CONTRACT LAW

Contract Law



Contract Law

Part A

Legal Issues

Contracts are enforceable in the courts. If one party meets its contractual obligations and the other party doesn't ("breaches the contract"), the nonbreaching party is entitled to receive relief through the courts. Contracts can cover an extremely broad range of matters, including the sale of goods or real property, the terms of employment or of an independent contractor relationship, the settlement of a dispute, and ownership of intellectual property developed as part of a work for hire. The common starting point for this debate is the observation that state contract law cannot fulfill its function to safeguard the performance of contractual claims in today's globalized markets with the same reliability that it achieves in domestic markets. Every state has its own contract law, which is in force within its territory. Therefore, the possibility exists that national legal systems collide once an economic transaction transcends national borders. From the perspective of actors interested in economic exchange, the territorial fragmentation of law leads to three main problems.

First, uncertainty can emerge about the obligations of the contractual parties, as they can be assessed differently according to the law applicable. Second, it is unclear where the place of jurisdiction is for the solution of conflicts. Third, it is often doubtful whether judgments of one state are actually enforced in another. In more abstract terms, economic globalization ends the congruency of economic and legal spaces. The far-reaching unity of state, law, and economy is increasingly undone by this process. In short, the uncertainty about whether prospective contractual partners behave in an opportunistic or cooperative manner is far higher in global than in domestic markets, as in the transnational realm actors have no unitary contract law system at their disposal in order to enforce contracts effectively

Application of Law

Initially, Bob made an offer to Madge and asked to respond to him by Friday. On Friday, when Madge tried to phone Bob to communicate her acceptance, Bob was unavailable and Madge asked Britney, who was a close friend of Bob, to communicate her acceptance to Bob.

Economic notions of contract have long been theoretical and formalist; the contract has been more an ancillary element in the study of market equilibrium than an object significant in its own right for the economy.

According to the transnationalists' theory, the easing of uncertainty occurs within an institutional framework that functions without much state support. Hence, supporters of this theory are opposed to those approaches that emphasize the significance of state PIL with regard to safeguarding the contractual fulfillment of international exchange processes. However, both approaches have in common the fact that they refer to an institutional mechanism in which the performance of contractual agreements is safeguarded by the organizing activity of a formal higher third party.

Britney was not an authorised person but a close friend of Bob. She forgot to communicate the acceptance to Bob and he remained unaware by the acceptance by Friday. As the acceptance was not communicated to him, ...