Legal English and the Common Law AY 2017/2018 Università degli Studi di Roma ″Tor Vergata″ Dipartimenti di Diritto Privato e di Diritto Pubblico Prof. Paola Lucantoni

The Language of Contract Law. Commercial Contracts The Structure Commencement - the formal opening of the contract; it may state the nature of the agreement and always gives the date on which the agreement is entered into, and the identify of the parties. Recitals (preambles) - these paragraphs may follow the commencement; they provide background information against which the agreement should be read. Operative part - the main body of the document, that contains provisions organised in a series of clauses, agreed by the parties, creating rights and duties for each of them. Definitions clause - a clause that defines terms which are fundamental to the agreement, and provides rules for interpreting it. Conditions precedent - the contract may contain a clause stipulating a condition or conditions precedent: the contract, or specified parts of it, will only become operative if the condition is fulfilled. Other operative provisions - the main body of the contract often includes representations (pre-contractual statements) and warranties. The boiler-plate - the final clause of the contract, typically covering matters such as governing law and jurisdiction, payment of legal fees in connection with the contract, assignment of rights and so on. Closing formula - the final operative clause is followed by a conventional formula. Schedules – set out matters of detail, fundamental to the contract. Signatures

Law of contract in action: Apple Corp Ltd v Apple Computer Inc

Apple corps v Apple computer Law of contract in action The two companies concluded a contract in October 1991, to regulate the use of their trade marks in different areas of activity. The Beatles’ company (‘Corps’) claims that Apple Computer Inc is in breach of contract. They allege that Computer ‘has broken, and intends to break’ the contract. The claimant seeks an injunction to restrain the defendant from breaking the contract ‘within the jurisdiction’, that is, within the territory over which the English courts have authority. The equitable remedy of an injunction is available in both tort and contract. The questions formulated by the judge are relevant to decide whether England is the appropriate forum for the dispute. According to the allegations made by the claimant, question will have an affermative answer: there is a threatened breach of contract within the jurisdiction. But Computer deny the ‘factual bases’ and maintain that ‘England is not the appropriate forum for the dispute’.

Apple corps v Apple computer Governing law and jurisdiction Two aspects relevant in this case are generally regulated by specific clauses in international commercial contracts: governing law and jurisdiction. The governing law of a contract is the law of the specific legal system that governs the contract: its rules and interpretation. The parties’ choice of law in a written contract is generally respected. In Apple v Apple, the judge asks: ‘was the contract governed by English law?’. The question of jurisdiction over disputes relating to the contract is separate: it determines which courts have authority to decide a dispute. Where a dispute is heard by the courts of a different jurisdiction from the governing law, questions of foreing law will be produced by expert witnesses during the proceeding and treated by the English courts as matters of fact. It is possible for the courts of more than one legal system to have jurisdiction over a dispute. In Apple v Apple, it seems that the contract has strong links with England, but the judge asks: ‘is England the proper place in which to bring the claim?’. As already mentioned, the answer will be affirmative.

Examining a contract: clause by clause Definitions and interpretation The purpose of the clause is to clearly and precisely define the meaning of terms used with specific reference in the contract (succlause 1.1) and to provide rules for the interpretation and construction of the Agreement (subclause 1.2).

Examining a contract: clause by clause Appointment 2.1 creates the distributorship, stipulating that it is exclusive, and dinining its purpose; 2.2 places a duty on the distributor to purchase the products only from the supplier, and from no other competitor; 2.3.clearly places a territorial limit on the distributor’s activity in relation to the products. Distributor’s undertakings 3.1 the distributor’s first duty reflects the basic reason for the contract, stated in the recital; 3.2 the distributor must employ sufficient qualified staff to ‘ensure’ the ‘proper fulfilment’ of its obligations.

Examining a contract: clause by clause Distributor’s undertakings 3.3 the distributor must regularly submit to the supplier a range of reports; 3.5 the distributor must inform the supplier of a change in its business organisation. Supply of products The supplier promises to meet all orders forwarded by the distributor in the specified manner; the distributor promises to buy the products for resale ‘pursuant to this Agreement’.

Examining a contract: clause by clause Supplier’s undertakings 5.1 the supplier must not supply the products directly to users in the territory, but must supply them to the distributor for resale in the territory; 5.2 the obligation is to provide ‘any information and support as may reasonably be requested; 5.3 the supplier has 28 days, after receiving promotional information, to approve or reject it; 5.4 the supplier’s obligation here is intended to ensure that the distributor is able to fulfil its ‘repair and service obligations’.

Examining a contract: clause by clause Additional contractual clauses (non exhaustive list) Compliance with laws and regulations 8.1 the principal warrants to the Agent that (i) the Products to be delivered to customers in the Territory will on arrival in the Territory comply with the Local Regulations and that (ii) provided that the Agent complies with its obligations under this Agreement; 8.2 the Agent shall be responsible for obtaining any licenses, registrations, permits or approvals necessary for the importation, promotion and sale of the Products in the Territory. Severability If any provision of this Agreement or any provision of any document incorporated by reference shall be held invalid, such invalidity shall not affect the other provisions of this Agreement which can be given effect without the invalid provision, if such remainder conforms to the requirements of applicable law and the fundamental purpose of this agreement, and to this end the provisions of this Agreement are declared to be severable.