Table of Contents. The Authors 3. List of Abbreviations 13. Preface 15. General Introduction 17. Introduction to the Law of Contracts 27
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1 The Authors 3 List of Abbreviations 13 Preface 15 General Introduction THE GENERAL BACKGROUND OF THE COUNTRY 17 I. Geography 17 II. Cultural Composition 17 III. Political History 18 IV. Political System 19 V. Economy 20 VI. Legal Culture and Legal System SWEDISH LAW BELONGS TO THE NORDIC LEGAL FAMILY PRIMACY OF LEGISLATION THE ROLE OF THE JUDICIARY BETWEEN PUBLIC AND PRIVATE LAW ( ADMINISTRATIVE CONTRACTS ) DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW ( COMMERCIAL CONTRACTS ) 25 Introduction to the Law of Contracts DEFINITION OF CONTRACT 27 I. Will, Intent and Reliance 27 II. Freedom of Contract 28 III. Binding Character of Contract 29 IV. Mandatory Rules 30 V. Rights In Personam and Rights In Rem 31 5
2 2. HISTORICAL BACKGROUND OF THE LAW OF CONTRACTS 31 I. Influence of Roman Law 31 II. Later Development of Swedish Contract Law CLASSIFICATION OF CONTRACTS 34 I. Consensual Contracts 34 II. Solemn Contracts 34 III. Real Contracts 34 IV. Bilateral and Unilateral Contracts 34 V. Onerous and Gratuitous Contracts 35 VI. Commutative and Aleatory Contracts 35 VII. Intuitu Personae Contracts 35 VIII. Nominate and Innominate Contracts 35 IX. Standard Form Contracts 36 X. Main Contracts and Accessory Contracts 36 XI. Frame Contracts CONTRACT AND TORTS CONTRACT AND QUASI-CONTRACTS CONTRACT AND THE LAW OF PROPERTY 39 I. No Distinction between Legal and Equitable Ownership 41 II. The Right of Usufruct 41 III. Conveyancing 42 A. Agreement 42 B. Registration CONTRACT AND TRUST GOOD FAITH AND FAIR DEALING 44 I. Duty of Loyalty 44 II. Duty of Cooperation 45 III. Inconsistent Behaviour STYLE OF DRAFTING SOURCES OF THE LAW OF CONTRACTS 47 I. The Norm Hierarchy 48 II. Practices and Custom 49 Part I. General Principles of the Law of Contract 51 Chapter 1. Formation AGREEMENT AND QUID PRO QUO (RECIPROCITY) 52 6
3 I. Offer and Acceptance 52 A. Definition of Offer 52 B. Withdrawal of Offer 54 C. Revocation of Offer 54 D. Rejection of Offer 55 E. Mode of Acceptance 55 F. Time of Acceptance 56 G. Late Acceptance 56 H. Delay in Transmission of Acceptance 57 I. Withdrawal of Acceptance 57 J. Modified Acceptance 57 K. Writings in Confirmation 58 L. Notices 59 M. Conclusion of Contracts Dependent on Agreement on Specific Matter or in a Particular Form 60 N. Contracts with a Term Deliberately Left Open 60 O. Letters of Intent 61 P. Merger Clauses and Clauses on Modification in a Particular Form 61 Q. Contracting under Standard Terms 62 R. Conflict between Standard Terms and Non-standard Terms 63 S. Battle of Forms 63 II. Intention to Create Legal Relations 64 III. Consideration 65 A. The Common Law Doctrine of Consideration 65 B. Gratuitous Promises FORMAL AND EVIDENTIAL REQUIREMENTS 66 I. Formal Requirements 66 A. Contracts under Seal 67 B. Solemn Contracts 67 II. Evidential Requirement: Proof 67 A. The Parol Evidence Rule 67 B. No Notary 67 III. Burden of Proof 67 A. General Observations on Burden of Proof 67 B. Obligation of Means and Obligation of Result LIABILITY AND NEGOTIATIONS 69 I. Precontractual Liability 69 A. Breakdown of Negotiations 70 B. Culpa in Contrahendo 71 C. Duty to Inform 71 D. Intention to Contract 72 E. Damage 72 F. Summary of Precontractual Liability 72 7
4 Chapter 2. Conditions of Substantive Validity INVALIDITY/INTRODUCTION 73 I. General Remarks 74 II. Voidness and Voidability 75 III. Contracts Where Not All of the Terms Have Been Agreed 76 IV. The Doctrine of Impossibility 76 V. General Remarks About Formalities 76 VI. The General Clause on the Modification/Setting Aside of Contracts CAPACITY OF THE PARTIES 77 I. Minors 77 II. Insanity or Other Mental Disturbances 78 III. Married Women. Aliens 79 IV. Bankruptcy 79 V. Moral Person DEFECTS IN CONSENT 79 I. General Remarks 79 II. The Doctrine of Failed Assumptions 80 III. Duress, Coercion, Undue Influence 81 IV. Fraud 81 V. Usury (Unfair Exploitation) 82 VI. Mistake 82 A. Mistake in the Declaration of Intent 82 B. Mistake as to the Person 83 C. Mistake as to the Substance 84 VII. The General Clause on Dishonesty 84 VIII. Misrepresentation 85 IX. Gross Disparity OTHER CONDITIONS OF VALIDITY 88 I. Existing and Lawful Cause 88 II. Initial Impossibility 88 III. Contracts Against Public Policy 89 IV. Contracts Against Morality 89 V. Contracts Against Mandatory Regulation THE RE-INTEGRA RULE OF SECTION 39 OF THE CONTRACTS ACT THE LEGAL CONSEQUENCES OF INVALIDITY 91 I. General Remarks 91 II. Avoidance of the Contract. Nullity 91 III. Restitution 92 IV. Damages 92 8
