Sample Undergraduate Law of Obligation Essay

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If Parties are to have Maximum Substantive Freedom, Constraints on The Substance of What can Be Agreed to Should Be Kept to a Minimum

Introduction

The perspective of substantial freedom is focused on improving the lives and the freedom of the people.[1]. In other words, substantial freedom is concerned with expanding the freedoms for providing value to the lives to become social persons altogether and interacting with the world in which they live.

Substantial freedom is a freedom-oriented approach that tends to increase the self-reliant freedom of the parties involved in a particular contract, both as regards to the process that leads up to the bargain and as regard to the substantive terms that can be agreed to[2].

One of the fundamental dogmas of the law is that every person or party is free to contract as they wish, as long as no unfairness or illegality is involved. The following paper aims to examine the value and credibility of substantive freedom in the light of specific laws, including the law of contracts, namely as contracts in constraint of trade, agreement as to terms, contracts requiring the implication of a term, involving a penalty, or providing for the prohibition of some relevant frustration and liability. Reference or relevant case laws will also be demonstrated that reflect the constraints on the substance of what could be agreed to be kept to a minimum.

[1] Sen, Amartya. “Freedom of choice: concept and content.” European Economic Review 32, no. 2-3 (1988): 269-294.

[2] Stoop, Philip N. “The concept ‘fairness’ in the regulation of contracts under the Consumer Protection Act 68 of 2008.” Ph.D. diss., 2013.

Discussion

Substantive freedom has been argued that if the parties have maximum substantive or procedural freedom for agreeing, then it means that the law has to define the fundamental notion of agreement that should be kept liberal, fair, and confined scope to set the contractual agreements aside based on procedural impropriety.[1]. It reflects that if certain parties have maximum substantive freedom, limitations or restrictions on the substance of what can be agreed to should be kept to a minimum.

Under substantive law, the purpose of substantive freedom is to maintain the balance between the interests of the parties involved in a contract and to secure the procedural and substantive interests of the parties.[2]. Based on the substantive interests of the parties, the interest can be influenced by the rights and obligations offered by the terms.

The rights and rules stipulated for mentioned in terms may influence the important proprietary, physical, economic, and social interest of the parties. From a freedom-oriented perspective, terms could be unfair where these interests of parties are unduly compromised.[3]. Based on the procedural interests of the parties, interests are influenced by what happens in the procedure that leads to the conclusion of the contract.

If parties have maximum substantive freedom for bounding in a certain contract, then substantive law governs how parties of a contract should behave and defines responsibilities and rights in civil law and punishments and crimes in the criminal law.[4].

Substantive law can be codified in statutes or may exist through precedents in the common law. English law is the substantive common law regulating and restricting freedom of contract to examine the control over such freedom. Lawsuit between the contracting parties, issuing through their attempts to regulate their duties and rights by agreement and may give rise to several different issues.[5].

Several reported cases assert that the difference between the contracting parties resulting from some disputes among them as the contractual nature of their agreements is different or may have precise effects or scope or continuance.

The case law of Parker v South Eastern (1877)[6] It is relevant here, demonstrating that notice can integrate terms reliant on the context and what the logical and reasonable expectations are mentioned in the given context. This case asserts that the plaintiff should not be in a better position compared to other persons on account of his exceptional stupidity, ignorance, and carelessness.

However, the railway has not sufficiently conveyed to the people that the ticket contains certain conditions. Railway Company received goods on deposit without acquiring the people’s consent to deposit them to the conditions that limit their liability. In such cases, judgment is handled through the jury that freedom of contract does not mean that parties should conduct undue promises and certain laws restrict unfairness of the contracting parties.

Moreover, it can be argued that the court has a substantial role in establishing constraints on the substance of what can be done or agreed to should be kept to a minimum.[7].However, the question arises that court is either restricted or bound by the interest of the parties in a way that only through seeing what the contracting parties have articulated and the decision can be made, or the court is open to interpret or analyse for itself the nature of the relationship between the parties and make an independent conclusion.

