Innocent Parties Research Articles

A Critical Evaluation of Appropriateness of Duress and Undue Influence as Legal Safeguards Against Unconscionable Contracts

Duress and undue influence as equitable concepts in the Law of Contract permit an innocent party to withdraw from a subsisting contractual relationship on grounds that the innocent party was induced to accede to such contractual relationship, by reprehensible pressure on the part of the other party; in other words, that as a result of some unconscionable conduct of the part of the other party to the contract, the agreement that gave rise to the contract could not be said to have proceeded from the voluntary choice of the innocent party and as such ought to be annulled. Although the major issue where both or either of duress or undue influence is relied upon to seek to invalidate a contract, is whether the aggrieved party has acted freely, yet duress must be distinguished from undue influence in that the former is usually pleaded as a causative factor to undue influence whereas the latter is relied upon to establish that as a result of duress or other causes, the aggrieved person was deprived of the requisite mental capacity to legitimately and freely make a choice. While it is obvious that presence of such pressure should may constitute a good-enough reason to overturn an otherwise good agreement, it is important to scrutinize belief(s) that inspire resolutions permitting a repudiation of contracts on the basis of either of these concepts with a view to delimiting the exact range of application or effect of each or both of them. This paper examines the question whether duress and undue influence as vitiating factors constitute sufficient legal safeguards against unconscionable contractual transactions. Beginning with a brief look at meaning, types, scope and application of duress and undue influence, the paper proceeds to a consideration of relevant case law and statutory provisions on application of these concepts to unconscionable contracts, and then concludes with a general discussion of the adequacy or otherwise of the law on the subject.

Revisiting a\xa0Remedy Against Chains of Unkindness

Previous experiments observe a chain of unkindness: unkindly treated people treat an innocent third party unkindly. As a remedy, it has been proposed that the unkindly treated person engages in emotional regulation by writing a letter to the unkind person. Indeed, subjects who received little money were willing to leave more to a third person when they were writing a letter rather than waiting.Here, we examine whether emotional regulation is indeed behind this observation. In line with emotional regulation, we find that letter writing also leads to more giving if the person is treated unkindly by being assigned to a frustrating rather than a pleasant job. Being able to write, however, does not affect self-reported happiness differently from having to wait. Even more strikingly, subjects assigned to pleasant jobs also give more when writing rather than waiting. This is not consistent with emotional regulation.

Case Law Note: EU VAT in Jeopardy: Clues from the Unitel Case (C-653/18)

The Court of Justice of the European Union (CJEU or the Court) has had multiple opportunities to rule on the issue of fraud associated with value added tax (VAT). For instance, in the Missing Trade Intra-Community Fraud context, exemplarily with the United Kingdom: CJEU 12 January 2006, Joined Cases C-354/03, C-355/03 and C-484/03, Optigen and Others, ECLI:EU:C:2006:16, or in cases when only invoices confirmed that transactions took place, see exemplarily HU: CJEU 21 June 2012, Joined Cases C-80/11 and C-142/11, Mahagében and Dávid, ECLI:EU:C:2012:373. While many aspects of the concept of fraud have already been clarified in the Court’s jurisprudence, some of them remain to be specified and clarified. In the Polish case Unitel, the Court further elucidated the consequences of fraud for (innocent) parties in the supply chain (PL: CJEU 17 October 2019, Case C-653/18, Unitel, ECLI:EU:C:2019:876.). In particular, the case clarified when tax authorities may deny the right to zero-rate exports. Court of Justice of the European Union, VAT, VAT fraud, Export, Tax avoidance

The breach of contractual indemnities under English law – a debt claim or a damages claim?

In 2015 the English High Court delivered two important but not widely publicised judgments in the cases of ABM Amro Commercial Finance plc v Ambrose McGinn & others [2014] EWHC 1674 (Comm.) and Durley House Limited v Firmdale Hotels plc [2014] EWHC 2608 (Ch.). Febechi Chukwu reviews those judgments, and several previous rulings by the English courts, concluding that the lack of a single interpretive rule for contractual indemnities in English law is a preferable approach. The English courts should be clearer in accepting the complexity of properly interpreting indemnities and assessing the available remedies for breach. Ultimately that assessment is substantially dependant on how the indemnity in question is drafted and constructed in the contract. The courts should boldly promote the more nuanced approach to determining whether a particular breach gives the innocent party a right to a claim in debt or a claim in damages, and this will be of benefit also to practitioners negotiating indemnity clauses in English law contracts.

