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Slides 2023 - Session 4
Slides 2023 - Session 4
Contract
Interpretation
Session 4
Contract Law
29/08/2023 1
Today’s Program
• Recap
• Pre-contractual liability
– Tennor
– Manoukian
• Quiz!
• Contract Interpretation
– UBS v Red Zone
– Haviltex
– Bear Sterns
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Recap
• Lawyers
• Freedom of contract
• Legal capacity & issues of validity
• Uber
• Formation: offer & acceptance
• In-class exercises
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Pre-contractual Liability
• General principle
during negotiations:
Freedom
• Limit: Good faith
• Jurisdictional variation
• Art. 2.1.15 UNIDR.
• Contract v tort law
• Confidentiality
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Pre-contracts
• Agreement to negotiate
• Preliminary agreement
- terms left open
- fallback agreement
• Called: letter of intent, agreement in principle,
memorandum of understanding
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Tennor Exercise
Briefing the case: facts – issue – holding – rationale
1. How did the court build the argument that signing th
e TA was necessary for its validity?
2. What are the implications for the “share the pain”
doctrine for ongoing M&A transactions in the face
of the Covid-19 pandemic?
3. What if after signing the contract the value of the
target company decreases dramatically because of
Covid-19? How could the parties regulate this risk?
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Tennor Simulation
1. Class will be divided in two groups
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Manoukian
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Break!
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Performance
• Default rules! (often in contract law)
• Specific result v best efforts
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UBS v. Red Zone
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Haviltex
Briefing: facts – issue – holding – rationale
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Bear Stearns/JP Morgan
• 2008: Bear
• JPMorgan steps in
• Share purchase agreement (SPA)
• 'Inadvertently included’ phrase
• JPMorgan’s error?
• How did Bear's shareholder use
this to their benefit?
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Recommendations
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Thank you!
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