Contract Law: A Comparative Introduction, Second Edition by J.N Smits

Please see the below Questions for self-study for this title, organised by chapter.

Chapter 1

Questions for self-study

1. How do you define a contract? Which types of contracts can be distinguished?
2. Freedom of contract is one of the four main principles of contract law. Do you believe this principle is important? Give some examples where you think contracts are freely negotiated and some where they are not.
3. What is the main difference between contracts in Roman law and today?
4. What are the main sources of contract law?
5. Why and how is the European Union active in the field of contract law?
6. What does consensus ad idem mean and where do we find this in the various jurisdictions?
7. What is meant with a cascade of contracts?
8. Give a definition of an obligation in the context of private law. Take into consideration that each obligation has two sides.
9. Where do you place contract law within the overall ‘system’ of private law?
10. What is the relationship between a contract and an obligation? And between a contract and a juridical act?
11. Why are third parties, in principle, unaffected by a contract?
12. What are the main principles of contract law?
13. What does the principle of pacta sunt servanda mean? Has this principle always been accepted?
14. What is the advantage and disadvantage of a closed system of contracts as existed in Roman law?
15. What is a stipulatio in Roman law?
16. Explain the difference between procedural and substantive (contractual) fairness
17. Could contract law be used as an instrument to redistribute wealth in society?
18. What are regulated contracts?

Web links

- There are numerous websites that provide examples of written contracts. Although the full contract is often only available for a fee, these websites do show examples of what typical contracts look like in practice. A website directed at the general audience in the UK is for example http://www.contractstore.com, in Germany http://www.formblitz.de and in France http://www.documentissime.fr.

- An English translation of the Institutes of Gaius can be found at: http://thelatinlibrary.com/law/gaius.html

Chapter 2

Questions for self-study

1. What does it mean to say that contract law is a ‘multi-level’ legal system?
2. Where do you find contract law in French, German, English and Dutch law?
3. What are the main characteristics of the civil law and common law ‘legal family’?
4. What is the substantive and geographical scope of application of the CISG?
5. What is the main difference between ‘official sources’ and informal rules of contract law?
6. What are the aims of the PECL? Which other sets of contract law principles do you know?
7. Give a difference between secular contract law and Islamic contract law.

Web links

- The proposed reform of the French law of obligations of Pierre Catala is available in an English translation by John Cartwright and Simon Whittaker

- A full English translation of the German Civil Code

- An overview of European consumer legislation in force can be found at the European Commission’s website

- European Commission, Communication from the Commission to the Council and the European Parliament on European Contract Law, COM (2001) 398 final

- European Commission, Proposal for a Regulation on a Common European Sales Law, COM (2011) 635 final

- Website of the French Cour de Cassation (in French)

- Website of the German Bundesgerichtshof (in German)

- Website of the UK Supreme Court

- Website of the Dutch Hoge Raad (in Dutch)

- Common portal of national case law (Network of the Presidents of the Supreme Judicial Courts of the European Union)

Chapter 3

Questions for self-study

1. Explain the formation of a contract through offer and acceptance.
2. Can you put the rules on offer and acceptance in the various jurisdictions into a chart? Add the relevant articles from civil codes and case law. If you wish to cover all five issues identified in the Textbook, this exercise will take considerable time.
3. Describe and explain the different approaches to the bindingness of offers to the public (advertisements and goods on display in shops).
4. When is an offer revocable?
5. What is the difference between revocation of an offer and withdrawal of a declaration?
6. When does an offer lapse?
7. Can silence count as acceptance of an offer?
8. Explain the various approaches to the ‘battle of the forms’.
9. What are the different theoretical and national approaches to the time of conclusion of the contract?
10. Explain the postal rule and its rationale.
11. If B send his acceptance of A’s offer by text message (SMS) just before midnight on 1 May, and the message arrives with A just after midnight, at what time does the contract come into being?

