Contractual Parties Research Articles

Optimal contracting with asymmetric risk aversion information and fairness concerns

PurposeThis study considers a contracting problem between a fairness concerned entrepreneur (EN) and a fair-neutral venture capitalist (VC) to explore the effects of asymmetry, agency conflicts and fairness concerns.Design/methodology/approachThe authors construct the model by assuming the EN's risk aversion degree is private information, which is more realistic but ignored in most studies. Under the principal–agent framework, the authors solve the VC's optimal contracting models by identifying the ranges of feasible solution, where the optimal solutions of these models are explicit and nicely reconcile the “private equity” puzzle. Moreover, validity of the optimal solutions is verified by numerical simulations.FindingsIn accordance with empirical evidence, information asymmetry lowers the optimal equity share that the VC provides to EN but raises EN's profit due to lower effort disutility and information rent. Moreover, the authors find that the fairness concerns is beneficial for the EN, where it not only increases the EN's optimal equity share, but also enhances the certainty equivalence of the EN's utility regarding its profit. Relative to the benchmark model where the EN's risk aversion degree is common knowledge, the EN's efforts recommended by the optimal contract is less sensitive to the EN's fairness concerns degree when the EN does not actually announce its risk aversion degree.Originality/valueFirst, the authors incorporate asymmetry to study a two-period contracting problem and explore how it affects the equity shares allocated to the contractual parties. Second, the authors incorporate fairness concerns and analyze its effect regarding the decision-makings and profits.

Recommender Systems: An Overview, Challenges and Optimization Strategies, Future Scope

Contracts can be considered as one of the fundamental legal instruments that reach deep into our daily life. Numerous numbers of contracts are entered into with a view to creating obligations and rights for the contracting parties. For the creation of a legal relation the contracting parties enter into a valid contract to perform their agreed task and there are also certain chances that the contract agreed to be performed may be breached. In this case, in order to protect the goals of the contracting parties along with providing them with justice, the parties who have been victims of the unlawful act of violation shall be granted such remedies. Apart from these in several cases the contract which was made between the parties is terminated due to various causes and the contracting parties of that contract may be relieved from performing their agreed task. Keywords: Contract, Agreement, Performance, Obligation, Breach, Remedies, Termination

ТРУДОВИЙ ДОГОВІР ЯК ПІДСТАВА ВИНИКНЕННЯ ТРУДОВИХ ПРАВОВІДНОСИН В УМОВАХ ВОЄННОГО СТАНУ

The article is devoted to the issues of legal regulation of the employment contract as a basis for labor relations emergence in conditions of martial law. In conditions of Russia’s military aggression against Ukraine, this issue has become extremely important. The article examines the peculiarities of concluding an employment contract under martial law. An analysis of the changes made to Article 21 of the Labor Code over the past three years was carried out and the essence of the employment contract was clarified. The norms of the labor legislation, which regulated the employment contract conclusion in the pre-war period, and the changes in the norms of the legislation, which were introduced into the labor legislation in conditions of martial law, were analyzed. The specifics of concluding the employment contract with employees under martial law conditions were determined. During the research, it was found out that the legislator expanded the list of essential conditions that can be established by both parties in the employment contract and relate to the performance of work that requires professional and/or partial professional qualification, as well as conditions for the performance of work that do not require a person’s professional or partial professional qualification. It was concluded that the legal definition of an employment contract enshrined in Article 21 of the Labor Code is optimal and fully reflects the essence of the employment contract as an institution of labor law at the current stage of labor relations development. The norms of the Law of Ukraine “On the Organization of Labor Relations in Martial Law” were analyzed and it was noted that this Law was adopted in a timely manner, in difficult conditions for the country, namely at the beginning of Russia’s armed aggression, which enabled both sides of labor relations to settle their labor relations properly. The article draws attention to the fact that during the period of martial law in Ukraine, restrictions on the constitutional rights and freedoms of a person and a citizen, provided for by Articles 43 and 44 of the Constitution of Ukraine, were introduced. It was noted that the reform of labor legislation in conditions of martial law led to the need of developing new effective mechanisms for the implementation of legal norms in practice. Appropriate conclusions were made regarding the development of labor legislation during martial law, and positive changes in the regulation of labor relations were noted. Key words: labor contract, right to work, right to rest, employer, employee, fixed-term labor contract, restriction of the right to work, martial law.

