October 20, 2010

Week 3 – What actually defines a contract?

For such an essential and universal concept, analysis of what actually constitutes a contract highlights a surprising amount of difference between countries. The idea of contractual relations and obligations is one of fundamental significance in commercial and personal affairs – yet the way in which jurisdictions define a contract differs markedly; owing to a complex history of legal interaction across a multitude of legal traditions, influenced majorly by Roman law, canon law, common law, and lex mercatoria. This mix has led to the developments of nuanced and varying definitions into what today can be defined as a contract.

France seeks to define a contract based on the notion of agreement, and how contractual obligations arise via this agreement. The system sees the contract defined on the basis of the contractor’s position – as seen in the Code Civil.

Meanwhile, the German BGB shies away from determining what exactly a contract is. Instead, the focus is placed on the obligation created by the arrangement, which is concentrated in turn by a contract. Both French and German contract law achieve naturally the same legal principles, but the methodology used to determine the definition of a contract is noticeably different.

As ever, the English system has evolved without any legislative definition of a contract – with academic writing and jurisprudence here filling the void. It seemingly stands somewhere in between the agreement-based conception borne out of the French doctrine, and the abstract German idea of obligations creating the contract – with academics stating the obligation arises out of agreement, to be enforced by legal remedies. Common law instead seeks to define the constituent parts, for a check-list approach to what a contract is, and how it arises out of a need to remedy a contractual situation. Nevertheless, the English definition of a contract is most definitely the least clear of the three – most probably arising out of the absence of codification.

Whilst the three systems all diverge at the basis of what a contract is, it is interesting to see how the concept still has evolved and become a central and indispensable theme of domestic civil law. 

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EU Consumer Protection:

Notices and Other Communications under UNCITRAL:

The Right of Withdrawal and Unfair Contract Terms:

Law Society speaks out on EU consumer contract law:

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