1. Review the European Union Directive on Unfair Contract Terms at http://ec.europa.eu/consumers/consumer_rights/rights-contracts/unfair-contract/index_en.htm.
The European Union Directive on Unfair Terms in Consumer Contracts (93/13/EEC) defines an unfair term as “any term which contrary to the requirement of good faith causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.” Exculpatory clauses (clauses that excuse a party from his own negligent acts) and clauses limiting the liability of the seller are considered to create such imbalances. However, unfair terms are not voidable if the term was “individually negotiated.”
1. What is the importance of the notion of individual negotiation? 2. Would your answer be different if the contract containing the exculpatory clause also had a choice of law clause directing the court to a non-EU country? Why or why not?
2. How do courts determine which national laws apply in a given case?
3. As a seller and exporter of goods you are negotiating a long-term (three-year) installment contract. Because of the length of the contract, an open price term needs to be negotiated. Write a clause that anticipates the risks involved in entering a long-term supply contract. What cost factors should be described in detail? Also, how would one interrelate the open price term with a force majeure clause?
4. You are negotiating a contract for the shipment of goods from Miami to the Middle East. The risks and costs of the shipment will be yours to the point of destination. Draft a force majeure clause. What events would you want to be considered as force majeure? Should some occurrences provide for an excuse (termination) and others for suspension?
5. In a “battle of forms” situation the additional terms in the acceptance often become a part of the contract. Assuming that you are the offeror, draft language for your offer that would preclude those additional terms from entering the contract. Assuming that you are the offeree, draft a clause for your acceptance that would make it clear that there is no contract unless it is on the terms of the acceptance (counteroffer).
