Contents of Commercial Contracts: Terms Affecting Freedoms (Hart Studies in Private Law Book 35)

Freedom of contract is a great strength of English law: it is a key reason why English law is often the law of choice. But the terms of commercial contracts often restrict freedom of action. In this book, leading commentators consider those terms by taking stock of recent developments, such as increased reliance on good faith and the rise of smart contracts. In so doing, they make original contributions to ongoing debates concerning the limits to parties’ freedom of contract. This important subject will interest drafters of commercial contracts keen to ensure that contracts are clear and enforceable; litigators disputing the meaning, scope and validity of terms; and academics interested in the purpose and nature of the exercises involved. Volume 35 in the series Hart Studies in Private Law Foreword by Lady Arden 6 Acknowledgements 10 Contents 12 List of Contributors 14 1. Freedom of Contract and Terms Affecting Freedoms 16 2. Binding Our Future Selves 28 I. Power to Contract 28 II. Why Do We Need Contract Rights? 29 III. Promises and Agreements 30 IV. Rights and Recourse 37 V. Formalities, Nullity and Unenforceability 39 VI. Consideration 40 VII. Variation 45 VIII. Increasing and Decreasing Pacts 46 IX. Conclusion 48 3. Anti-Oral Variation Clauses: Rock-Solid or Rocky? 50 I. Introduction 50 II. MWB Business Exchange Centres Ltd v Rock Advertising Ltd: Facts and Decision 51 III. The Reasoning of Lord Sumption (for the Majority) 53 IV. The Reasoning of Lord Briggs 55 V. The Reasoning of Lord Justice Beatson in the Globe Case 57 VI. Which is the Best Approach? 58 VII. Conclusion 64 4. Controlling Contractual Interpretation 66 I. The Context 67 II. Can We Use Interpretation Clauses? 70 III. Should We Use Interpretation Clauses? 70 IV. What Should an Interpretation Clause Say? 71 V. What Else Could an Interpretation Clause Do? 75 VI. Conclusion 78 5. Good Faiths and Contract Terms 80 I. Introduction 80 II. Four Models of Good Faith 83 III. Interpretation of Contract in Light of Reasonable Expectations of Honesty 91 IV. Implication of Good Faith 93 V. The Doctrine of Proper Purpose and Good Faith 100 VI. Conclusion 102 6. Excluding Good Faith and Restricting Discretion 104 I. Express Restrictions on Self-interested Behaviour 105 II. Implied Restrictions on Self-interested Behaviour 107 III. Excluding Terms Restricting Self-interested Behaviour 114 IV. The Exercise of Contractual Powers 119 V. Conclusion 126 7. The New Override of Bans on Assignment of Receivables 128 I. Legislation in Other Jurisdictions 128 II. Summary of the 2018 Regulations 129 III. The Legal Effect of a Ban on Assignment 131 IV. Why an Override is Desirable 132 V. Empirical Studies 133 VI. The Government's Reaction 134 VII. Early Exceptions 136 VIII. The Legal Profession Begins to Respond 138 IX. Special Interest Exceptions: Other Government Departments? 142 X. Taking Our Eyes Off the Ball: Contracts Between the Same Parties 144 XI. The Profession's Response to the 2017 Draft 145 XII. The Process of Reform 151 8. The Boundaries of a Borrower’s Freedom to Act: Negative Covenants in Loan Agreements 154 I. Introduction 154 II. The Purpose of Contractual Terms in a Loan Agreement 155 III. Terms of a Typical Loan Agreement 157 IV. How Do Negative Covenants Work? 160 V. The Content of Negative Covenants 171 VI. Conclusion 176 9. ‘Ethical Clauses’ in Global Value Chain Contracts: Exploring the Limits of Freedom of Contract 178 I. Introduction 178 II. The Distinctiveness of Ethical Clauses 181 III. The Enforcement of Ethical Clauses 192 IV. Conclusion 204 10. Smart Contracts 206 I. What is a Smart Contract? 