THE IMPACT OF COVID-19 ON CONTRACTUAL OBLIGATIONS IN MALAYSIA

The widespread Covid-19 pandemic has significantly impacted business and commerce across the globe, including Malaysia. As aresult, businesses throughout Malaysia may face the inability to perform their contractual obligations and may seek to determine whether they or their counterparty have any legal basis for the non-performance of those contractual obligations. This research used content analysis by categorizing the same theme and discussing the wording adopted in Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020, force majeure clause, and the doctrine of frustration in Malaysia. The Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 is one of the defenses available to excuse the non-performance of contractual obligations due to Covid-19. However, the Covid-19 act is relatively new, and no precedent has been established to interpret the vague language adopted in the act. It was found that financial hardship can be a ground for non-performance of contractual obligations. Alternatively, contractual parties may invoke the force majeure clause that is provided in a contract. However, the ability to seek relief for force majeure events depends on the precise wording adopted in the clause. In the absence of a force majeure clause, the contractual parties may consider the doctrine of frustration. However, frustration is not a straightforward doctrine to reckon with. This research will provide insight into contractual parties on their rights, remedies, and repercussions if they choose to terminate the contract due to the widespread Covid-19 pandemic.

Comparison Study between Iraqi Conditions of Contract and FIDIC Conditions- The Red Book

Reconstruction in Iraq requires coherent legitimate frameworks that are able to detail obligations, rights and responsibilities of the parties participating in reconstruction projects, regardless their type or delivery system.Conditions of Contract can be considered an important component of these frameworks. This paper investigates flexibility and appropriateness of the application of Iraqi conditions of contract in reconstruction projects. These conditions were compared to FIDIC Conditions. The objective wasn't comparing individual clauses, but rather exploring the principles and philosophy laying behind each conditions, and to what extent each conditions care about realizing equity between main contract parties. Validity of application on various project delivery systems was also investigated. The structure of Iraqi and FIDIC conditions were compared to determine how the efficiency of use will be effected by the layout, presentation, organization, and detailing of the contents of each conditions. Moreover, some clauses related to the project parties were compared in order to further illustrate the disparity in efficiency of each conditions. The paper concludes that Iraqi conditions of contract in its current state was, and will continue, hindering the reconstruction efforts in Iraq, as well as being a cause of money waste and bad quality of project outputs.

DELAYS IN EXECUTION OF BUILDING PROJECTS AND THEIR FINANCIAL CONSEQUENCES FOR CONTRACTORS - POLISH VIEW

The execution of building projects should be planned in a realistic time, at the assumed cost and quality, and take into account the risk of the contract parties. However, even the best-planned construction projects are exposed to the risk of delays. The article reviews causes of delays in the construction projects identified both in the world and in Poland. The consequences of delays, regardless of the responsible party, should be clearly spelled out in the contracts. Financial penalties for delays are commonly used in agreements for construction works, and their level, according to the presented analyses, is usually higher in the public than in the private sector. Attention has been also paid to the few models presented in the literature that make it possible to predict delays and prevent their effects. It seems that this is an interesting direction for further research.

The prevalence of claims under the JBCC Principal Building Agreement in South Africa

The JBCC Principal Building Agreement is the foremost building contract in South Africa, with claims being a regular custom in construction projects where the agreement is used. This study therefore focused on South African construction industry role-players and sought to discover the regularity of claim events under the JBCC Principal Building Agreement. The study adopted a quantitative research approach with an online structured questionnaire being completed by 380 respondents consisting of principal agent practitioners and contractors in South Africa. Descriptive statistics were then used to analyze the data. The findings indicate that the most recurrent claim events are the execution of additional work, contract instructions, and adverse weather. The claim events that occur the least are insolvency of a nominated subcontractor, suspension or termination by a subcontractor due to a default by the employer, and force majeure. The study has therefore recognized and closed the knowledge gap regarding the regularity of claims under the JBCC Principal Building Agreement in South Africa. Principal agents should now be aware of the extent of claims under the agreement, which would help them to prevent and manage these claims to avoid damages to contractual parties. Also, although the study was limited to South Africa, the findings should still be relevant for users of the agreement in neighbouring countries.

