Common Law Of Contract Research Articles

Human dignity in the common law of contract : making sense of the Barkhuizen, Bredenkamp and Botha trilogy

Human dignity in the common law of contract : making sense of the <i>Barkhuizen, Bredenkamp</i> and <i>Botha</i> trilogy

Principles of Internet contracting: Illuminating the shadows

The common law that applies to Internet contract formation could be said to exist in a penumbra—a grey area of partial illumination between darkness and light—where it may be possible to lose sight of established contract law principles. Internet contracts raise difficult issues relating to their formation that challenge traditional contract doctrine. Analysis of case law from the United States, United Kingdom and Ireland illustrates that the courts have not applied contract formation doctrine in a principled or consistent way. There is a tendency for decisions to be reached for policy reasons, for example, to facilitate the development of e-commerce, or to achieve a result that is considered fair, rather than on sound principles of contract law. There may also be some uncertainty arising from the relationship between statutory consumer protection rules and common law contract formation doctrine. The enforceability of Internet contracts in the common law courts remains unpredictable. This article argues that although Internet contracting may raise distinctive contract formation issues, it is possible for the judiciary to invoke the inherent flexibility of the common law, to take into account the specific characteristics of Internet contracts, while still adhering to established contract law doctrine and maintaining a principled approach.

Harmonising Legal Values and uBuntu: The Quest for Social Justice in the South African Common Law of Contract

In this article, a comparison is drawn between the role of good faith in the development of the Roman law of contract and the emerging role of ubuntu in the South African common law of contract. Firstly, it is shown how the idea of good faith as an open norm in Roman law was inspired by Greek philosophy and it is argued that ubuntu as an underlying value of the customary law can infuse good faith in the common law of contract in similar fashion. Secondly, an important distinction between the two concepts is identified. Although both concepts promote contractual justice between the contracting parties, ubuntu entails a further duty to promote the social and economic well-being of the parties as well as that of the greater community. Hence, in contrast to good faith, ubuntu is concerned with the promotion of substantive equality in private dealings.

Legal Pluralism, uBuntu and the Use of Open Norms in the South African Common Law of Contract

In this article, a comparison is drawn between the role of good faith in the development of the Roman law of contract and the emerging role of ubuntu in the South African common law of contract. Firstly, it is shown how the Romans realised that their existing formal and rigid laws could not address the changing legal needs of the community due to the influx of foreigners (especially foreign traders) into Rome. In reaction to the changing commercial environment, they introduced flexible legal procedures and a more normative approach to these legal transactions to achieve fairness and justice between the contracting parties. This worked so well that the new flexible procedures and normative principles were transferred to the existing formalistic law. Gradually the existing ius civile became subject to a more normative interpretation in the interests of justice through the use of the open norm of good faith. It is argued that in a similar way, ubuntu can be used to address legal pluralism in the South African legal system, and its application as an underlying constitutional value could result in the better use of the open norm of good faith to address contractual unfairness.

The Best and Worst of Contracts Decisions: An Anthology

The common law of contract is an intellectual and political triumph. In its mature form, it enables judges whose ideological goals may differ to apply doctrines that provide the right to make enforceable promises; with legislation, the common law also provides proper limits on that right. Lately, scholars have produced a flood of contract law theory that enriches our thinking about and grounding for contract law norms. But the real work of common law development has always occurred in the trenches — in judicial decisions. In those trenches and on the framework built there, some decisions matter far more than others, and jurists, scholars, and teachers draw on these key decisions to do their work. In the following collection of essays, scholars deeply familiar with judicial opinion in the common law of contract — twenty authors who have a collective 497 years writing, teaching, and thinking about contract law — identify the best and worst of contracts cases. Many of the cases are staple examples for practical and theoretical contracts scholarship. Many are taught to thousands of students each year. Many are routinely cited by courts. The essays explain, rebuke, extol, entertain, and inspire. They are brief but substantive. They set a basis for future commentary and establish a collective standard against which contracts decisions may be judged. They are vital study for contract law adjudication, scholarship, and teaching.

