RECENSIONE: COMMON LAW CONTRACT LAW. A PRATICAL GUIDE FOR THE CIVIL LAW LAWYER: DI JEAN STEADMAN E STEVEN SPRAGUE WOLTER KLUWER— IPSOA — ANNO 2015 – 896 PAGINE – € 95

SOMMARIO

PARTE I – The Origins of the Common Law and the Legal System
Chapter   1 – The Origins of the Common Law in England and Wales
Chapter 1- The Origins of the Common Law in America
Chapter 2 – The Legal System in England and Wales
Chapter     2 – The Legal System in America
PARTE II – Hypothetical transaction
Chapter 1 – Precontractual Liabilities and Agreements in England and Wales

Chapter 1 – Precontractual Liability and Preliminary Agreements in America

Checklist  For Preliminary Agreements
Chapter 2 – The Formation of a Contract in England and Wales

Chapter 2 – The Formation of a Contract in America

Checklist For Contract Formation

 

Chapter 3 – Discharge of Obligations in England and Wales

Chapter 3 – Discharge of Obligations in America

Checklist For Discharge Of An Obligation

Chapter 4 – Resolution of a Contract in England and Wales

Chapter 4 – Resolution of a Contract in America

Checklist For Contract Resolution Of A Contract

Hypothetical Transaction Wrap-Up (alla fine di ogni capitolo)

 

Ormai tutti coloro che si occupano di contratti internazionali hanno una qualche familiarità con le drafting techniques anglosassoni e con la common law. In realtà troppo spesso si finisce per utilizzare dei concetti di common law senza avere una piena consapevolezza del loro significato nel sistema giuridico ove essi sono stati codificati e questo libro serve proprio a farci comprendere “che cosa c’è dietro” a tali concetti e metodologie.  Gli autori di questo libro, Jean Steadman, attorney U.S.A., e da Steven Sprague, solicitor of the Senior Courts of England and Wales, hanno adottato un approccio che trovo particolarmente originale, in quanto nel libro i due autori “raccontano” le fasi del contratto nelle rispettive versioni della “common law”. Con Jean e Steven sovente partecipo a corsi dedicati alla pratica dei contratti internazionali, per la qual cosa ho avuto il piacere di predisporre la prefazione al libro. Senza dilungarmi troppo la ripropongo qui, in Inglese come in Inglese è scritto il libro.

“Nowadays the common law drafting techniques are increasingly dominating international contracts practice. Even civil law legal practitioners mostly rely on them for structuring international agreements, and, more and more frequently, when drafting “national” contracts too.  

One of the consequences of such approach is the gradual introduction in the civil law countries of common law legal concepts and new types of contracts. However, civil law legal scholars do not always appreciate such approach, which, to an extent, they seem to perceive as a departure from the central role that the civil law systems traditionally attribute to the principles of laws codified by the domestic Civil and Commercial Codes. 

Many reasons are offered for the gradual spreading of the common law drafting techniques in the international commerce, including the influence of the multinational companies willing to standardise their contracts even when they are operating abroad, and the supposed willingness of the legal practitioners to escape from the limitations imposed by the national laws (the dream of a contract “sans-loi”). 

As a civil law legal practitioner, I believe that the main reason for our use of the common law drafting techniques in our daily international practice is the role that the contract plays (or, at least, the role that it should play if and when properly drafted,) in the modern world and in the international commerce, and the way in which such role may be better interpreted by adopting the common law drafting techniques. 

For a company operating abroad, the contract is not just a legal tool recording the rights and the obligations of the contracting parties, to be supplemented and interpreted, as the case may be, on the basis and within the frame of a codified legal system, as traditionally occurs for domestic contracts in a civil law system. 

On the contrary, and  quoting the definition offered by a civil law lawyer who is Legal Counsel for a multinational operating worldwide, today the contract is an instrument that “define roles, identify responsibilities and contain the expectation of the parties as a result of their contractual relationship”[1].  Ultimately, the contract is a business tool, the scope of which is to achieve the business target embodied in the relationship that the contracting parties are willing to establish. 

