Introduction to Project Finance & Legal Aspects of Projects - CT3102 Lecture Slides 2024 PDF

Introduction to project finance & legal aspects of projects - CT3102 3 & 4 - Contract law September 12, 2024 1 9/12/2024 2 Set-up lecture 3 1. Pre-contract 4. Null or voidable? 5...

Introduction to project finance & legal aspects of projects - CT3102 3 & 4 - Contract law September 12, 2024 1 9/12/2024 2 Set-up lecture 3 1. Pre-contract 4. Null or voidable? 5. Failure 2. Contract basics 6. Limitations a. Content b. Multilateral legal act?! 7. The judicial system c. Offer & acceptance a. Law of civil procedure b. Which judge is 3. Contract defects authorized? a. Mental disturbance c. Different procedures b. Defects of will (intention) d. Alternative dispute resolution September 12, 2024 3 Private law and contract law Private law: is about the legal relation between civilians. Private law protects the private interests. Enforcement takes place on the initiative of civilians. Private law consists of e.g. labor law, family law, property law, civil procedure law, contract law Contract law is private law Not all private law is contract law September 12, 2024 4 1. Pre-contract What happens in real life? September 12, 2024 5 1. Pre-contract What is there before there is a contract? Start and end of the pre-contractual phase Liability? Agreements about making agreements September 12, 2024 6 2. Contract basics Contract = agreement Principles of contracts Freedom of contract Consensus Private law Art. 6:213 DCC: an agreement in the meaning of this Title is a multilateral legal act whereby one or more parties enter into an obligation towards one or more other parties. September 12, 2024 7 2.a Setting the content is up to you, mostly.. Art. 6:248 lid 1 DCC: an agreement not only has the legal effects which parties have agreed upon, but also those which, to the nature of the agreement, arise from law, usage (common practice) or the standards of reasonableness and fairness. Content is prescribed by: 1. What parties have agreed upon (partijafspraken) 2. Law (wet) 3. Common practice (gewoonte) 4. Reasonebleness and fairness (redelijkheid en billijkheid) September 12, 2024 8 2.a Limits to the freedom of contract Armin Meiwes: the cannibal of Rotenburg He posted an ad on the internet to attract people who wanted to be eaten. Bernd Jurgen Brandes applied, he wanted to be eaten. In March of 2001 they met each other and carried out their agreement. Is this a legitimate agreement? September 12, 2024 9 2.b Legal act Legal act (rechtshandeling): this creates at least 1 right for A towards B and 1 obligations for B towards A Multilateral: e.g. purchase → Jack has the right to his car and is obligated to pay the price for that product to the VW dealer; the VW dealer has right to the price and is obligated to give Jack his car Unilateral: e.g. ending an employment contract→ David can end his employment contract with the TU Delft September 12, 2024 10 2.c Offer and acceptance Art. 6:217 DCC: an agreement comes into being by means of offer and acceptance. It sounds simple, but a lot can go wrong: You could regret your offer You made a verbal offer and forget what you offered You thought you had bought a red sofa, but is appears to be orange Your counterparty was a minor You were drunk.. September 12, 2024 11 2.c Offer An offer is valid when it consists of: A valid declaration of intention (art. 3:33 DCC) (geldige wilsverklaring) The person that offers has the capacity to exercise his rights (art. 3:32 DCC) (handelingsbekwaamheid) The essentials of the upcoming agreement, e.g. the price and the object (art. 6:227 DCC) September 12, 2024 12 2.c Hofland/Hennis Hofland places an add in which he puts his house up for sale. The price of the house is fl. 215.000. Hennis accepts this offer right away. When Hofland finds out that Hennis has accepted his offer, he withdraws his offer. Hennis says that the agreement has been made. Was this add an offer? 13 2.c Acceptance The declaration of intention which connects to the offer. Consists of: A valid declaration of intention (geldige wilsverklaring) The person that accepts has the capacity to exercise his rights (handelingsbekwaamheid) What if the acceptance differs from the offer? September 12, 2024 14 2.c Incapacity Natural persons can be incapable → they are unable to perform inviolable legal acts (geldige rechtshandelingen) Minors: under the age of 18 (and not married or formerly married) Persons placed under legal restraint (onder curatele gestelden) September 12, 2024 15 3. Contract defects Mental disturbance Defects of intention (will) September 12, 2024 16 3.a Mental disturbance Applicable to the person that is permanent or temporarily mentally disturbed and, in that state, makes a declaration. This declaration is assumed to be made under influence of the mental disturbance (→ lacks will) when the legal act is unprofitable for the mentally disturbed. Consequence: voidable legal act (unless there is a successful appeal to the principle of justified belief). September 12, 2024 17 3.a Eelman/Hin In the spring of 1954 Eelman decides to sell his farm on the island Texel. He makes an agreement with Hin for an economic normal price. In 1955 he is placed under guardianship because of mental illness. Eelman refuses to sign one of the necessary certificates and appeals to the fact that he was mentally disturbed when he sold the farm to Hin. What can Hin do? Will Hin succeed? September 12, 2024 18 3.b Defects of intention (will) Defect of intention: during the determination of the intention about a legal act the acting party was influenced by certain circumstances; the intention was formed defectively. 