obligations & contract law
introduction
the course starts with a general perspective on contracts and contracting, exploring the
concept of ‘contract society’. The focus will be on the paradigm of a two-party contract in
which each party involved has obligations. The questions discussed in this paradigm are:
- Why do we need a contract?
- Why do certain promises give rise to obligations that the law will uphold?
- What does it mean to be bound to a contract, for example, in terms of the available
remedies in case of non-performance?
- What is the basis on which the law, in particular circumstances (e.g. duress, fraud),
sets aside otherwise binding obligations?
week 1, introduction to contract law
mandatory materials
Contract law, Smits.
- How to use this book (pp. xiv-xv)
- Chapter 1: Introduction (pp.1-15)
- Chapter 2: sources of contract law (pp.16-37)
- Chapter 4: The intention to create legal relations (except for the sections on ‘The test
of earnestness in problematic cases’ and ‘Considerations and causa’) (pp. 39, 63-70)
Knowledge clip - sources of Contract law
Case law
- HR 15 April 1983, ECLT:NL:PHR:1983:AG4574
- Court of appeal Den Bosch, 22 January 2008, ECLI:NL:GHSHE:2008:BC2420
- Smith v Hughes [1871] LR 6 QB 597
- Cass Com. 15 February 1961, Bull. Civ. III, 91
- Bundesgerichtshof 22 June 1956, BGHZ 21, 102
legislation
Maastricht Colelction
- Dutch law: Book 3 BW Title 2 Legal Acts (Art. 3:32-3:37 BW)
- French law: Articles 1101, 1112, 1128 Code civil
- German law: Book 1, Division 3, Title 2, Declaration of Intent (§§ 116-133 BGB)
Knowledge clip notes:
We will focus on the civil and common law divide
Sources of contract law:
● Party agreement: what the parties agreed upon when entering into the contract
(price, quality)
○ (practice) commercial parties often use standardised sets of rules
suiting their own interests → general conditions/ standard terms
● official sources:
○ National law (civil law countries e.g. Civil Code ≠ common law
countries: case developed by courts, but also statutes e.g. Sales of
Goods Act. 1979, Unfair Conyract terms Act 1977)
, ■ mandatory rules
■ default rules
○ EU law: over 25 Directives (consumer law: Directive 93/13 Unfair Terms in
Consumer Contarcts)
○ Supranational law (e.g. CISG or Vienna Convention on Contracts for the
International Sale of Goods)
● informal rules
○ Soft law: guidelines, codes of conduct, resolutions, action plans, model rules
○ Principles (e.g. PECL, DCFR, PICC)
Civil vs Common Law Perspective on Sources
- sources have a different weight in common law vs. civil law tradition
- codification vs. development through case law
Reading chapter 1 + 2 + part of 4 all highlighted on Ipad.
-Lecture 1, Obligations & contract law-
submit all assignments, to be able to gain 0.5 bonus to the final grade.
- do the readings for each week & listen to the KC
- Prepare & submit your tutorial assignments.
The life of the contract
● Formation
● performance
● Remedies for beach
Contract and contract law
A contract is an agreement that is legally binding on the parties.
Contracts can be written or not.
● definitions: Art 1101 Code Civil, Art 6:213
● BW as a category of juridicial acts
contract as a Juridical act
● Doctrine of juridical acts → Friedrich Carl von Savigny )1779-1861)
● A juridicial act is an act that has legal consequences because the person acting
intends to create these consequences
● Prominent place in civil codes
● contract is the most important example of a juridical act
● Other types of juridical acts that can impact peoples’ rights and obligations: making
a will, decision to establish a company, recognizing a child, quit one’s job.
what is contract law?
Set of rules & principles that govern transactions among parties establishing those
parties’enforcebale rights and obligations
Why do we need contract law?