5 Chapter 3. The Contents of a Contract THE DIFFERENT CLAUSES 93 I. Ascertaining of Express Terms 93 II. Implied Terms 93 III. Standard Terms and Exemption Clauses 93 IV. Penalty Clauses 93 V. Arbitration Clauses INTERPRETATION 94 I. Introduction 94 II. Intention of the Parties 95 III. Interpretation of Statements and Other Conduct 95 IV. Relevant Circumstances 96 V. Reference to Contract or Statement as a Whole 98 VI. All Terms to Be Given Effect 99 VII. Contra Proferentem Rule 99 VIII. Supplying an Omitted Term 100 Chapter 4. Privity of Contract THE RULE OF PRIVITY OF CONTRACT 101 I. Third Parties and the Contract 101 II. Contract for the Benefit of a Third Party 105 A. Conditions of Validity 106 B. The Right of the Beneficiary 106 C. Rights and Duties of the Stipulator, the Promisor and the Third Party The Relationship Stipulator: Promisor The Relationship Stipulator: Third Party The Relationship Promisor: Third Party 107 D. Direct Actions TRANSFER OF CONTRACTUAL RIGHTS 108 I. General Principles 108 II. Effects of the Assignment 110 III. The Transfer as against Third Parties (Other Than the Debtor) TRANSFER OF CONTRACTUAL OBLIGATIONS AND OF THE WHOLE CONTRACTUAL POSITION SUBCONTRACTING 112 I. The Liability of the Main Contractor for the Defective Performance of the Subcontractor 112 II. The Relationship Employer-Subcontractor 113 9
6 5. OBLIQUE ACTION, THE PAULIAN ACTION AND DIRECT ACTIONS (RIGHTS AND DUTIES OF THIRD PARTIES) 113 Chapter 5. The End of the Contract PERFORMANCE 115 I. Determination of Quality of Performance 115 II. Price Determination 115 III. Contract for an Indefinite Period 116 IV. Time of Performance 116 V. Computation of Time Set by the Parties 117 VI. Partial Performance 117 VII. Order of Performance 118 VIII. Earlier Performance 118 IX. Place of Performance 118 X. Payment Methods 119 XI. Currency 119 XII. Costs of Performance 120 XIII. Imputation of Obligations 120 XIV. Application for Public Permission NON-PERFORMANCE 121 I. Non-performance Defined 121 II. Interference by the Other Party IMPOSSIBILITY, FRUSTRATION AND HARDSHIP: THE UNFORESEEN 121 I. Introduction 121 II. Modification and Cease of Obligations Due to Unforeseen Circumstances DISCHARGE BY AGREEMENT NOVATION 124 Chapter 6. Remedies GENERAL PROVISIONS SPECIFIC PERFORMANCE TERMINATION THE DEFENCE OF NON-PERFORMANCE BY THE OTHER PARTY DAMAGES AND EXEMPTION CLAUSES 127 I. Introduction
7 II. Liability for Negligence 127 III. Full Compensation 129 IV. Certainty of Harm 130 V. Foreseeability of Harm 131 VI. Proof of Harm in Case of Replacement Transaction or by Means of Current Price 132 VII. Harm Due in Part to Aggrieved Party 132 VIII. Mitigation of Harm 132 IX. Interest for Failure to Pay Money or Damages 132 X. Manner of Monetary Redress 133 XI. Currency in Which to Assess Damages 133 XII. Agreed Payment for Non-performance LIMITATION OF ACTIONS 134 Part II. Specific Contracts 137 Chapter 1. Agency REGULATION REGARDING AGENCY AND OTHER INTERMEDIARIES AGENCY UNDER THE CONTRACTS ACT 138 I. Various Ways to Establish Agency/Mandate 138 II. Agency as a Result of a Certain Position 139 III. The Difference between Authority and Mandate 140 IV. Termination of Agency 141 V. Ratification. Principal Becoming Bound by Passivity 141 VI. Passive Authority 141 VII. Agent Acting Outside His Authority COMMISSION AGENCY SELF-EMPLOYED COMMERCIAL AGENTS BROKERS DISTRIBUTORS 145 Chapter 2. Bailment 146 Chapter 3. Aleatory Contracts GAMING AND BETTING 147 Chapter 4. Sale of Goods
8 Chapter 5. Hire of Work & Skills, Building Contracts THE GENERAL LAW BUILDING CONTRACTS 153 Chapter 6. Lease, Commercial and Agricultural Leases 155 Chapter 7. Compromise Settlement 157 Chapter 8. Suretyship 158 Chapter 9. Pledge 159 Chapter 10. Loans 161 Chapter 11. Contracts with the Government and Other Public Administrations 162 Chapter 12. Contract of Partnership 164 Chapter 13. Quasi-contracts NEGOTIORUM GESTIO ENRICHMENT WITHOUT CAUSE MONEY PAID BUT NOT DUE (CONDICTIO INDEBITI) 166 Selected Bibliography 167 Index
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