Often overlooked requirements
The drafting of contracts is often obscured as much by the technicality of a method which often consists in using precedents developed by successive additions, by “sedimentation”, as by phenomena of superficial logic.
One can cite, for example, the use of a neutral law, which is likely to be either manifestly inadequate or in fact very biased.
An inadequate law is, for example, the use of Swiss law in international contracts in the field of oil exploration, where the reference to Swiss law is manifestly inoperative, Swiss law not having for obvious reasons a significant development in the area. matter.
As a recourse to a law that is in fact oriented, political neutrality not being neutrality in matters of legislative policy, the stipulation which was frequent between American and Chinese companies of Swedish law, which is a law with a strong consumerist tendency, and therefore very unfavorable for the seller, generally the American company which pushed for the stipulation of this right.
The requirement for consistency, which is moreover a form of logic, is also often overlooked. We can cite a few examples of consistency requirements
- consistency between the applicable law and the language of the contract
- consistency between the language and the law used in the place of performance
the use in the contract, which is supposed to guide the parties in the performance of the commitments, of a language which is not that of the performing party is a clear source of difficulties. If the parties, who generally draw up the contract with their lawyers, are not in a position to draw up the stipulations in the language of execution, it is clear that those who will implement them, if they can possibly understand their general meaning , will not give a rigorous application in accordance with legal requirements.
- internal consistency of contractual stipulations
The stipulations must be understandable (which is not the case when concepts unknown to local law are used) by the competent court (effectively competent outside the field of application of the law possibly chosen)
We can cite, for example, the concepts of “through put agreement” in terms of project financing. The stipulation of a law recognizing these concepts (themselves disputed moreover) will not be able to give validity to concepts which will have to be applied before courts necessarily competent because the assets or the debtors are located in their jurisdiction. The law applicable to sureties, moratoriums or receivership being the law of the forum seized, any court pragmatically applying in any case its own concepts, the contractual stipulations will have no effectiveness in the event of litigation.
In all the laws the courts have a power of interpretation of the clauses which are not clear and precise which they use in fact as a power of equity and of intervention.
Very detailed drafting far from guiding the courts, especially when it is in a style that is unfamiliar to the judge and with concepts that he does not know, will in fact be a source of imprecision and arbitrariness.
The “civil law” wording
The “civil law” type drafting is done according to the concepts of continental, Romano-Germanic law. It is thus structured according to the requirements of civil law as to the content of the contract such as
- Object of the contract
- Obligation of the parties
The nature of the parties’ obligations is qualified according to legal concepts, such as obligation of means or obligation of result.
The “common law” wording
The contractual drafting is done according to the statement of definitions and of factual situations for which are specified in more and more detail either the consequences with regard to the obligations of each party, or the procedures.
Common law drafting is thus characterized by its length and style and its style.
- the contracts, after having made dozens of pages, have gone to hundreds of pages, with a catalog of factual situations, and taking into account a law conceived as a function of the procedure and therefore of “remedies”
- the role of the contract is to constitute a bible to guide the execution of the contract: “monitoring the performance of the contract”
The divisions of the contract are based on different legal concepts
- Positive & Negative covenants
- Previous Conditions
- Representations and warranties
- Events of default
The nature of the obligations is qualified according to criteria such as “best efforts”, “reasonnable efforts”, etc.
The essential clauses
The essential clauses are those whose absence is likely to vitiate the contract. They correspond to the minimum requirements of precision of the contract necessary for its existence. As the binding force of contracts is based on respect for the will of the parties, it is logical to require that the fundamental commercial conditions have been specified in the contract, except to make the judge or arbitrator the creator of the contract as it is. it will be executed.
Other clauses, such as choice of law or jurisdiction clauses, are important although they are essentially legal in nature because they allow, before any difficulty of execution, to better define the obligations of the parties.
Dangerous clauses are those which are prohibited and sanctioned, for example by competition law
Both the legislator and the courts deprive abusive clauses of effectiveness
Standard clauses (boiler plate clauses)
heading clauses, literal meaning, interpretative value, definition clauses, terminology, key concepts,
contract definition clauses,
full agreement clauses,
exclusion of simulation, counter-letters, exclusion of previous contracts, exclusion of pre-contractual documents, extrinsic evidence, exclusion of written or oral declarations
substantive or procedural clause,
exclusion of the general conditions,
defense or blocking clauses, exclusion from future contracts and documents, contractual protection,
language clauses, contradictions, priority rule,
oral non-modification clauses
partial nullity clauses, gap filling clauses,
custom, usage, commercial practice,
internationally recognized standard conditions (Incoterms)
good faith clauses, interpretation guidelines,