The common law contract cannot rely, and indeed does not rely, on a codified set of principles that may be compared with the Codes of a civil law Country. The contract is drafted in a way to focus on defining all the practical aspects of the business relationship envisaged by the parties. The aim of such a contract is to anticipate, identify and resolve, to the extent it is possible[2], the potential problems in advance, rather than at leave them to be resolved through a litigation at a later stage.  

So, as of today, more and more civil law and, more generally, non-native legal practitioners are currently adopting common law drafting techniques when dealing with international contracts. However, even when mastering such techniques, quite often they have just a superficial, or at the best, an incomplete understanding of the common contract law and of the “reasons behind” terms and principles that they are incorporating in their contracts.

The purpose of the authors of this book appears to be “filling the gap”, by offering an introduction to the contract law and then analysing and discussing the legal rules that govern its “birth,life and death”, both in the U.S. and in England and Wales. 

The book is divided into two distinct sections. The first section begins with a comparative explanation of the development of common law contract law in U.S. and in England and then focuses on how the two legal systems are structured. This entails how laws are made and by whom and how the court systems are structured. In the US chapter, the bifurcated systems at federal and state level is outlined. This section also addresses the issues of choice of law, jurisdiction and conflicts of law.

The second section is dedicated to the continuum of a contract. It starts logically at the beginning with a discussion of pre-contractual liability before dividing the actual contract process into three central phases: formation of a contract; discharge of contractual obligations; and contractual remedies.

What I found  very fascinating from the very beginning of this book is the immediateness of the comparison between the ”English common law” and the “U.S. common law”, which offer to the  civil law legal practitioner  both the possibility to immediately appreciate similarities and differences in the two systems  and to compare them with the civil law contract law. 

As a civil law practitioner, I cannot really add anything worth to the overview of the common law contract law offered by Jean Steadman and Steven Sprague in this book. However, going through the pages of this book, I have to admit that I understood the way in which in a civil law country we often wrongly or superficially perceive certain topics of the common law system(s).

The first one is the very concept of “common law”. While civil law practitioners, and sometime, legal scholars too, are mentioning “the common law system” as a whole, single, legal system, after reviewing this book I think we should rather refer to the “common law systems”, plural and not singular.  As better explained in Chapter 1, the English contract law is the result of an historical process lasted for centuries, born in the Courts of Law and centred at first on the writ system, and then gradually developed by the case law in parallel with the English mercantile and industrial expansion. On the other hand, the U.S. legal system find its roots in the different ideals, political culture, religious beliefs and legal traditions that played a part in the birth of the American nation, and from the very beginning is not a mere “translation” on the American continent of the  English legal tradition.  As transpire from the Chapters of the book, while the two legal systems share a common ground, there are now material divergences between them that go beyond the historical ones.  As a civil law lawyer, I would dare say that the English common law seems to be the “true” common law, at least “true” as the common law system is hastily perceived by civil law practitioners, while the U.S. common law appears more “original”, so that we may still perceive civil law influences in their system too.   . 

Probably, reminiscing their past law studies, lawyers trained in a civil law system often assume that one of the main characteristic of the common law is the absence of a systematic codification. While the code represents the “default” principle in civil law systems, common law principle is the “default” rule in common law jurisdictions, where the contract displays its effect in an “open” legal system, the nature of which is procedural more than systematic and the common law principles traditionally are illustrated, explained and created by the case law. This is true and correct, at least to a general extent even today. Nevertheless in the modern time enacted law is playing a major role, both in England and in the U.S. Specifically looking to the U.S. Chapters of the book we may see how much the U.S. state contract law refers to the U.C.C. – the Uniform Commercial Code. 

What appears peculiar to a civil law lawyer is that the U.C.C., as better explained in Chapter 1, was drafted in the 1950’  by the American Law Institute, an independent U.S. organisation made by lawyers, judges, and law professors. The goal of the Institute was to create a uniform code …that fills in the gap or missing or open elements of contracts and would ensure uniformity in commercial dealings. Only a later stage each U.S. State ratified the Code, as a whole, or by modifying or adapting parts of it. The peculiarity lies in the fact that while in the civil law Codes originate from the State with a top down methodological approach, the Uniform Commercial Code is the result of the efforts independently made by practitioners and legal scholars, with the practical aim to support commercial dealings more than dictating a systematic legal system. A Code from the bottom to the top, but still a contract law Code even for a lawyer.

