Incomplete Agreements Research Articles

A Review of Incomplete Agreements and the Formation of a Sales of Goods Contract

Purpose - This paper focuses on two issues that may arise from incomplete agreements in relation to the formation of contracts in international sales transactions, and explores national attitudes toward these issues. The first issue is whether a contract can be formed for an incomplete agreement. The second issue is the question of what criteria can be used to determine terms not agreed upon between the parties.
 Design/Methodology/Approach - This paper analyzes each country’s attitude toward incomplete agreement through case analysis. It explores the international trend towards incomplete agreements through analysis of the case of the UK and the cases of CISG member countries.
 Findings - Our findings may be summarized as follows. Even if an incomplete agreement is achieved, the courts tend to interpret it to allow the formation of a contract if the parties’ intentions to be bound by the agreement are clear. Whether or not a contract is formed depends on what terms the parties need to agree to in order to make the contract binding. If there is no agreement between the parties regarding the open terms, these are determined by applying objective criteria that consider the transaction process, trade usage, and purpose of the contract.
 Research Implications - This research is significant in that it analyzes the trends in the interpretation of incomplete agreements. This thesis found where it was clear that the parties intended to be bound, and to establish a legal relationship, it is permissible to imply terms that give business validity.

Failing forward in EU migration policy? EU integration after the 2015 asylum and migration crisis

ABSTRACTBy advancing integration through incomplete agreements, the European Union (EU) has created the very conditions for the emergence of crises, and this has, in turn, spurred on further agreements to deepen integration. Employing this theoretical lens, this article examines EU co-operation in asylum and migration that culminated in 2015 to determine whether crises are, in fact, integral to a cyclical process of EU integration rather than occasional events caused by external shocks. This is done by examining the failures and crises that emerged in migration and asylum policy up to 2015 and the agreements struck at EU level to address them. It is found that despite nominal action to address the weak monitoring mechanisms in use to date and incremental reinforcement of the constellation of institutions operating in this area, no solution has dealt with the critical lack of solidarity and absence of centralized institutions at the root of these issues.

The non-ratification of mixed agreements: Legal consequences and solutions

The 2016 referendum in the Netherlands on the EU-Ukraine Association Agreement and the Walloon objection in Belgium to sign CETA triggered the question of the consequences of the non-ratification of mixed agreements that are (to be) concluded between the EU, its Member States and one or more third parties. This non-ratification would lead to so-called “incomplete” mixed agreements. The present article discusses the legal problems connected to incomplete agreements and points to the differences between bilateral and multilateral agreements. Now that mixity seems to be have become more common – due to the wider scope of Free Trade Agreements – and EU citizens and their parliaments become more outspoken with respect to the content of these agreements, it seems just a matter of time before we are faced with problems of non-ratification. The unclear division of external competences between the EU and its Member States makes it difficult to offer clear-cut solutions. Overall, however, it does not seem advisable to rely on ex post facto solutions for non-ratification problems; we may have to find ways to allow potential problems to be on the negotiation table at an earlier stage.

Managing the relational character of public-private partnership contracts

A public-private partnership contract has the character of a relational contract. Relational contracts are incomplete agreements governing transactions where the contracting parties have mutually agreed that it is impossible or economically inefficient to contractually define ex ante possible difficulties and contingencies in the contract implementation, nor the difficulties and contingencies underlying the ex post control of contract performance by a third entity (court or arbitration). Considering the methodology of managing relational contracts, it is essential that the theory of relational contracts does not advocate for the establishment of relational contracts as a separate category of contracts, with specifically designated contractual instruments. This theory defines the relational contract as a category which legitimizes 'the relational mode' of a particular contract. The methodology of relational contracts is important for contracts on public-private partnership as it ensures that the contractual relationship is aligned with the changes in the immediate environment where the PPP contract operates. The aforementioned alignment has two aspects. The first one is the ex ante aspect of the alignment which is primarily aimed at preventing the detrimental effect of such alignment to the public partner's interests. Therefore, the intent to prevent such an effect shall be taken into account when defining the criteria for the selection of the most favorable private partner and the best offer. At the same time, it is essential to establish verifiable standards for measuring the private partner performance in the phase of contract implementation. For this goal to be achieved, it is crucial to specify the subject matter of the private partner's obligations, to establish the priority rank of PPP project objectives, to elaborate on the specific requirements governing the eligibility of private partners to participate in the bidding process, to specify the 'value for money' which the public partner will obtain by the implementation of the contract, and to ensure an adequate structural framework of the PPP contract. The second one is the ex post aspect of alignment which involves alignment of the contract to the contextual changes in the contract environment during the contract period. In this regard, the key principles are the principles of solidarity and cooperation.