4 ways of vitiated consent: threat (bedreiging) art. 3:44 DCC fraud (bedrog) abuse of circumstances (misbruik van omstandigheden) art. 6:228 DCC error (dwaling) Only the person whose intention was formed defectively can appeal to a defect of intention. September 12, 2024 19 3.b Van Geest/Nederlof Nederlof has sold a secondhand car to Van Geest. After the purchase it is apparent that the car has been in an accident and was declares total-loss after that. The car was fixed, but a couple important parts were still in a bad condition. Nederlof knew about this and did not tell this to Van Geest. Van Geest claims nullity of the agreement acting on error. Did Nederlof have an obligation to report or did Van Geest have an obligation to research? September 12, 2024 20 3. Intention and declaration – three options 1. Intention and declaration correspond: legal act is formed (art. 3:33 DCC). 2. Intention and declaration do not correspond: the counterparty succesfully appeals to justified belief; legal act is formed (art. 3:35 jo. art. 3:33 DCC). 3. Intention and declaration do not correspond: the counterparty can not or does not appeal to justified belief; legal act is not formed, the act is voidable or null. September 12, 2024 21  offer + acceptance = agreement intention intention Boundaries: & & public morals declaration declaration public order law Justified belief reasonableness and fairness Vitiated consent → incapacity Threat Fraud Abuse of circumstances Error September 12, 2024 22 4. Legal consequences: null or voidable Nullity or null and void (nietig) The act has never existed, therefore is not enforceable as a legal act. Voidable or annulled (vernietigbaar) Nullity has to be invoked (the act can be annulled) by the person protected by law. September 12, 2024 23 4. Legal consequences: null or voidable Defects of intention, mental disturbance* and incapacity* lead to a voidable agreement. * Only if they are directed to a specific person, because..? An agreement incompatible with public morals, public order or law leads to a null agreement. September 12, 2024 24 5. Failure There is failure (tekortkoming) when the debtor falls short in any way of what he agreed up on. Claims: Fullfilment (nakoming) Rescission (ontbinding) Damages (schadevergoeding) To be entitled to damages the debtor has to be in default (in verzuim). 5. In default and a notice of default Basic rule: the debtor is in default when the notice of default has been served → not the only element! Fulfillment is permanently impossible → a notice of default isn’t needed; the debtor is automatically in default. The agreement has a deadline for fulfillment → the debtor is automatically in default after the deadline expires; a notice of default isn’t needed. From a communication by the debtor must be inferred that the latter does not intend to fulfil his obligation → the debtor is automatically in default; a notice of default isn’t needed. 6. Limitation Claims based on failure barre (verjaren) 1. 5 years from the day that you have learned about the failure. 2. 5 years from the day that you are entitled to the claim. You snooze? You ‘lose’! 7. The judicial system Right to access to justice and legal assistance: a fair trial → Art. 6 ECHR and art. 17 Constitution September 12, 2024 28 7. The judicial system Which court and which procedure? Depends on the type of case Contract law Law of civil procedure Civil court art. 112 Constitution Administrative law (lecture 6) Law of administrative procedure Administrative court art. 112 Constitution September 12, 2024 29 7.a Law of civil procedure Right to access to justice and legal assistance Initiative and autonomy for the parties Examination/hearing of both parties Decision within reasonable time Public Motivated jurisdiction September 12, 2024 30 7.b Which judge is authorized? Absolute competence: Which authority? Relative competence: Where? Sector competence: Sub-district court or district court? (sector kanton of civiel) September 12, 2024 31 Absolute competence District and Sub-District Court (rechtbank en kanton gerecht) Court of Appeal (gerechtshof) Supreme Court (Hoge Raad) September 12, 2024 32 Absolute competence District or subdistrict court Court of Appeal September 12, 2024 33 Relative competence Main rule = the judge of the court in the legal district of the accused Extra options for the accuser: Labour contract dispute: the court of the location where the labour takes place Wrongful act: the court of the location where the wrongful act took place Fixed asset (onroerend goed): the court of the location where the fixed asset can be found. Regulatory law! September 12, 2024 34 Sector competence Sub-district Court District Court Labour agreements, - collective labour agreement (CAO), rent agreements, consumer (credit) agreements Monetary claims < 25000,- Monetary claims > 25000,- No obligatory legal Obligatory legal representation representation September 12, 2024 35 Example Daniel is a student at the TU Delft and during his study he rents a room in the city center of Delft. His landlord wants to sell the house Daniel lives in and asks Daniel to move out by the end of July. On September 2nd Daniel is still in his room and the landlord threatens him by saying he will personally remove Daniel from his room. Wise, calm and mature as Daniel is, he goes to court to enforce his rent contract instead of starting a personal argument with his landlord. Question: to which court should Daniel go? (absolute, relative and sector) September 12, 2024 36 7.c Different procedures Standard procedure = summons procedure (dagvaardingsprocedure) Urgency? → summary proceedings (kort gedingprocedure) Keyword = urgency Difference in administrative or civil law! September 12, 2024 37 7.d Alternative dispute resolutions Why would you choose an alternative? Mediation Binding opinion Arbitration (often used in disputes regarding construction) September 12, 2024 38