● result of society we lve in
, ● Ensures that contracts (agreements/ promises) parties concludes are binding & can
be enforced in courts if non-performance by one of the parties
● Allows market actors (e.g. individuals, companies, governments, municipalities,
NGOs) to participate in the economic & social life
sources of contract law
● take a look ot thestructure of the national Dutch, French & Ger,an Codes
● Always have the legal text at hand and read the title & the text of the legal
provision: national, European, international (CISG)
● case law , especially in common law traditions → Reader for Cases
available in Canvas
● CJEU law cases - manadory to be considered and followed by EU member States
courts
● informal rules or soft lawinstruments: UNIDROIT Principels if International
Commercial Contracts (PICC), Principles of EUropean Contract Law (PECL), Draft
Common Frame of Reference of european Private Law (DCFR) are not mandatory
sources of law, you should not apply yhem instead of national/European/international
rules (unless parties to a contract referred to them or chose them)
Type of contracts:
● Type of parties:
○ B2B
○ B2C
○ C2C
● Typeof performance
○ specific/nominate
○ innominate
● Reason for performance
○ bilateral
○ unilateral
Main principles of contract law
four main principles
● Freedom of contract
○ freedom to contract at all
○ chouce of contents
○ Freedom to choose the other party
● Binding force (pacta sunt servanda)
● Absence of formalities
● Conyractual fairness
○ substantivefairness
○ Procedural fairness
creation of legal relations
Three main requirements:
● Agreement of the parties
● intention to create legal relations
● Legal capacity of the parties +
, ○ (formalities)
intention: Key element for formation of contract
● intention to create legal relations +
○ consideration in English law
○ …..
● ……
intention
● subjective approach: the party’s subjective intention, regardless of appearances
● Objective approach: how a reasonable person would interpret a party’s intention
from his/her conduct in all circumstances
● contract law is not interested
Reason for objectivity
● accessibility
○ evidential difficulty of determining the party’s intention
● avoidance of fraud
○ to determine a person’s intention simply by reference to his/her assertion as
to his/her subjective state of mind at the time is to invite dishonesty & chaos
● Certainty & …..
○ …..
objectivity from whose point of view
● actors objectivity
● addressee’s objectivity
● third parties objectivity…
week 2 video notes:
Main requirements for contract validity
1. agreement of the parties
2. intention to create legal relations
3. legal capacity of the parties
4. (formalities)
Earnestness of intention test
● Law input
● presumption: party will only bind itself if there is some gainfrom the transaction
● Law reluctance to enforce purely gratuitous promises/ promises among family
members/ friends because it is less likely someone would want to be bound
Determining when intention is directed towards legal relations
introduction
the course starts with a general perspective on contracts and contracting, exploring the
concept of ‘contract society’. The focus will be on the paradigm of a two-party contract in
which each party involved has obligations. The questions discussed in this paradigm are:
- Why do we need a contract?
- Why do certain promises give rise to obligations that the law will uphold?
- What does it mean to be bound to a contract, for example, in terms of the available
remedies in case of non-performance?
- What is the basis on which the law, in particular circumstances (e.g. duress, fraud),
sets aside otherwise binding obligations?
week 1, introduction to contract law
mandatory materials
Contract law, Smits.
- How to use this book (pp. xiv-xv)
- Chapter 1: Introduction (pp.1-15)
- Chapter 2: sources of contract law (pp.16-37)
- Chapter 4: The intention to create legal relations (except for the sections on ‘The test
of earnestness in problematic cases’ and ‘Considerations and causa’) (pp. 39, 63-70)
Knowledge clip - sources of Contract law
Case law
- HR 15 April 1983, ECLT:NL:PHR:1983:AG4574
- Court of appeal Den Bosch, 22 January 2008, ECLI:NL:GHSHE:2008:BC2420
- Smith v Hughes [1871] LR 6 QB 597
- Cass Com. 15 February 1961, Bull. Civ. III, 91
- Bundesgerichtshof 22 June 1956, BGHZ 21, 102
legislation
Maastricht Colelction
- Dutch law: Book 3 BW Title 2 Legal Acts (Art. 3:32-3:37 BW)
- French law: Articles 1101, 1112, 1128 Code civil
- German law: Book 1, Division 3, Title 2, Declaration of Intent (§§ 116-133 BGB)
Knowledge clip notes:
We will focus on the civil and common law divide
Sources of contract law:
● Party agreement: what the parties agreed upon when entering into the contract
(price, quality)
○ (practice) commercial parties often use standardised sets of rules
suiting their own interests → general conditions/ standard terms
● official sources:
○ National law (civil law countries e.g. Civil Code ≠ common law
countries: case developed by courts, but also statutes e.g. Sales of
Goods Act. 1979, Unfair Conyract terms Act 1977)
, ■ mandatory rules
■ default rules
○ EU law: over 25 Directives (consumer law: Directive 93/13 Unfair Terms in
Consumer Contarcts)
○ Supranational law (e.g. CISG or Vienna Convention on Contracts for the
International Sale of Goods)
● informal rules
○ Soft law: guidelines, codes of conduct, resolutions, action plans, model rules
○ Principles (e.g. PECL, DCFR, PICC)
Civil vs Common Law Perspective on Sources
- sources have a different weight in common law vs. civil law tradition
- codification vs. development through case law
Reading chapter 1 + 2 + part of 4 all highlighted on Ipad.
