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The previous chapter suggested that contract theories should be categorized according to how they answer to basic questions about contract law: (1) an analytic question about the nature of contract law; and (2) a normative question about the justification for contract law. With respect to the answer given to the analytic question, most contract theories can be placed into one of three broad categories. Promissory theories regard contractual obligations as obligations created by the parties through promises or a related kind of self-imposed obligation, such as an agreement. Reliance theories regard contractual obligations as being imposed by the law in order to ensure that those whom we induce to rely upon us are not made worse off as a consequence. Finally, transfer theories regard contractual obligations as obligations to respect property-like rights that have been intentionally transferred between contracting parties. This chapter examines in more detail the answers to the analytic question. The general aim is to determine what, if anything, is distinctive about contractual obligations — how are contractual obligations different, if indeed they are different, from other kinds of legal obligations?

This chapter discusses the main streams of contract philosophy in order to elucidate the extent to which boilerplate is a permissible means of creating contractual obligation. In particular, it considers the deep embeddedness—the ineradicability—of the notion of voluntariness. It also compares and contrasts the economic efficiency theory of contract with the various theories based more directly on freedom of the will. The chapter first provides an overview of contract theory, focusing on autonomy (rights) and welfare theories, reliance theory, and equivalence of exchange theory. It then describes the basic premises of the economic theory of law, the role of incentives in maximizing social welfare, contract law, and property and liability rules. It shows that the existing philosophical theories of contract depend on the core notions of voluntariness, freedom of choice, or consent, thus making it difficult to incorporate boilerplate into the theories of contract.

This chapter discusses contract law as set forth in the German Civil Code (Bürgerliches Gesetzbuch). The first part focuses on the judicially created cause of action of breach of contract. The second part discusses the development of secondary contractual obligations. In the third part, cases involving the doctrines of impracticability and of frustration of purpose, change of economic circumstances, and mutual error are analysed. Throughout, the chapter emphasizes the historical and theoretical aspects, as well as the practical implications of the doctrine of good faith in German contract law.

This chapter discusses the law on contractual obligations. On Exit Day, and unless any further legislative provision is made, the provisions of EU law set out in the Rome I Regulation, Regulation 593/2008, will be retained as the law of the United Kingdom. The adjustments necessary to allow the Rome I Regulation to operate as English private international law are made by the Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (EU Exit) Regulations 2019, SI 2019 No 834: these adjustments are of no substantial importance. It follows that it is possible to refer in this chapter to the Rome I Regulation without needing to draw attention to its status as EU legislation (as it was prior to Exit Day) or as retained EU legislation (as it is on and after Exit Day).

This chapter discusses the law on non-contractual obligations. On Exit Day, and unless any further legislative provision is made, the provisions of EU law set out in the Rome II Regulation, Regulation 864/2007, will be retained as the law of the United Kingdom. The adjustments necessary to allow the Rome II Regulation to operate as English private international law are made by the Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (EU Exit) Regulations 2019, SI 2019 No 834: these adjustments are of no substantial importance. It follows that it is possible to refer in this chapter to the Rome II Regulation without needing to draw attention to its status as EU legislation (as it was prior to Exit Day) or as retained EU legislation (as it is on and after Exit Day).

This chapter argues for the adoption of the possibility of suspending performance as a remedy for breach. Rather than forcing the injured party to choose between terminating the contract and keeping it alive, he should, in an appropriate case, be entitled to suspend his performance or to require an assurance that the other party will fulfil his obligation. The chapter analyses the various functions and advantages of suspension and discusses the pertaining legal rules in English and Australian law, which do not openly recognize suspension, as well as the provisions in the Convention on International Sale of Goods (the Vienna Convention) and the United States' Uniform Commercial Code and Restatement 2d Contracts.

This epilogue argues that Castile was solvent throughout Philip II's reign. A complex web of contractual obligations designed to ensure repayment governed the relationship between the king and his bankers. The same contracts allowed great flexibility for both the Crown and bankers when liquidity was tight. The risk of potential defaults was not a surprise; their likelihood was priced into the loan contracts. As a consequence, virtually every banking family turned a profit over the long term, while the king benefited from their services to run the largest empire that had yet existed. The epilogue then looks at the economic history version of Spain's Black Legend. The economic history version of the Black Legend emerged from a combination of two narratives: a rich historical tradition analyzing the decline of Spain as an economic and military power from the seventeenth century onward, combined with new institutional analysis highlighting the unconstrained power of the monarch.

