Contract Clauses Research Articles

Asymmetrical Arbitration Clauses: A Comparative Study of International and Indonesian Arbitration Law

This article presents a study of the validity of asymmetrical arbitration clauses, a clause that combines arbitration and a choice of court option, in international commercial contracts. These clauses designate a method of dispute settlement that gives a more favorable position for one of the parties to a contract, hence, creating a debate on its validity on an international level. Despite the convenience the trend has brought in business, this form of arbitration clause has been called into doubt by courts in numerous jurisdictions. Unfortunately, Indonesia itself has yet to have a firm legal standing on this matter as asymmetrical arbitration clauses are not explicitly regulated by the Indonesian arbitration law. This research is conducted by exploring the relation between theories and practices concerning asymmetrical arbitration clauses through analyzing case law and provisions of international arbitration law and the Indonesian arbitration law, and are also analyzed through principles of international and Indonesian contract law. This article aims to provide an analysis regarding the legal effects of having asymmetrical arbitration clauses in commercial contracts and commercial arbitration. Lastly, this study offers a method of interpretation towards such clauses that favors their validity under both international arbitration law and Indonesian arbitration law.

The Value of Accuracy in Contract Interpretation

The economic argument for textualism rests on two tenants: that rules of interpretation are majoritarian defaults and that risk-neutral and sophisticated parties do not care about the courts’ accuracy in interpreting their agreement. In this Essay, we challenge this second tenant. Risk-neutrality, we show, implies indifference to accuracy when it comes to the parties’ ultimate objective of maximization, namely their joint surplus. But this does not mean that parties are also indifferent to accuracy in interpretation. On the contrary, whenever accuracy can affect their joint-surplus risk-neutral parties seek to maximize accuracy in interpretation. There are two additional reasons sophisticated parties care about accuracy. Accuracy, or the lack thereof, may entice parties to adopt inefficient terms, and it may also affect the contractual price. Both suggest that accuracy affects the preferences of sophisticated commercial parties. Showing the value of accuracy is the first significant contribution of this Essay. Its second contribution is to harmonize the other considerations affecting the parties' preferences. Where rules of interpretation are considered majoritarian defaults and accuracy is believed to be unimportant, finding the factors that determine the parties' preferences became a fertile ground for research. Drafting costs, litigation costs, settlement costs, contractual uncertainty, market thickness, and types of terms were all offered as factors controlling the parties' preferences. This myriad of sometimes conflicting and often seemingly unrelated factors makes an eventual determination of majoritarian preferences challenging to achieve. We argue that appreciating the value of accuracy can create order in this fragmented picture. A preference for accuracy in interpretation, we show, can also account for existing contracting practices. We illustrate this by using examples of MAC clauses in merger and acquisition contracts, force majeure clauses, acceleration rights in loan agreements, and alternative dispute resolution clauses.

Chapter V of Regulation (EU) 2018/1725 on transfers of personal data by Union institutions and bodies to third states and international organisations

Chapter V of Regulation (EU) 2018/1725 on transfers of personal data by Union institutions and bodies shows that its general principles, approach, architecture and legal bases are all consistent with those provided for in both the General Data Protection Regulation and the Law Enforcement Directive. The Schrems II judgment has far-reaching implications for Union institutions and bodies. The extremely limited number of adequacy decisions shows the practical importance of appropriate safeguards as a legal basis for Union institutions and bodies to transfer personal data to third states and international organisations. In this context, the availability of updated standard contractual clauses is a welcome development.