Web links

Case law:

Adams v Lindsell [1818] EWHC KB J59

Hyde v Wrench [1840] 3 Beav 334

Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256

Pharmaceutical Society v Boots [1953] 1 QB 401

Entores Ltd v Miles Far East Corporation [1955] 2 QB 327

Thornton v Shoe Lane Parking [1971] 2 QB 163

Gibson v Manchester City Council [1979] 1 WLR 294

Other:

- http://www.carbolicsmokeball.co.uk

Chapter 4

Questions for self-study

1. Which theories exist to explain contractual liability?
2. Which factors play a role in establishing whether reasonable reliance or an objective intention exists?
3. How does the law deal with the problem of dissensus of intention and declaration?
4. Can you give an overview of how the law goes about establishing that a party has the intention to be legally bound? Do formalities and other factors play a role here?
5. What is the difference between commercial and other agreements in establishing the intention to be legally bound?
6. How are prenuptial agreements dealt with in civil law and in English law?
7. How can commercial parties avoid being bound too soon by what may be regarded as an intention by the other party?
8. What is a gratuitous transaction?
9. What is the feminist reading of the House of Lords case Balfour v Balfour? Do you agree?
10. Explain the English doctrine of consideration. Do you believe consideration is a useful doctrine? Can it be circumvented?
11. Which sub-rules exist within the consideration doctrine?
12. What is the importance of the Court of Appeal case Williams v Roffey Bros?
13. Explain the doctrine of promissory estoppel.
14. Explain the French doctrine of causa. Which types of causa exist? Do you believe causa is seen as an important requirement by French lawyers?
15. Explain why consideration and causa have common historical roots.

Web links

Case law:

BGH 22 June 1956, BGHZ 21, 102 (K Speditionsgesellschaft), English translation by Raymond Youngs, available through Institute for Transnational Law, University of Texas

Cass. Civ. 22 October 1996, D 1997, 121 (Chronopost 1), English translation by Tony Weir, available through Institute for Transnational Law, University of Texas

Stilk v Myrick [1809] EWHC KB J58

Glasbrook Brothers v Glamorgan County Council [1925] AC 270

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1990] 2 WLR 1153

Baird Textile Holdings Ltd v Marks & Spencer plc [2001] EWCA Civ 274

Bear Stearns Bank plc v Forum Global Equity Ltd [2007] EWHC 1576

Radmacher v Granatino [2010] UKSC 42

Leeds United Football Club v The Chief Constable of West Yorkshire Police [2013] EWCA Civ 115

Other:

Law Commission for England and Wales, Consultation papers on marital property agreements

Chapter 5

Questions for self-study

1. What are the interests at stake when the law has to decide who has legal capacity and who does not? How does the law weigh these interests? If you were the legislator, would you weigh them in the same way?
2. Does legal incapacity mean that any contract entered into by a minor is automatically invalid?
3. What is the main difference between English law and civil law jurisdictions when it comes to contracts entered into by minors?
4. What is a ‘contract for necessaries’ under English law?
5. When does French law hold a contract entered into by a minor not avoidable?
6. What is the main difference between French and German (and Dutch) law in their treatment of contracts entered into by minors?
7. How do the various jurisdictions deal with contracts entered into by adults suffering from a mental disorder?

Web links

Case law:

Hart v O’Connor [1985] AC 1000

Other:

- Example of a public register of adults (in Dutch)

- Comparative Study on the Legal Systems of the Protection of Adults Lacking Legal Capacity, Council of Europe 2008