The Structure of Negotiations: Incomplete Agreements and the Focusing Effect

We study the use of incomplete agreements in a deterministic environment. If preferences are distorted by the focusing effect, the negotiating players may negotiate in stages: first signing an incomplete agreement and then finalizing the outcome of the negotiation. The first bargaining stage can be used to eliminate extreme outcomes from the possible bargaining solutions, hence increasing the value of the agreement for the players whose preferences are distorted by the focusing effect. Our framework justifies the existence of a number of pre-bargaining actions. For example, a seller may enter the negotiation over the sale of a good having already announced a maximum price. Similarly, a seller may prefer to produce a good and later bargain over the price of the good (i.e. may prefer to be held up), rather than simultaneously bargain over price and quality.

Contractual framework of private-public partnership: The sui generis nature of PPP as a result of the holistic approach

The holistic (comprehensive] approach to the methodological framework for the analysis of public-private partnership is essential presumption for the transformation of the public and private interests from the conflicting ones to the parallel and convergent ones. Private and public interests are to be regarded not as the divided particulars but as the element of the dynamics of PPP as a whole. The holistic approach facilitates interaction which brings new 'added values' in the exercise of the public interest by using the PPP construction: economic, social and political. This concept allows the PPP to 'take the best of both worlds' (the protection of the public interest and solidarity from the public sector, and the entrepreneurial logic from the private sector]. In light of the sui generis structure of mutual relations between the public and the private partner in the PPP framework, the contractual basis of public-private partnership has the character of relational contracts. Relational contracts differ from traditional contracting mechanisms. The parties to traditional contracts have equal information at their disposal, which enables them to define ex ante the terms of the transaction insofar as the consequences of performance or non-performance are anticipated at the time of contract conclusion. On the other hand, relational contracts are incomplete agreements: the parties to relational contracts mutually agree that it is impossible or economically inefficient to define ex ante the possible difficulties and circumstances of the transaction at issue (which is possible in classical contracts]. In this respect, in relational contracts the rationale for commitment is relatively flexible. The public-private partnership agreement is a relational contract. Relational contracts within the PPP framework limit the opportunistic behaviour on both parties and promote the development of their co-operation and exchange of information. Relational contracts are idiosyncratic (unlike traditional contracts which may be standardized and embodied in a specific legal form]. Public private partnerships agreements have to align the principle of hierarchy on which the public partner has based its activities (a high level of administrative control and the lack of economic incentives] with the principles of market economy underpinning the logic and the operation of the private partner.

Incomplete Agreements: a Comparative Law Analysis

Incomplete Agreements: a Comparative Law Analysis

Contractual Incompleteness as a Signal of Trust

This paper shows how the fear of signaling distrust can endogenously lead to incomplete contractual agreements. According to standard results in contract theory an optimal incentive contract should be conditional on all verifiable information containing statistical information about an agent's action or type. Most real world contracts, however, condition only on few contingencies and often no explicit contract is signed at all. This paper argues that the proposal of a sophisticated complete contract including fines for misbehavior and other explicit incentives signals distrust to the partner. A trustworthy partner would choose the desired action anyway. Insisting on explicit contractual incentives thus means that the partner's trustworthiness is called into question. Thus if it is important for the relation that an agent believes to be trusted, a principal may prefer to leave a contract incomplete rather than to signal her distrust by proposing a complete contract.

Incomplete agreements and the limits of persuasion in international politics

Research on international political communication has been revived by constructivist International Relations scholars who have developed the concept of ‘arguing’. In this mode of communication, negotiators are brought to revise causal or normative beliefs that they previously held by means of persuasion. Thus arguing is conceptualized as a trigger of change in international politics. Yet, the underlying assumptions about the malleability of beliefs contrast with traditional approaches to international diplomacy. In the traditional view, diplomacy is a practice of containing rather than resolving fundamental disagreement. In this essay, I claim that whenever arguments are part of a process of legal reasoning, they can be politically effective without a demonstrable change in actors’ beliefs. To account for such different effects of ‘arguing’, I introduce the distinction between complete and incomplete agreements from legal theory. Incomplete agreements occur when actors agree on a norm, a rule or a course of action, yet without agreeing on all principles, values or other reasons that stand behind it. The article illustrates the emergence of such an incomplete agreement with the negotiation history of the United Nations Framework Convention on Climate Change.