Negotiating Damages in English Contract Law

This article evaluates the decision by the UK Supreme Court in One Step (Support) Ltd. v. Morris-Garner (2018), in which the Court laid down the circumstances in which damages for breach of contract may be measured by reference to the amount of the fee that the innocent party could have demanded from the breaching party for a release of the latter from the relevant obligation (negotiating damages).

Coming In From the Cold of Digital Audits: The Need for Safe Harbours in the Sea of Misleading and Deceptive Marketing

Deferred prosecution agreements (“DPAs”) encourage companies to come in from the cold. The idea of “coming in from the cold” is linked to the “zone of non-discovery by government”. In this zone, as the result of an internal investigation a corporation becomes aware of evidence of regulatory violations or criminal conduct before the regulator has discovered it or even has reason to be suspicious. If the company comes in from the cold, the government gains evidence of a violation or crime that it might never have discovered. From the corporation’s perspective, the DPA avoids the negative consequences of a formal conviction or the formal record of a violation. This paper considers the potential application of DPAs in the area of misleading advertising offences and deceptive marketing administrative violations. Despite the policy rationale of encouraging companies to come in from the cold, DPAs have been used sparingly for misleading advertising crimes, in contrast to the more serious offence of foreign bribery. In Canada, which is used a case study, the crime of misleading advertising is excluded from the DPA legislation, which may have been a drafting omission. Civil penalty regimes used to enforce deceptive marketing do not have parallel DPA programs at all. With respect to misleading advertising crimes, this paper argues that the Canadian government should fix the drafting omission and add the criminal offence of misleading advertising in the Competition Act to the list of eligible offences for which a DPA is available. This would bring Canada into line with other jurisdictions. There are some comparative international precedents for the use of deferred prosecution agreements for misleading advertising, although generally these cases rise to the level of criminal fraud cases that involved an element of misleading acts. The same policy rationales that support DPAs for serious criminal offences apply to misleading advertising offences. In particular, reducing the negative consequences for innocent parties who would be impacted by a debarment is an important consideration. With respect to deceptive marketing violations enforced by civil and administrative penalties, this paper argues that DPA parallel programs should be developed. This proposal would not, strictly speaking, be deferred prosecution agreements, as the administrative monetary penalty does not involve the criminal justice prosecution apparatus. But, the same policy rationales that support DPAs for serious criminal offences apply to deceptive marketing. When a company discovers evidence of deceptive marketing in the “zone of non-discovery by government”, there needs to be an incentive to self-report. Creative incentive programs within the administrative paradigm are discussed and proposed.

국제상사계약원칙(PICC)에서 이행기전 불이행의 효력에 관한 연구

Anticipatory non-performance occurs before the agreed time of performance, where on party indicates by words or deed that he will not perform his undertaking, including making it impossible for himself to perform. This paper focused on the interpretation of Anticipatory non-performance doctrine under PICC Article 7.3.3 and 7.3.4. It also provided some practical issues in international commercial transactions. In conclusion, the doctrine of anticipatory non-performance under PICC is slightly favor of innocent party. Because there are some practical issues with PICC Artcle 7.3.3 and 7.3.4, such as an innocent party's readiness and willingness to perform at the time of terminating a contract, absence of the notification requirement, unclearing meaning of adequate assurance of due performance and the scope of performance withholding. Therefore, concerned party who engage in international commercial trade need to understand these issues and resolve them based on good faith.

The absence of choice of law in commercial contracts: problems and solutions

Abstract In a commercial contract with an arbitration clause, the parties may fail to determine any applicable law, in which case the arbitral tribunal is expected to identify the rules applicable to the merits of the dispute. A modern approach suggests that localizing legal issues originated from an international contract is inappropriate and that the tribunal should conduct an assessment to identify international or non-national rules or practices appropriate to the issues at hand. This approach, which grants the tribunal maximum freedom in choosing the applicable law with no reference to any choice-of-law rules, is adopted in a few institutional rules such as the Article 21(1) of the ICC Rules. This article seeks to introduce an evaluative framework informing the tribunal’s methodical task in identifying the most suitable legal regimes. The evaluative framework seeks to assess the relationship of legal doctrines to commercial considerations and expectations regarded by businesses. A significant issue that befalls the arbitrators is that of pleading, proving, and measuring monetary damages. Yet, damages have remained an issue that is inaccurately dealt with by arbitral tribunals. This article aims to examine the principles governing damages available to an innocent commercial party under significant legal regimes widely applied in international commercial arbitration in an attempt to offer guidance on which legal regime has provided the most appropriate set of principles reflecting the essential needs and interests of commercial parties.