Chapter 6

Questions for self-study

1. Dominique considers donating a painting to a friend. As it happens, she has houses in Paris, Berlin, London and Amsterdam and wants to know where it is easiest to donate the painting. Advise Dominique.
2. What are the reasons for the law to impose formalities for the formation of a contract? Do you believe these formalities achieve their intended goals?
3. The law sometimes imposes extensive information requirements on professional parties. Give examples of this. Do you ever read this information? Does it matter if you do not?
4. For which contracts or juridical acts and in which jurisdictions is a notarial deed required?
5. Give examples of contracts that are to be made in writing.
6. What does it mean to say that a contract is be ‘evidenced in writing’?
7. Give examples of pre-contractual information duties.
8. What is the sanction in case of failure to comply with an information duty?
9. In which case does a ‘withdrawal right’ exist
10. Does a contract made through e-mail or WhatsApp meet the written form? What pleads against a positive answer?
11. What is the sanction if a contract lacks the required form? Can a lack of form be cured?

Web links

Case law:

- BGH 27 October 1967, BGHZ 48, 396 1967 (Kaufmannsehrenwort), English translation by Kurt Lipstein, available through Institute for Transnational Law, University of Texas

- Pascoe v Turner [1979] 1 WLR 431

Other:

- International Union of Notaries

- The Notaries Society of England and Wales

- National Notary Association (US)

Chapter 7

Questions for self-study

1. Why is it not rational for most parties to deal with all possible contingencies in their contract?
2. What are the two types of gap filling (supplementing the party agreement)?
3. What is the difference between ad hoc gap filling and gap filling through default rules?
4. Explain what default rules are. Can you give examples?
5. Which elements play a role in the proper interpretation of a contract?
6. Explain the parol evidence rule.
7. Explain the contra proferentem rule.
8. Explain the various techniques that jurisdictions use for ad hoc gap filling.
9. Draft your own example of an ambiguous contract clause and interpret this provision in both an objective and a subjective way.
10. Read the House of Lords decision in Liverpool City Council v Irwin. How would French, German and Dutch law deal with a case like this?

Web links

Case law:

- Liverpool City Council v Irwin [1977] AC 239

- Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896

Chapter 8

Questions for self-study

1. What does it mean to say that good faith is an open-ended norm?
2. What is the difference between objective and subjective good faith?
3. What are the three functions of good faith?
4. Explain the doctrine of unforeseen circumstances (hardship).
5. What is the alternative explanation by Ellinghaus of the role of good faith in English law?
6. Explain the three problems of using general conditions. How are these problems dealt with in the various jurisdictions? Can you make a chart?
7. What are exemption clauses? Are they always unfair?
8. Is it necessary for a party to have read an exemption clause in order for it to have been incorporated in the contract?
9. What is the scope of application of the ‘specific controls’ of unfair contract terms set out in the German BGB, UCTA in the UK, the French ‘Loi Scrivener’ and the EU directive on unfair terms in consumer contracts?
10. What is the ‘red hand’-rule?
11. Which methods exist to enforce rules put in place to protect consumers?
12. Suppose that you, as a consumer, do not mind about clauses in contracts or enforceable rights, but you do mind about a lower price on the product. Would you be allowed to negotiate a lower price in return for agreeing not to sue the seller?

Web links

Case law:

Cass Civ. 14 May 1991, D 1991, 449 (Minit France), English translation by Tony Weir, available through Institute for Transnational Law, University of Texas

RG 28 November 1923, RGZ 107, 78 (Luderitzbucht Mortgage), English translation by Irene Snook, available through Institute for Transnational Law, University of Texas

Spurling Ltd v Bradshaw [1956] 1 WLR 461

Interfoto Picture Library v Stiletto Ltd [1988] 2 WLR 615

Walford v Miles [1992] 1 All ER 453

Director General of Fair Trading v. First National Bank [2001] UKHL 52

International Management Group UK Ltd v Simmonds [2003] All ER 199

Yam Seng Pte Ltd v International Trade Corp Ltd [2013] EWHC 111

Other:

European Commission’s website on Unfair contract terms

UK Unfair Terms in Consumer Contracts Regulations 1999

French Commission des clauses abusives (in French)

UK Competition & Markets Authority

Dutch Autoriteit Consument en Markt (in Dutch)