A Theory of Self-Enforcing Indefinite Agreements

All contracts are incomplete. But incomplete contracts differ along several key dimensions. Many contracts are incomplete because parties decline to condition performance on future states that they cannot observe or verify to courts. In these cases, the incompleteness is exogenous to the contract. Other agreements, however, appear to be incomplete in the sense that parties decline to condition performance on available, verifiable measures that could be specified in the contract at relatively low cost. Thus, incompleteness is endogenous to these agreements suggesting that the parties had other reasons for leaving the terms in question unspecified. Traditional contract law doctrine appears to track this distinction. One of the core principles of contact law is the requirement of definiteness. An agreement will not be enforced as a contract if it is uncertain and indefinite in its material terms. It is widely believed, however, that the indefiniteness doctrine is largely ignored by contemporary courts. But a study of the contemporary case law on indefinite contracts reveals some striking facts. In literally dozens of cases, American courts dismiss claims for breach of contract on the grounds of indefiniteness, often without granting any relief to the disappointed promisee. This evidence raises a fundamental question: Why do parties write deliberately incomplete agreements in the shadow of a robust indefiniteness doctrine? One hypothesis is that these agreements may be self-enforcing. But most of the recently litigated cases do not appear to be self-enforcing in the traditional sense. Rather, most are isolated transactions between strangers trading at arms length. Recent work in experimental economics suggests, however, that the domain of self-enforcing contracts may be considerably larger than has been conventionally understood. A robust result of these experiments is that a significant fraction of individuals behave as if reciprocity were an important motivation (even in isolated interactions with strangers) while a comparable fraction react as if motivated entirely by self interest. These experiments support a theory that predicts that deliberately incomplete contracts that rely on self-enforcement through reciprocal fairness are more efficient than the alternative of more complete, legally enforceable agreements. The potency of reciprocal fairness as a method of self-enforcement explains (and justifies) the resiliency of the common law indefiniteness doctrine in the face of a contemporary academic consensus in favor of expanding the scope of legal regulation.

A Theory of Self-Enforcing Indefinite Agreements

All contracts are incomplete. But incomplete contracts differ along several key dimensions. Many contracts are incomplete because parties decline to condition performance on future states that they cannot observe or verify to courts. In these cases, the incompleteness is exogenous to the contract. Other agreements, however, appear to be incomplete in the sense that parties decline to condition performance on available, verifiable measures that could be specified in the contract at relatively low cost. Thus, incompleteness is endogenous to these agreements suggesting that the parties had other reasons for leaving the terms in question unspecified. Traditional contract law doctrine appears to track this distinction. One of the core principles of contact law is the requirement of definiteness. An agreement will not be enforced as a contract if it is uncertain and indefinite in its material terms. It is widely believed, however, that the indefiniteness doctrine is largely ignored by contemporary courts. But a study of the contemporary case law on indefinite contracts reveals some striking facts. In literally dozens of cases, American courts dismiss claims for breach of contract on the grounds of indefiniteness, often without granting any relief to the disappointed promisee. This evidence raises a fundamental question: Why do parties write deliberately incomplete agreements in the shadow of a robust indefiniteness doctrine? One hypothesis is that these agreements may be self-enforcing. But most of the recently litigated cases do not appear to be self-enforcing in the traditional sense. Rather, most are isolated transactions between strangers trading at arms length. Recent work in experimental economics suggests, however, that the domain of self-enforcing contracts may be considerably larger than has been conventionally understood. A robust result of these experiments is that a significant fraction of individuals behave as if reciprocity were an important motivation (even in isolated interactions with strangers) while a comparable fraction react as if motivated entirely by self interest. These experiments support a theory that predicts that deliberately incomplete contracts that rely on self-enforcement through reciprocal fairness are more efficient than the alternative of more complete, legally enforceable agreements. The potency of reciprocal fairness as a method of self-enforcement explains (and justifies) the resiliency of the common law indefiniteness doctrine in the face of a contemporary academic consensus in favor of expanding the scope of legal regulation.

Peace operations: From short‐term to long‐term commitment

By developing a strategic approach to the implementation of peace accords in civil war, the United Nations can better the odds for ending a war and fostering development in the long run. Recent attempts at implementation have suffered from recurring difficulties: incomplete, vague and expedient agreements; lack of coordination between mediators and those who have to implement an agreement; lack of co‐ordination between implementing agencies; lack of sustained attention by the international community; incomplete fulfilment of agreements by warring parties; and the presence of ‘spoilers’ who seek to destroy any incipient peace. To overcome these difficulties, the UN must encourage the parties to choose political, cultural, social and economic security‐building measures during the negotiation phase and systematically apply confidence‐building measures to the military components of implementation. This demands a reconsideration of peace making in a civil war to include a long‐term international commitment to ...

Relational Contracts in the Courts: An Analysis of Incomplete Agreements and Judicial Strategies

Relational Contracts in the Courts: An Analysis of Incomplete Agreements and Judicial Strategies

Specific Performance of Incomplete Agreements

Specific Performance of Incomplete Agreements