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Contract law for dummies Contract law for dummies
by Joseph Gatt
2021-11-23 08:07:07
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Contract law tends to be the most frustrating subjects to study in law school. Often because professors teach it in complicated ways, use all sorts of jargon, and choose the most boring examples and case studies in the world.

So here's the challenge: I'll make contract law fun!

Contract law is in fact simple. It involves three things:

Parties (could be individuals or companies or organizations)

cont000001_400The environment it creates (that's what a contract basically does, it creates an environment where the individuals or parties have obligations towards each other, the obligations could be to pay people, to sell things to people, to stop doing things to people, to help people and so on).

And, third thing, the jurisdiction (which government, which court system is the contract under? Is it under US law or French law? If so, which jurisdiction oversees the contract? Is it the local district court? The state court? The federal court? Specialized courts?).

So let's keep things simple. What are the most complex aspects of contract law for lawyers to examine?

-First problem that could arise: one of the parties defects from the contract or gets added to the contract. What should be done?

-Second problem that could arise: the “environment” that the parties agreed to create is being violated by one or several parties. That is one or several parties are not respecting their contractual obligations.  What should be done?

-Third problem that could arise (and this one is a headache for a lot of lawyers, in some cases even judges): under which jurisdiction is the contract? This is a tricky one, because some clauses of the contract could depend on tribunal A, while other clauses could depend on tribunal B. This gets even more complex in cases the parties are from different cities, different states, different countries, or organizations that operate in completely different trades (for example a contract between an individual from France and a business from Canada and a government organization from Australia... this is where things get complicated).

WHAT YOU NEED TO KNOW ABOUT CONTRACT LAW

-Simply speaking, a lot of times, the parties don't agree on which jurisdiction should examine the case if the environment the contract is supposed to create is being violated. The Italians want Italian courts to examine the case, but the French want a French judge to decide. You get the idea.

-Sometimes, the “environment” created by the contract contains vague clauses, or unrealistic clauses, or clauses that are legal in one country and illegal in another. When problems arise because of that clause, fights ensue.

-Sometimes, philosophies related to contract amendments, or how to “change” the environment are a cause of disagreement. Japanese law sort of allows unilateral changes to most contracts, on short-notice, and with no consensus. And Japanese law tolerates contract violations in many cases. The Americans tend not to allow that.

-Sometimes, even the courts don't know which jurisdictions are supposed to handle the case. Sometimes the disagreement is geographic (should a Japanese court or an American court arbitrate the dispute?) and sometimes it's a matter of relevance (should the case be settled at the administrative court or at the criminal court?).

-And then of course, other things can arise, such as when new parties get replaced by old ones, or when parties get added into the contract. Or when the nature of the environment changes (for example, COVID has imposed a lot of restrictions on contracts and so on).

So, if contract law confuses you, I hope this clarifies things a bit!


   
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