Chapter 9

Questions for self-study

1. What is the difference between a contract being void and being avoidable?
2. What are defects of consent?
3. What are the requirements for mistake?
4. Which types of mistake are recognised in English law?
5. When does a duty of disclosure exist? And a duty to investigate?
6. When is fraud legally relevant?
7. When is threat legally relevant?
8. How is undue influence dealt with in the various jurisdictions?
9. Explain the caveat emptor rule. Does the rule apply to any contract?
10. What is the difference between a term, a representation and a misrepresentation?
11. Mention the three types of misrepresentation. Can you give an example of each of them?
12. What is the advantage of being able to invoke S. 2 (1) Misrepresentation Act?
13. Make a chart of the possibilities for avoidance of a contract for mistake, fraud, threat and misrepresentation in the various jurisdictions.
14. In so far as you have not covered this in question 13: which jurisdictions accept duties of disclosure, and when?

Web links

Case law:

BGH 13 November 1975, NJW 1976, 565 (Matchfixing), English translation by Irene Snook, available through Institute for Transnational Law, University of Texas:

http://www.utexas.edu/law/academics/centers/transnational/work_new/german/case.php?id=937

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623, available here:

http://www.bailii.org/ew/cases/EWCA/Civ/1965/2.html

Lloyd’s Bank Ltd v Bundy [1975] QB 326, available here:

http://www.bailii.org/ew/cases/EWCA/Civ/1974/8.html

Spice Girls Ltd v Aprilia World Service BV [2002] EWCA Civ 15, available here:

http://www.bailii.org/ew/cases/EWCA/Civ/2002/15.html

Chapter 10

Questions for self-study

1. When will a contract be held to be contrary to public policy or good morals? How do you think a court goes about establishing this?
2. Alan and Rodger own a small law firm in which they employ four other lawyers. They wish to insert a restraint of trade clause in their employment contracts. Alan and Rodger seek your advice and ask you to draft a clause that suits their needs.
3. Visit the website http://surrogacyindia.comAt the conclusion of which type of contract is this practice directed? Would these contracts be accepted in any of the four jurisdictions we look at in this course? Explain which of the two approaches you like better: the Indian or the ‘European’ one.
4. What are the two ways to categorise illegal contracts?
5. Are all contracts violating a statutory rule void? Explain.
6. Give examples of contracts that go against public policy or good morals.
7. Do you believe that waiver of a fundamental right should be possible?
8. Is a contract in restraint of trade ever allowed? Explain.
9. To what extent is a surrogate motherhood contract against public policy or good morals in the various jurisdictions?
10. What are the arguments pro and contra enforcing surrogate motherhood contracts?
11. What is the effect of an illegal contract?
12. Is it possible to recover paid money or delivered goods in case of an illegal contract?
13. Explain the in pari delicto rule.

Web links

Case law:

European Commission decision of 12 November 2008, 2009/C 173/08 (Car glass)

Supreme Court of New Jersey, 109 N.J. 396 (N.J. 1988) (Baby M)

Other:

European Commission’s page on competition law

Wikipedia entry on Surrogacy laws by country

The surrogacy contract in the Baby M case (1988)

Law Commission of England and Wales page on illegality, including a link to its report on ‘The Illegality Defence’, Law Com No 320 (2010)

UK Sunday Trading Act 1994

Chapter 11

Questions for self-study

1. What is the usual way in which a contract is discharged?
2. Civil law systems and English law have a different approach towards the availability of the action for (specific) performance of the contract. Explain these approaches and their rationale (if any). Which approach do you prefer? Do you believe the distance between civil law and English law is as wide as is sometimes suggested?
3. Explain the different approaches to ‘impossibility of performance’ in the various jurisdictions.
4. Are unforeseen circumstances (‘hardship’) accepted in all jurisdictions as a ground for escaping the bindingness of the contract? Explain.
5. What is meant with the phrase ‘clausula rebus sic stantibus’?
6. What is the appropriate remedy in case of unforeseen circumstances?
7. What is a ‘hardship clause’?
8. Directive 99/44 on sale of consumer goods and associated guarantees provides remedies to the consumer. Explain what these remedies entail. What is the main reason why the European legislator introduced these rules?
9. Where can you find an action for price reduction in case of non-performance?