Interpreting merger clauses in contracts governed by the CISG: delineating the scope for the use of extrinsic evidence

Abstract Under Article 8(3) of the United Nations Convention on Contracts for the International Sale of Goods (CISG), parties’ statements, prior negotiations and other external circumstances may be used to assess the presence of subjective or objective intent that can, in turn, be used to interpret contractual terms in international sales contracts governed by the CISG. However, parties to the contract can, through the adoption of an ‘entire agreement’ or ‘merger’ clause, opt out of this rule under Article 8(3) and restrict these interpretative tools in any manner as they see fit, depending on the requirements of their contract. Since the CISG does not explicitly address merger clauses and their effects, the CISG Advisory Council, in its Opinion no. 3, has provided a test to determine how the scope of a merger clause is to be determined. However, this test presents certain conceptual and practical limitations that render it inadequate for use in international commercial contracts. This article aims to analyse this test and the methods that have been used to interpret merger clauses under other uniform legal instruments and cases in common law jurisdictions. On this basis, the article proposes a test that attempts to fully capture the conceptual intent behind including merger clauses while ensuring that the parties are in the driver’s seat while determining their scope and effect.

Act of Consoling Helps Those Who Console: A Multicenter Observational Survey Study in Hospice Services

Background: The contemporary scientific literature documents a lack of attention toward the act of consoling put into practice by health care professionals (HCPs) in hospice services. Objective: To describe the act of consoling and its meaning for hospice-employed HCPs. Design: A multicenter observational survey study was performed through a paper-based questionnaire. Subjects: The study was sent to the directors of 10 hospices in Northern Italy and distributed to 232 HCPs. Results: A total of 218 HCPs responded (94%). The results showed that most HCPs consider the practice of consoling to be essential to their profession, but they also underscored the extreme complexity of the process. Conclusion: The act of consoling is not simply a professional duty defined in contractual clauses. Rather, it is a set of specific communicative practices and skills required of HCPs.

Accounting conservatism and income smoothing practices in EU food and drink industry

PurposeThe purpose of this paper is to identify the application of the fundamental principle of accounting conservatism within the EU food and drink industry. Furthermore, the authors would also investigate in-depth the above relationship in two different subsamples (income smoothers and non-income smoothers).Design/methodology/approachAll EU-listed companies of the food and drink industry were identified covering the year 2019. Eckel's model was used to classify listed companies as smoothing or non-smoothing, and Basu's model was adopted to test the degree of conditional conservatism.FindingsThe results indicate that conservatism is strongly present in food and drink industry and also in its subindustries. We also showed that non-smoothing firms had higher levels of conditional conservatism in terms of more opportunity to recognize future economic losses because the market could use the stock return data to anticipate future losses contained in the information regarding profits.Research limitations/implicationsOne limitation of this work is the small size of the investigated companies. The authors demonstrate that the likely increased use of conservatism produces better credibility in the EU markets. Practical implications indicate a higher degree of monitoring of the accounting practices adopted by firms. Regulators have to set accounting policies to enhance the quality of the informational environment, investors and shareholders might exercise control over executives' decisions, and lenders might impose contractual clauses requiring the timely disclosure of “bad news.”Originality/valueThis industry is “belted” from any external speculations. This research made it possible also to observe theoretical relationships between the financial information provided by the EU food and drink industry that contributes to the market distinction between smoothers and non-smoothers.

ARBITRATION TO RESOLVE DISPUTES OF INTERNATIONAL ADMINISTRATIVE CONTRACTS

The judiciary is the natural way to resolve disputes and the means of establishing justice in society among its various members, because the judiciary is a manifestation of state sovereignty and can only be exercised by the public authority of the State. Since Iraq is one of the states that adopt a system of double law and justice and enshrined its constitution and laws, the adjudication of disputes in which the administration as a governing body exists is a public authority of the administrative judiciary, as the subject of the dispute was based on a single act, but in the view of the ordinary judiciary, it was a contract. The refore, the need for a more effective and effective approach to the implementation of the agreement sought to ensure that the parties are able to meet the needs of the international community. Common law people as a public authority, and although some jurisprudence is opposed to the inclusion of the arbitration clause in administrative contracts in general and administrative contracts of a particularinternational nature, economic and social changes have made it imperative to resort to it, which has led to increased interest in alternative methods of resolving disputes in various legal and judicial systems.

