Business Law and EthicsContract Law
Below is a structured and detailed summary of the book “Comparative Contract Law: British and American Perspectives” by Larry A. DiMatteo and Martin Hogg, using concrete examples and actionable advice.
Title: Comparative Contract Law: British and American Perspectives
Authors: Larry A. DiMatteo and Martin Hogg
Categories: Contract Law
Introduction
“Comparative Contract Law: British and American Perspectives” is a profound exploration of the similarities and differences between British and American contract law. The authors, Larry A. DiMatteo and Martin Hogg, provide a detailed comparative analysis, enriched with numerous examples. The book serves as an invaluable resource for legal practitioners, scholars, and students who wish to understand transatlantic differences and how they impact contract formation, interpretation, and enforcement.
Major Points and Actions
1. Historical Foundations
British Perspective:
– Contract law in Britain evolved significantly from the 19th century, heavily influenced by common law principles and landmark cases like Carlill v Carbolic Smoke Ball Co. (1893).
American Perspective:
– In the U.S., contract law development was shaped by both common law and the Uniform Commercial Code (UCC), with cases such as Hawkins v. McGee (1929) underscoring the importance of expectation damages.
Actionable Advice:
– Legal practitioners should study seminal cases specific to each jurisdiction to understand the foundational principles that guide current contract law. For instance, reviewing Carlill v Carbolic Smoke Ball Co. can elucidate the understanding of unilateral contracts in the U.K.
2. Formation of Contracts
British Perspective:
– The formation of contracts under British law strictly follows the requirements of offer, acceptance, consideration, and intention to create legal relations. For example, the case Fisher v Bell (1961) clarifies that displaying items constitutes an invitation to treat, not an offer.
American Perspective:
– In the U.S., the formation process includes similar elements but places stronger emphasis on the UCC for commercial contracts. The case Lucy v. Zehmer (1954) demonstrates how intent is evaluated in determining contract formation.
Actionable Advice:
– When drafting or reviewing contracts, ensure all elements of formation are fulfilled according to the respective jurisdiction. For instance, clearly distinguishing between an offer and an invitation to treat can prevent misunderstandings in British contracts.
3. Capacity and Legality
British Perspective:
– British law mandates that parties must have the legal capacity to contract, and the contract’s purpose must be legal. Minors, for instance, can enter into binding contracts only for necessaries.
American Perspective:
– Similarly, U.S. law requires capacity and legality. Contracts involving minors or illegal purposes are void or voidable, as seen in cases like Craig v. Boren (1976).
Actionable Advice:
– Verify the legal capacity of all parties involved and ensure the contract’s purpose aligns with statutory regulations. For instance, when contracting with a minor in the U.K., ascertain that the agreement pertains to necessaries to avoid invalidation.
4. Consideration and Promissory Estoppel
British Perspective:
– Consideration must be present in British contracts to make them binding. The notion is succinctly illustrated in Chappell & Co Ltd v NestlĂ© Co Ltd (1960), where consideration was deemed valid even if trivial.
American Perspective:
– In the U.S., consideration is similarly essential, but the doctrine of promissory estoppel can enforce promises without consideration if reliance is shown, as in Rickets v. Scothorn (1898).
Actionable Advice:
– When seeking to enforce a contract in the U.S., consider invoking promissory estoppel if there is significant reliance on the promise, even in the absence of traditional consideration.
5. Contractual Terms and Interpretation
British Perspective:
– Term interpretation in British law relies on the literal rule and purposive approach, explained through cases like Investors Compensation Scheme Ltd v West Bromwich Building Society (1998).
American Perspective:
– The U.S. approaches interpretation with the “four corners rule” and considers extrinsic evidence if ambiguities persist, as seen in Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co. (1968).
Actionable Advice:
– Draft terms as clearly and unambiguously as possible, and understand the interpretative rules of the relevant jurisdiction. For example, include comprehensive definitions to clarify contract terms in the U.S. context.
6. Breach and Remedies
British Perspective:
– Remedies for breach of contract in Britain include damages, specific performance, and injunctions. The principle of expectation damages is highlighted in Robinson v Harman (1848), emphasizing compensation for what was promised.
American Perspective:
– Remedies in the U.S. also focus on expectation damages, with courts using the UCC to determine appropriate measures for commercial breaches, such as in Hadley v. Baxendale (1854).
Actionable Advice:
– When dealing with breaches, evaluate the most beneficial remedy and understand the criteria for each. For example, pursue specific performance in the U.K. when monetary damages are insufficient to rectify the breach.
7. Implied Terms and Good Faith
British Perspective:
– Implied terms in British contracts often derive from statute or common law, as seen in Liverpool City Council v Irwin (1977), which implied reasonable standards of maintenance in lease agreements.
American Perspective:
– The U.S. implies reasonable and fair dealing into contracts under the UCC, emphasizing good faith, illustrated by Wood v. Lucy, Lady Duff-Gordon (1917).
Actionable Advice:
– Review the relevant statutory and common-law provisions to understand which terms might be implied. For example, ensure all parties are aware and comply with the good faith requirement in the U.S. when managing commercial agreements.
8. Excuses for Non-Performance
British Perspective:
– British law acknowledges excuses such as frustration, where unforeseen events make contractual obligations impossible, as demonstrated in Taylor v Caldwell (1863).
American Perspective:
– In the U.S., doctrines like impossibility, impracticability, and frustration of purpose are recognized, as seen in Transatlantic Financing Corp. v. United States (1966).
Actionable Advice:
– When unforeseen circumstances arise, determine if the situation qualifies for an excuse under the appropriate doctrine. For example, document and communicate any events leading to frustration of purpose in U.S. contracts.
9. Contract Modification
British Perspective:
– Contract modifications in Britain must adhere to the same formalities as initial contracts, including consideration, unless they are under seal.
American Perspective:
– In the U.S., the UCC allows for contract modifications without consideration under certain conditions, provided they are made in good faith.
Actionable Advice:
– Clearly document all modifications and ensure they meet jurisdictional requirements to remain enforceable. For instance, include clauses in U.S. contracts that permit modifications without consideration to accommodate future changes.
10. Ethical Considerations
British Perspective:
– Ethical considerations in British contract law center around fairness and reasonableness, as reflected in the Consumer Rights Act 2015.
American Perspective:
– In the U.S., ethical practices are guided by principles such as transparency and fair dealing, mandated by bodies like the American Bar Association (ABA).
Actionable Advice:
– Uphold ethical standards by being transparent in negotiations and avoiding unfair practices. For example, disclose all relevant information during contract formation in both the U.K. and U.S.
Conclusion
“Comparative Contract Law: British and American Perspectives” provides an insightful examination of contract law across two major legal systems. Through detailed analysis and case studies, Larry A. DiMatteo and Martin Hogg illuminate the nuanced differences and underlying commonalities in foundational concepts, formation, interpretation, and enforcement of contracts. By understanding these distinctions and adhering to the actionable advice provided, legal professionals can navigate transatlantic contract law more effectively, ensuring compliant and enforceable agreements.
This summary encapsulates the key points and examples from the book while providing practical steps for application in legal practice. The structure ensures comprehensive coverage of contract law aspects from both British and American perspectives.