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BUSINESS LAW EXAM – main topics to be studied
Question 1: Particolar Legal Issue that can rise when persons are doing business together or making a specific contract and they are based in different European States:
-international contract vs domestic contracts -lack of uniformity between european and domestic laws -lack of certainty on the judjment -is a problem in business sense -Principle Comety: “One country judicial system shouln’t act in a way that conflicts with the court system of another country”
There are 3 main legal issues that can arise when people are doing business in different European States:
1) Which law applies? 2) Which court is competent? 3) How can both paties understand the rules?
The answer to the first legal is issue is given to us by the Rome regulation (Rome 1 for contractual obligation, Rome 2 for non-contractual obligation) Rome regulation says that the parties are free to decide the law they want that govern they contractual disputes. They can choose also a law which is not a member state law and also if it regards just a part of the contract. If they do not express it the choice of law can be inferred by term of the contract or circoumstances of the case (it can be inferred by choice of jurisdiction recital 12). If it cannot be also inferred the law is choosen considering the nature of contract in question, for goods where they are sold, for service where they are provided. Moreover abitual residence of party who is giving “characteristic performance”. But there are some limits:
• if all elements of the situation at time of choice are located in another country the coice of the parties shall not prejudice the application
• the choice should be meaningful and sufficiently certain (Sharia) The answer to the second legal issue is given by the Brussel 1 Regulation that states that persons domiciled in a member state a sued by the court of that member state. In England also if you have been served with a claim form in England In Germany also if you are defendant and you have assets in Germany linked to the dispute In France also if you are born in France Moreover in contract case the court could be choosen for the place of performance: for good where they are sold, for services where they are delivered In case of tort or delict the court of the State where it is occurred is chosen. It is necessary that at least one of the two stated in the dispute come from eu and they can choose an exclusive jurisdiction but the the coice should be written. (formal requirement for jurisdictional choice).
To respond to the lack of Uniformity that arises between all the domestic contracts there are three main instruments: the CISG ( United Nations conventions on contracts for international sale). It applies on contracts for sale of good not (auction, familiar use ecc…) Unidroit Principles (international commercial contracts) Pecl (principles of European Contract law) Unidroit and Pecl apply when paties decide to incorporate them in their contract. Moreover the English law is used as intenational contract law for banking and commercial contracts since its jurispodence on these subjects is really well developed. The fact that different law can have different judgment on disputes cuold be a problem because the way the two parts negotiate vary a lot with respect to the law used. For example under English law the parties shoul know with certainty that the terms of the contracts will be enforced, on the other hand, under Pecl and Unidroit there is the idea of equity to avoid undue hardship. On the same case they could generate different judgements. In my opinion these differences in law incentivates the parties to clear determine which law to aplly in order the more certainty possible on contracts matters.
Question 2: Revise jurisdictional rule under Brussel I regulation
Brussel 1 Regulation states that persons domiciled in a member state a sued by the court of that member state. In England also if you have been served with a claim form in England In Germany also if you are defendant and you have assets in Germany linked to the dispute In France also if you are born in France Moreover in contract case the court could be choosen for the place of performance: for good where they are sold, for services where they are delivered In case of tort or delict the court of the State where it is occurred is chosen. It is necessary that at least one of the two stated in the dispute come from eu and they can choose an exclusive jurisdiction but the the coice should be written. (formal requirement for jurisdictional choice).
Question 3: How English law consider good faith aspects when two parties are negotiating a contract? How Unidroit? How Pecl approch this precontract negotiation? Unjust enrichment
English law recognises no general dutyon those involved in negotiations to act in good faith with the other party to the negotiations. In 1992 the House of Lord made some observations regarding the concept of duty of good faith:
1) good faith is repugnant to the adversarial conditions of parties who are involved in negotiations.
2) Each party pursues its own interest 3) Seeking for improved terms a party can 4) Unworkable in practice 5) You should be free to withdraw from a contract also if there is no a proper
On the other hand under Cisg, Unidroit and Pecl parties shoul act in accordance with good faith. Cisg: good faith in international trade Unidroit e Pecl: good faith, if bad faith a party is liable for losses caused to other party
However, concerning English law in 2008 the house of lords has recognised that if a party breaks off from a contract in bad faith it is liable for damages caused so far: “the unjust enrichment” but on the other hand the profits that would be gained if the contract would be concluded are not recoverable.
Rewiew material and discussion to how a party can escape a contract on hardship:
A party can escape from a contract because of hardship when a change of circoumstances has been occurred; When hardship occurred? -when the value of the performance is really Under Pecl the parties are entitled to renegotiate the contract adapting or teminating it provided that: The change has occurred after the conclusion of the contract The change cannot be reasonably determined before the conclusion of the contract The risk of change of circoumstances is not a risk that the parties were entitled to bear.
If the parties do not reach an agreement in a certain reasonable period the court can: End the contract Adapt it distributing in an equal manner gains and losses of the change in circoumstances.
For Unidroit: Is the same as Pecl
Question 5: Rewiew material about “enforcing contractual obligations”
- Unidroit: If a party should provide a performance other than monetary it is entitled to perform it unless:
1) impossible in law 2) unreasonably or expensive 3) the partner can obtain that performance reasonably from another source 4) is of an exclusive and personal 5) if the party that require performance require it in a non reasonable period
of time it becomes “aware” of the non-performance.
- Pecl: It is the same as Unidroit
On the other hand, under English law there is no precise reference to specific performance and there are insufficient precise obligations. Just in “co-operative insurance society” Lord Hoffman state there are some references which invited partiesn in the contract to be precise when determine their obligations to be performed!