Klausula Boiler Plate dalam Pembuatan Kontrak Dagang Internasional

In an international trade contract, the parties are bound by different legal provisions, different languages and also different customs and cultures. This condition creates a big risk in implementing the substance of the contract. To anticipate this risk, there are several steps that can be taken by the parties in terms of arranging and creating the contents of their contracts. This article will discuss the part of the contract that is often regulated in international trade contracts, called the boiler plate clause. This article is the result of normative research, both related to national legal norms, namely the Civil Code, Uniform law and examples of international trade contracts. A contract is a mechanism for expressing all the wishes of the parties agreed to by other parties. In current developments, contract clauses are no longer just the essentials of the agreement. There are other clauses which have the function of further clarifying how the contract must be interpreted and as an effort to cover all opportunities for contract failure, including what are called boilerplate clauses. In the practice of making international trade contracts, there are several substances that need to be regulated in boilerplate clauses, including choice of law provisions, choice of forum provisions, language provisions, severability provisions, integration provisions, notices provisions, force majeure provisions, duration of contract provisions, obligation after termination provision.

A crashing-based time-cost trade-off model considering quality cost and contract clauses

The success of a construction project is often evaluated by time, cost, and quality performances, which are interdependent. Shortening the project duration does not only increase the direct cost but also affects the project’s quality cost positively or negatively. In addition, the contract clauses in terms of penalty cost and early finish bonus have a significant impact on project duration and cost. This study proposes a crashing-based model, which simultaneously considers quality cost and contract clauses, to solve time-cost trade-off problems. The applicability of the proposed model is demonstrated with an illustrative example. The results of the proposed model were also compared with the results of two meta-heuristic algorithms, namely Particle Swarm Optimization (PSO) and Genetic Algorithm (GA), in order to validate the effectiveness of the model. The results revealed that the proposed model provides better solutions than these algorithms in terms of total project cost corresponding to different durations.

Shahjalal Fertilizer Company Limited (SFCL): in Retrospect

This is a reflection on the implementation of Shahjalal Fertilizer Project (SFP) what is today Shahjalal Fertilizer Co. Ltd. (SFCL). This deals with a wide range of issues covering technical, contractual, and administrative involving SFP, General Contractor, sub-contractors, Process Licensors and vendors. These arose because of mindset, interpretation of contract clauses, inexperience, expectation and frustration of both Owner and General Contractor. Lessons learned would enable BCIC to undertake such projects in future by avoiding pitfalls and missteps of SFP.
 Chemical Engineering Research Bulletin 21(2020) 1-13

Features regulation of force majeure in private international lawin the covid era

This article analyzes the regulation of relations to release from the fulfillment of cross — border obligations due to the onset of force majeure, namely the new coronavirus infection (COVID-19). The issue of practical difficulties in obtaining certificates of force majeure circumstances in the Chamber of Commerce and Industry of Russia is discussed, and problems of using certificates to prove these circumstances in judicial practice. At the international public level, an interesting decision was analyzed, which was rendered in France by the Colmar Court of Appeal. In the field of private international law, the following international acts were analyzed: Vienna Convention on Contracts for the International Sale of Goods 1980, Principles of International Commercial Contracts UNIDROIT, rev. 2016, New ICC Model Clauses 2020. This article reveals the need for the mandatory use of a force majeure clause in a cross-border commercial contract. This article analyzes a new 2020 documents «Note on the UNIDROIT Principles of International Commercial Contracts and the COVID-19 health crisis», whichexplained the impact of the COVID-19 pandemic on the performance and non-performance of international commercial contracts.

O caso Enka Insaat v. Insurance Company Chubb e a questão relativa à lei aplicável à cláusula arbitral: entre a lex contractus e a Lei da Sede

When negotiating a contract, parties usually establish that future and eventual disputes arising out and related to the performance of their obligations shall be resolved by arbitration. Such a choice, a clear expression of the principle of party autonomy, is embedded in a contractual clause, commonly referred to as arbitration agreement. The way by which the agreement is written and, to some extent, how it is construed can, and most commonly will, result in extensive and costly disputes. In the UK, the Supreme Court has recently decided a case related to the construction of an arbitration agreement, specifically to the law applicable to its validity, scope and effectiveness. According to the Court, in the absence of an express choice made by the parties, the system of law chosen to govern the substance of the contract will apply to the validity and scope of the agreement to arbitrate. Where no such choice is expressly or implied made by the parties, it will be the law of the seat of arbitration since it represents the system of law most closely connected to the agreement. This article reviews the case-law and provides some relevant excerpts of the case.