Unconscionability's Greatly Exaggerated Death

Reports of unconscionability’s demise are greatly exaggerated. According to conventional wisdom, the common-law contracts doctrine is rarely used, except in limiting clauses that purport to waive consumers’ remedial rights. In fact, as this Article documents, the doctrine is quietly flourishing, and courts regularly use it to strike down substantive terms. In recent years judges across the country have rewritten or voided payday loans, signature loans, overdraft fees, and mortgage contracts on the grounds that their interest rates, prices, or other core terms were unconscionably unfair. Since unconscionability is alive and well, the time is ripe to answer an unexplored question in the doctrine’s contours: How tailored should the unconscionability analysis be to the characteristics of a particular consumer entering into a contract, versus untailored to the typical or median consumer? This Article advances an argument in favor of tailoring unconscionability. In addition to consistency with unconscionability’s theoretical underpinnings, tailoring brings the doctrine in line with modern contracting practices. Today’s consumer contracts involve increasing market segmentation, individualized pricing, and customization of terms, in stark contrast to the stylized view of boilerplate that most scholars take for granted. Unconscionability can thus play an important role in consumer protection policy, which faces the challenge that consumers are highly heterogeneous and need different protections. Courts have a particular edge here: they specialize in individualized fact-finding, in contrast to regulations, which are generally one-size-fits-all.

"The Common Law is … not what it used to be"*: Revisiting Recognition of a Constitutionally-Inspired Implied Duty of Fair Dealing in the Common Law Contract of Employment (Part 3)

This piece, which is in three parts, will revisit the importation of fairness into the employment contract (outside and independent of the fairness-based provisions of our labour legislation) by a line of Supreme Court of Appeal (SCA) judgments during the 2000s. This process culminated in the recognition of an "implied duty of fair dealing" in the common-law employment contract. This piece will discuss such developments, will argue that such an implied duty still forms part of our law (despite the apparent consensus in the literature that the SCA turned its back on such earlier judgments), will critically examine some of the arguments for and against the recognition of such a duty, and will then consider the issue within the broader context of the role of good faith and fairness in our general law of contract.&#x0D; &#x0D;

"The Common Law is … not what it used to be"*: Revisiting Recognition of a Constitutionally-Inspired Implied Duty of Fair Dealing in the Common Law Contract of Employment (Part 1)

This piece, which is in three parts, will revisit the importation of fairness into the employment contract (outside and independent of the fairness-based provisions of our labour legislation) by a line of Supreme Court of Appeal (SCA) judgments during the 2000s. This process culminated in the recognition of an "implied duty of fair dealing" in the common-law employment contract. This piece will discuss such developments, will argue that such an implied duty still forms part of our law (despite apparent consensus in the literature that the SCA turned its back on such earlier judgments), will critically examine some of the arguments for and against the recognition of such a duty, and will then consider the issue within the broader context of the role of good faith and fairness in our general law of contract.&#x0D; &#x0D;

"The Common Law is … not what it used to be"*: Revisiting Recognition of a Constitutionally-Inspired Implied Duty of Fair Dealing in the Common Law Contract of Employment (Part 2)

This piece, which is in three parts, will revisit the importation of fairness into the employment contract (outside and independent of the fairness-based provisions of our labour legislation) by a line of Supreme Court of Appeal (SCA) judgments during the 2000s. This process culminated in the recognition of an "implied duty of fair dealing" in the common-law employment contract. This piece will discuss such developments, will argue that such an implied duty still forms part of our law (despite the apparent consensus in the literature that the SCA turned its back on such earlier judgments), will critically examine some of the arguments for and against the recognition of such a duty, and will then consider the issue within the broader context of the role of good faith and fairness in our general law of contract.&#x0D; &#x0D;