Frustration v Imprévision, Why Frustration is so 'Frustrating': The Lack of Flexibility in the English Doctrine's Legal Consequence.

The COVID-19 pandemic and subsequent economic restrictions have placed many contractual parties under great strain to honour their agreements as contracts have become commercially impracticable and excessively onerous. This article explores the legal position in England, France and the Middle East under the doctrine of impossibility, impracticability and unforeseen circumstances. Strongly rooted in contractual autonomy and commercial certainty, this article argues that frustration in English common law is not sufficiently broad because the consequence (automatic discharge) is too rigid and does not allow a renegotiation of obligations. French civil law is more accommodating but only formally adopted imprévision in civil law in 2016, meaning it lacks traction. However, Middle Eastern civil law countries accept the doctrine as an integral part of their law and theory of justice, allowing obligations to be rebalanced in a more flexible manner. The English legal system should consider the advantages of a similar reform.

Analisis Pada Force Majeure Dalam Akad Murabahah Dan Dampak Implementasi Pada Lembaga Keuangan Syariah

This study aims to determine and analyze the position of force majeure in murabahah contracts and how the implementation of force majeure in murabahah contracts in Sharia Financial Institutions. This study uses normative legal research supported by empirical data. Data collection techniques used by the author is the study of literature documents that are examined from books, literature, journals, and legislation. The conclusion of this research is first, the position of force majeure in the murabahah contract is a necessity to anticipate unwanted and dangerous circumstances, which are beyond the authority of the parties in the murabahah contract. In addition, Islamic law also regulates positions related to force majeure that is known as dharurah, which means damaging or giving harm. Second, the implementation of force majeure in the murabahah contract at the Sharia Financial Institution has already been applied in the contract or agreement by the parties. Force majeure clause becomes a reason not to charge the parties for losses arising from force majeure events that occur. Something that is allowed due to dharurah conditions, must be completed according to the required size restrictions.

Bridging the gap: improving integration between duty holders involved in well operations

Major incidents often culminate from complex human, technical, organisational and regulatory factors. Risk mitigation is rarely the responsibility of only one party, and deficiencies in communication and integration between contractual parties continue to be a contributing factor in incidents. Duty holders involved in well construction and intervention should continually seek to improve their coordination and communication, particularly with respect to change management, risk management and well control. This paper describes the criticality of the rig contractor/operator relationship and describes available tools that should be used to ensure gaps are identified and addressed in the planning phase.

LEGAL NATURE OF A SMART-CONTRACT AND ISSUES OF ITS APPLICATION IN THE FIELD OF DIGITAL ASSETS

The article looks into the concept and legal nature of smart contracts, as well as the issues that arise during the use of smart contracts in the field of digital assets. The technical and legal aspects of the concept of a smart contract are considered. Models of use of smart contracts are described. Scientific and legislative approaches to determining the legal nature of smart contracts are presented. The dual legal nature of a legal smart contract is analyzed: as a form of transaction and an object of copyright. Some issues in the field of protection of the rights of smart contract parties are considered. Based on the findings, temporary solutions in the field of using smart contracts are proposed.

Modeling the dynamics of contractual relations.

Contracts usually have clauses that enable contracted parties to adjust their contractual positions in time, e.g., to relieve another party from duty or to grant new permission. This is especially important in long-running service relations, which require contracts to be adjusted to accommodate new or unforeseen circumstances. Despite that, the representation of dynamic aspects of contractual relations has not been given enough attention in the literature. In this study, we address this gap by employing the notions of legal power and legal subjection. We propose an ontological analysis of unilateral contractual changes based on a well-founded legal core ontology that adopts a relational perspective for legal positions. We present a case study to show the benefits of representing different types of contractual changes and how these changes can impact contractual dynamics. The case study is based on recent changes to WhatsApp terms of service.