Multi-Tiered Dispute Resolution Clauses after UML on Mediation 2018 and the Singapore Convention

Multi-tiered dispute resolution provides distinct stages, involving separate consecutive ADR procedures for dealing with and seeking to resolve disputes amicably first without a binding result (initial tiers), followed by a binding dispute resolution process, arbitration or litigation, as the last stage for a final and binding decision if the chosen ADR method does not work. Before complying with the ADR procedure in the dispute resolution clause of a contract, when one of the parties directly brings a claim before the arbitral tribunal, it is most likely that the other party will raise an objection regarding the effect of the non-fulfilment of ADR process. How will the tribunal decide regarding the issue? On the one side wording of such MTDR clauses is important on the other side it may be observed that mediation clauses are favourably enforced in comparison with negotiation clauses. Furthermore, the matter whether breach of the contract clause regarding initial ADR clauses is a substantive or procedural issue. Having decided these issues, a further question comes up: what would be the effect of non-fulfilment of such ADR clauses on an arbitration procedure. Of this question, there are several opinions and case reports opposing each other. With the praiseworthy effort of UNCITRAL UML on Mediation and the Singapore Convention together with the ADR rules of certain international dispute resolution institutions may encourage business people to make an effort to solve the disputes by enforcing the ADR procedures in their dispute resolution clauses.

Impact of tax difference and asset structure on a capital-constrained vertical equity holding transnational supply chain

Capital and taxes play vital roles in transnational supply chain financing and operations. We use the Stackelberg game method to explore the financing strategy selection and contract clauses setting for a capital-constrained transnational supply chain with vertical equity holding. The results prove that asset structure, tax difference, and shareholding ratio are essential in selecting the financing strategy and additional clause. First, a higher supplier's asset structure can increase the profits of supply chain members. Second, a threshold for contract choice connected to tax difference is discovered. Early payment with a discount clause is optimal when tax difference is significant. When the tax difference is slight, buyer financing without additional clauses is optimal. Further, there exists an optimal shareholding ratio related to tax, which can avoid double marginalisation under buyer financing and reduce supply chain losses under bank financing. Tax subsidies due to deficit make supply chain performance outstrip centralised decision-making when the shareholding ratio is more excellent than a threshold. Last, the choice of strategy under buyer financing is related to the ex-ante or ex-post signing of the purchase contract and the limited deduction of interest payment within the tax law. Our findings guide transnational supply chain financing and operations.

Legal Aspect of an Agreement Cancellation in the State of Majeure Force during the Pandemic Covid-19

Many parties can cancel an agreement or contract during the Covid-19 pandemic in Indonesia. WHO Director General, Tedros Adhanom Ghebreyesus determined the status of Corona Virus Disease 2019 (Covid-19) as a Pandemic This happened because the government issued Presidential Decree No. 12 of 2020 concerning the Determination of Disaster in the Spread of Corona Virus Disease 2019 (COVID-19) as a National Disaster. The covid-19 pandemic falls into the force majeure category or a state of force because it causes the economic sector to experience a decline. The community cannot do work as usual, all activities carried out are very limited. A contract is an agreement made by the parties in written form. An agreement is an act that binds one or more people to one or more people. This event resulted in a legal relationship between the parties, which included rights and obligations. Circumstances compel or force majeure may be earthquakes, fires, floods, landslides, wars, military coups, embargoes, epidemics, and so forth. In the time of the corona pandemic which is currently hitting all parts of the world, of course, it has an impact on the implementation of an agreement / contract. The purpose of this paper is to examine the force majeure in an agreement that occurs during the corona virus pandemic, which cannot automatically be used as a reason for cancellation of an agreement / contract, but can be used as a way to negotiate in canceling or changing the contents of the agreement / contract. The contract / agreement is canceled unilaterally without regard to the sense of justice, in accordance with Article 1338 paragraph (1) of the Civil Code, it is stated that the contract is a law for the parties. So the cancellation of the contract with due regard to aspects in the law and Article 1338 paragraph (1) of the Civil Code cannot be carried out in a covid-19 pandemic force majeure situation. The parties are required to carry out good faith in accordance with Article 1338 of the Civil Code by reviewing the agreement / contract or renegotiating by adding a contract clause to postpone carrying out obligations.

