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Summary Chapter 6: formalities, ISBN: 9781785368783 Comparative Contract Law (Law3011/2020-200)
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Chapter 6: formalities
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College aantekeningen Contract Law Contract Law, ISBN: 9781785368783
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Chapter 6: FormalitiesInformality Contract law does not require any form
Art. 3:37 (1) Dutch Civil Code, which states: ‘Unless provided
otherwise, declarations, including communications, can be
made in any form and can be inferred from conduct’
Some contracts need to be put in writing
Gratuitous contracts in the common law
Donation in the civil law
Balance unequal bargaining strength between parties by
requiring one of them (the professional party) to provide
information to the other (the consumer)
Reasons for Warning (cautionary) function
formalities To warn a party that it is entering into an important or
financially dangerous transaction
To prevent a party from inconsiderate action: mere consensus
of the parties is not seen as sufficient because this would bind
them too easily
Example (both require a written contract before they become binding
on the consumer)
Consumer credit (the usually high interest rate could burden the
debtor and his family for a long period of time)
Consumer suretyship (‘guarantee’ or ‘personal security’, party
promises to pay a creditor if somebody else does not meet its
obligations, a mother can stand surety for the debts of her child
against a bank
The obligation to put things on paper will offer a party a final chance to
reflect on the transaction
Information function
To provide a party with legal advice or information before it is
bound
Example
Notarial deed that a civil law notary must draft in case of
transfer of immovable property. The notary must warn the
parties of the legal consequences of their action
Extensive information duties on professional parties that follow
from European directives (in cases of consumer credit and
distance contracts, the credit supplier and the seller must give
extensive information to the consumer at various stages of the
contracting process
Evidentiary function
A form can be required to secure evidence of the contract
By putting the contract into writing certainty is provided about
the existence and the contents of the parties’ obligations
To avoid future disputes about what the parties actually
intended, agreed upon
Example
Under English Statute of Frauds, suretyship: a guarantee must
, be ‘evidenced in writing’, meaning that the contract itself does
not have to be written but the claimant must be able to prove
the existence of the contract through written evidence
In the absence of written material even a CEO of a large
company, who promises over to lunch to guarantee another’s
debt, will not be bound despite the availability of three
witnesses present at the restaurant table
Holographic testament
Civil law countries
Art. 970 CC
Art. 2247 BGB
Art. 4:94 ff. BW
The testator is able to dispose of at least some of his goods (which
goods exactly differs from one country to another) by way of a
completely handwritten document.
Only valid if handwritten to ensure that it is really the testator’s
well-considered last will
In the presence of the two witnesses who have signed the
document (English law)
Handley v Kemp (1999)
Members of the pop group’s claim was that they had orally
agreed upon sharing these royalties, but were not able to prove
the existence of such a contract in the absence of any written
document
Types of formalities
A. Contracts to Civil law countries (French, German, Dutch law)
be made by Require certain contracts to be made by notarial deed (acte
notarial deed authentique, Beurkundung, authentieke akte)
The most strict formality in the civil law
It requires not only that a deed is drafted by the notary and
signed by the parties, but also that the notary establishes that
the parties intend to be bound after having been warned about
the legal consequences of their action
Gift
Intervention of a notary
Donation: promise to make a gift (Art. 931 CC, §518 BGB)
Creating a mortgage (Art. 2416 CC, §873 BGB, Art. 3:260 BW)
Matrimonial contracts (Art. 1394 CC, §1410, Art. 1:115 BW)
The making of a public statement (Art. 971 CC, §2232 BGB)
The establishing of a corporation (§23 Aktiengesetz, Art. 2:64 (2)
BW)
Importance of notarial intervention: concern complicated acts that
people tend to make only once or twice in their life and therefore
require careful consideration and advice.
One exception
Giving something away on the spot
The actual giving
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