The Law of Corporate Finance: General Principles and EU Law

Transcription

1 The Law of Corporate Finance: General Principles and EU Law

2 Petri Mäntysaari The Law of Corporate Finance: General Principles and EU Law Volume II: Contracts in General 123

3 Professor Petri Mäntysaari Hanken School of Economics Handelsesplanaden Vaasa Finland petri.mantysaari@hanken.fi This title is part of a three volume set with ISBN ISBN e-isbn DOI / Springer Heidelberg Dordrecht London New York Library of Congress Control Number: c Springer-Verlag Berlin Heidelberg 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg Printed on acid-free paper Springer is part of Springer Science+Business Media (

4 Table of Contents 1 Introduction Investments, Generic Contracts, Payments Particular Contract Types Examples of Topics The Perfect Contract Payment Obligations Nexus of Contracts Contracts in General: The Legal Framework Introduction The Legal Framework: General Remarks Introduction Platforms, Market Practice, Contract Models Governing Law Choice of Legal Background Rules The Legal Framework: EU Contract Law Introduction The Law Governing the Contract Approximation of Contract Laws Fixing the Legal Framework Introduction Documentation Choice of Governing Law Limiting the Scope of Substantive Provisions of Law Choice of Core Commercial Terms Introduction Definition of Performance Price and Payment Obligations Performance, Price, Cost, Risk Economic Efficiency and the Choice of Terms Management of Agency, Loyalty, Non-competition Business Outsourcing Management of Legal Risk: General Remarks Legal Risks Risks Managed by Legal Means...48

5 VI Table of Contents 4 Risks that Relate to the Country s Legal System Introduction Laws Not Enforced (Lack of the Rule of Law) Change of Law Flexibility of Law General Remarks Community Law Differences Between Member States Mitigation of the Flexibility of Law Risk Mandatory Provisions Risks that Relate to the Statements of the Parties Introduction Interpretation of Contracts Introduction Interpretation of What People Say or Do Traditional Canons of Interpretation Real Method of Interpretation Mitigation of Risk Terms Not Binding Introduction Non-conformity with Mandatory Rules Different Types of Mandatory Rules: Introduction Fraud Unfair Contract Terms Under Community Law Unfair Contract Terms Under Member States Laws Mitigation of Risk Caused by Mandatory Rules Particular Remarks on Standard Form Contracts Mitigation of Risk in Other Areas of Law Binding Terms Not Enforceable Introduction Recognition and Enforcement of Judgments Availability of Specific Performance Binding Terms Too Rigid Introduction Community Law Member States Laws Mitigation of Risk Particular Remarks on Material Adverse Change Contract Terms Become Binding Introduction Mitigation of Risk Management of Counterparty Risk Introduction Counterparty Corporate Risk

6 Table of Contents VII Introduction Community Law and Member States Laws Mitigation of Counterparty Corporate Risk Counterparty Commercial Risk Introduction Community Law and Member States Laws Management of Counterparty Commercial Risk Management of Information Introduction Information Duties Substance Core Obligations Provisions that Influence Core Obligations Secondary Duties Separate Information Duties Payment Obligations: Introduction Traditional Payment Obligations Other Forms of Payment Obligations Payment Obligations: Traditional Legal Questions Introduction Money, Currency, Governing Law Principle of Nominalism Money as Money or a Commodity Interest Introduction Fixed Rates, Floating Rates, the Eurosystem Contract v Mandatory Law The Performance of Monetary Obligations Introduction Payment Finality, Conditionality, Revocability, Recourse Set-off Netting Generic Forms of Payment Obligations Introduction Legally Not Enforceable Cash Flows Legally Enforceable Payment Obligations Management of Counterparty Credit Risk Introduction Choice of the Form of Payment Obligations Choice of the Time of Payment...292

7 VIII Table of Contents 11.4 Transferability Introduction Basic Legal Aspects Relating to Transferability Enforceability of the Transfer Introduction Assignment of Receivables Transfer of Negotiable Instruments The Use of Credit Enhancements Introduction Management of Counterparty Commercial Risk Securing Obligations by the Value of Assets Payment Obligations of a Third Party Hedging Introduction Hedges Linked to the First Transaction Netting, Close-out Netting, Set-off Derivatives Credit Risk Transfer in General Introduction Incentive Issues: Risk Shedder s Perspective Incentive Issues: Risk Taker s Perspective Tranching Other Contract Types Introduction Multi-Party Contracts Islamic Finance General Remarks Basic Principles References