A Comparative Analysis of Unfair Terms in Consumer Contracts in Malaysia and Singapore

The inclusion of welfarist ideology in the consumers’ trade derived from the ideal of paternalism is a paradigm change from the doctrine of freedom of contract. Regulatory and legislative steps must be taken to support and attract consumers to the industry. Judicial and legislative actions must be taken to correct the market flaws that create consumers’ vulnerability while trading in the global market. As one of ASEAN members’ founders, Malaysia is moving towards people-centered economic endeavours to balance both industry and consumer interests through exclusion clauses to prevent unfair practices in consumer contracts. Legal intervention is one of the ways to curbing the issues that arise from exclusion clauses. Before 2010, the non-existence of a specific regulatory framework to limit exclusion clauses usage in contracts involving consumers further increases consumers’ vulnerability. Traditional judicial approaches in the battle against coercion and unethical behaviour of traders before 2010 did not engross consumer rights and interests. This sign is, in fact, the modern age of customer contracts, the enforcement of unfair terms. This article used the content analysis technique and analysed the evolution of legislative interference and judicial approaches in interpreting exclusion clauses in contracts involving consumers in Malaysia and Singapore.

No Oral Modification clauses to the test: how relevant are they in the COVID-19 shock and beyond?

The focus of this article will be on the function, use and judicial recognition of No Oral Modification clauses (NOM clauses). These terms usually form part of entire agreement clauses to be found in numerous commercial contracts. A No Oral Modification clause is a contractual term prescribing that an agreement may not be amended save in writing signed by or on behalf of the parties. An entire agreement clause prevents statements or representations that are not set out in a written agreement from having contractual force. According to Chitty, the practice of entire agreement clauses probably originated in the United States. No oral variation clauses, among other clauses, such as force majeure clauses, are more relevant than ever. Due to the COVID-19 pandemic challenging timeframes and the ability of the parties to perform their contracts, businesses have experienced time pressure, cash flow difficulties, lack of revenue, restrictions in their operation, and as anticipated, the immediate effect is on compliance with their contracts. Commercial contracts are thus affected. Experienced businessmen will explore ways to modify their duties to ensure they perform on the basis of what is doable, eg limit the amount of obligations, agree on more extended timelines for performance or limit imminent or longer-term performance of obligations. In a nutshell, this means that commercial practitioners will seek to somehow amend their contract. More notably, because of the pandemic and the hardship it brings forward, parties involved may try to invoke a contractually available force majeure clause. However, the latter may need to be read with the NOM clauses, which, as we shall see, are almost as important as redhand rule clauses. The original questions that this article will pose and then answer are the following: 1. How popular are NOM clauses in commercial contracts? The methodology that we will follow will look at real life commercial contracts of the following two types: commercial leases and shipping contracts. 2. Are NOM clauses prevalent? 3. How are English courts upholding NOM clauses? The role of Rock Advertising will be of particular consideration. What is the importance of the recent English judicial development when compared with the quantitative results of the appearance of NOM clauses in commercial leases and standard shipping contracts?

