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INTRA SEMINAR Introduction to contracts 11 March 2009 Clíona O’Sullivan
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Introduction to contracts Contracts are the scaffolding for our dealings with others
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Introduction to contracts You probably entered into 5 or 6 contracts before you got here today In college In the pub In the shop On the Web At home
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Introduction to contracts Contracts are an essential tool for doing business. They lie at the heart of everything you do in business. Hardware supply State contracts Media services Leasing Software design ISP agreement Utilities e.g. gas telecoms
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Aims of Seminar How to recognise a contract at 20 paces Practical tips for contracting Interaction between laws and contracts
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Recognising a contract What is a contract? A legally binding promise
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What you don’t (always) need for a contract seals Fancy paper signature A lawyer
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Contracts come in many guises Email with follow phone call Silently buying a Mars bar Emails, paper On the phone, face to face ORALWRITTEN MIXED ORAL & WRTTEN GESTURES
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Components of a contract Consideration Acceptance Offer
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Standard Terms Battle of the forms Email 1 My standard purchase terms (Offer) Email 2 Your standard supply terms (Counter-offer) Email 3 My goods order (Acceptance) Ubiquity PracticalityLegality
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Contract evolution Signed contract Day to day reality Dispute, Compromise New agreement
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When things go wrong “RYANAIR’S one millionth customer was yesterday awarded €67,500 damages in the High Court after the budget airline reneged on its pledge to give her free flights for life.” Irish Examiner 20.06.02 AerLingus €5 bargain buys turn out not to be the ticket” Irish Times 18.04.08 “Argos apologises for 49p TV error” BBC news online 1.09.05
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Some practical points on contract terms The Deal The Relationship Getting InGetting Out When things go wrong
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The Deal Parties: Who’s your partner? Product/Service specification. Technical schedules Charges Payment structures Getting in & Out
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Getting In Start Date Delivery Milestones Staggered payment
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Getting Out Fixed? Rolling automatically? Term Notice periods Grounds – no fault termination, termination for breach Termination
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Relationship clauses Communication – reporting and meeting clauses Change – amendment process Flexibility e.g. in delivery
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Avoiding and resolving disputes Escalation clause – process of referring disputes upwards Mediation Party-led dispute resolution facilitated by a mediator. Contract can specify that mediation must be attempted before a party can go to court Arbitration – Private (non- court) adjudication of disputes by a party-appointed arbitrator. Court – litigation
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When things go wrong – rights and remedies Right to terminate for breach of contract obligations Service credits – a pre-agreed price reduction for failures Injunctions Step In Financial Compensation – put in position as if contract had been properly performed Cap on damages payable Exclusion clauses – excluding categories of losses Limitation of Liability Damages Termination Additional remedies
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Interaction between laws and contracts The Constitution EU laws & treaties General laws Sectoral regulation e.g. telecoms The Contract
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Interaction between laws and contracts Freedom of contract – including the freedom to enter a bad or unfair deal Laws set parameters of the deals that can be done (e.g. laws on consumer protection, market abuse, sectoral regulation ) EXAMPLE: the Distance Selling Regulations provide rights to consumers who purchase goods online, such as a 7 day “cooling down period” and rights to information. These rights cannot be overridden by the supplier.
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