This chapter on alternative obligations considers contracts which give one of the parties the right to choose between two or more ways of rendering performance. It discusses the general rule that a party is not excused when one alternative becomes impossible or illegal after the contract is made, and the exceptions to it. One exception is where the contract creates a liberty to substitute rather than a true alternative. It analyses how courts have distinguished between the two situations. It also considers alternative methods of discharge, and alternative and contingent obligations.

This chapter challenges the argument that one of Equity’s most distinctive doctrines, fiduciary law, must be fused with a common law doctrine—the law of contract. In particular, it highlights the disadvantages of transforming the equitable duty of loyalty into an ordinary contractual obligation. The chapter first considers the ‘contractarian’ interpretation of fiduciary law according to which fiduciary duties are no more than a species of contractual obligations before explaining why, in contrast with the contractarian argument, Equity was right in claiming that the fiduciary relationship was essentially different from contract. After making the case of why fiduciary law should be treated as a sui generis equitable doctrine, the chapter examines two features of equitable fiduciary law that will change dramatically if the fusion suggestion is adopted (the language in which it is set and the way into the relationship) and shows the adverse consequences of moving in that direction. It concludes with the contention that the concept of ‘conscience’ still has an active role to play in the legal reasoning about fiduciaries.

One of the most original, interesting, and profound legal thinkers of the present century is the late Lon Fuller, with ‘The Reliance Interest in Contract Damages’ as one of the most influential single articles in the entire history of modern contract scholarship. This chapter is an exploration of Fuller's case book, specifically his section on ‘The Role of Contract’, about the ‘principles of social ordering’. Fuller's overall theory of contractual obligation reflects several weaknesses and ambiguities which are due to his failure to expound a systematic theory of contract. These difficulties can be classified into three groups and are discussed in detail in this chapter.

This chapter analyses the effects of external events occurring after the conclusion of the contract (‘supervening events’) on contractual obligations. It focuses on Book III of the (academic) Draft Common Frame of Reference (DCFR), which laid the foundations for the recent Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (CESL).

This chapter examines whether an oath in classical Athens, like a modern contract, guaranteed a ‘claim right’ – in other words, whether it imposed on the swearer a duty to act in a certain way towards another party. It considers how an oath could reinforce a claim right by making a breach of it an offence, not only against the other party but also against the gods, and begins by discussing claim-right arguments based on alleged breach of contract. The chapter cites examples in Greek literature where a contractual obligation has allegedly not been met, and also describes a procedure known as the dikē emporikē, which was connected with the practice of maritime loans, and its relation to Athenian law. Finally, it analyses the agon from Euripides's play Phoenissae.

This chapter explains how deposit insurance is capable of being either explicit or implicit. The former refers to coverage that is contractual obligations, while the latter refers to coverage that is conjectural. This study, then, add some new data points to the evidence and analysis in the chapter for the purpose of providing more guided decisions about deposit insurance adoption, design, and implementation. Other parts of the chapter include a review on cross-country econometric evidence on the costs and benefits of deposit insurance, and the practical lessons that can be derived from individual country experiences. In conclusion, the benefits or harms of deposit insurance on a country are dependent upon the design and administration that surrounds it. It is important, however, to be able to establish reliable procedures for contract enforcement before adopting explicit deposit insurance.

Recent reinterpretations of Hugo Grotius focusing on his treatise De jure praedae see him as intellectually compromised by his efforts to provide legal support for the colonial ambitions of the Dutch Republic. This chapter attempts to ‘provincialize’ Grotius by viewing him in a contemporary non-European mirror, through a contextualized and comparative reading of the Malay treatise Taj al-Salatin [‘The Crown of All Kings’], composed in 1603 by Bukhari al-Jauhari in north Sumatra. It is argued that crucial aspects of Grotius’ theory were also dominant features of political thought in the Malay region, with mutually cherished notions of trust and contractual obligations. Conversely, the Southeast Asian perspective shows that Grotius’ proposition of the Dutch East India Company as a ‘corporate sovereign’ with international legal personality, and his distinction between the legal, religious, and political realms, must have been alien to his imagined Islamic readers in Southeast Asia.