‘No pain, no gain’ – A comparative analysis of Austrian and Louisiana contract law concerning the correlation between risk-taking and irrelevance of original and continuing laesio enormis

Abstract

For all contracts, the risk component is either the initial lack or the subsequent disruption of the value balance of services. Determining the conditions under which the value of the service and the consideration at the time of the contract’s conclusion (as a matter of invalidity) or at the time of the performance (as a matter of breach of contract) can be in proper balance may be both a legislative and an enforcement issue. If the band, within or around which the difference between the two values is not considered to be legally undesirable, is defined by the legislator, there is no discretion left to the application of thelaw. However, in the case of a generalised rule, i.e., where the legislator does not define disproportionality in terms of a specific ratio or range of values, it is at the discretion of the jurisdiction to decide on the question of proportionality. The rules of invalidity and of breach of contract as traffic safety criteria are expressly excluded by law for certain types of contracts, while in other cases, the law expressly authorises the parties to exclude these guarantee rules for their legal relationship by their commercial will, since their interests are precisely directed towards a higher degree of risk-taking. Where these rights are not based on law, the parties’ contractual intention must include the assumption of these rights. In the continental-rooted civil codes of the US-State of Louisiana, the problem is based on a body of law being fairly similar to that of Austria: Even the wording of the codes’ provisions is somehow identical. At the same time, it is remarkable that, compared to this legal environment, judicial thinking in litigation before the courts of the highest instances greatly differs.