Chapter 1 Flashcards
from the book
what is an important distinction between interpretation and construction of a contract?
While interpretation is the process of clarifying the linguistic meaning of a text, construction is the process of inferring legal effects from that text.
The words will produce the legal effects that the law attaches to them, and they will therefore be understood in the light of the applicable law.
As an example of how the process of construction can influence the legal effects of contract wording, see the Force majeure clause.
The wording is clear- the seller is exempted from liability if delivery is prevented by an event which is, inter alia, beyond the seller’s control.
What is to be deemed to be beyond the seller’s control, however, depends on the applicable law.
What is transnational law?
Transnational law is believed to provide a uniform system that is independent of the peculiarities of national laws.
Weakness of transnational law
As Chapter two will show, however, there do not seem to be any generally acknowledged transnational principles that are sufficiently comprehensive and specific to give exhaustive and uniform guidance on the interpretation and construction of contracts.
what are boilerplate clauses?
These clauses relate to the interpretation and general operation of contracts and are to be found in most contracts irrespective of the subject matter of the contract.
They are relatively standardized and their wording is seldom given attention during the negotiations.
often contracts contain an Arbitration clause, what does this entail?
In this way, the parties agree that disputes between them shall not be solved by courts, but in arbitration– a private disputes settlement mechanism.
As arbitration enjoys a significant autonomy from courts and national laws, the influence of national law is reduced, although not completely avoided.
If a dispute happens to one of the clauses, are litigation or drafting lawyers concerned?
Litigation lawyers
what kind of clause is this?
(a) Entire Agreement Clause
The purpose of the Entire agreement clause (also known as the Merger clause or
Integration clause) is to attempt to isolate the contract from any source or element that
may be external to the document. This is also often emphasised by referring to‘the four
corners of the document’ as the borderline for the interpretation or construction of the
contract. The parties’ aim is thus to exclude terms or obligations that do not appear in the
document. A typical Entire agreement clause might read as follows:
This Agreement constitutes the entire agreement between the Parties and
supersedes any prior understanding or representation of any kind preceding
the date of this Agreement.
Boilerplate clause
