Pacta sunt servanda

From Wikipedia, the free encyclopedia

Jump to: navigation, search Pacta sunt servanda (Latin for "agreements must be kept"[1]), is a brocard, a basic principle of civil law and of international law. In its most common sense, the principle refers to private contracts, stressing that contained clauses are law between the parties, and implies that non-fulfilment of respective obligations is a breach of the pact. The general principle of correct behaviour in commercial praxis and implies the bona fide is a requirement for the efficacy of the whole system, so the eventual disorder is sometimes punished by the law of some systems even without any direct penalty incurred by any of the parties. With reference to international agreements, "every treaty in force is binding upon the parties to it and must be performed by them in good faith."[2] Pacta sunt servanda is based on good faith. This entitles states to require that obligations be respected and to rely upon the obligations being respected. This good faith basis of treaties implies that a party to the treaty cannot invoke provisions of its municipal (domestic) law as justification for a failure to perform. The only limit to pacta sunt servanda are the peremptory norms of general international law, called jus cogens (compelling law). The legal principle clausula rebus sic stantibus, part of customary international law, also allows for treaty obligations to be unfulfilled due to a compelling change in circumstances.

[edit] See also

Breach of contract Fundamental breach Breach of the peace

Breach of contract
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Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. If the party does not fulfill his contractual promise, or has given information to the other party that he will not perform his duty as mentioned in the contract or if by his action and conduct he seems to be unable to perform the contract, he is said to breach the contract.

Contents
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1 Minor breaches 2 Material breach 3 Fundamental breach 4 Anticipatory breach 5 Limits on Remedies and Damages 6 See also

[edit] Minor breaches

A minor breach, a partial breach or an immaterial breach, occurs when the non-breaching party is unentitled to an order for performance of its obligations, but only to collect the actual amount of their damages. For example, suppose a homeowner hires a contractor to install new plumbing and insists that the pipes, which will ultimately be sealed behind the walls, be red. The contractor instead uses blue pipes that function just as well. Although the contractor breached the literal terms of the contract, the homeowner can only recover the amount of his damages. Generally, this means the difference in value between the red pipe and the blue pipe. Since the pipes are identical value, the difference is zero; therefore, there are no damages and the homeowner receives nothing. (See Jacob & Youngs v. Kent, on which this example is based.)

[edit] Material breach

A material breach is any failure to perform that permits the other party to the contract to either compel performance, or collect damages because of the breach. If the contractor in the above example had been instructed to use copper pipes, and instead used iron pipes which would not last as long as the copper pipes would have, the homeowner can recover the cost of actually correcting the breach - taking out the iron pipes and replacing them with copper pipes. As with nearly everything in the law, there are exceptions to this. Legal scholars and courts often state that the owner of a house whose pipes are not the specified grade or quality (a typical hypothetical example) will not be able to recover the cost of replacing the pipes for the following reasons:

1. Economic waste. The law does not favor tearing down or destroying something that is valuable (almost anything with value is "valuable"). In this case, significant destruction of the house would be required to completely replace the pipes, and so the law is hesitant to enforce damages of that nature.[citation needed] 2. Pricing in. In most cases of breach, a party to the contract simply fails to perform one or more terms. In those cases, the breaching party should have already considered the cost to perform those terms and thus "keeps" that cost when they do not perform. That party should not be entitled to keep that savings. However, in the pipe example the contractor never considered the cost of tearing down a house to fix the pipes, and so it is not reasonable to expect them to pay damages of that nature.[citation needed] The result is that most homeowners will not collect damages that will compensate them for replacing the pipe, but rather collect damages that compensate them for the loss of value in the house. For example, say the house is worth $125,000 with copper and $120,000 with iron pipes. The homeowner would be able to collect the $5,000 difference, and nothing more. The Restatement (Second) of Contracts lists the following criteria to determine whether a specific failure constitutes a breach: In determining whether a failure to render or to offer performance is material, the following circumstances are significant: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. American Law Institute, Restatement (Second) of Contracts 241 (1981)

[edit] Fundamental breach

A fundamental breach (or repudiatory breach) is a breach so fundamental that it permits the aggrieved party to terminate performance of the contract, in addition to entitling that party to sue for damages.

[edit] Anticipatory breach

A breach by anticipatory repudiation (or simply anticipatory breach) is an unequivocal indication that the party will not perform when performance is due, or a situation in which future non-performance is inevitable. An anticipatory breach gives the non-breaching party the option to treat such a breach as immediate, and, if repudiatory, to terminate the contract and sue for damages (without waiting for the breach to actually take place).

