho, nosso questionamento se volta para a possibilidade do impedimento da utilização do know-how e da atividade desenvolvida pelo ex-franqueado ao término da relação contratual em contextos complexos e específicos. A análise dos dez contratos de franquia que representam cinquenta por cento dos atuais segmentos do setor é reveladora. Todas as cláusulas de não concorrência possuem preocupantes deficiências técnicas. Constatamos a ausência de requisitos essenciais, estratégicos e de eficiência, o que pode significar a relativização ou nulidade das cláusulas de não concorrência e, consequentemente, insegurança jurídica. Como soluções práticas apresentamos a proposta de modulação das cláusulas de não concorrência por meio dos requisitos essenciais, estratégicos e de eficiência, criando duas classes distintas como forma de proporcionar segurança jurídica aos contratos de franquia. Propomos a revisão do marco legal do franchising. <b>English Abstract:</b> The topic of this paper is the relationship between the franchiser and the franchisee. Our goal is to explore the non-compete clauses to unveil how they are being adopted and applied by main franchisors in Brazil; finding its thresholds. Despite the system's maturity, we are living with the legal franchising framework for more than 20 years. From a legal point of view and technical quality of the franchise agreements, ","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123131847","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the Restatement (Second) of Contract’s most significant contributions to the area of contract law is its formulation of the implied duty of good faith and fair dealing. Under the Contract Restatement’s formulation of the implied duty, which is widely used by courts, parties must, as a normative matter, affirmatively perform a contract in a way that is faithful to the parties’ common purpose and in line with their respective justified expectations. That means each party must act honestly, reasonably, and fairly, though this normative standard of conduct is described quite capaciously in the Contract Restatement. The Contract Restatement also broadly describes how a contracting party acts in bad faith, thereby breaching the implied duty. It also includes many examples of bad faith conduct from cases. With this guidance, contracting parties can determine up front how to perform their contractual obligations in line with the implied duty’s normative standard of conduct and standard of liability. The American Law Institute’s most recent Restatement—the Restatement of Employment Law—also addresses the implied duty of good faith and fair dealing, though only with respect to employment contracts. However, it does so in a way that is at odds with the Contract Restatement. Importantly, the Employment Law Restatement does not describe any normative standard of conduct for employers and employees. This failure suggests there is no normative expectation that parties to an employment contract act honestly, reasonably, and fairly in performing their contractual obligations. Of course, given the power imbalance present in most employment relationships in favor of the employer, the absence of such a normative standard could harm employees. The Employment Law Restatement also presents the standard of liability for the implied duty in a way that suggests it only applies to limited contractual employment terms, and only captures a limited range of bad faith conduct. Such a narrowing of the standard of liability could also harm employees, who might not have a claim, or might not know they have a claim, for breach of the implied duty where they are treated dishonestly, unfairly, or unreasonably. To cure these defects, this article proposes changes to the Employment Law Restatement’s formulation of the implied duty to make it more closely track the approach taken in the Contract Restatement.
{"title":"Jettisoning the Normative Value of the Implied Duty of Good Faith","authors":"Nadelle Grossman","doi":"10.2139/ssrn.3166196","DOIUrl":"https://doi.org/10.2139/ssrn.3166196","url":null,"abstract":"One of the Restatement (Second) of Contract’s most significant contributions to the area of contract law is its formulation of the implied duty of good faith and fair dealing. Under the Contract Restatement’s formulation of the implied duty, which is widely used by courts, parties must, as a normative matter, affirmatively perform a contract in a way that is faithful to the parties’ common purpose and in line with their respective justified expectations. That means each party must act honestly, reasonably, and fairly, though this normative standard of conduct is described quite capaciously in the Contract Restatement. The Contract Restatement also broadly describes how a contracting party acts in bad faith, thereby breaching the implied duty. It also includes many examples of bad faith conduct from cases. With this guidance, contracting parties can determine up front how to perform their contractual obligations in line with the implied duty’s normative standard of conduct and standard of liability. The American Law Institute’s most recent Restatement—the Restatement of Employment Law—also addresses the implied duty of good faith and fair dealing, though only with respect to employment contracts. However, it does so in a way that is at odds with the Contract Restatement. Importantly, the Employment Law Restatement does not describe any normative standard of conduct for employers and employees. This failure suggests there is no normative expectation that parties to an employment contract act honestly, reasonably, and fairly in performing their contractual obligations. Of course, given the power imbalance present in most employment relationships in favor of the employer, the absence of such a normative standard could harm employees. The Employment Law Restatement also presents the standard of liability for the implied duty in a way that suggests it only applies to limited contractual employment terms, and only captures a limited range of bad faith conduct. Such a narrowing of the standard of liability could also harm employees, who might not have a claim, or might not know they have a claim, for breach of the implied duty where they are treated dishonestly, unfairly, or unreasonably. To cure these defects, this article proposes changes to the Employment Law Restatement’s formulation of the implied duty to make it more closely track the approach taken in the Contract Restatement.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128362800","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On the doctrinal surface, there is a deep divide between common and continental law when it comes to the origin of contractual obligations. Under continental law, in principle a unilateral promise suffices. Common law by contrast requires consideration. When it comes to deciding cases, the divide is much less pronounced. But for the most part the law does not govern people's lives through adjudication. It matches or molds their moral intuitions. We test these intuitions in the lab. If consideration is required, participants believe that all participants make more ambitious promises. But they themselves make a more cautious promise. These two effects cancel out, so that promises are not more likely to be kept with consideration.
