[NRO-IANAXFER] Contract details

Gordon Lennox gordon.lennox.13 at gmail.com
Tue Jan 6 20:49:35 CET 2015


I have been involved in dealing with various forms of agreements over the years - contracts, MoUs and treaties - and almost always in international setting. So maybe I can add a little.

Agreements can be legally binding without all the paraphernalia that many people presume is necessary. A contract after all is just an offer and an acceptance of that offer. What constitutes an "offer" and what constitutes "acceptance" can though vary enormously between cultures and jurisdictions.

It has also been said though that it is the content that matters. I very much agree with that, particularly in an international setting. Certain terms  - agreement, MoU, contract? - can be useful of course. But it is particular content that really matters. and that content concerns what happens when the parties disagree.

Drafting an agreement is a bit like writing software. You needed to have a clear objective, an intent. You need to define certain terms. You need to define  a process. You need to define what happens with problem cases and errors. Nobody though can take care of all the problem cases or errors and so there has to be an understanding on what happens then.

So an MoU says something like: this document is not legally binding; the parties cannot be held responsible for the actions of other parties; the parties cannot be held responsible for costs of any kind incurred by other parties; parties can simply disassociate themselves from this agreement by <define process>.

A contract then says something like: this document is legally binding; the parties are individually and collectively responsible towards other parties <up to a certain amount? >; in the event of a disagreement between the parties the following (binding?) arbitration procedure <here defined> will be used; in the event of continued disagreement then the following (identified) courts in a particular jurisdiction will be competent.

Given the oft stated aim to internationalise this area and the frequent concerns expressed about US dominance it would be bizarre if it was a US court  - in California? - that was now identified.

Then the question of a renewable agreement. I think having an agreement that is renewable or having functions that are somehow transferable would make much of this more palatable to many people. However hard experience has shown that the process to renew or transfer has to be very clearly built in from the beginning. I would go as far as to say that an agreement ought not be signed until it is clearly understood how the required functions could be transferred. So the process for negotiating a new agreement with the same party or another party, either because of a date defined in the original agreement or because of a  disagreement, or the process for the possible transfer of functions to a new party has to be thought about now and defined in some detail.

Gordon


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