[edit] Limits on Remedies and Damages

Typically, the judicial remedy for breach of contract is monetary damages. See damages. Where the failure to perform cannot be adequately redressed by money damage, the court may enter an equity decree awarding an injunction or specific performance. The aggrieved person has a duty to mitigate or reduce damages by reasonable means. Liquidated Damages may be limited to a specific amount. In the United States, punitive damages are generally not awarded for breach of contract but may be awarded for other causes of action in a lawsuit. Limitation of Liability (Exculpatory) clauses. [Private agreement is permissible.] [Invalid when public interest is involved and there is willful conduct or gross negligence.]

Fundamental breach
From Wikipedia, the free encyclopedia
Jump to: navigation, search A fundamental breach of a contract, sometimes known as a repudiatory breach, is a breach so fundamental that it permits the distressed party to terminate performance of the contract, in addition to entitling that party to sue for damages.

Contents
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1 History 2 English law 3 Canada 4 See also 5 Notes

[edit] History

Contract law
Part of the common law series

Contract formation

Offer and acceptance Mailbox rule Mirror image rule Invitation to treat Firm offer Consideration

Defenses against formation

Lack of capacity Duress Undue influence Illusory promise Statute of frauds Non est factum

Contract interpretation

Parol evidence rule Contract of adhesion Integration clause Contra proferentem

Excuses for non-performance

Mistake Misrepresentation Frustration of purpose Impossibility

Impracticability Illegality Unclean hands Unconscionability Accord and satisfaction

Rights of third parties

Privity of contract Assignment Delegation Novation Third party beneficiary

Breach of contract

Anticipatory repudiation Cover Exclusion clause Efficient breach Fundamental breach

Remedies

Specific performance Liquidated damages Penal damages Rescission

Quasi-contractual obligations

Promissory estoppel Quantum meruit

Related areas of law

Conflict of laws Commercial law

Other common law areas

Tort law Property law Wills, trusts and estates Criminal law Evidence

vde

The law of fundamental breach was historically treated as an extension of the doctrine of deviation. The development of this doctrine can be traced down to the first half of the 19th century, when Tindal C.J. stated in Davis v. Garrett that deviation made by the carrier from the agreed voyage route brings the latter outside of contract and therefore outside of exceptions or limitation clauses provided by such a contract. This harsh attitude to deviation cases originated from the earlier marine insurance practice when cargo insurance policy was lost in case of deviation. Thereby strict obligations imposed to the carrier were designed to afford protection to the cargo owner.

[edit] English law

See also: English contract law The doctrine of fundamental breach further developed in numerous cases and by the second half of the last century was extended far beyond of the deviation cases and cases related to the carriage of goods by sea. Lord Greene M.R. in Alderslade v. Hendon Laundry Ltd.[1] labelled the fundamental term as the hard core of the contract'. Lord Reid in Suisse Atlantique Societe d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale[2] defined fundamental breach as a well-known type of breach which entitles the innocent party to treat it as repudiatory and to rescind the contract. As a matter of law, under the doctrine of fundamental breach of contract, exclusion clauses were deemed not to be available to a party in fundamental breach of the contract. In particular, the common law approach that the carrier deviated from his contractual voyage has been deprived of the defence available under the Hague Rules, even if the bill of lading contract of carriage was governed by the Rules, was unchanged and unchallenged for many years when in Tate & Lyle, Ltd. v. Hain Steamship Company, Ltd. the ordinary law of contract was applied to the deviation case for the first time. In the second half of the 20th century, first in Maxine Footwear[3] and Suisse Atlantique and then in several posterior cases, principally in Photo Production Ltd. v. Securicor Transport Ltd, the unavailability of exclusion clauses to the party in fault in cases of fundamental breach was doubted in favour of such cases as falling within authority of the ordinary law of contract .