-Lecture 1, Obligations & contract law-
submit all assignments, to be able to gain 0.5 bonus to the final grade.
- do the readings for each week & listen to the KC
- Prepare & submit your tutorial assignments.
The life of the contract
● Formation
● performance
● Remedies for beach
Contract and contract law
A contract is an agreement that is legally binding on the parties.
Contracts can be written or not.
● definitions: Art 1101 Code Civil, Art 6:213
● BW as a category of juridicial acts
contract as a Juridical act
● Doctrine of juridical acts → Friedrich Carl von Savigny )1779-1861)
● A juridicial act is an act that has legal consequences because the person acting
intends to create these consequences
● Prominent place in civil codes
● contract is the most important example of a juridical act
● Other types of juridical acts that can impact peoples’ rights and obligations: making
a will, decision to establish a company, recognizing a child, quit one’s job.
what is contract law?
Set of rules & principles that govern transactions among parties establishing those
parties’enforcebale rights and obligations
Why do we need contract law?
● result of society we lve in
, ● Ensures that contracts (agreements/ promises) parties concludes are binding & can
be enforced in courts if non-performance by one of the parties
● Allows market actors (e.g. individuals, companies, governments, municipalities,
NGOs) to participate in the economic & social life
sources of contract law
● take a look ot thestructure of the national Dutch, French & Ger,an Codes
● Always have the legal text at hand and read the title & the text of the legal
provision: national, European, international (CISG)
● case law , especially in common law traditions → Reader for Cases
available in Canvas
● CJEU law cases - manadory to be considered and followed by EU member States
courts
● informal rules or soft lawinstruments: UNIDROIT Principels if International
Commercial Contracts (PICC), Principles of EUropean Contract Law (PECL), Draft
Common Frame of Reference of european Private Law (DCFR) are not mandatory
sources of law, you should not apply yhem instead of national/European/international
rules (unless parties to a contract referred to them or chose them)
Type of contracts:
● Type of parties:
○ B2B
○ B2C
○ C2C
● Typeof performance
○ specific/nominate
○ innominate
● Reason for performance
○ bilateral
○ unilateral
Main principles of contract law
four main principles
● Freedom of contract
○ freedom to contract at all
○ chouce of contents
○ Freedom to choose the other party
● Binding force (pacta sunt servanda)
● Absence of formalities
● Conyractual fairness
○ substantivefairness
○ Procedural fairness
creation of legal relations
Three main requirements:
● Agreement of the parties
● intention to create legal relations
● Legal capacity of the parties +
, ○ (formalities)
intention: Key element for formation of contract
● intention to create legal relations +
○ consideration in English law
○ …..
● ……
intention
● subjective approach: the party’s subjective intention, regardless of appearances
● Objective approach: how a reasonable person would interpret a party’s intention
from his/her conduct in all circumstances
● contract law is not interested
Reason for objectivity
● accessibility
○ evidential difficulty of determining the party’s intention
● avoidance of fraud
○ to determine a person’s intention simply by reference to his/her assertion as
to his/her subjective state of mind at the time is to invite dishonesty & chaos
● Certainty & …..
○ …..
objectivity from whose point of view
● actors objectivity
● addressee’s objectivity
● third parties objectivity…
week 2 video notes:
Main requirements for contract validity
1. agreement of the parties
2. intention to create legal relations
3. legal capacity of the parties
4. (formalities)
Earnestness of intention test
● Law input
● presumption: party will only bind itself if there is some gainfrom the transaction
● Law reluctance to enforce purely gratuitous promises/ promises among family
members/ friends because it is less likely someone would want to be bound
Determining when intention is directed towards legal relations