Having just mentioned the contribution of the legal scholars in drafting the U.C.C., in reading the U.S. and English Chapters, I also tried to understand what the role of the legal doctrine is and legal scholars in common law.  This is due to the fact that, in the civil law systems, the legal scholars advocate a coherent and systematic legal order and, together with the jurisprudence of the Courts, traditionally play an important role in interpreting the principles codified by the Codes.

In England the leading actor appears to be the Judge, who historically is said to be “rule maker and decision maker all at once”, and probably this is the reason for which in the past the contraposition between civil and common law originated the way of say according to which the common law is a “lawyers ‘law” while the civil law is a professors ‘law”.  Probably this is the reason why, in the English Chapters, all the lawyers cited are Judges.

Surprisingly enough this is not the case of the U.S. Chapters, where mostly all the lawyers mentioned when explaining the development of the U.S. contract law are legal scholars.  Other than their above-mentioned contribution to the U.C.C., the best evidence of the legal scholars’ influence in developing and unifying the U.S. contract law is the Restatement of Law of Contracts also drafted by the American Law Institute, which is the leading treatise on general contract principles in the US.

An additional topic that I would also like to comment is the respective attitude of the common law and civil legal systems on good faith in contracts.  In civil legal systems, contract law generally recognises the existence of a duty of good faith imposed on the contracting parties in discharging their contractual obligations, and even during the negotiation of a potential deal. As underlined in Part II, Chapter 1, English common law has always recognised that the parties must look after themselves (caveat emptor) and that it is what the parties have written that counts and not what would be fair or just.  In keeping with its general principles, in English contract law, it is fundamental to ensure that their dealings are undertaken honestly, but honestly does not mean fairly, it simply means truthfully. The U.S. version of the same chapter tells us a slightly different story.

If the aim of “true” common law (the English one, according to the definition of the two common law systems I offered above) has always been to protect rights of the parties to create and establish contracts as freely as possible without becoming concerned with ethical and moral values, the U.S. version, faithful to its “originality”, is more flexible and attempts to find a balance between the protection of parties’ rights and interest and the freedom of contract principle.  A difficult task indeed, for both common law and civil law lawyers.

However as deeply analysed in the U.S. Chapter, a task that the U.S. lawyer, legal scholar, judges and legal practitioners, are willing to accept, so that both the Uniform Commercial Code and the Restatement (Second) of Contracts attempt to understand and define the meaning of good faith and fair dealing. Personally, I share and recommend the comments of Robert Summers, a legal scholar, mentioned in the US Chapter, stating, “Good faith…is best understood as an excluder – it is a phrase which has no general meaning or meanings of its own, but which serves to exclude many heterogeneous forms of bad faith”. An elegant way to say that may be it is difficult to define what does it mean “good faith” in a given practical context, but if you find a “bad faith behaviour” in that practical context it  should be easier to  understand and recognise that one of the parties did not act in good final ….

Overall, I believe the book is faithful to its declared aim to give non-common law legal practitioners an overview of common law contract law so that they are more fully capable of understanding, negotiating and drafting contracts and supervising commercial transactions governed by the common law and in English. Praise should be given to Jean Steadman and Steven Sprague for explain their respective versions of common law contract law in a plain language.  Additionally I would also mention that I fully appreciate the authors’ idea to insert at the beginning of the book a hypothetical business transaction and then explain at the end of each of the following chapters as the transaction progresses so that readers may immediately relate both the legal analysis provided in the Chapters and its impact on the transaction.

 

Avv. Marco Bianchi Milano July 2015”.

 

© riproduzione riservata – Novembre 2015

 

[1] Maria Celeste Vettese “Multinational companies and national contracts” in “Boilerplate Clauses, International Commercial Contracts and the Applicable Law”, edited by Giuditta Cordero-Moss, Cambridge University Press, 2011,23.

[2] See “Pratique contractualle internationale : de nature anglo-americaine?”, in Marcel Fontaine – Filip De Ly «Droit des contrats internationaux – Analyse et rédaction de clauses», Fec-Bruylant, 2003, 682-686.

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