POGREŠNA KVALIFIKACIJA UGOVORNOG ODNOSA : JEDAN OD BROJNIH IZVORA NESIGURNOSTI RADA U INDUSTRIJI VIDEOIGARA

Working in the video game industry is associated with many uncertainties, since the legal position of the worker depends on whether the work is performed on the basis of a civil law contract (self-employment) or employment contract (employment relationship). Considering that labour law imposes numerous legal obligations on an employer to protect the worker as the weaker contractual party (due to subordinate position and economic dependence of the worker in relation to the employer), an employer often deliberately practices fraudulent (unlawful) contracting of work. The article draws upon an in-depth analysis of this creative economy sector. The author critically deals with identified weaknesses and risks of precariousness that workers are exposed to and offers possible alternatives for consideration without examining the effectiveness of legal solutions of individual EU member states, but leaning towards the example of good practice on the Croatian videogame market.

‘Wages for Work Done’: Is it Time to Legislate?

This study is designed to address one of the major issues regarding employment contracts that have been widely debated when most businesses were forced to shut down by the state authorities as part of the containment measures of the Covid-19 pandemic. The issue is on the entitlement of employees to secure their full wages while they can't perform their work at all or partially perform the assigned tasks from home. Therefore, this paper explores the issue by examining the legal position of 'wages' in employment contracts under the Malaysia employment legal framework. As a contract of employment is generally built on the exchange of labour for wages or is better known as the work for wages rule or work-wage bargain, it is pertinent to evaluate the extent the rule affects the contractual parties of employment in such circumstances. This research is purely doctrinal legal research that applies a critical analysis approach. Apart from the reference to the relevant statutory provisions and case laws within Malaysian and foreign jurisdictions in particular the United Kingdom and Australia, the issue is evaluated through the theory of employment relationship. This paper generally has found the inadequacy of the Malaysian labour law in dealing with the issue effectively and calls on the legislative to pursue considerable thoughts that enable statutory provisions for the same issues to be dealt with better in the future.

AN INSPECTION OF LEGAL DILEMMA IN ARBITRATION PROCEEDINGS AND INSOLVENCY PROCEEDINGS

Arbitration proceedings are intended to resolve the dispute between contractual parties according to the contract by which parties bind and govern by the mutually decided laws. Arbitration and Conciliation Act 1996 derived its source from UNICTRAL model law on International Commercial Arbitration in 1985. Whereas, the Insolvency proceedings are right in rem means that it can adjudicate the claim of people. The Insolvency & Bankruptcy Code 2016(IBC) enacted after repealing Act i.e., Sick Industrial Companies Act (SICA) which is a paradigm shift from debtor centric to creditor centric. It is pertinent to discuss that whether the conflict between Insolvency proceedings and Arbitration proceedings runs simultaneously or not? In India, Law is not clear in this regard so it can be resolved by two folded arguments, first, that the moratorium issued under Section 14 of IBC bars the jurisdiction of the Arbitration Tribunal. Secondly, that the law IBC has overriding effect over the law which governs the arbitration proceeding. The law is not clear about the status of both the proceedings run simultaneously. It is a well settled law that as soon as the moratorium order has been passed by the tribunal then all the legal proceeding has been stayed till the disposal of the moratorium order pending against the corporate debtor.

Effect of public–private partnership features on contractual complexity: evidence from China

PurposeA public–private partnership (PPP) is an agreement between the government and private investors to deliver long-term public services. The efficiency of PPP projects depends on PPP contracts stipulating contractual parties' corresponding responsibilities and rights to deal with relational and performance risks. Although more complex contracts provide more remedies for mitigating ex-post transaction costs, they also result in the increased ex ante transaction costs associated with contract writing. Thus, contractual complexity is a design choice that can reduce the overall contract transaction costs.Design/methodology/approachUsing 365 transportation PPP projects in China from 2010 to 2019, this study applies the Poisson regression model to examine the effects of payment mechanisms, ownership by investors and equity structure on contractual complexity.FindingsPPP contracts have control and coordination functions with unique determinants. Parties in the government-pay mechanism are more likely to negotiate coordination provisions, which results in greater contractual complexity. PPP projects with state-owned enterprises (SOEs) have less contractual complexity in terms of both two functions of provisions, whereas the equity structure has no impact on contractual complexity.Originality/valueThese findings provide a nuanced understanding of how various contractual provisions are combined to perform control or coordination functions and make managerial recommendations to parties involved in PPP projects.

