The Law of Corporate Finance: General Principles and EU Law - Volume II: Contracts in General

Table of Contents

1 Introduction

1.1 Investments, Generic Contracts, Payments

1.2 Particular Contract Types

1.3 Examples of Topics

1.3.1 The “Perfect Contract”

1.3.2 Payment Obligations

1.3.3 Nexus of Contracts

2 Contracts in General: The Legal Framework

2.1 Introduction

2.2 The Legal Framework: General Remarks

2.2.1 Introduction

2.2.2 Platforms, Market Practice, Contract Models

2.2.3 Governing Law

2.2.4 Choice of Legal Background Rules

2.3 The Legal Framework: EU Contract Law

2.3.1 Introduction

2.3.2 The Law Governing the Contract

2.3.3 Approximation of Contract Laws

2.4 Fixing the Legal Framework

2.4.1 Introduction

2.4.2 Documentation

2.4.3 Choice of Governing Law

2.4.3 Limiting the Scope of Substantive Provisions of Law

2.5 Choice of Core Commercial Terms

2.5.1 Introduction

2.5.2 Definition of Performance

2.5.3 Price and Payment Obligations

2.5.4 Performance, Price, Cost, Risk

2.5.5 Economic Efficiency and the Choice of Terms

2.5.6 Management of Agency, Loyalty, Non-competition

2.5.7 Business Outsourcing

3 Management of Legal Risk: General Remarks

3.1 Legal Risks

3.2 Risks Managed by Legal Means

4 Risks that Relate to the Country’s Legal System

4.1 Introduction

4.2 Laws Not Enforced (Lack of the Rule of Law)

4.3 Change of Law

4.4 Flexibility of Law

4.4.1 General Remarks

4.4.2 Community Law

4.4.3 Differences Between Member States

4.4.4 Mitigation of the Flexibility of Law Risk

4.5 Mandatory Provisions

5 Risks that Relate to the Statements of the Parties

5.1 Introduction

5.2 Interpretation of Contracts

5.2.1 Introduction

5.2.2 Interpretation of What People Say or Do

5.2.3 Traditional Canons of Interpretation

5.2.4 Real Method of Interpretation

5.2.5 Mitigation of Risk

5.3 Terms Not Binding

5.3.1 Introduction

5.3.2 Non-conformity with Mandatory Rules

5.3.3 Different Types of Mandatory Rules: Introduction

5.3.4 Fraud

5.3.5 Unfair Contract Terms Under Community Law

5.3.6 Unfair Contract Terms Under Member States’ Laws

5.3.7 Mitigation of Risk Caused by Mandatory Rules

5.3.8 Particular Remarks on Standard Form Contracts

5.3.9 Mitigation of Risk in Other Areas of Law

5.4 Binding Terms Not Enforceable

5.4.1 Introduction

5.4.2 Recognition and Enforcement of Judgments

5.4.3 Availability of Specific Performance

5.5 Binding Terms Too Rigid

5.5.1 Introduction

5.5.2 Community Law

5.5.3 Member States’ Laws

5.5.4 Mitigation of Risk

5.5.5 Particular Remarks on Material Adverse Change

5.6 Contract Terms Become Binding

5.6.1 Introduction

5.6.2 Mitigation of Risk

6 Management of Counterparty Risk

6.1 Introduction

6.2 Counterparty Corporate Risk

6.2.1 Introduction

6.2.2 Community Law and Member States’ Laws

6.2.3 Mitigation of Counterparty Corporate Risk

6.3 Counterparty Commercial Risk

6.3.1 Introduction

6.3.2 Community Law and Member States’ Laws

6.3.3 Management of Counterparty Commercial Risk

7 Management of Information

7.1 Introduction

7.2 Information Duties

7.3 Substance

7.3.1 Core Obligations

7.3.2 Provisions that Influence Core Obligations

7.3.3 Secondary Duties

7.4 Separate Information Duties

8 Payment Obligations: Introduction

8.1 Traditional Payment Obligations

8.2 Other Forms of Payment Obligations

9 Payment Obligations: Traditional Legal Questions

9.1 Introduction

9.2 Money, Currency, Governing Law

9.3 Principle of Nominalism

9.4 Money as Money or a Commodity

9.5 Interest

9.5.1 Introduction

9.5.2 Fixed Rates, Floating Rates, the Eurosystem

9.5.3 Contract v Mandatory Law

9.6 The Performance of Monetary Obligations

9.6.1 Introduction

9.6.2 Payment

9.6.3 Finality, Conditionality, Revocability, Recourse

9.6.4 Set-off

9.6.5 Netting

10 Generic Forms of Payment Obligations

10.1 Introduction

10.2 Legally Not Enforceable Cash Flows

10.3 Legally Enforceable Payment Obligations

11 Management of Counterparty Credit Risk

11.1 Introduction

11.2 Choice of the Form of Payment Obligations

11.3 Choice of the Time of Payment

11.4 Transferability

11.4.1 Introduction

11.4.2 Basic Legal Aspects Relating to Transferability

11.5 Enforceability of the Transfer

11.5.1 Introduction

11.5.2 Assignment of Receivables

11.5.3 Transfer of Negotiable Instruments

11.6 The Use of Credit Enhancements

11.6.1 Introduction

11.6.2 Management of Counterparty Commercial Risk

11.6.3 Securing Obligations by the Value of Assets

11.6.4 Payment Obligations of a Third Party

11.7 Hedging

11.7.1 Introduction

11.7.2 Hedges Linked to the First Transaction

11.7.3 Netting, Close-out Netting, Set-off

11.7.4 Derivatives

11.8 Credit Risk Transfer in General

11.8.1 Introduction

11.8.2 Incentive Issues: Risk Shedder’s Perspective

11.8.3 Incentive Issues: Risk Taker’s Perspective

11.8.4 Tranching

12 Other Contract Types

12.1 Introduction

12.2 Multi-Party Contracts

12.3 Islamic Finance

12.3.1 General Remarks

12.3.2 Basic Principles

References