Contract Composition Flashcards
(20 cards)
What are the five main parts of an international contract?
1) Introduction, 2) Primary Operative Provisions, 3) Secondary Operative Provisions, 4) Framework Provisions, 5) Post-Contractual Obligations.
Example: A sales contract starts with party info and ends with governing law and confidentiality clauses.
What does the introduction (or preamble) of a contract usually include?
It names the parties, explains the background of the deal, and describes what the parties intend to achieve.
What are Primary Operative Provisions?
The core business terms — price, product, delivery, payment, etc.
Example: “Seller agrees to deliver 1,000 units at €20 each by June 1.”
What are Secondary Operative Provisions?
Additional performance terms — warranty, inspection, liability.
Example: “Buyer shall inspect goods within 5 days and notify defects.”
What are Framework Provisions?
Legal infrastructure — governing law, jurisdiction, assignment, force majeure.
Example: “This contract shall be governed by English law.”
What are Post-Contractual Obligations?
Clauses that apply after the contract ends — confidentiality, survival clauses.
Example: “The duty to maintain confidentiality survives 3 years after termination.”
What is a “survival clause”?
It states which provisions continue after termination.
Example: “Clause 9 (Confidentiality) and Clause 10 (Non-compete) survive termination.”
What is a “boilerplate clause”?
Standard clause found in most contracts — often legal or procedural.
Often found at the end of an agreement, that addresses generic or routine matters. These clauses are typically not the focus of extensive negotiation and serve to clarify the relationship between the parties, define the terms of the agreement, and provide certainty in case of disputes.
Example: Governing law, entire agreement, waiver.
What is the “entire agreement clause”?
A clause stating the written contract overrides all prior negotiations.
Example: “This Agreement contains the entire understanding of the parties.”
Why is clarity important in contract drafting?
To avoid disputes and ensure enforceability — especially in common law.
Example: A vague clause on “fair delivery time” may be unenforceable in the UK.
How do civil and common law systems treat unclear clauses?
Civil law looks at party intent. Common law interprets against the drafter (contra proferentem).
Example: In Spain, the court might consult background facts; in England, the clause may be enforced strictly.
What is a “merger clause”?
Same as entire agreement — prevents use of side deals or prior promises.
Example: “No other terms apply unless written in this document.”
What is the purpose of a “no waiver” clause?
Prevents a party from losing rights just because they didn’t enforce them immediately.
Example: “Failure to enforce payment terms once doesn’t waive future rights.”
What is the difference between a recital and an operative clause?
Recitals explain context; operative clauses are legally binding.
Example: “Whereas the parties wish to cooperate…” vs. “The parties hereby agree…”
Why is the use of headings important in contracts?
Helps structure content clearly — though headings don’t always have legal effect.
Example: A court may ignore a misleading heading if the clause itself is clear.
What is a “split clause”?
A clause that assigns different rules to different disputes — risky if poorly drafted.
Example: “Technical disputes go to arbitration, legal disputes go to court.”
How can contract length reflect the legal system?
Common law contracts are longer and more detailed; civil law contracts are shorter due to statutory backup.
Example: An English IT agreement may run 30 pages; a German one may run 12.
What is the role of model clauses (e.g., ICC (International Chamber of Commerce), ITC (International Trade Centre)?
Provide tested wording for common contract issues — reduce errors and disputes.
Example: ICC force majeure clause defines “beyond control” and gives procedures.
What is a “precedent contract”?
A past contract used as a starting point — must be tailored to the new deal.
Example: A supplier reuses an old contract but adjusts volumes and delivery terms.
What is “interpretation risk”?
The risk that a clause will be misunderstood or enforced differently by courts.
Example: “Reasonable efforts” might be strict in the US but flexible in Italy.