The Hollowed Out Common Law

The electronic marketplace poses novel issues for contract law. Contracts created through browsewrap, clickwrap, and shrinkwrap (contracts whose embedded terms are only available after purchase) poorly fit doctrines that emerged from face-to-face offer and acceptance, the mutual execution of a common set of documents, or the rituals of mass market transactions involving physical fine print. Not surprisingly, these contracts of the new electronic marketplace require doctrinal elaboration. Our Article asks not about the specific resolution of new doctrinal challenges, but about how the common law of contracts will be elaborated. Specifically, the Article begins with empirical observations about the domain of all electronic and shrinkwrap contract cases and makes four critical findings. First, we document two shifts: One arises from a steady decline in the number of cases adjudicated in state court relative to federal courts, which by 2015 adjudicate the vast majority of cases. The other stems from a rise in class actions, which is intimately tied to the migration of cases to federal court. The result is that today the vast majority of cases are class actions brought in federal court. The increase in class actions is not surprising given the relatively small stakes of most transactions and the little incentive that creates for individual consumer litigation. The increased dominance of the federal forum is in part likely a reflection of the federalization of class action law under the Class Action Fairness Act (CAFA). Second, the consequence of the dominance of the federal forum is that the common law is being elaborated in federal court in suits arising under diversity jurisdiction. In turn, those federal courts are largely bereft of any state law moorings as they develop the common law of the electronic marketplace. Erie Railroad v. Tompkins notwithstanding, the common law is driven by federal court decisions, building incrementally on each other rather than state law. Third, the development of common law in federal court means that there is no apex court that can define conclusively the law of any jurisdiction. Diversity jurisdiction allows federal courts to predict how they believe state common law would develop, but binds no state courts in the affected jurisdiction, and does not even bind federal courts in the same Circuit putatively applying the law of another state. Rather than the law resolving hierarchically, we identify a “tournament effect” in which the law settles on one or a few influential decisions, regardless of the state law that the case may have arisen under. Finally, we conjecture that the use of contractual clauses compelling arbitration and forbidding claim aggregation may have affected the number of cases being adjudicated in court and, consequently, depressed the development of publicly-available law in this area.

An Empirical Study of Judicial Review of Issues of Arbitration Consent

Voluntary arbitration should have played a more positive role in most regions of mainland China with heavy litigation caseloads in local people’s courts. Such arbitration must be relied upon consent of the parties. The quality of legislation for disputes of arbitral consent and its application by judicial review is very important to improve arbitration. Oversea judicial review of disputes of arbitral consent mainly relies upon common contract law and involves the issues about whether there is an acceptance to the offer for arbitration, the parties have signed an arbitration agreement with minimum content, there exists arbitral intention in multiple modes of dispute settlement agreed by the parties, and so on. The burden of proof in oversea jurisdiction is substantially assumed by the party who makes claims. The standards for establishing arbitral consent vary with jurisdiction, as well as time. Much oversea jurisdiction, however, adopts a friendly position towards arbitration to solve relative issues. In the judicial review practice, the people’s courts at all levels have tended to determine the establishment of arbitral consent in some cases, showing their supportive position towards arbitration. In addition, the Supreme People’s Court also assists arbitration in the manner that, once a lower people’s court finds that foreign-related arbitration agreement is invalid, it will require the latter to report to high people’s courts. However, such a request for reporting is only applied against foreign-related cases, and its own procedure is very prolonged and inefficient. At the same time, in other cases including the nature of foreign-related affairs, there is a very unfriendly attitude towards the determination of arbitral consent, which is mainly manifested in the lack of agreement on arbitration agreement with the selection of two or more arbitration institutions. Such a harsh attitude of judicial review is not conducive to China’s growth into a world-competitive place of arbitration. As one of the world’s arbitration centers, it can bring a lot of benefits such as good reputation, foreign exchange income and a reduction in litigation rate in our country. Our country should adopt the dual measures of amending the corresponding defects of the Arbitration Law and improving the judicial attitude of the people’s courts to achieve this goal, that is to abolish the legislative provisions of the prohibition of ad hoc arbitration, to allow to appeal to the higher-level people’s courts for negative decisions on the issues of arbitral consent. At the same time, the people’s courts in the judicial review of any case stop applying internal reporting procedures when they announce arbitral consent and so on.

The Constitutional Court as the apex court for the common law of contract: middle ground between the approaches of the Constitutional Court and the Supreme Court of Appeal

In terms of the Constitution Seventeenth Amendment of 2012, the Constitutional Court is now the apex court in all legal matters. From a conceptual standpoint, this development is welcomed in relation to contract law. Indeed, the hope is that the recognition of the Constitutional Court as the apex court better enables it to exhort the Supreme Court of Appeal (SCA) (and the lower courts) to integrate the rights and values of the Constitution properly within the common law of contract. Unfortunately, what has unfolded thus far in the Constitutional Court does not quite seem to measure up. Whilst the Constitutional Court has tended generally to emphasise the need for greater fairness in contracts upon the basis of the Constitution and its broader transformative project for South African law, it appears perplexed when confronted with the question of how to do so without unduly sacrificing legal certainty. As a counterfoil, the SCA remains steadfast that the established common law of contract is constitutionally legitimate (and inherently fair) as it stands. In this article, I argue that the appropriate approach to the question of fairness in a constitutionalised common law of contract lies somewhere between the approaches of the Constitutional Court and SCA.