Powerful Individuals Behave Less Cooperatively in Common Resource Dilemmas When Treated Unfairly.

Previous research has suggested that power undermines cooperation in social dilemmas. However, the story may not be so simple. Guided by recent findings that power heightens sensitivity to unfairness, we examined the moderating effect of distributive justice on the association between power and cooperation. Across two experiments, when treated unfairly, high-power (vs. low-power) participants perceived greater unfairness. Moreover, high-power (vs. low-power) participants behaved less cooperatively not only when they interacted with the offender who treated them unfairly (Experiment 1), but also when they interacted with innocent third parties (Experiment 2). However, high-power and low-power participants showed no difference in perceived fairness and cooperation when treated fairly. These findings shed light on the association between power and cooperation by suggesting the modulating role of distributive justice, and they remind us that researchers should take participants' personal sense of power into account when manipulating fairness.

Anticipatory Breach: An International Comparison of an Innocent Party's Right to Terminate

As Lord Mustill observed in relation to anticipatory breach, ‘the common law has never succeeded in finding a solution which is both theoretically sound and capable of producing sensible results in practice’. This has certainly been the case with the courts’ responses to anticipatory breach not only in Australia but also in the United Kingdom, United States and Singapore. The common law origins of the doctrine have inevitably created a sometimes convoluted and often contradictory set of legal principles in relation to the executed contracts exception, mitigation of loss and the ‘ready, willing and able’ principle. International instruments have attempted to provide clarity to this complex area of law but their effectiveness is limited by the refusal of countries such as the United Kingdom to ratify the Convention and the reluctance of contract drafters to rely on international law. The doctrine of anticipatory breach ultimately requires revision and clarification by the courts in order to provide increased certainty to this presently highly uncertain area of law.

Quantifying Damages in Cases of Advantageous Breach: The Curious Case of Mcdonald’s Milkshakes

Perhaps as often as contracts are made, they are breached. When breaches occur, it falls to the innocent party to quantify and make a claim for their losses informally or through the courts (if they choose to do so). An award of compensation under contract law is premised upon the goal of restoring the plaintiff to the position they would have been in had the contract been performed correctly. But what are the remedial consequences if a plaintiff benefits, rather than loses, as a result of the breach? What if the benefits arise without any efforts from the plaintiff? This was the situation that arose in the McDonald’s franchising saga of the 1950s and early 1960s, all because of a humble milkshake.

Breach of Contract: A Plea for Clarity and Discipline

The author identifies an `anti-termination’ bias in the judicial classification of terms (and in some legislative intervention). The problems engendered by this bias are, first, a weakening of the innocent party’s protection in the face of breach; weakening of commercial discipline overall in the fulfilment of contractual undertakings; and the inability to advise with confidence on whether breach in particular instances will permit, or has permitted, a party to terminate the contract for breach. As the author concludes, the anti-termination bias is a denial of “bright-line” protection of the innocent party and it promotes an overall slackening of discipline by failing to insist on strict compliance with contractual obligations.

DEAL PROTECTION MEASURES IN TAKEOVERS AND MERGERS: BREAK FEES

This article discusses an agreement by directors to pay a break fee during a takeover or a merger and highlight some corporate governance issues that may arise due to such payments. The article further discusses how regulators limit such payments. Takeover and merger agreements contain numerous terms and conditions intended to protect all parties to the transaction. The agreements are also aimed at ensuring that, where there is a breach, the innocent party is able to recoup the costs incurred in undertaking the transaction. Break fees are some of the terms and conditions included in the takeover and merger agreements known as deal protection measures. However, these terms and conditions raise a number of concerns for shareholders, directors and regulators. They have the potential to affect the shareholders’ interests negatively during a takeover or a merger. Accordingly, the Takeover Provisions set parameters within which break fees are monitored and regulated. In terms of the Takeover Provisions, the decision whether or not to agree to payment of a break fee lies with the directors of the target company. Therefore, this article is aimed at raising awareness and promoting corporate governance during takeovers and mergers.