Web links

Case law:

Cass. Civ. 6 March 1876, D. 1876.I.93 (Canal de Craponne), English translation by Tony Weir, available through Institute for Transnational Law, University of Texas

Cass. Civ. 3, 11 May 2005, RTD Civ 2005, 596 (Belhadj v Les Batisseurs du Grand Delta)

Lumley v Wagner [1852] EWHC Ch J96

Krell v Henry [1903] 2 KB 740

Davis Contractors Ltd v Fareham UDC [1956] AC 696

Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1

Other:

European Commission website on Sales and guarantees

Chapter 12

Questions for self-study

1. Define non-performance of a contract. Which types exist?
2. Which requirements need to be met in order to be able to claim damages for non-performance of a contract?
3. What are the main differences in the requirements for a successful claim for damages for non-performance in the various jurisdictions?
4. What is meant with the doctrine of ‘absolute contracts’?
5. Explain how the facts of the case Taylor v Caldwell would probably be decided in German or French law.
6. Does each jurisdiction allow a ‘last chance to perform’?
7. When is the damage caused by the non-performance?
8. What is a ‘notice’ and when is it needed?
9. Which types of damages can you distinguish?
10. Explain the difference between the expectation and the reliance interest. Which of these two interests is usually protected by contract law?
11. Is it possible to claim non-pecuniary losses in case of non-performance?
12. What is the difference between a liquidated damages clause and a penalty clause?

Web links

Case law:

Paradine v Jane [1647] 4 KB

Hadley v Baxendale [1854] EWHC J70

Taylor v Caldwell [1863] 122 ER 309

Farley v Skinner [2001] UKHL 49

Court of Justice of the European Union 12 March 2002, Case C-168/00 (Simone Leitner v Tui Deutschland)

Chapter 13

Questions for self-study

1. What are the requirements for termination of a contract in the various jurisdictions? Which interests do these requirements aim to weigh against each other? Which jurisdiction is the most strict in allowing termination?
2. Explain what is ‘fundamental non-performance.’
3. What is ‘efficient breach’?
4. When is it allowed to resort to a so-called ‘anticipatory breach’?
5. What is the effect of a claim for termination?
6. When is a party allowed to withhold performance?
7. What is a ‘right of retention’?

Web links

Case law:

Hong Kong Fir Shopping Co. v Kawasaki Kisen Kaisha [1962] 2 QB 26

Chapter 14

Questions for self-study

1. Explain the doctrine of privity of contract.
2. What is a contract for the benefit of a third party? Who are the parties involved in such a contract?
3. Describe the third party-effect of exemption clauses.
4. Give an example of a linked contract. Why is it unusual for the law to treat such contracts as interconnected?
5. Could contract law play a role in addressing gross human rights violations in the global supply chain?
6. What is agency? Who are the parties involved?
7. What is the difference between direct and indirect representation? Is this distinction accepted everywhere?
8. What is apparent authority? What are the requirements for a successful claim?
9. What is assignment? Who are the parties involved in this type of contract?

Web links

Case law:

BGH 28 January 1976, BGHZ 66, 51 (Vegetable leaf), English translation by the University of Texas at Austin

BGH 17 January 1985, BGHZ 93, 271 (Denied passenger), English translation by the University of Texas at Austin

White v Jones [1995] 2 AC 207

ParkingEye Limited v Beavis [2015] UKSC 67

Doe v Wal-Mart Stores, United States Court of Appeals, 572 F.3d 677 (9th Cir. 2009)