{"title":"Committing the English and the Continental Way: An Experiment","authors":"C. Engel, André Schmelzer","doi":"10.2139/ssrn.2981720","DOIUrl":"https://doi.org/10.2139/ssrn.2981720","url":null,"abstract":"On the doctrinal surface, there is a deep divide between common and continental law when it comes to the origin of contractual obligations. Under continental law, in principle a unilateral promise suffices. Common law by contrast requires consideration. When it comes to deciding cases, the divide is much less pronounced. But for the most part the law does not govern people's lives through adjudication. It matches or molds their moral intuitions. We test these intuitions in the lab. If consideration is required, participants believe that all participants make more ambitious promises. But they themselves make a more cautious promise. These two effects cancel out, so that promises are not more likely to be kept with consideration.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130386108","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A negotiator's Best Alternative to a Negotiated Agreement ("BATNA") is a key source of negotiating power. The BATNA concept was originally developed in the United States and has been exported to other countries through negotiation books and courses. But can negotiators legally rely on BATNA strategies in civil law countries, where there is a duty to negotiate in good faith? And when does a duty to negotiate in good faith arise in a common law country like the United States? In addressing these research questions, this article concludes that the duty to negotiate in good faith under the civil law weakens the ability of negotiators to rely on their BATNA power and subjects them to the possibility of reliance damages when they violate the duty. Under the common law approach used in the United States, negotiators can exercise their BATNA power unless they decide to assume a duty to negotiate in good faith. The risk of assuming this duty increases when negotiators use preliminary agreements — such as term sheets, memoranda of understanding, letters of intent, and agreements in principle. In light of a recent Delaware Supreme Court decision allowing the plaintiff to recover expectation damages, the consequences of breaching this duty can be severe. The article includes several practical lessons for negotiators who are considering the use of preliminary agreements.
{"title":"The Duty to Negotiate in Good Faith: Are BATNA Strategies Legal?","authors":"G. Marsden, George J. Siedel","doi":"10.15779/Z386688J21","DOIUrl":"https://doi.org/10.15779/Z386688J21","url":null,"abstract":"A negotiator's Best Alternative to a Negotiated Agreement (\"BATNA\") is a key source of negotiating power. The BATNA concept was originally developed in the United States and has been exported to other countries through negotiation books and courses. But can negotiators legally rely on BATNA strategies in civil law countries, where there is a duty to negotiate in good faith? And when does a duty to negotiate in good faith arise in a common law country like the United States? \u0000In addressing these research questions, this article concludes that the duty to negotiate in good faith under the civil law weakens the ability of negotiators to rely on their BATNA power and subjects them to the possibility of reliance damages when they violate the duty. \u0000Under the common law approach used in the United States, negotiators can exercise their BATNA power unless they decide to assume a duty to negotiate in good faith. The risk of assuming this duty increases when negotiators use preliminary agreements — such as term sheets, memoranda of understanding, letters of intent, and agreements in principle. In light of a recent Delaware Supreme Court decision allowing the plaintiff to recover expectation damages, the consequences of breaching this duty can be severe. The article includes several practical lessons for negotiators who are considering the use of preliminary agreements.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"124 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125217966","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this paper is to examine whether the Italian commercial impracticability doctrine reflects the efficient breach theory or the best risk bearer model. The conclusion is that in the Italian legal system there is a discipline that could be considered as a form of “modified” efficient breach theory, according to which judges can decide to terminate contracts that are ictu oculi inefficient because the cost of performance (C) is greater than value for the promissory (V), but since judges’ decisions cannot always be right, it allows the potentially compliant party to offer a modification of the contract to the other party. In these hypotheses, if performance is efficient, that is C is less than V, parties will find an agreement to execute the contract.
{"title":"The Contractual Liability Function: Efficient Breach Theory or Best Risk Bearer Theory? The Two Theories Tested by the Commercial Impracticability Doctrine in the Italian Legal System","authors":"Enrico Baffi, D. Nardi","doi":"10.2139/ssrn.2915214","DOIUrl":"https://doi.org/10.2139/ssrn.2915214","url":null,"abstract":"The aim of this paper is to examine whether the Italian commercial impracticability doctrine reflects the efficient breach theory or the best risk bearer model. The conclusion is that in the Italian legal system there is a discipline that could be considered as a form of “modified” efficient breach theory, according to which judges can decide to terminate contracts that are ictu oculi inefficient because the cost of performance (C) is greater than value for the promissory (V), but since judges’ decisions cannot always be right, it allows the potentially compliant party to offer a modification of the contract to the other party. In these hypotheses, if performance is efficient, that is C is less than V, parties will find an agreement to execute the contract.","PeriodicalId":129207,"journal":{"name":"Law & Society: Private Law - Contracts eJournal","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133358185","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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