Misbehavioral Law and Economics

Many legal rules—ranging from common-law contract doctrines to modern consumer protection regulations—are designed to protect individuals from their own mistakes. But scholars have neglected a core difficulty facing such policies: we humans are a motley bunch, and we are defined in part by our idiosyncrasies. As a result, one person’s mistake is another’s ideal choice. Making matters worse, it is hard to observe when a policy response misfires. If cognitive errors and psychological biases are as prevalent as current research suggests, then we have no reliable way of knowing consumers’ true preferences. So are we always faced with a dilemma, where any approach that helps one group of consumers must hurt another? This Article suggests an approach to this impasse. The key is to distinguish two potential sources of individual preferences: subjective tastes and objective circumstances. For example, two day-traders betting in the stock market may differ along either dimension. Each may place a different subjective value on the thrill of gambling (taste), and a stock market loss may have different impacts on each trader’s objective financial health (circumstance). This distinction can guide policy. Consumers likely have better information on their subjective tastes, while third-party interventions can often make better use of objective circumstances in improving choices. This approach underscores some of the limitations of the rising reliance on behavioral economics and psychology in legal scholarship and policy. This Article discusses how discerning tastes from circumstances could guide regulation of pressing issues including payday lending and investor protection.

Contract Law and the Constitution: Bredenkamp v Standard Bank of South Africa Ltd (SCA)

Case Note

O direito contratual comparado em nova perspectiva: revisitando as diferenças entre os sistemas romano-germânico e de common law

Resumo Este artigo busca oferecer uma nova interpretação de certas distinções clássicas entre o direito dos contratos romano-germânico e anglo-saxônico. Desta análise surge um padrão claro, mas até então negligenciado. O sistema de civil law impõe mais limitações ao conteúdo das obrigações contratuais, valorizando o papel da boa-fé como standard de conduta obrigatório e impondo um maior número de cláusulas de natureza cogente. O sistema de common law, em contrapartida, estabelece limitações mais contundentes aos remédios disponíveis em caso de inadimplemento contratual, invalidando cláusulas penais, qualificando a execução específica como remédio excepcional e concedendo mais generosamente um “novo começo” (fresh start) na insolvência. Não obstante, os diferentes papéis do Estado na fiscalização das cláusulas do contrato e na imposição de consequências jurídicas para o inadimplemento são, em larga medida, substitutos funcionais, o que torna os resultados concretamente obtidos em ambos os sistemas mais próximos do que se esperaria ao se examinar os diferentes institutos de forma isolada.

Objective Plain Meaning in Common Law Contracts

Courts and scholars disagree about the quantum of evidence that is necessary to determine the meaning of contractual provisions. Formalists favor excluding extrinsic evidence unless the contractual text is found to be ambiguous. Contextualists, by contrast, look to extrinsic evidence to support claims about contractual meaning even absent a finding of ambiguity. The formalist approach is faulted for failing to provide a meaningful account of the parties’ intentions and for placing heavy reliance upon the judge’s own linguistic intuitions and general-use English dictionaries—both problematic guides to plain meaning. At the same time, the contextualist approach may impose significant costs on the contracting parties and invite strategic behavior. Corpus linguistics offers a middle way. Corpus linguistics draws on evidence of language use from large, coded, electronic collections of natural language—language used in natural settings, rather than language elicited through interviews or surveys. These may include collections of texts from newspapers, magazines, academic articles, or transcribed conversations. These collections of texts are referred to as corpora (the plural of corpus). Linguistic corpora can be designed to model the linguistic conventions of a wide variety of speech communities, industries, or linguistic registers. Because large, sophisticated linguistic corpora are freely available, language evidence from linguistic corpora offers a comparatively low-cost alternative to the vast quantity of extrinsic evidence permitted by contextualist interpretive approaches. Moreover, by evaluating corpus evidence, judges and lawyers can create a more accurate, evidence-based picture of contractual meaning than can be found in the formalist judge’s linguistic intuition or in a general-use dictionary. Moreover, corpora can provide objective evidence of the linguistic conventions of the communities that draft and are governed by the agreements judges and lawyers are called upon to interpret. Corpus evidence can give content to otherwise vague legal concepts and provide linguistic evidence to aid in the evaluation of claims about the meaning (or ambiguity) of a contractual text. Below I outline how corpus linguistic methods may be applied to the interpretation of contracts.