Private Enforcement of the EU Rules on Competition \u2013 Nullity Neglected

Private enforcement of the European Union’s rules on competition (Arts. 101, 102 TFEU) has become prominent as a counterpart to their public enforcement. Mostly, it is identified with tort actions brought under EU-harmonized national law by individuals claiming compensation for the harm suffered from anticompetitive agreements or practices. However, claims for compensation represent imperfect sanctions for the infringement of the competition rules because they are brought only once the damage is done and at a time when the conditions of competition may have changed. Typically also, such private actions are no equivalent or complement to administrative enforcement, but are largely dependent on it (follow-on actions). In addition, bringing them is attractive only if the damage suffered is considerable, sufficient evidence available, and the defendant solvent enough. Therefore, this paper revisits the first line of private enforcement, which is enforcing the nullity of anticompetitive agreements as provided for directly by primary Union law in Art. 101(2) TFEU. Nullity was a much-discussed issue under the authorization regime of Reg. 17/62, the first regulation implementing the enforcement of the competition rules, but has become somewhat neglected as a sanction since Reg. 1/2003 changed the enforcement system. Yet, it is precisely under the regime of immediate and direct applicability of both Arts. 101(1) and 101(3) TFEU, which Reg. 1/2003 reestablished, that the potential of nullity as a sanction of anticompetitive agreements could be fully activated. Such active use of invalidity challenges may lead to redefining the interface between EU law and national contract law, which is the line of severability of the innocent parts of a restrictive agreement from its anti-competitive parts. It should also result in reassessing the legal fate of follow-on transactions concluded by a party to an anticompetitive agreement with third parties, and it should bring abusive contracts within the realm of the nullity sanction that dominant firms impose on third parties. The guiding principle for such general reappraisal of the nullity sanction must be to bring its purpose fully to bear, which is to facilitate exit from anticompetitive agreements or from (abusive) contract clauses with a view to reopening competition and/or to allow the renegotiating of a transaction in terms of undistorted competition. This may mean that only the party whose freedom of competition is restricted may claim nullity.

How Trustees of Dartmouth College v. Woodward Clarified Corporate Law

The U.S. Supreme Court decided Trustees of Dartmouth College v. Woodward (17 U.S. 4 Wheat 518) in 1819, just as the corporate form of organization was rapidly becoming the preferred legal form for organizing and carrying out a wide range of business activities. The case is most widely-known for its decision that the charter by which the privately-funded eleemosynary institution – Dartmouth College – was founded constituted a “contract” between the state and the founders, thereby bringing it within the jurisdiction and protection of the “Contract Clause” of U.S. Constitution which provides that “No state shall pass any Law impairing the obligation of contracts” (U. S. Constitution, Article 1, Section 10). But the case was arguably more important for clarifying and settling a critical question about the corporate form: it confirmed, unequivocally, that for an “association” to receive the special privileges available to corporations, it must have a government-issued charter. Those privileges include separate entity status, which was especially important for receiving, holding and transferring land, for continuity in contracting, for clear lines of succession, and for litigation to enforce contracts. Prior to this case, courts in the U.S. struggled with deciding what rules to apply to a variety of voluntary associations that lacked government-issued charters.

Masking of photovoltaic system performance problems by inverter clipping and other design and operational practices

This paper describes how performance problems can be “masked,” or not readily evident by several causes: by photovoltaic (PV) system configuration (such as the size of the PV array capacity relative to the size of the inverter and the resultant clipped operating mode); by instrumentation design, installation, and maintenance (such as a misaligned or dirty pyranometer); by contract clauses (when operational availability is transformed to contractual availability, which excludes many factors); and by identified management and operational practices (such as reporting on a portfolio of plants rather than individually). A simple method based on a duration curve is introduced to overcome shortcomings of Performance Ratio based on nameplate capacity and Performance Index based on hourly simulation when quantifying masking effects, and inverter clipping and pyranometer soiling are presented as two examples of the new method. With a better understanding of the non-transparency of masking issues, stakeholders can better interpret performance data and deliver improved AC and DC plant conditions through PV system operation and maintenance (O&M) for improved performance, reduced O&M costs, and a more consistently delivered, and reduced, levelized cost of energy (LCOE).