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1 TABLE OF CONTENTS Acknowledgements... v PART I: INTRODUCTION Chapter 1: Introduction Introduction Interpretation and Gap Filling Purpose and Issue Definition Methodology and Structure Introduction Choice of Legal Systems Theoretical Component European Contract Law: The Harmonization Debate Introduction The Need for Harmonization Introduction Diversity Deters Cross-Border Trade Improving Consumer Protection Protection of Social Values Creating A European Identity The European Agenda General The Common Frame of Reference The Optional Instrument Reflection vii
2 PART II: COMPARATIVE PERSPECTIVE Chapter 2: Preview Chapter 3: Interpretation and Gap Filling in Dutch Law Introduction Interpretation Introduction The Haviltex Interpretation Standard Introduction Relationship to the Will-Reliance Theory Subjective-Objective Interpretation Conclusion The Objective CAO Standard Introduction Interpretation of the CAO Scope of Application Conclusion Reconciling Rival Approaches Introduction A Common Foundational Norm A Smooth Transition? Reflection Conclusion The Supplementary Sources of Article 6:248(1) BW Introduction Legislation As a Source of Gap Filling Solutions Introduction The Supplementing Character of Legislation General and Specific Default Provisions Conclusion Custom Introduction Definition of Custom Customary Conditions Conclusion Good faith (Redelijkheid en Billijkheid) Introduction What is Good Faith (Redelijkheid en Billijkheid)? Introduction Conceptual Definition Behavioural Norm or Legal-Ethical Principle? Objectification Contextualization of an Open-ended Norm Functions An Alternative View Conclusion viii
3 The Case Law Introduction Duties to Inform General Contractual Duties to Inform Objective to Control and Enforce Performance Knowledge Bank-Client Relationships Conclusion Right to Terminate Contract of Undefined Duration Duties to Compensate The Impact of a Legislative Framework Duty not to Compete Duty to Cooperate Conclusion Concluding Remarks on Gap Filling Based on Good Faith The Nature of the Contract Introduction An Independent Source of Obligation? Determining the Nature of the Contract Conclusion Hierarchy of Sources The Prevailing View vs. An Alternative Viewpoint Introduction The Prevailing View An Alternative View Reflection on Two Opposing Views Conclusion Chapter 4: Interpretation and Gap Filling in German Law Introduction Interpretation Introduction Subjective or Objective Interpretation: 133 and 157 BGB The Wirkliche Wille and 133 BGB Introduction Actual Intention Common Understanding Conclusion Objective-Normative Interpretation Introduction The Nature of Normative Interpretation Relevant Circumstances Conclusion Supplementation of the Contract Introduction ix
4 3.2. Legislative Default Provisions General Primacy of Legislative Defaults Conclusion The Supplementing Role of 242 BGB Introduction The Nature of 242 and Good Faith (Treu und Glauben) Introduction Treue and Glauben Conceptual Definition Open-ended Norm A Legal-Ethical Principle The Role of Common Practices (Verkehrssitte) The Functions and Fallgruppen of Good Faith (Treu und Glauben) Conclusion Ancillary Duties Introduction Concretization of the Main Obligations (Hauptleistungskonkretisierung) Duties of Loyalty (Leistungstreuepflichten) Duties to Inform (Aufklärungs- und Auskunftspflichten) Duties to Cooperate (Mitwirkungspflichten) Duties of Care (Schutzpflichten) Conclusion Constructive Interpretation: Ergänzende Vertragsauslegung Introduction The Gap Concept Introduction Issues of Definition Deliberate and Inadvertent Gaps Initial and Subsequent Gaps Conclusion Standards of Constructive Interpretation Introduction The Parties Hypothetical Intention Constructing the Parties Hypothetical Intention Introduction Individual-Subjective Factors Normative-Objective Factors The Time Factor Individualized vs. Standardized Solutions Limits to Constructive Interpretation The Nature, Function and Foundation of Constructive Interpretation Introduction Legal Foundation Is Constructive Interpretation a Form of Interpretation? Constructive Interpretation and Filling Gaps in Default Law Hierarchy between Default Law and Constructive Interpretation Conclusion x