If the first perspective is correct, then it could be said that the court has passive control over contracts for giving legal effects to the efforts of the contracting parties. If the second perspective is correct, then courts are actively involved in the establishment and regulation of the contractual relationships, even to the level of making a bargain for the contracting parties that they cannot make for themselves[8].

It asserts that despite having maximum substantive freedom, contracting parties are minimally limited to certain constraints of what can be agreed. If parties have to exercise the maximum substantive freedom over the contract, they should keep minimum constraints on the substance for agreeing upon the agreement.

For example, suppose the express terms agreed by the parties in the employment contract have very limited scope. In that case, the common law can be implied in which legislative decisions are made based on a judicial decision made in similar cases and similar tribunals.

In addition to this, the provisions of the Sale of Good Act 1893 demonstrated that agreement between the parties should be held legally and offer and acceptance should match to form a contract, and then terms are decided to be agreed on[9]. The case law of Harvey v Facey [1893] AC 552[10] It is relevant here which demonstrated that offer and acceptance are based on the terms agreed by both parties, and the offer of Bumper Hall Pen is agreed to be sold at the lowest price of £900 and offer is accepted.

The other party is agreed to buy Bumper Hall Pen. In this case, parties agree on the terms made in the sale contract of Bumper Hall Pen that made certain constraints on the good to exercise maximum substantive freedom to get engaged in sale transactions significantly. It reflects that parties should seek or set fair standards to keep minimum constraints on the substance, such as default rules and regulations. It can only be done through substantive law that defines statutes relevant to contract, the law of duress, etc.

Concerning the law of duress, it is argued that contract law assures fairness and avoids unfairness within the contracts on the basis of implying legislation on the contracts that are deemed inherently fair.[11]. Substantive fairness ensures that the bargain between the parties is a fair one and ensures that parties should be agreed on minimum constraints on the substance such as coercion, illegitimate pressure, and causation.

If these constraints are not limited to the substance, then the law of duress can be implied, and the contract is considered illegitimate. It reflects that if constraints on the substance are high, a party is pressurized, and its substantive freedom of contract is repressed.

The absence of choice in the contracts does not provide substantive freedom to the parties, and constraints on the substance are kept high for the party. The case law of Dyson J, DSND v Petroleum Gas Services (2000)[12] Exemplified that the misrepresentation of the contractual terms could lead the party to amount to coercion.

Duress is an illegal practice that is secured by the law of duress (contract). Breach of contract with the duress could reduce parties’ substantive freedom that keeps minimal constraints on the substance. However, the case of Dimskal Shipping Co S.A. v International Transport Workers Federation (The Evia Luck) (No.2) [1992][13] is distinguished as the contractual breach utilizing duress which was proven and explicitly evidenced. It reflects that if parties have to exercise their substantive freedom to be bound to a contract, they should keep minimal constraints on the goods and set fair terms without misrepresenting them.

In addition to this, it is argued that constraints such as social, industrial, and commercial factors may affect the contractual agreement held between the parties.[14]. It reflects that considerations and external constraints or pressures may be of substantial importance compared to the free expression of the freedoms held by the parties.

It does not mean that parties have no freedom of contract, but external constraints are only the important and relevant considerations that could change the nature of the contract. Thus, the legal nature of the contractual relations or contracts is secured by the alleged courts to decide or resolve disputes arising out from an alleged contract or contract.

Sometimes, courts implement some clumsy efforts on the parties to acquire a contractual situation through applying several different legislative statutes[15]. In this regard, courts have to make strenuous efforts to declare and uphold the existence of a contract between both of the parties and conduct a general determination to enter into a substantial contractual agreement. To exercise substantive freedom of contract, the contractual purpose should be evident to both parties are all contractual relationships should bind with the law that is giving effect to the parties’ freedom.

