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Negotiating the legal framework of the contract, questions concerning,…
Negotiating the legal framework of the contract
six steps
the applicable law
contract or no contract
meeting of minds, capacity, legality, consideration
entire agreement
whereas recital, contract documents, definitions
parties
identity, names, notices, assignment of rights and delegation of duties
the status of the contract
termination, cancellation, rescission, language
settlement of dispute
amicable settlement, arbitration, litigation
differences
continental law
is fully codified
goal: consistency and uniformity of enforcement
predictability and consistency of court decision: Most decisions are predictable with some accuracy and decisions are generally consistent.
contract: short and lacking in details
not internationally accepted
anglo-american law
relies on cases and precedents
justice in the individual case
not full predictable and decisions are not consistent
long and detailed
widely understood and respected
What does the applicable law govern?
interpretation
performance
validity
the principles of an enforceable contract
The purpose of the contract is legal
The parties are capable of entering the contract
The Parties achieve a “meeting of minds” through a process of offer and acceptance.
When does a contract come into existence?
one party makes an offer
another party accepts it
Who are unable to sign contracts?
children
feeble minded
lack of contractual capacity
drunks
What does “ultra vires” mean?
under the public law of many countries, a company only signs the contract that is within its power
a contract that is ultra vires is unenforceble
beyond its power
When is the agreement unenforceable?
when the purpose of the contract is illegal
Which kind of agreement is not a contract?
the agreement in which one side has only rights and other side has only duties
What is the Entire Agreement?
the final written version of the contract that replaces all previous agreement between the parties
What is The Whereas Recital? Why is it necessary?
the word "whereas" means "because" or "considering that"
whereas clauses are not provisions, promises, conditions, they are explanations
a typical whereas recital contains many types of background information
when the disputes arise, the court must ask some background questions
What should appear at the head of the contract?
the offical registered names of the parties
What is discharge by performance?
the last duty is fully performed
when both the parties perform their duties exactly according to the contract
What is termination? Name the two types of termination?
a side may have the right under the contract to end contract
termination for convenience
occurs when
no reason is required
the buyer must pay for all work performed and partly performed
one party (usually buyer) simply decides to drop the contract
termination for default
occurs when
the contract names certain defaults which allow a side (usually buyer) to terminate
What is Cancellation?
occurs when a party breaches the contract and the other has the right to demand cancellation of the contract
difference
termination
a contract is terminated under a provision of the contract
cancellation
a contract is cancelled when one party breaches the contract and other party simply refuses to proceed
What is Rescission?
two parties agree to end the contract
In legal theory, they enter a new contract to annul the old contract
occurs when
What are the ways to solve disputes?
litigation: settlement by court
it is expensive
the results are often legalistic rather than business like
it is time-consuming
it is public
an amicable settlement
arbitration: a panel of arbitrators solves the disputes
costs are predictable
decision is business-oriented
quick
What does the arbitration clause specify?
who pays court costs
what is the language of the court
where does the court sit
how many arbitrators sit in the court
questions concerning
litigation before the courts is internationally the least attractive