TERMS: COVENANT, USAGE, BUSINESS EFFICACY

Topic of the day

- The subject matter of the terms of contract

- The difference between the various approaches to the terms of contract

THE SUBJECT MATTER OF THE TERMS OF CONTRACT

The terms of contract may vary according to the nature of the agreement. Below are the common parts and cases that may include in typical contracts:

1. Introduction/party: this is the part that determine all parties involved in the contract and also specify the date of the agreement.

2. Solo/Preface: this is the part that provide the background information and context of the contract and it also describe the purpose and intention of the parties.

3. Definition: this is the part of contract that clarify specific terms used in the entire contract to avoid ambiguity and to ensure that there is a common understanding of key terms between all parties.

4. Agreement scope: this section clearly outlines the goods, services or obligations covered by the contract and it also define duration and any geographical restrictions.

5. Terms and Conditions: this is the part of contract that design the rights and responsibilities of all parties in the contract including address payment clauses, delivery schedule and any other related conditions.

6. Performance obligation: this part contains the detailed explanation of specific tasks or obligations that all parties must perform and it also set performance standards.

7. Guarantee and guarantor: this section provides for the overview of any guarantee or guarantor provided by the party without leaving out the description of the remedial measures that violate the warranty.

8. Intellectual property: this section determine and protect intellectual property related to contract then also specify how to deal with intellectual property rights.

9. Confidential/non -disclosure: this part determine the obligation of sensitive information confidentiality and also define the scope and duration of confidential obligation.

10. Assurance: this is the part that talks about what extent one party compensates the loss or losses of the other party and the overview the conditions for compensation applicable.

11. Termination: this part describes what can terminate the conditions of the contract and specify any fines that are terminated in advance.

12. Dispute Resolution: this section gives the overview of the process of resolving disputes between the two parties and it also specify whether to resolve disputes through negotiations, mediation or arbitration.

13. Legal law: this section specify the jurisdiction and management laws that will be applied to the contract.

14. Miscellaneous items: this part icludes any other terms or regulations that are considered necessary. Itmay cover force majeure, revise cases or other matters.

THE DIFFERENCE BETWEEN THE VARIOUS APPROACHES TO THE TERMS OF CONTRACT

The method of contract terms may be different according to the legal tradition, jurisdiction and the nature of all parties. Below are some methods including key parts and cases related to different methods:

1. Ordinary method: this method seriously rely on precedent and judicial decisions to explain the terms of the contract. It confirms the importance of the party's behavior or trade customs and it usually limit the use of verbal or external evidence when explaining written contracts. See the case of Hadley V Baxendale where the courts establish foreseeable testing to achieve corresponding damage in the contract law.

2. Civil law method: this method is more relying on comprehensive civil law and regulations to regulate contracts.The court plays a more positive role in investigation and determining the terms of contracts and it emphasizes on the freedom of the parties, but within the framework of the legal principle. See the Napoleon's "Civil Code" (1804) where the code shaped the influence of modern civil law methods, emphasize clarity and predictability.

3. Relationship contract method: this method emphasizes on the obligation of honesty and fair exchanges. It recognize that certain contracts are continuous relationships rather than discrete transactions and it also recognize the flexibility of adapting to the environmental environment. See MAPLE Leaf Foods Inc. Loin Schneider Corp where the importance of sincerity and fair transactions in the relationship contract was explained.

4. International/Unidroit Principles: You can refer to international principles, such as the UNIDROIT principle of international commercial contracts. It emphasize the principles of fairness in contractual relations and also provides a mechanism that fills the gap between the contract when the clause is not clearly resolved. See the UNIDROIT principle of international commercial contracts as it provides a set of principles for applications for international commercial transactions.

5. Consumer protection method: this method solves the unique nature of the contract, one of which has more bargaining ability. It also emphasize clauses that need to be clearly understood in contracts with consumers and where specifications and restrictions may be considered as unfair or unreasonable terms.

See the unfair contract terms in Europe where the influence of the consumer protection law of European countries was discussed.