A living customary law of commercial contracting in South Africa: some law-related hypotheses

Inspired by calls to ‘decolonise’ South African law and legal education, this paper will posit some hypotheses as to the nature of a living customary law of commercial contracting from the perspectives of two South African contract law teachers. An account of the commercial format of customary contracting is largely absent from the law reports and leading legal textbooks in this country. The dominant narrative in existing legal sources, however, (which may be stereotyped), is of African communalism prevailing in customary contract practice. This is reflected, for example, in the discourse on ‘ubuntu’, which is being used at present as a vehicle for the constitutional transformation of the South African common law of contract. Other existing empirical accounts from discourses such as economics and anthropology also suggest, however, that contracting in indigenous African communities rests on notions of trust and community. This is reinforced by the existence of informal township dispute resolution structures. We will thus posit a central hypothesis that customary commercial contracting is relational in nature, using an inter-disciplinary literature review and drawing on the lived experiences of the authors. Other related hypotheses will also be developed. Ultimate truth here is a matter for future empirical study.

The National Credit Act Regarding Suretyships and Reckless Lending

In terms of the National Credit Act a credit provider may conclude a credit agreement with a consumer only after he has made a proper financial assessment and concludes that the consumer will be able to satisfy all of his obligations under all his credit agreements. However, a practice of not conducting this affordability assessment has evolved amongst certain credit providers where the credit agreement involved is a suretyship agreement. This article investigates whether or not a suretyship agreement is indeed a credit agreement in terms of the National Credit Act, and if a financial assessment should be conducted in the case of a suretyship agreement. The main aim of the article is to try to identify what the concept of a “credit guarantee”, as defined in the Act, encompasses and ultimately if the common-law contract of suretyship falls under this definition. Our conclusion is that “credit guarantee” is as vague and problematic as many of the other definitions in the Act. If one reads the Act in its entirety (including the regulations to the Act), it seems unlikely that the legislature intended not to regulate common-law suretyships also.

Decomposing Bhasin v Hrynew : Towards an institutional understanding of the general organizing principle of good faith in contractual performance

In Bhasin v Hrynew, the Supreme Court of Canada recognized good faith in contractual performance to be a ‘general organizing principle’ of the common law of contract. The true impact of Bhasin on the future development of Canadian contract law remains the subject of considerable debate among legal scholars and practitioners. This article explores Bhasin’s evolutionary impact on the Canadian common law of contract, by providing an institutional understanding of the general organizing principle of good faith in contractual performance. It is contended that Bhasin’s contribution to the common law of contract is institutional rather than substantive – Bhasin fundamentally alters the organization of the sources of contract law by introducing a new law-making mechanism (that is, ‘law-making through good faith’) that is separate from, and potentially supersedes, the traditional doctrine of precedent. To support the central claim that Bhasin’s contribution is institutional rather than substantive, I employ three different kinds of arguments that correspond to three distinct, but closely related, dimensions of the principle of good faith in contractual performance: (a) semantic structure; (b) historical origins; and (c) economic function. Although these three lines of inquiry rest on quite different methodological premises, they converge in supporting the central idea that good faith performance is best understood as an institutional mechanism to allocate law-making power rather than a substantive legal principle.

Case Note England and Wales, UKSC 4 November 2015, Cavendish Square Holdings BV v. Makdessi; ParkingEye Ltd v. Beavis

Abstract: The UK Supreme Court decision in Cavendish Square Holdings BV v Makdessi; ParkingEye Ltd v Beavis marks an important turning point in the treatment of penalty clauses in England and Wales. In these two conjoined cases, the Court sought to give clarity to the previously complex law on this topic and to identify its underlying principles. The cases involved both commercial parties (Makdessi) and a consumer (ParkingEye). While refusing to abolish the rule against penalties, the Supreme Court, in adopting a very restrictive approach to intervention, highlights the continuing importance of freedom of contract reasoning in the common law of contract. It also provides a good illustration of the difficulties of applying a directive (here the Unfair Terms Directive 1993/13/EEC) in the national consumer law context.