Inequality of bargaining power in cellular telecommunication services agreements

This research examined the inequality of bargaining power between the contracting parties in mobile phone service contracts in the West Bank, Palestine. It identified several legislative gaps in regulating the requirements of this balance. Also, the relevant government departments and civil society organizations do not provide adequate consumer support in these contracts. The field research showed the respondents' dissatisfaction with communication service providers' compliance with the balanced contractual relationship requirements. What are the features and reasons for this imbalance? To what extent do neighboring countries introduce regulatory solutions to ensure the balance of the contractual relationship during this phase? What solutions would be proposed to ensure the balance of the contractual relationship during this phase? This research proposed legislative amendments to provide a balanced representation of consumer interests compared to providers.

E-DAGANG: KONTRAK DAN TRANSAKSI

With the recent emergence of globalisation, many people including Malaysians are widely using the online platform to conduct online transactions known as e-commerce. E-commerce did not require the sale and purchase transaction to be done face-to-face, in fact, by having an Internet connection, the contractual parties are then able to transact. The increase in the online sale and purchase transactions are in line with the increase in the numbers of internet users day-by-day. The objective of this research is to refine further and discuss the concept of e-commerce from the perspective of online contract and online sale and purchase transaction. This research is done using a qualitative measure through literature review and descriptive method whereby the highlights of previous studies involving e-commerce and e-contract are thoroughly discussed. The research outcome portrays a vast evolution of e-commerce from when it was first introduced causing e-contract to be widely used. Thus, it can be said that a contract made online or e-contract is valid under the law of Malaysia so long as it doesn’t contravene with the existing laws.

Identification of key Risks in Fast-Track Construction projects: A Literature Review

Fast-track construction projects have become more common in recent yearsas a response to increased demand. The sector was known for its high-risk and highcomplexity features. Regardless of the degree of difficulty in construction projects,the construction industry has responded to requirements for faster project deliverydeadlines to meet standards, emergency/disaster preservation, and time-to-marketconstraints. The purpose of this study was to clarify risk management's role in fasttrack construction projects, evaluate how fast-track construction projects impact theconstruction time of such projects, and investigate risks that might occur fromdifferent levels of overlap. To achieve this, the paper undergone a comprehensiveliterature review on several 43 papers that have been published in Scopus. Theresearcher reviewed the literature for several studies, such as papers and books inthis field from 2000 to 2021. The results were: identifying accelerated techniquesand their classification; clarifying risks; risk management processes and theirclassification; and clarifying risks in fast-track construction projects because of anunfair risk distribution between the contractual parties because of specific or incorrect contract terms. This has led to a careful assessment of the scope of thework and how the project will be executed.

Identification of Dispute Sources in the Construction Industry via Court Files

Contracting parties generally tend to resolve their disputes through the litigation process. The lengthy litigation process reduces the belief among the parties that the disputes are resolved peacefully, and this destabilizes the sustainable structure of the construction industry where disputes are very common. Determining the most common sources of disputes in construction lawsuits is very important in terms of taking necessary precautions beforehand. Additionally, increasing the competency levels of construction and judicial actors regarding construction processes is extremely important in terms of making the judicial process more efficient and faster. Therefore, this study aims to reveal the most frequent dispute sources in the construction industry, the competency levels of judicial actors including expert witnesses and the average duration of the construction-related litigation process for the superior courts. Hence, 346 construction-related lawsuits conducted between 2018 and 2021 were examined via content analysis to classify the common themes. Lawsuits were investigated via the official websites of Courts of Cassation and National Judicial Network Information System (UYAP). Next, the frequency analysis was conducted to detect the significance of each theme via SPSS software. It is highly believed that this study will enable the decision-makers to take necessary precautions before the dispute occurs as well as improve the dispute resolution process in the construction industry. Projects related to superstructure works constituted the majority of the disputes ending up with the judicial process. Additionally, the majority of the disputes detected from lawsuits resulted from “Debit and Credit” related issues. Moreover, the litigation process was also detected as a very lengthy process. Furthermore, it is detected that majority of the lawsuits were rejected by the Courts of Cassation due to inadequacies of the competency levels of the judicial actors.