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Consumer Contracts Law as a Special Branch of Contract Law—The Israeli Model

By   /  May 19, 2014  /  Contracts, Featured 

Contract

This Article highlights the distinction between many of the rules governing consumer contracts and those governing general contracts. The rules governing consumer contracts differ considerably from those governing general contracts, and it has even been suggested that these differences justify the classification of consumer contracts as a special branch of contract law.

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The Banking Contract as a Special Contract: The Israeli Approach

By   /  November 18, 2013  /  Contracts, Featured 

Scales of Justice and Gavel

The banker-customer relationship is a contractual relationship based on a contract between the parties. As a contractual relationship, it is governed by contract law. However, contract law does not provide the customer with the protection he or she requires against the bank. Therefore, the Israeli courts have adopted a unique approach in determining that the banking contract is a special contract—a fiduciary contract. Under a fiduciary contract, the bank, as a fiduciary, is subject to a fiduciary duty vis-à-vis the beneficiary, the customer. The fiduciary duty imposes a very high standard of behavior on the bank, much higher than the standard imposed on it under contract law. By adopting a fiduciary approach, the customer is granted very wide protection against the bank.

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Penalty Clauses as Remedies: Exploring Comparative Approaches to Enforceability

By   /  October 28, 2013  /  Contracts, Featured 

Law Books

Commercial agreements often provide for “fixed sums” payable upon a specified breach. The common law distinguishes between provisions for “liquidated damages” and “penalty” clauses, enforcing the former, while invalidating the latter as punitive. In contrast, such agreements are generally enforced in civil law jurisdictions, without any distinction between liquidated damages and penalties—though they may be reduced if excessive, even as penalties. In contrast, this same split between the civil and common law jurisdictions can be found in the treatment of specific relief, with the former presumptively granting such “ordinary” relief, subject to a narrowly cabined set of exceptions, and the latter granting such relief only under certain limited “extraordinary” circumstances.

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Party Sophistication and Value Pluralism in Contract

By   /  October 21, 2013  /  Contracts, Featured 

Contract

In a previous article, Contract Law, Party Sophistication and the New Formalism, I documented a trend in United States case law and scholarship that fashions a “dichotomy between sophisticated and unsophisticated parties.” That article set out to explain the trend as a theoretical compromise between formalism and realism in the face of a resurgence of formalism (the “new formalism”). For sophisticated parties, “freedom of contract” and literalism have come to trump all normative concerns. For unsophisticated parties, fairness concerns outweigh the principle of autonomy. However, as I noted in the previous article, the “new formalism” may not be formalism at all because it retains normative concerns. Indeed, the shift in legal thought may be more appropriately and simply characterized as embracing pluralism. This piece will place observations about party sophistication within recent scholarship discussing pluralist conceptions of contract doctrine and suggest that the focus on sophistication is a means to order contract law’s competing values.

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Putting the CISG Where it Belongs: In the Uniform Commercial Code

By   /  April 22, 2013  /  Contracts 

Man Holding Globe

[T]his Comment will propose that the UCC itself should be amended to include explicit language that Article 2 does not apply to a sale of goods contract when a buyer and seller have their principal place of business in two different contracting states under the CISG. [...]

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Party Sophistication and Value Pluralism in Contract

By   /  March 20, 2013  /  Contracts, Featured 

Contract

“Pluralism” is not readily defined. The term here is intended to refer to “value pluralism.” Broadly, in the words of Isaiah Berlin, this is recognition of “the fact that human goals are many, not all of them commensurable, and in perpetual rivalry with one another.” As applied to contract law, pluralist theories “advert to autonomy, efficiency, morality, social norms, policy, experience, and other values to explain and justify contract doctrines.”

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The Privatization of Civil Justice: An Exposition on New York’s Prompt Payment Law and its Imposition of Mandatory Arbitration

By   /  June 1, 2012  /  Contracts 

Construction Site

In a world of constant flux and fluctuation, one rule generally remained invariable: arbitration required the mutual assent of both parties. It seems, however, that all good and simple things come to an end. In 2009, the New York State legislature amended the Prompt Payment Law with the objective of establishing a default rule that prescribes the manner with which providers of construction services are compensated for the work and services they provide.

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