NILAI MORAL DALAM SĀQ Al-BAMBŪ KARYA SAʻŪD AL-SANʻŪSĪ

This study aims to formulate moral values contained in the novel Sāq al-Bambū. The research data are sentences of text containing the Sāq al-Bambū-moral values in the story. Collecting, sorting or reduction of data, and analyzing data done by using hermeneutic methods. The study concludes that the novel Sāq al-Bambū offers three social moral values and a religious moral value. The first moral value is that the gamble will plunge himself and his family, even his own descendants, to live in misery, and these problems will never-end. The second moral value is that the marital relationship which is conducted outside a legitimate marriage will not only spoil and closed his future but also afflict his children with the various conflicts and pressures of the environment. The third moral value is that belief in superstition will preoccupy the attention, energy, and mind. In fact, a lot of things and a lot of innocent parties will be considered negative. The fourth moral value is that to keep self-esteem and dignity is not necessarily by persecuting others.

Enforcement of the Arbitration Agreement within the Context of the European Union

An arbitration agreement is the essential basis for international arbitration as it materialises the principle of party autonomy. Accordingly, parties to the agreement voluntary consent to litigate outside national courts employing a private and consensual method of resolving disputes, where an effective final and binding award is obtained and is enforceable by a court due to the New York Convention (NY Convention). The breach of this agreement means that a party will commence court proceedings as opposed to resorting to arbitration. When faced with a breach, the innocent party will have mechanisms at its disposal to prevent court proceedings and enforce arbitration, pursuant to the agreement. Traditionally, the remedies sought under common law have been the following: stay of proceedings and anti-suit injunctions. However, due to recent European Court of Justice (ECJ) case law, the resort to anti-suit injunctions has been severely questioned and parties have had to consider alternative remedies in order to obtain some form of relief. As a consequence, more emphasise has been given to an action in damages as a remedial option, which provides the innocent party with a remedy to at least recover costs for litigating in the wrong forum, since the resort to anti-suit injunctions within European Union (EU) Member State courts requires further clarification. Conversely, an award of damages does not depend on the cooperation of foreign courts and the breaching party. Additionally, the claim for damages is not an application for a provisional or interim measure, much like the anti-suit injunction. This means that it is procedurally simpler, as the claim for monetary relief can be considered in the course of the arbitration alongside other claims for breach, making this a great advantage. Finally, the enforcement of the award of damages can be done with less difficulty under the NY Convention and its compensatory result definitely outweighs that of simply impeding foreign proceedings. Hence, for the non-breaching party, it might be more advisable to seek protection in the form of damages.

DOWÓD Z OPINII RODZINNEGO OŚRODKA DIAGNOSTYCZNO-KONSULTACYJNEGO W SPRAWACH O ROZWÓD I JEGO WPŁYW NA TREŚĆ WYROKU W ŚWIETLE WYNIKÓW BADAŃ AKTOWYCH

THE OPINION OF THE FAMILY DIAGNOSTIC-ADVISORY CENTRE AS THE EVIDENCE IN DIVORCE CASES AND ITS INFLUENCE ON JUDGEMENTS (IN THE LIGHT OF C OURT RECORDS)Summary The present article contains results of studies conducted in the Institute of Justice in Warsaw. Basis for the research was 100 judgments in divorce cases by Polish provincial courts from 1997 to 1998. Each of the examined judgments was done after hearing by court of the Family Diagnostic - Advisory Centre (FDAC) opinion in cases including decision as to the guilt for breaking up of marriage and subsequent granting of the paternal authority to the innocent party. The study is going to establish relation between opinions by the FDAC and judgments.The study contains complex and detailed analysis of court decision and its grounds. It shows that opinion given by FDAC is very influential for courts granting judgments which followed it in 80% of analyzed cases. However not all of the suggestions given by experts were relevant. In the majority of the examined cases a mistake made by the expert consisted of the ignorance of law and consequendy of the ambiguous wording of the opinion. Such an opinion was then followed by the judge who usually chose the simplest solution granting the full parental authority to both of the divorced spouses thus avoiding the time consuming and laborious procedure based on the article 58 of the Code of Family and Guardianship Law determining possibility of limitation of the parental authority.Such approach could be declared as an opportunistic one, and provokes postulate de lege ferenda for abolishment of the institution of granting the full parental authority to both of the divorced spouses. Proposed change should simplify courts procedure as well as enable the FDEC to develop its activity as family advisory centers which until now does not exist in Polish legal system.