            The fact that parties who do not want to be engaged to the law of contract then court are willing to permit rejections of the general consequences of the agreement through a legal or legitimate process. It reflects that it is not the case to prove the effectiveness of the parties’ substantive freedom, it is the case them their freedom of contract is invoked or supressed by the substantive law, which asserts that parties are free to agree before contracting, but only to the level to which the courts allow them to do so.

It is asserted that contracting parties’ intentions are free, but parties have to agree on. Itmal constraints on substance. The case law of Earl of Aylesuppressedorris (1873)[16] Demonstrated that undue harshness should be allowed on the part of any party to a contract against each other, even one of the parties now being subjected to what could be regarded as an unconscionable or excessive demand that has been agreed upon earlier. The court in such a case asserts that what could be termed as an equitable approach to the issue of demonstrating the contractual obligations and rights of the parties.

In the case-law of Campbell Discount Co. v. Bridge[17]It is reflected that the hire-purchase contract includes hirer that intended to pay a sum through depreciation, thus assuring the owner of the article to be sold on minimum payment and included in a clause that penalty would be applied on buyer he breaches the contractual terms of hire-purchase. It reflects that parties should set fair terms and conditions before making a contract to exercise their substantive freedom of contract with minimal constraints on substance.

[1] Phillips, Michael J. “Thomas Hill Green, Positive Freedom, and the United States Supreme Court.” Emory LJ 25 (1976): 63.

[2] Dawkins, Cedric E. “The principle of good faith: Toward substantive stakeholder engagement.” Journal of Business Ethics 121, no. 2 (2014): 283-295.

[3] Prassl, Jeremias. “Freedom of Contract as a General Principle of E.U. Law? Transfers of Undertakings and the Protection of Employer Rights in E.U. Labour Law: Case C-426/11 Alemo-Herron and others v Parkwood Leisure Ltd.” Industrial law journal 42, no. 4 (2013): 434-446.

[4] Ripstein, Arthur. Force and freedom. Harvard University Press, 2010.

[5] Weber, David P. “Restricting the freedom of contract: A fundamental prohibition.” Yale Hum. Rts. & Dev. L.J. 16 (2013): 51.

[6] Parker’s Case, 2 C.P.D. 416 (1877).

[7] Kennedy, Duncan. “Form and substance in private law adjudication.” Harv. l. rev. 89 (1975): 1685.

[8] Macneil, Ian R. “Contracts: Adjustment of long-term economic relations under classical, neoclassical, and relational contract law.” Nw. U.L. Rev. 72 (1977): 854.

[9] Battersby, G., and A. D. Preston. “The Concepts of ‘Property’,‘Title’and ‘Owner’used in the Sale of Goods Act 1893”(1972).” MLR 35: 268.

[10] Harvey v. Facey, 1893 A.C. 552 (1893).

 

[11] Dressler, Joshua. “Exegesis of the law of duress: Justifying the excuse and searching for its proper limits.” S. Cal. L. Rev.62 (1988): 1331.

[12] DSND Subsea Ltd v. Petroleum Geo-Services A.S.A., 2000 B.L.R. 530 (2000).

[13] Dimskal Shipping Co S.A. v International Transport Workers Federation (The Evia Luck) (No.2) [1992] 2 A.C. 15

[14] Caves, Richard E. Creative industries: Contracts between art and commerce. No. 20. Harvard University Press, 2000.

[15] Gaillard, Emmanuel. “Transnational Law: A Legal System or a Method of Decision Making?.” Arbitration International 17, no. 1 (2014): 59-72.

[16] Earl of Aylesford’s Case, 8 Ch. App. 484 (1873).

 

[17] Campbell Discount Co. v. Bridge, 2 All E.R. 97 (1961).

 

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Conclusion

On a conclusive note, it can be concluded based on substantive findings as demonstrated above that court might feel challenging to make fair decisions on rational grounds if courts are passively involved in decision-making through listening articulation from both parties. In this regard, it has been identified that the court has a substantial role in establishing constraints on the substance of what can be done or agreed to should be kept to a minimum.