206 II. Formation: The Spectrum of Smart Contracts in Practice 212 III. Code as Contract 214 IV. Interpretation 217 V. Concluding Remarks 223 11. Disproportionate Penalties in Commercial Contracts 226 I. Introduction 226 II. The Problem 227 III. Breach of Contract and Secondary Obligations 230 IV. Proportionality 238 V. Justification 248 VI. Conclusion 252 12. Opting for ‘Documentary Fundamentalism’: Respecting Party Choice for Entire Agreement and Non-Reliance Clauses 254 I. Introduction 254 II. Purpose and Use 257 III. Objection (1): Fraud and Public Policy 261 IV. Objection (2): 'Mere Boilerplate' 264 V. Objection (3): Logically Unsustainable? 267 VI. Common Law Regulation: Construction Contra Proferentem 270 VII. Statutory Regulation 273 VIII. Conclusion 281 13. Planning for Failure: Contract Design, Ineff ective Bargains and Restitution 282 I. Introduction 282 II. The Case for Planning for Unforeseen Eventualities 283 III. Valid Contracts as Justifying Grounds 285 IV. Termination and Frustration: Scope for Provision in Valid Contracts 292 V. Frustration or Force Majeure 295 VI. Contractual Bargains and Unjust Enrichment Claims 298 VII. Failure of Consideration and the Parties' Bargain 300 VIII. Conclusion 305 14. ‘All Watched Over by Machines of Loving Grace’? The Inevitable Conflict between Contract Law and Free Speech in Cyberspace 308 I. Welcome to the Machine 309 II. Gimme Shelter 318 III. The Sound of Silence 325 15. Private Law and Public Concerns: Non-Disclosure Agreements in English Contract Law 330 I. Use and Abuse 331 II. Contract Law and Non-disclosure Agreements 334 III. Conclusions 352 16. Professional Ethics and NDAs: Contracts as Lies and Abuse? 354 I. Zelda Perkins 355 II. Might the Use of This Kind of Clause Amount to Perverting the Course of Justice? 359 III. Professional Ethics Perspectives 361 IV. The Balancing Exercise 365 V. Common Law and the Freedom of Contract 366 VI. The Court Consideration of the Green Cases 367 VII. The Costs Arguments 373 VIII. Conclusions 375 17. Choice of Court and Choice of Law Agreements: Freedom of Freedom of Contract 378 I. Freedom of Contract Justifications for Party Autonomy in Private International Law 378 II. The Distinction between Private International Law Party Autonomy and Contractual Party Autonomy 380 III. Consequences of the Distinction 384 IV. Conclusions 395 18. Illegality in English Arbitration Law after Patel v Mirza 396 I. Introduction 396 II. The Relevance of Patel for English Arbitration Law 398 III. Patel: A Closer Look 403 IV. Pre-award Litigation 405 V. Post-award Litigation 408 VI. Conclusion 416 19. The Reform of Insurance Warranties: Looking Beyond the Past 418 I. Introduction 418 II. Bluebon Ltd 420 III. Antecedence 422 IV. Contractual Construction: An Exercise in Judicial Contortions? 424 V. Insurance Act 2015: A Brave New World? 431 20. The Right to Delivery of Goods under Contracts of Carriage 436 I. What Constitutes Misdelivery? 438 II. The Limits to the Cargo Interest's Rights to Delivery 442 III. Possible Avenues to Bring a Misdelivery Action 451 IV. Conclusion 453 21. The Contents of Commercial Contracts: Terms Affecting Freedoms – A Response 456 I. Themes Old and New in Commercial Contracts 456 II. Contractual Relationship and Behaviours 456 III. Breach and Termination – Inside or Outside the Contract 458 IV. Good Faith 461 V. Interpretation 463 VI. The Muddle of Reform 464 Index 468 "Freedom of contract is a great strength of English law: indeed it is a key reason why English law is often the law of choice. But the terms of commercial contracts often restrict freedom of action. This book considers such terms. Leading commentators take stock of recent developments such as increased reliance on good faith/discretion and the rise of smart contracts. Insodoing, they make original contributions to ongoing debates concerning the limits to parties' freedom of contract. This important subject will interest drafters of commercial contracts keen to ensure that contracts are clear and enforceable; litigators disputing the meaning, scope and validity of terms; and academics interested in the purpose and nature of the exercises involved"-- Provided by publisher