Comparative Law - Essay Example

Comparative Law In any legal case, past or present, it is useful to examine the laws of different countries. The following comparisons of Australian, German and Chinese contract laws will be utilized to determine how a hypothetical contract dispute between Moe, King Kong, and Lisa, Bart and Burns and Co. would be handled in each country. Australian contract law is associated with the common law, which is also practiced by Great Britain, the United States, Canada and New Zealand. (Nicholson, 2006). "Consideration" is the term used in Australian contract law to describe the price that is requested in exchange for the promise to be made in a contract. It is a necessary element of a contract that is intended to be legally binding. In cases where a party is attempting to prove the existence of a contract, evidence of consideration often proves useful. However, "the onus is on the party seeking to prove the contract to demonstrate intention and the nature of the relationship between the parties." (Clarke, 2008). Additionally, in order to prove that both parties intended to enter into legal relations with one another, the agreement must have been very specific in its material components. "An agreement which is 'vague or ambiguious', incomplete or constitues a mere 'agreement to agree' will not be enforceable." (Clarke, 2008). In terms of proving a contract's validity, it is important to note that contracts do not always have to be written; they can be oral. Certain types of contracts, as protected by the 1677 Statute of Frauds, do have to be signed. And it is certainly much easier to prove the validity of a contract with a signed document. (Clarke, 2008). German contract law is known to place an emphasis on citizens' rights to govern their own affairs with no or little interference from the government. According to the Principle of Abstraction, "contracts only create an obligation, but there are no actual changes to the legal correlation concerning the object of the contract." (Wikipedia, 2008). In recent years, however, Germany has been moving toward a trend of greater regulation. According to Germany's Civil Code 157, "contracts are to be interpreted in accordance with good faith and fair dealing having regard to commercial practices." (Lando, 1996). Contracts are often voided if an unfair weight is placed on one of the involved parties, especially if that party is somehow weaker, such as a minority or a consumer rather than a professional. In contemplating the validity of a contract, also to be considered are the issues that were involved in the initial formation of that particular contract. (Wikipedia, 2008). Germany is a member of the European Union, which has its own set of regulatory principles regarding contracts. (Wikipedia, 2008). The Principles of European Contract Law is a lengthy document detailing regulations of contracts to be governed by law of the European Union. Some of the articles in this set of principles, to be addressed subsequently, pertain to contract terms, revocation of an offer, and unfair advantages. The European Union includes, as of January 1, 2007, Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. (Rosenberg, 2007). Chinese contract law holds both parties involved in a contract to be legally equal. Similar to contract law in Germany, those contracts in which one party unfairly takes advantage of another party may be voided. Contracts in China may be oral or written but similar to both Australia and Germany, there are certain circumstances in which a contract must be written and signed. One of these cases is that of a lease. Whether oral or written, contracts must include which parties are involved, the object or subject of the contract, quantity and quality specifications, remuneration, time limit, method of performance, legal responsibility in the case of a breach, and how to settle potential disputes. Involved parties must make clear crucial terms that would cause unfair benefits or consequences if that information was withheld. (National People's Congress, 1999). Based on the preceding information, Moe's scenario can be assessed in terms of what would hypothetically happen in each country. In Australia, Moe would have very little legal standing against Lisa, Bart or Burns and Co. Lisa assured Moe that Burns and Co. would definitely lease property from Moe. However, very little specifications were agreed upon, as Lisa told Moe that details could be worked out later. As previously stated, consideration is often used to prove legal intentions in Australian contract law. No consideration was specified in this case. The other material terms of the contract were also ambiguous, making the contract unenforceable. (Clarke, 2008). Without a signed document or those crucial specifications, Moe will have little luck winning that case. Moe, in Australia, is more likely to win in a case against King Kong. King Kong signed a document which specifically stated that variations to the contract could not be made based on unexpected weather and site conditions such as rock. With such a signed document Moe is in a good position. King Kong could, however, argue that the contract was very unspecific and rock should have been checked for before the contract was formed. When German contract law is applied to the scenario, Moe has fairly good legal standing against Lisa, Bart and Burns and Co. Article 2:202 of the Principles of European Contract Law clarifies that a contract may not be revoked if one of the parties has reasonably acted in reliance to the offer. (Commission on European