CONTRACT LAW
QUARTER 2
L. Spruit (16030575)
THE HAGUE UNIVERSITY OF APPLIED SCIENCES
,Lieke Spruit (16030575) Contract Law Study Guide
Table of Contents
LECTURE 1 .................................................................................................................................................. 2
LECTURE 2 .................................................................................................................................................. 7
LECTURE 3 ................................................................................................................................................ 12
LECTURE 4 ................................................................................................................................................ 18
LECTURE 5 ................................................................................................................................................ 23
LECTURE 6 ................................................................................................................................................ 30
LECTURE 7 ................................................................................................................................................ 35
,Lieke Spruit (16030575) Contract Law Study Guide
Lecture 1
A contract is a promise the Courts will enforce; a legally binding agreement.
Contract Law (contractual obligations) – some definitions
B.W Art 6:213 – A contract is … a multilateral juridical act whereby one or more parties assume an
obligation towards one or more other parties.
Restatement 2nd Contracts – s.1: A contract is a promise or a set of promises for the breach of which the
law gives a remedy or the performance of which the law in some way recognises a duty.
Treitel – The Law of Contract 12th ed: A contract is an agreement giving rise to obligations which are
enforced or recognised by law (English law has NO formal definition)
Contract law in a Global World
Classifications of Contracts
By Type of Parties By Reason for Performance By type of performance
• B2B • Each party assumes Employment, Banking,
• B2C an obligation to do Carriage by Air, Carriage by
• C2C something = Bilateral Sea, Competition Law,
• A party is not Construction Contracts,
promised anything in Intellectual Property,
return for Insurance, International Sale
performance = of Goods, Marriage, etc. …
Unilateral
,Lieke Spruit (16030575) Contract Law Study Guide
Regulated contracts
• Contracts that are so frequently concluded that the law provides answers to questions
regarding to such contracts.
• Parties involved may need some protection. The law responds by providing mandatory
provisions that may not be contracted out of.
• Regulated by specific legislation (not dealing with this)
Sources of contract law
Multi-level Contract Rules
Rules from the Agreement made by Parties
Rules from official sources - mandatory / default rules
•Rules originating from different geographical levels - National, European, Supranational
Rules from informal sources
•Rules from different actors - parties, legislators, courts, other actors
Primary sources
• Legislation – civil codes / acts / statutes / regulations (national law)
• Ratified international instruments – e.g. CISG
• Case law – precedent (common law countries)
Secondary sources
• Restatements / principles (soft law)
o Principles of European Contract Law
o UNIDROIT Principles of International Commercial Contracts
o European Commission Draft Common Frame of Reference
• Commercial custom
• Academic writing
Supranational law – examples
European Law International Law
EU Directives • The CISG
• Defective Products • United Nations on Contracts for the
• Self Employed Commercial Agents International Sale of Goods (Vienna,
• Package Travel 1980) (CISG)
• Unfair Terms Consumer Contracts • Work of United Nations Commission on
• Sale Consumer Goods International Trade Law
• Electronic Commerce • Applies whenever contracts for the sale
• Distance Marketing of gods are concluded between parties
• Credit Arrangements for Consumers with a place of business in Contracting
• Timeshare States
• Consumer Rights
, Lieke Spruit (16030575) Contract Law Study Guide
Fundamental principles
Freedom of contract
• This principle gives legal application to allowing each individual to make the choice they desire.
o The law presumes that a party will not choose contract terms that are unfavourable to
it.
• On whatever terms, whenever desired, with whomever
• Assumes equality of bargaining power.
• Formation – consensus ad idem (meeting of the minds)
• Vitiating factors – show there was no consensus ad idem
• Discharge – party has freedom to accept partial performance
• Breach – party has freedom to choose between rejecting the contract or continuing with the
contract
Binding force
• The contract is binding upon the parties. Each party has to perform the obligations it took upon
itself and if it fails to do so, the court can intervene at the request of the other party.
o The law can react in different ways to ensure the binding force of the contracts:
▪ It can force the defaulting party to perform the contract (normal remedy in civil
law)
▪ It can force the debtor to pay damages (normal remedy in common law)
• Unless unfair or prohibited
Principle of informality
• Contracts do not require any particular form. If parties are legally bound to the contract because
they intended to be bound, their intention is sufficient.
• If consensus ad idem is what creates the binding effect then nothing more is needed. Is this
always the case?
Contractual fairness – good faith
• Procedural fairness and substantive fairness
o Procedural – unequal position between parties needs to be remedied.
o Substantive – unequal position of the content needs to be remedied.
• In civil law systems plays important role in formation of contracts and in the performance of
contracts
• Embraced in US Restatement S.205
• Gives importance to negotiations and other pre-contractual sources of information regarding
contents of contract
• Emphasizes pre-contractual duty of good faith to negotiate fairly and honestly
• Good faith in common law
o Interfoto Picture Library Ltd. v. Stiletto Visual Programmes Ltd. (Bingham J.) 1 All E.R.
348 at 352 (C.A.)
