Examining Hardship Provisions & Contractual Obligations in Civil & Common Law, Lecture notes of Law

Download Examining Hardship Provisions & Contractual Obligations in Civil & Common Law and more Lecture notes Law in PDF only on Docsity! Examples of Trans-systemic Exam Questions for Contractual Obligations Technique 1: Using the fictitious jurisdiction of Transania: Example 1(1): The country of Transania is presently looking to reform many aspects of its law of contracts. Having heard about the unique, creative and trans-systemic legal education you have received, you have been hired as a consultant to comment on the following draft provision proposed for adoption by the Legislative Assembly of Transania. “Where the performance of a contract becomes more onerous for one of the parties, that party is nevertheless bound to perform its obligations subject to the following provisions on hardship: (1) There is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party’s performance has increased or because the value of the performance a party received is diminished through events that are beyond the control of the disadvantaged party. (2) Incase of hardship the disadvantaged party is entitled to request renegotiations. Upon failure to reach agreement within a reasonable time, the party may resort to judicial proceedings pursuant to which the court may terminate the contract or adapt the contract with a view to restoring its equilibrium.” Please comment on this draft provision supporting your remarks with reference to legislative and jurisprudential material from both legal systems. Discuss whether your opinion would change in any way, and if so how, depending on whether Transania is a civil law or common law jurisdiction. Example 1(2): The country of Transania is presently looking to reform many aspects of its law of contracts. Having heard about the unique, creative and trans-systemic legal education you have received, you have been hired as a consultant to comment on the following draft provision proposed for adoption by the Legislative Assembly of Transania. “Upon the demand of one of the parties, the judge may modify the effects of a contract, or he may set it aside in whole or in part on the basis of unforeseen circumstances which are of such a nature that the co-contracting party, according to the criteria of reasonableness and equity, may not expect that the contract be maintained in an unmodified form.” Please comment on this draft provision supporting your remarks with reference to legislative and jurisprudential material from both legal systems. Discuss whether your opinion would change in any way, and if so how, depending on whether Transania is a civil law or common law jurisdiction. Technique 2: Fact Pattern that arises somewhere in the world (or in several different jurisdictions): Example 2(1): Barty is a fertilizer supplier who has had a lease arrangement with Alvin for some 10 years now, always on the basis of a renewable year-to-year lease. Barry leased from Alvin the facility where it made and stored the fertilizer before shipping it to farmers. In addition to the landlord/tenant relationship (Alvin being the landlord and Barry the tenant), Alvin supplied Barry, under separate agreements, with the goods necessary to make fertilizer which Barry then sold to farmers. By the terms of the original lease, either party had the ability to terminate the lease effective June 30" in any year so long as notice was given by April 1* of the year in question. Otherwise, it would be renewed. The term was set because of the nature of the fertilizer business. Briefly, the most important time for the supply of fertilizers to farmers is from March to June. Once the end of June arrives, farmers no longer need fertilizer. The fertilizer supplier then returns to building up its supply over the summer, fall and early winter and begins supplying again the next March. In January of 2006, Alvin decided that the contractual relationship with Barry was not commercially advantageous. Alvin did not want to terminate the lease but wanted to add more flexibility to his options with respect to the leasing arrangement. Alvin approached Barry and suggested that the yearly lease be converted to a month-to-month lease, whereby either party could terminate the lease on 30 days notice at any time. Alvin assured Barry that no other terms of the lease would be changed in any way. Barry was not too happy with this new arrangement but felt that if he did not agree, he would risk Alvin terminating the lease at the very next opportunity (ie the next April 1“) and he did not want that to happen. Barry continued to operate at the site through 2006 and 2007. On November 1, 2007, as he had done many times in the past, Alvin supplied Barry with 88 tons of urea, one of the products needed to make fertilizer. However, on December 1, 2007, Alvin served Barry with a notice to terminate the lease, demanding vacant possession one month later. Barry does not want to comply, claiming that terminating the lease now would be detrimental to his business, causing him an irreparable loss of reputation and customers. Barry asserts further that he had no way of anticipating this notice to end the lease, particularly in light of Alvin’s recent delivery of 88 tons of urea, which farmers would not use until the Spring of 2008 and which he would now have nowhere to store.