Several statutory changes such as passing by the Parliament of the Carriage of Goods by Sea Act 1971 and the Unfair Contract Terms Act 1977, further affected the law position on the doctrine of fundamental breach and liability limitations. Former by giving the force of law to the HagueVisby Rules and later by providing the rules to regulate the contracts between the parties with the different bargaining strength. This law was successfully applied in two most recent cases related to carriage of goods by sea and application of limitation clauses under the Hague and The Hague-Visby Rules:Daewoo Heavy Industries Ltd. v. Klipriver Shipping Ltd.[4] and The Happy Ranger[5] In English law, fundamental breach was first examined by the House of Lords in the Suisse Atlantique case[6], wherein they decided that a contract can be voided if a breach of a fundamental term can be found. That is, a breach of a condition that "goes to the root of the contract". This approach is known as the Rule of Law doctrine. At the Court of Appeal level in Photo Productions Ltd. v. Securicor Transport Ltd.[7] Lord Denning championed the Rule of Law doctrine and extended the rule in Suisse Atlantique case to apply to all exemption clauses. However on appeal to the House of Lords Lord Wilberforce effectively overturned the Rule of Law doctrine and instead maintained a strict Rule of Construction approach whereby a fundamental breach is found only through examining the reasonable intentions of the parties at the time of the contract.

[edit] Canada
The doctrine of fundamental breach has been laid to rest[8] by the Supreme Court of Canada in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways)..[9] In its place, the Court has created a three-step test to evaluate the application of exclusion clauses. The first step is to evaluate the exclusion clause in the factual context of each case to determine if it applies to the material circumstances. The second step is to evaluate if the exclusion clause was unconscionable at the time of incorporation. The final step is to evaluate whether the exclusion clause should not be enforced on public policy grounds.

Breach of the peace

From Wikipedia, the free encyclopedia
Jump to: navigation, search Breach of the peace is a legal term used in constitutional law in English-speaking countries, and in a wider public order sense in Britain.

Contents
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1 Constitutional law 2 Public order 3 See also 4 References

[edit] Constitutional law

In the United States, the Speech or Debate Clause of Article One of the United States Constitution provides that members of Congress shall be immune from arrest in going to and departing from sessions and while Congress is in session except for cases of "Treason, Felony, and Breach of the Peace." The first two are somewhat self-explanatory; it has been suggested that the third is deliberately somewhat vague. The doctrine thus established is called congressional immunity; it arose out of the necessity to prevent a vengeful executive from arresting members of the legislature as a pretext to prevent them from taking actions that the executive might find to be displeasing. In recent years, this doctrine has been used to prevent members from being stopped and held for speeding on their way to sessions; this apparently is not a "breach of the peace", whereas perhaps another misdemeanor such as "drunk and disorderly" might be construed to be such. Most states of the United States and most other English-speaking jurisdictions have extended this privilege to members of their legislatures on the theory outlined above.

[edit] Public order

Main article: Disturbing the peace (crime) The concept of a "breach of the peace" is more widely used in English law, however. Theoretically all criminal offences cognizable by English law involve "a breach of the Queen's peace", and all indictments conclude "against the peace of our Lady the Queen, her crown and dignity". Historically this phrase, now legally superfluous, represents the last trace of the process by which the royal courts assume jurisdiction over all offences, and gradually eroded the jurisdiction of the sheriff and of lords of manor and franchises, making crime a matter of national concern as distinguished from civil wrongs or infractions of the rights of local magnates. The Peace of the King was sworn on his accession or full recognition, and the jurisdiction of his courts to punish all violations of that peace was gradually asserted. The completion of this process is marked by the institution of the office of Justice of the Peace.

In the United Kingdom, although not a statutory offence but a common law offence (the use of the word offence is disputed due to the rulling of Williamson v West Midlands Police [1]), "breach of the peace" is widely used.[2] In the United Kingdom, constables (or citizens) are permitted to arrest a person to "prevent a further breach of the peace" which allows to the police or the public to arrest a person before a breach of the peace has occurred. This is permitted when it is reasonable to believe should the person remain, that they would continue with their course of conduct and that a Breach of the Peace would occur. Breach of the Peace is usually used to remove violent or potentially violent offenders from a scene rapidly, in Biddy V Chief Constable of Essex it was also used when a person in the opinion of a Constable was likely to be the victim of a breach of the peace or an act of violence [3]; the only punishment that can be inflicted by a court for this offence is to bind over the offender to keep the peace. There are some minor differences between English law and Scots law in relation to breach of the peace. One of the leading cases in Scots Law is that of Smith v Donnelly, a case concerning a Faslane protester.[4] In England, Wales and Northern Ireland Breach of the Peace is descended from the 1361 Justices of the Peace act [5]which refers to riotus and Barratory behavior that disturbs the peace of the King. The conclusion has also found its way into constitutional law in many United States state constitutions, which mandate that indictments within the state end in a similar manner to the above, usually omitting the "crown" part or substituting "government". For example New Jersey's is "against the peace of this State, the government and dignity of the same".[6]