▪ “In many civil law systems, and perhaps in most legal systems outside the
common law world, the law of obligations recognises and enforces an
QUARTER 2
L. Spruit (16030575)
THE HAGUE UNIVERSITY OF APPLIED SCIENCES
,Lieke Spruit (16030575) Contract Law Study Guide
Table of Contents
LECTURE 1 .................................................................................................................................................. 2
LECTURE 2 .................................................................................................................................................. 7
LECTURE 3 ................................................................................................................................................ 12
LECTURE 4 ................................................................................................................................................ 18
LECTURE 5 ................................................................................................................................................ 23
LECTURE 6 ................................................................................................................................................ 30
LECTURE 7 ................................................................................................................................................ 35
,Lieke Spruit (16030575) Contract Law Study Guide
Lecture 1
A contract is a promise the Courts will enforce; a legally binding agreement.
Contract Law (contractual obligations) – some definitions
B.W Art 6:213 – A contract is … a multilateral juridical act whereby one or more parties assume an
obligation towards one or more other parties.
Restatement 2nd Contracts – s.1: A contract is a promise or a set of promises for the breach of which the
law gives a remedy or the performance of which the law in some way recognises a duty.
Treitel – The Law of Contract 12th ed: A contract is an agreement giving rise to obligations which are
enforced or recognised by law (English law has NO formal definition)
Contract law in a Global World
Classifications of Contracts
By Type of Parties By Reason for Performance By type of performance
• B2B • Each party assumes Employment, Banking,
• B2C an obligation to do Carriage by Air, Carriage by
• C2C something = Bilateral Sea, Competition Law,
• A party is not Construction Contracts,
promised anything in Intellectual Property,
return for Insurance, International Sale
performance = of Goods, Marriage, etc. …
Unilateral
,Lieke Spruit (16030575) Contract Law Study Guide
Regulated contracts
• Contracts that are so frequently concluded that the law provides answers to questions
regarding to such contracts.
• Parties involved may need some protection. The law responds by providing mandatory
provisions that may not be contracted out of.
• Regulated by specific legislation (not dealing with this)
Sources of contract law
Multi-level Contract Rules
Rules from the Agreement made by Parties
Rules from official sources - mandatory / default rules
•Rules originating from different geographical levels - National, European, Supranational
Rules from informal sources
•Rules from different actors - parties, legislators, courts, other actors
Primary sources
• Legislation – civil codes / acts / statutes / regulations (national law)
• Ratified international instruments – e.g. CISG
• Case law – precedent (common law countries)
Secondary sources
• Restatements / principles (soft law)
o Principles of European Contract Law
o UNIDROIT Principles of International Commercial Contracts
o European Commission Draft Common Frame of Reference
• Commercial custom
• Academic writing
Supranational law – examples
European Law International Law
EU Directives • The CISG
• Defective Products • United Nations on Contracts for the
• Self Employed Commercial Agents International Sale of Goods (Vienna,
• Package Travel 1980) (CISG)
• Unfair Terms Consumer Contracts • Work of United Nations Commission on
• Sale Consumer Goods International Trade Law
• Electronic Commerce • Applies whenever contracts for the sale
• Distance Marketing of gods are concluded between parties
• Credit Arrangements for Consumers with a place of business in Contracting
• Timeshare States
• Consumer Rights
, Lieke Spruit (16030575) Contract Law Study Guide
Fundamental principles
Freedom of contract
• This principle gives legal application to allowing each individual to make the choice they desire.
o The law presumes that a party will not choose contract terms that are unfavourable to
it.
• On whatever terms, whenever desired, with whomever
• Assumes equality of bargaining power.
• Formation – consensus ad idem (meeting of the minds)
• Vitiating factors – show there was no consensus ad idem
• Discharge – party has freedom to accept partial performance
• Breach – party has freedom to choose between rejecting the contract or continuing with the
contract
Binding force
• The contract is binding upon the parties. Each party has to perform the obligations it took upon
itself and if it fails to do so, the court can intervene at the request of the other party.
o The law can react in different ways to ensure the binding force of the contracts:
▪ It can force the defaulting party to perform the contract (normal remedy in civil
law)
▪ It can force the debtor to pay damages (normal remedy in common law)
• Unless unfair or prohibited
Principle of informality
• Contracts do not require any particular form. If parties are legally bound to the contract because
they intended to be bound, their intention is sufficient.
• If consensus ad idem is what creates the binding effect then nothing more is needed. Is this
always the case?
Contractual fairness – good faith
• Procedural fairness and substantive fairness
o Procedural – unequal position between parties needs to be remedied.
o Substantive – unequal position of the content needs to be remedied.
• In civil law systems plays important role in formation of contracts and in the performance of
contracts
• Embraced in US Restatement S.205
• Gives importance to negotiations and other pre-contractual sources of information regarding
contents of contract
• Emphasizes pre-contractual duty of good faith to negotiate fairly and honestly
• Good faith in common law
o Interfoto Picture Library Ltd. v. Stiletto Visual Programmes Ltd. (Bingham J.) 1 All E.R.
348 at 352 (C.A.)
▪ “In many civil law systems, and perhaps in most legal systems outside the
common law world, the law of obligations recognises and enforces an