5 5. Conclusion Chapter 5: Interpretation and Gap Filling in English Law Introduction Interpretation Introduction Objective or Subjective Interpretation? General Justification of the Objective Approach Criticism of the Objective Approach Conclusion Ascertaining the Objective Meaning Introduction The Traditional Approach Modern Developments General The Objective Nature of Interpretation The Relevant Background General Absolutely Anything? Mutual Context The Contractual Document Surrounding Circumstances Aim and Purpose of the Transaction The Exclusionary Rules Introduction The Exclusionary Rules in the Courts Criticism of the Exclusionary Rules An Exceptional Case Conclusion The Contextual Meaning The Natural and Ordinary Meaning A Common Sense Approach Conclusion Implied Terms Introduction Terms Implied in Fact Introduction Presumption Against Implication Parties Presumed Intention as the Basis for Implication The Role of Intention Reflection Tests for the Implication of Terms in Fact Introduction Business Efficacy Test Introduction What does it mean? Application xi
6 Reflection Officious Bystander Test Introduction The Subjective or Objective Officious Bystander? Obviousness Application Reflection Other Factors Introduction Reasonableness and Equity Capable of Clear Expression Compatibility with Express Terms Relationship Between the Tests Implication in Fact as Constructive Interpretation Overlap with Terms Implied in Law Conclusion Terms Implied in Law Introduction Implied Terms or Default Rules? Precedent as a Source Terms Implied in Law Introduction Development of Terms Implied in Law Nature of the Contract Reasonableness or Necessity? Policy Considerations Conclusion Statute as a Source of Terms Implied in Law General Sale of Goods Act Other Statutes Conclusion Terms Implied by Custom General Conditions Examples Continued Relevance? Conclusion Chapter 6: Comparative Review Introduction Ordinary Interpretation Introduction: Textual and Contextual Approaches Subjective Interpretation General Ascertaining the Common Understanding Contrast Objective Interpretation xii
7 General The Reasonable Person The Reasonable Parties Normative Interpretation Literal or Textual Meaning Conclusion Textual vs. Contextual Interpretation Concluding Remarks Constructive Interpretation Introduction Constructive Interpretation Recognized? Presumed or Hypothetical Intention Thresholds Constructing the Parties Hypothetical Intention Conclusion Supplementation Introduction Legislative Default Provisions Custom and Trade Usages Supplementation by the Courts Introduction The Supplementing Function of Good Faith Terms Implied in Law Standardized Terms Comparative Observation Conclusion Concluding Remarks PART III: THEORETICAL PERSPECTIVES Chapter 7: Preview Chapter 8: Autonomy and Gap Filling Introduction Autonomy-Based Theories of Contract Introduction Autonomy-Based Theories of Contract Barnett s Consent Theory of Contract Justification of Gap Filling Introduction Autonomy-Based Theories in General Consent Theory Justification of Gap Filling Introduction Consent to Jurisdiction Consent to Enforcement of Default Rules Conclusion xiii
8 4. Guidelines for Gap Filling Introduction Autonomy-Based Theories in General Barnett s Conventionalist Defaults Introduction The Role of Tacit Assumptions Subjective Disagreement What Are Conventionalist Defaults? Conclusion Conclusion Chapter 9: A Law and Economics Perspective on Gap Filling Introduction Fully Contingent Contract and Transaction Costs The Hypothetical Bargain Introduction Hypothetical Bargains and Transaction Costs Constructing the Hypothetical Bargain The Optimal Design of Gap Filling Terms Introduction Individualized and Majoritarian Hypothetical Bargains Rules vs. Standards Individualization vs. Standardization of Gap Filling Solutions Status Quo Bias Conclusion A Formalist Approach Introduction Default Rules and Standards Introduction Default Rules Default Standards Conclusion Information Asymmetry and Incomplete Contracts New Formalism and Extralegal Sanctions Conclusion Concluding Remarks: Some Concerns About the Effectiveness of the Economic Approach Chapter 10: Fairness and Gap Filling Introduction Fairness in Exchange Introduction Aristotle s Theory of Justice Distributive and Corrective Justice xiv
