<p>During the later half of the 20th century standard form contracts began to be used more frequently in contract situations. This trend has been consistent and in today’s world numerous commercial parties employ such contracts in their business transactions. The reasons for the extended use of standard form contracts are the benefits that can be obtained for the parties such as time efficiency, effectiveness and price advantages. Standardised contracts often regulate certain issues of the contract for example the way of delivery, remedies and complaints. The definition of such contracts is corresponding in Sweden and England as contracts containing in advance standardised terms with an aim to be used similarly in contract situations with most clients or customers.</p><p>As the usage of standard form contracts increased, the number of unfair contract terms also enhanced. Therefore, the legislative powers in Sweden and England realised that the rules concerning the freedom of contract had to be restricted and governed. As a result, the legislative powers introduced an open control device through statutory control. This was done in Sweden in 1976 with the enforcement of Section 36 of the Contracts Act, and in England the year after when UCTA came into force. The statutory control in both Sweden and England makes it possible to appraise the fairness of exemption clauses. The statutory control is not identical in the two states. UCTA only concerns exclusion clauses and limitation clauses regarding contract terms and non-contractual notices. In Sweden, on the other hand, there is a general doctrine of unfairness and Section 36 of the Contracts Act can set aside all kinds of agreements.</p><p>The statutory control is complemented by indirect means of controlling the content of a contract through non statutory methods. The non statutory methods are concerned with the incorporation, interpretation and construction of clauses in a contract. To be valid and for a party to be able to rely on a term it must have been incorporated into the contract. The rules concerning the interpretation of standard form contracts and exclusion clauses are also of great importance. In both states the approach held is that the statutory control should be used preferably over the indirect control means, though the indirect means still has a prominent role in England through common law. Both England and Sweden agree on that the weaker party in a contract situation is in a greater need of protection by the rules of law in unfair contract situations. However unfairness can only arise if the superior party has wrongfully used the exclusion clause.</p><p>Our study shows the differences between Swedish and English contract law that can result in difficulties in the harmonisation process. These differences concern the test of reasonableness of exemption clauses, the doctrine of good faith, the legal effects and to what extent the indirect means of control should be applied. The Swedish test of reasonableness may include all relevant circumstances irrespective of the time of their occurrence, before or after the entry of the contract. The courts in England are limited to circumstances that have occurred before the closure of the contract. Section 36 of the Swedish Contracts Act includes a general rule of unfairness applicable to all kinds of contract terms. The rule of unfairness in the UCTA on the other hand, is only applicable to exemption clauses and indemnity clauses and there is no general rule of unfairness in English contract law. Instead the courts rely on indirect means of control, which therefore is of greater importance in English contract law. Finally, adjustments of unfair exemption clauses has a significant role in Swedish contract law, in contrast to English contract law where any adjustment is regarded as an intrusion of the freedom of contract.</p><p>To endorse one of the most important aims of the EU; a well working inner market, discussions commenced in 2001. The discussions concerned the harmonisation of the contract law within the union. The questions that arose were whether or not it was possible at all to form a European common contract law and if so, what the effects would be. An action plan was developed by the Commission and today both the EU Parliament and the Council are positive in regard to the continuing work with a reference frame. The Commission aims to pass the reference frame in 2009. Since the EU member states are diverse and have different legal systems a harmonisation of the contract law could cause difficulties. There are differences concerning legal traditions and legal values, hence the legal expertise in Europe is divided in the harmonisation question.</p><p>The following study aims to analyse the existing rules of law in Sweden and England representing two diverse legal systems existing in Europe; civil law and common law. The focus of this study regards the control of exclusion clauses in standard form contracts in both legal systems. The comparison will then be used to analyse the fundamental question if the harmonisation of contract law in the EU is feasible. Specific areas within the contract law have already been harmonised, which shows a possibility to coordinate common law and civil law. Directive 93/13/EEC on Unfair Terms in Consumer Contracts is one example of harmonised contract law in the EU and the principles in PECL is another example which shows that it is possible to coordinate common law and civil law. A harmonisation of the contract law will probably promote the commerce within the union and be the next step towards one of the most prominent goals of the EU, namely a well functioning common market. However, our study shows that the differences between national legislation and the differences between the legal traditions within the EU are not insignificant and a harmonisation will probably not be enforced without difficulties.</p>
| Identifer | oai:union.ndltd.org:UPSALLA/oai:DiVA.org:hj-394 |
| Date | January 2006 |
| Creators | Hansson, Tanja, Nilsson, Anna |
| Publisher | Jönköping University, JIBS, Commercial Law, Jönköping University, JIBS, Commercial Law |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, text |
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