However, the question arises that court is either restricted or bound by the interest of the parties in a way that only through seeing what the contracting parties have articulated and the decision can be made, or the court is open to interpret or analyse for itself the nature of the relationship between the parties and make the independent conclusion.

In addition to this, it has also been identified that if parties have maximum substantive freedom for bounding in a certain contract, then substantive law governs how parties of a contract should behave and defines responsibilities and rights in civil law, and punishments and crimes in the criminal law. Substantive law can be codified in statutes or may exist using precedents in the common law.

The findings of different laws demonstrated that the parties should seek or set fair standards to keep minimum constraints on the substance, such as default rules and regulations. This can only be done through substantive law that defines statutes relevant to contract, the law of duress, etc.

Concerning the law of duress, it can be concluded that contract law assures fairness and avoids unfairness within the contracts on the basis of implying legislation on the contracts that are deemed inherently fair. Substantive fairness ensures that the bargain between the parties is a fair one and ensures that parties should be agreed on minimum constraints on the substance such as coercion, illegitimate pressure, and causation.

If these constraints are not limited to the substance, then the law of duress can be implied, and the contract is considered illegitimate. It reflects that if constraints on the substance are high, a party is pressurized, and its substantive freedom of contract is repressed.

[19] Campbell Discount Co. v. Bridge, 2 All E.R. 97 (1961).

Bibliography

Journal Articles

Battersby, G., and A. D. Preston. “The Concepts of ‘Property’,‘Title’and ‘Owner’used in the Sale of Goods Act 1893”(1972).” MLR 35: 268.

Dawkins, Cedric E. “The principle of good faith: Toward substantive stakeholder engagement.” Journal of Business Ethics 121, no. 2 (2014): 283-295.

Gaillard, Emmanuel. “Transnational Law: A Legal System or a Method of Decision Making?.” Arbitration International 17, no. 1 (2014): 59-72.

Dressler, Joshua. “Exegesis of the law of duress: Justifying the excuse and searching for its proper limits.” S. Cal. L. Rev.62 (1988): 1331.

Kennedy, Duncan. “Form and substance in private law adjudication.” Harv. l. rev. 89 (1975): 1685.

Macneil, Ian R. “Contracts: Adjustment of long-term economic relations under classical, neoclassical, and relational contract law.” Nw. U.L. Rev. 72 (1977): 854.

Phillips, Michael J. “Thomas Hill Green, Positive Freedom and the United States Supreme Court.” Emory LJ 25 (1976): 63.

Prassl, Jeremias. “Freedom of Contract as a General Principle of E.U. Law? Transfers of Undertakings and the Protection of Employer Rights in E.U. Labour Law: Case C-426/11 Alemo-Herron and others v Parkwood Leisure Ltd.” Industrial law journal 42, no. 4 (2013): 434-446.

Sen, Amartya. “Freedom of choice: concept and content.” European Economic Review 32, no. 2-3 (1988): 269-294.

Stoop, Philip N. “The concept ‘fairness’ in the regulation of contracts under the Consumer Protection Act 68 of 2008.” PhD diss., 2013.

Weber, David P. “Restricting the freedom of contract: A fundamental prohibition.” Yale Hum. Rts. & Dev. L.J. 16 (2013): 51.

 

Books

Caves, Richard E. Creative industries: Contracts between art and commerce. No. 20. Harvard University Press, 2000.

Ripstein, Arthur. Force and freedom. Harvard University Press, 2010.

 

Cases

Campbell Discount Co. v. Bridge, 2 All E.R. 97 (1961).

Dimskal Shipping Co S.A. v International Transport Workers Federation (The Evia Luck) (No.2) [1992] 2 A.C. 15

DSND Subsea Ltd v. Petroleum Geo-Services A.S.A., 2000 B.L.R. 530 (2000).

Earl of Aylesford’s Case, 8 Ch. App. 484 (1873).

Harvey v. Facey, 1893 A.C. 552 (1893).

Parker’s Case, 2 C.P.D. 416 (1877).