Lessons 6, 7 & 8: Contract law (part 1)
1 General
1.1 contracts and the free market economy
• if two parties trade voluntarily and with full knowledge, every trade will be to the
benefit of both parties
• market participants only conclude contracts if they assume that they will be better
off after the execution of the contract
• the law provides for sanctions to be applied in case one of the parties breaches the
contract
1.2 system of code of obligations
• basis of the Swiss contract law
1.3 obligation
contract: sales agreement
seller buyer
claim: payment price obligation: payment
obligation: transfer item/ownership claim: transfer
item/ownership
tort/accident
injured party injuring party
claim: reimbursement damage obligation: reimbursement damage
CO includes the grounds for the following obligations:
• contract
• tort
• unjustified enrichment
• agency without authority
1.4 international sources
• United Nations Convention on Contracts for the International Sale of Goods (CISG)
Lessons 6, 7 & 8
, 1.5 principles of freedom of contract
a basic concept of civil law is the principle of freedom applicable to contracts, which
includes the following elements:
• freedom to conclude or not to conclude a contract
• freedom to choose the contractual partner
• freedom of formality
• freedom to establish the contract's content
if the parties are not equal, the contract concluded between the parties may not be
balanced and the stronger party may push through its interests
statutory provisions – any terms implied by any statute, law, or regulation in the relevant
Jurisdiction with respect to the grant or operation of a lease
the statutory provisions are applicable to the contract even if the parties do not state it
explicitly
1.6 principle “pacta sunt servanda”
• pacta sunt servanda – agreements must be kept
• a contract can only be modified or terminated in accordance with its terms, by
agreements of the parties or as otherwise provided by the law
• one of the parties may be excused in the case that the performance becomes
impossible or in the case of a force majeure event
• force majeure – greater force
1.7 types of contracts
1.7.1 general
• codified and non-codified contracts
• bilateral and unilateral contracts
• continuing contracts
1.7.2 codified and non-codified contracts
• parties to a contract are not limited to the types of contracts included in the Code of
Obligations
• parties with particular needs may either mix different types of contracts included in
the Code of Obligations or create new ones to cover their business needs
• such non-codified contracts include:
o leasing contract
o franchise contract
o license contract
o sponsoring contract
Lessons 6, 7 & 8
1 General
1.1 contracts and the free market economy
• if two parties trade voluntarily and with full knowledge, every trade will be to the
benefit of both parties
• market participants only conclude contracts if they assume that they will be better
off after the execution of the contract
• the law provides for sanctions to be applied in case one of the parties breaches the
contract
1.2 system of code of obligations
• basis of the Swiss contract law
1.3 obligation
contract: sales agreement
seller buyer
claim: payment price obligation: payment
obligation: transfer item/ownership claim: transfer
item/ownership
tort/accident
injured party injuring party
claim: reimbursement damage obligation: reimbursement damage
CO includes the grounds for the following obligations:
• contract
• tort
• unjustified enrichment
• agency without authority
1.4 international sources
• United Nations Convention on Contracts for the International Sale of Goods (CISG)
Lessons 6, 7 & 8
, 1.5 principles of freedom of contract
a basic concept of civil law is the principle of freedom applicable to contracts, which
includes the following elements:
• freedom to conclude or not to conclude a contract
• freedom to choose the contractual partner
• freedom of formality
• freedom to establish the contract's content
if the parties are not equal, the contract concluded between the parties may not be
balanced and the stronger party may push through its interests
statutory provisions – any terms implied by any statute, law, or regulation in the relevant
Jurisdiction with respect to the grant or operation of a lease
the statutory provisions are applicable to the contract even if the parties do not state it
explicitly
1.6 principle “pacta sunt servanda”
• pacta sunt servanda – agreements must be kept
• a contract can only be modified or terminated in accordance with its terms, by
agreements of the parties or as otherwise provided by the law
• one of the parties may be excused in the case that the performance becomes
impossible or in the case of a force majeure event
• force majeure – greater force
1.7 types of contracts
1.7.1 general
• codified and non-codified contracts
• bilateral and unilateral contracts
• continuing contracts
1.7.2 codified and non-codified contracts
• parties to a contract are not limited to the types of contracts included in the Code of
Obligations
• parties with particular needs may either mix different types of contracts included in
the Code of Obligations or create new ones to cover their business needs
• such non-codified contracts include:
o leasing contract
o franchise contract
o license contract
o sponsoring contract
Lessons 6, 7 & 8