9 Distributive or Corrective Justice in Contract Law? Distributive and Corrective Justice and Gap Filling Fairness in Exchange and Gap Filling Measuring Fair Exchange Conclusion Fairness An Indeterminate Concept? Introduction Fairness and Open-ended Norms A Process of Contextualization Fairness and Gap Filling Conclusion Chapter 11: The Role of Social Context Introduction Why Contextualize the Content of the Contract? Introduction Empirical Studies into Contract Practice Introduction The Use and Non-Use of Contracts The Role of Non-Legal Sanctions Conclusion Reconceptualization of Contract Introduction The Contextual Setting of the Contract A Relational Conception of Contract Conclusion Commercial Norms and Practices in the UCC Introduction Llewellyn s Incorporation Strategy Commercial Norms and Practices in Article 2 of the UCC Introduction Sources of Immanent Commercial Norms The Incorporation of Commercial Norms Introduction Defining the Agreement Interpretation and Supplementation Hierarchy Open-ended Standards Conclusion Discussion Surrounding the Incorporation Strategy Introduction Verifying the Existence of Trade Usages Do Trade Usages Exist? Fine-tuning the Verification of Trade Usages xv
10 4.3. The Incorporation of Extralegal Norms Legal vs. Extralegal Norms Rebutting the Critique Encrustation and Standardization The Encrustation Critique The Need to Combat Encrustation Conclusion Conclusion Chapter 12: Review Introduction The Inevitability of Gaps and the Necessity of Gap Filling Introduction Efficiency Arguments The Contextual Dimension Consent to Jurisdiction and Reliance Conclusion Three Gap Filling Strategies Introduction A Formalist Strategy Normative Strategies The Contextual Approach Reflection Conclusion PART IV: A LAYERED INTERPRETATIVE AND GAP FILLING STRATEGY Chapter 13: A Layered Interpretative and Gap Filling Strategy Introduction The Nature of the Parties and the Nature of the Contract Introduction The Nature of the Contracting Parties Introduction Commercial Parties Private Individuals Conclusion The Nature of the Contract Conclusion A Layered Interpretative and Gap Filling Strategy Introduction Gap Filling by the Contracting Parties Introduction Negotiation xvi
11 Private Regulation within Contracting Communities Introduction The Nature of the Private Regulatory Framework Advantages of Private Regulation Some Concerns Conclusion Private Regulation and Atypical Transactions Private Regulation in Contracts Involving Private Individuals Private Regulation and European Contract Law Conclusion Legislative Gap Filling Introduction Legislative Frameworks for Standard Contract Types A General Contracting Framework for Atypical Contracts Scope of Application Legislative Frameworks and European Contract Law Conclusion Interpretation and Gap Filling by the Courts Introduction Textual and Contextual Interpretation Revisited General Private Individuals Mixed Transactions Commercial Transactions Interpretation in European Contract Law Gap Filling Introduction Threshold Conditions for Gap Filling Constructing the Hypothetical Bargain Gap Filling in Contracts between Private Individuals Gap Filling in Mixed Transactions Gap Filling in a Contracting Community Gap Filling in other Commercial Transactions Gap Filling in European Contract Law Conclusion Evaluation Introduction Legal Certainty and Flexibility Transaction Costs and Cost-Effectiveness Reduction of Judicial Error The Legal and Extralegal Dimensions Concluding Remarks xvii
12 Samenvatting: Uitleg en aanvulling van de overeenkomst: rechtsvergelijkende en theoretische perspectieven Inleiding: probleemstelling, methodologie en plan van aanpak Deel II Rechtsvergelijkend perspectief Deel III Theoretische perspectieven Deel IV Een strategie voor een gelaagde uitleg en aanvulling Bibliography Index Curriculum Vitae xviii
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