Private-Sector Cyberweapons: Strategic and Other Consequences

The cyber domain exhibits a sovereignty gap: the government cannot protect the private sector against all relevant threats. The challenge of cybersecurity, therefore, is essentially one of civil defense: how to equip the private sector to protect its own computer systems in the absence of decisive government involvement. Ordinarily, civil defense in the new domain has involved passive measures, such as resilience and redundancy. Passive measures, however, will not redress the sovereignty gap unless they are complemented by a proactive approach — especially the techniques of “active defense,” which attempt to neutralize threats before they are carried out. Yet presently the authority to implement active defense belongs exclusively to the government. Top officials in the United States and other countries have called for changes in law and policy that would bolster the private sector’s ability to conduct active defense, such as by inserting web beacons or disabling external hostile machines. This paper explores the possible strategic and other consequences of arming the civilian quarters of cyberspace with active defense capabilities. It argues that while the potential defensive and other benefits of private-sector arms are significant, the risks to defenders, innocent third parties, and international conflict stability are notably greater. Cyber civil defense, in short, should remain a reactive enterprise. The paper also explores the meaning of active defense — an ambiguous and contested notion that lies at the heart of contemporary debates about cyber strategy and policy in the Journal of Cybersecurity. Some observers claim that active defense involves actions taken within the defender’s own computer terrain. Others also claim that it entails disruptive action. This paper develops a different definition: it defines active defense as any defensive action — disruptive or undisruptive or both — that a defender conducts beyond the home perimeter.

Our seabed? Argentina, the Falklands and the wider South Atlantic

ABSTRACTThis note addresses the recent announcement regarding Argentina's submission to the UN Commission on the Limits of the Continental Shelf. While the commission considered much of Argentina's submitted materials regarding the outer continental shelf (and sovereign rights that accrue to the seabed), it deliberately excluded areas of controversy including the Falkland Islands and Antarctica. What should be of interest to Polar Record readers is how consistently international media, including British journalists, misunderstand international maritime law and ‘stoke’ the fires of Argentine and British nationalisms. The Argentine government, however, was not an innocent party and its own press releases were ambiguous on the matter concerned, even if the commission had recognised the merit of much of their scientific-technical submission.

RATIONALISING ANTICIPATORY BREACH IN EXECUTED CONTRACTS

RATIONALISING the doctrine of anticipatory breach is notoriously difficult. This may explain the complete lack of attempt by the UK Supreme Court to address its conceptual difficulties in its recent judgment in Bunge SA v Nidera BV [2015] UKSC 43; [2015] 3 All E.R. 1082. It is therefore of interest that the Singapore Court of Appeal in The “STX Mumbai” [2015] SGCA 35; [2015] 5 S.L.R. 1 explained why the doctrine of anticipatory breach can be applied to executed contracts (in the sense of being fully executed by the innocent party). Whilst anticipatory breach applies similarly under English law, the English courts have never considered the underlying justification, save to say in a case with a partially executed contract that “it would be very strange and hardly unworkable” if the innocent party had to wait until the time for performance (Moschi v Lep Air Services Ltd. [1973] A.C. 331, 356, per Lord Simon).

Winter issue 2015

Welcome to Issue 4 – the winter issue. In this issue we report on the Supreme Court decision in Cavendish Square Holdings v. Makdessi and ParkingEye Limited – Beavis (handed down on 4 November 2015) dealing with liquidated damage clauses and penalties. Readers may already to be aware that the rule against penalties has not been abolished but better clarified. The ‘new’ test will be much discussed and publicised, and so readers ought to note that the test is stated as ‘a contractual clause was penal if it was a secondary obligation which imposed a detriment on the contractbreaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation’. I have also focused some attention on a reader’s question submitted in the context of a contract that was meant to have been executed as a deed but was not. What does this mean, especially when the 6-year limitation period for a simple common law contract has expired? Readers may not like my answer! On equally substantive grounds we also report cases dealing with so-called ‘PFI contracts’ and the public sector treatment of tenders. We have also chosen to continue to look at some practical industry issues: The UK’s National Infrastructure Commission (NIC) became operational on 30 October 2015, enjoying cross-party support from the UK’s main political parties. We look at the following questions: What is the NIC? What is the NIC’s remit and specific tasks? What do commentators say about the NIC? I think readers ought also to be aware of certain important changes in the nuclear decommissioning sector and, in particular, the UK government’s decision in early 2015 to terminate the contract to decommission Sellafield – what does this mean for readers and the wider membership of the Institution of Civil Engineers? These are important topics for all of us involved in the construction law sector, and I hope readers will find this issue informative and a useful reference point.