Contract Law, 1999). Thus, Moe could argue that he proceeded with construction because of Lisa's oral contract that Burns and Co. would definitely lease the property from him. If he was able to prove that he began construction based solely on the oral contract with Lisa and that the oral contract did exist (although this would be hard to prove without writing), Moe would win this case. Moe's basis for legal claims against King Kong, on the other hand, is slim. Article 4:109 of the Principles of European Contract Law enables a party to avoid a contract if the other party should have been aware of certain terms that were not specified and thus served as an unfair advantage to the party who concealed those terms. (Commission on European Contract Law, 1999). Moe may have actually known that the rock was there and knew that if he told King Kong, he would have to pay more. Instead he prevented an increase in price by writing in the contract that no changes of price could occur due to any unexpected conditions. Article 2:104 provides evidence that this written part of the contract may be void, even though it was signed. In Article 2:104 it is stated that "terms are not brought appropriately to a party's attention by a mere reference to them in a contract document, even if that party signs the document." (Commission on European Contract Law, 1999). Because of these factors, Moe most likely cannot make valid claims against King Kong. Upon the application of Chinese contract law to this scenario, Moe would not likely be able to make a legal case against Lisa, Bart or Burns and Co. Although in China contracts can be spoken or written, contracts dealing with leases must be written and signed to maintain validity. (National People's Congress, 1999). It would have been very wise for Moe to have insisted on a written contract from Lisa regarding Burns and Co.'s agreement to enter into a lease. If King Kong played their cards right, Moe would have little legal standing against them in China. If Moe was proven to have intentionally concealed the information that there was rock in the construction site, Moe would be held responsible for the extra cost associated with constructing there. King Kong could also attempt to argue to the people's court that the terms of the contract were unfair. (National People's Congress, 1999). If neither of these factors were proven, however, Moe would be able to use the written and signed document to hold King Kong liable. Based on the preceding findings, it is apparent that contract law differs significantly in different countries. "Each country has its own laws governing contracts. There is no universal contract law that applies automatically in all countries." (Nicholson, 2006). And even within each distinct country, laws are subjective and can be interpreted in different ways. While no one country is necessarily right or wrong regarding their unique contract laws, it is crucial to examine which country's laws would be utilized in Moe's scenario. If all of the parties involved in the scenario resided in, formed their contract in, and had negotiated terms that were involved in Australia, the contract laws of Australia would apply. Similarly, if they were all in Germany or China, the contract laws of Germany or China, respectively, would be utilized. If the terms of their contracts involved Great Britain, the U.S., Canada or New Zealand, the Common Law shared by Australia would be utilized. If all aspects of the contracts correlated with any country that is a member of and uses the contract laws of the European Union, laws similar to Germany's would be used (because Germany is a member of the European Union). Complications would begin to surface if Moe, Burns and Co., and King Kong were all from different countries. "If parties in different countries have a contractual dispute, a problem may arise as to whose laws apply and which county's courts will have jurisdiction." (Nicholson, 2006). When parties from different countries negotiate the terms of a contract, they often agree upon a specific country's set of contract laws to use in the case of a dispute. It is clear that contract law is a very complex subject in that it means different things to different people in different countries and within the same country alike. Sources Cited Clarke, J. (2008). "Australian Contract Law." Retrieved online 2 August, 2008 from http://www.australiancontractlaw.com/. Commission on European Contract Law. (1999). "The Principles of European Contract Law." Retrieved online 2 August, 2008 from http://frontpage.cbs.dk/law/commission_on_european_contract_law/PECL%20engelsk/engelsk_partI_og_II.htm. Lando, O. (1996). "Principles of European Contract Law." Retrieved online 2 August, 2008 from http://www.kclc.or.jp/english/sympo/EUDialogue/lando.htm. National People's Congress. (1999). "Contract Law of the People's Republic of China." Judicial Protection of IPR in China. Retrieved online 2 August, 2008 from http://www.chinaiprlaw.com/english/laws/laws2.htm. Nicholson, M. (2006). "A Review of Basic Contract Law for International Business Students." Retrieved online 2 August, 2008 from http://www.globalview.org/student_files/libraries/A%20Review%20of%20Basic%20contract%20Law%20for%20International%20Business%20Students.doc. Rosenberg, M. (2007). "European Union Countries." About.com: Geography. Retrieved online 2 August, 2008 from http://geography.about.com/od/lists/a/eumembers.htm. Wikipedia Online Encyclopedia. (2008). "Law of Germany." Retrieved online 2 August, 2008 from http://en.wikipedia.org/wiki/Law_of_Germany. Read More