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Väsentlighetskravet för hävning av kommersiella köp av lös egendom - Särskilt om dess innebörd och tillämpning i svensk och engelsk rätt

Göransson, Johan LU (2018) JURM02 20181
Department of Law
Faculty of Law
Abstract
Swedish law only permits termination due to breach of contract when the committed breach is fundamental. To assess the fundamentality of a breach of contract is no easy mission. The main purpose of this study is to clarify the legal meaning of the concept of fundamental breach as a prerequisite in Swedish law for terminating a commercial contract. This study thoroughly focuses on the assessments of fundamentality made in relation to breaches of purchase agreements. It is based on a traditional legal method and considers generally accepted sources of law such as legal text, the legislative history, case law and jurisprudence. In addition, English contract and termination law and its relation to Swedish law is studied with a comparative... (More)
Swedish law only permits termination due to breach of contract when the committed breach is fundamental. To assess the fundamentality of a breach of contract is no easy mission. The main purpose of this study is to clarify the legal meaning of the concept of fundamental breach as a prerequisite in Swedish law for terminating a commercial contract. This study thoroughly focuses on the assessments of fundamentality made in relation to breaches of purchase agreements. It is based on a traditional legal method and considers generally accepted sources of law such as legal text, the legislative history, case law and jurisprudence. In addition, English contract and termination law and its relation to Swedish law is studied with a comparative method. Differences and similarities between English termination law and the Swedish prerequisite of fundamentality for termination of commercial contracts are analyzed and discussed.

In summary, it has been concluded that the prerequisite of fundamentality for termination of purchase agreements constitutes a general principle in Swedish contract law. The prerequisite, containing a requirement of both fundamentality and foreseeability, has an important function as a tool for determining the legitimacy of the termination. A case-by-case assessment of the fundamentality of the breach of contract needs to take place. The assessor may consider, as guidelines for the assessment, the purpose of the contract, the construction of the contract as well as the character of the contract together with the alternative possibilities of compensation that stand available. Although it cannot be concluded exactly when and in which situations these parameters are to be applied, they may be used as general guidelines for the assessment.

The prerequisite in The United Nations Convention on Contracts for the International Sale of Goods (CISG) for terminating a commercial contract has many similarities to the Swedish one. In case law it has been confirmed that the assessment of the fundamentality of the contractual breach is made in accordance with similar guidelines as the ones proposed for Swedish law. One difference in relation to Swedish law may be found in the fact that an application of CISG presupposes that the assessor more thoroughly investigates the consequences of the breach of contract. In addition, the courts are expected to more carefully consider the possibilities of alternative compensation.

Finally, the study concludes that English contract law contains what must be considered an equivalent to the Swedish prerequisite of fundamentality. When applying English contract law, one must assess the fundamentality of a breach of contract in order to determine whether a termination of the contract should be considered rightful. The fundamentality assessment in English law is, unlike the Swedish equivalent, made in two different steps. Initially it is considered whether or not the breached term constitutes a condition - an important term of the contract - and if termination should be allowed solely on this basis. If the breached term is not considered as a condition, the assessment will enter into the next stage. The assessor is then to estimate the seriousness of the breach. If the committed breach of contract is considered so serious that it deprives the buyer of what he was entitled to expect under the contract, the breach must be considered fundamental. From the comparison between Swedish and English law it can be concluded that the English two-step assessment has many advantages relative to the Swedish one. The advantages mainly consist of the fact that it is more clear in English law what guidelines you may follow when assessing the fundamentality of a contractual breach. These general guidelines must be considered rather precise which may result in legal foreseeability for commercial parties and a uniform application of the law. (Less)
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author
Göransson, Johan LU
supervisor
organization
alternative title
The prerequisite of fundamentality for termination of commercial purchase agreements - About its legal meaning and application in Swedish and English law
course
JURM02 20181
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
väsentligt avtalsbrott, väsentlighetskravet, väsentlighetsbedömning, väsentlig betydelse, köplagen, köprätt, hävning av avtal, hävning av kommersiella avtal, kommersiell avtalsrätt, när får man häva ett avtal, 25 § köplagen, avtalsrätt, köpavtal, hävning av köpavtal, väsentlighet.
language
Swedish
id
8940736
date added to LUP
2018-06-08 10:39:46
date last changed
2018-06-08 10:39:46
@misc{8940736,
  abstract     = {Swedish law only permits termination due to breach of contract when the committed breach is fundamental. To assess the fundamentality of a breach of contract is no easy mission. The main purpose of this study is to clarify the legal meaning of the concept of fundamental breach as a prerequisite in Swedish law for terminating a commercial contract. This study thoroughly focuses on the assessments of fundamentality made in relation to breaches of purchase agreements. It is based on a traditional legal method and considers generally accepted sources of law such as legal text, the legislative history, case law and jurisprudence. In addition, English contract and termination law and its relation to Swedish law is studied with a comparative method. Differences and similarities between English termination law and the Swedish prerequisite of fundamentality for termination of commercial contracts are analyzed and discussed.

In summary, it has been concluded that the prerequisite of fundamentality for termination of purchase agreements constitutes a general principle in Swedish contract law. The prerequisite, containing a requirement of both fundamentality and foreseeability, has an important function as a tool for determining the legitimacy of the termination. A case-by-case assessment of the fundamentality of the breach of contract needs to take place. The assessor may consider, as guidelines for the assessment, the purpose of the contract, the construction of the contract as well as the character of the contract together with the alternative possibilities of compensation that stand available. Although it cannot be concluded exactly when and in which situations these parameters are to be applied, they may be used as general guidelines for the assessment.

The prerequisite in The United Nations Convention on Contracts for the International Sale of Goods (CISG) for terminating a commercial contract has many similarities to the Swedish one. In case law it has been confirmed that the assessment of the fundamentality of the contractual breach is made in accordance with similar guidelines as the ones proposed for Swedish law. One difference in relation to Swedish law may be found in the fact that an application of CISG presupposes that the assessor more thoroughly investigates the consequences of the breach of contract. In addition, the courts are expected to more carefully consider the possibilities of alternative compensation. 

Finally, the study concludes that English contract law contains what must be considered an equivalent to the Swedish prerequisite of fundamentality. When applying English contract law, one must assess the fundamentality of a breach of contract in order to determine whether a termination of the contract should be considered rightful. The fundamentality assessment in English law is, unlike the Swedish equivalent, made in two different steps. Initially it is considered whether or not the breached term constitutes a condition - an important term of the contract - and if termination should be allowed solely on this basis. If the breached term is not considered as a condition, the assessment will enter into the next stage. The assessor is then to estimate the seriousness of the breach. If the committed breach of contract is considered so serious that it deprives the buyer of what he was entitled to expect under the contract, the breach must be considered fundamental. From the comparison between Swedish and English law it can be concluded that the English two-step assessment has many advantages relative to the Swedish one. The advantages mainly consist of the fact that it is more clear in English law what guidelines you may follow when assessing the fundamentality of a contractual breach. These general guidelines must be considered rather precise which may result in legal foreseeability for commercial parties and a uniform application of the law.},
  author       = {Göransson, Johan},
  keyword      = {väsentligt avtalsbrott,väsentlighetskravet,väsentlighetsbedömning,väsentlig betydelse,köplagen,köprätt,hävning av avtal,hävning av kommersiella avtal,kommersiell avtalsrätt,när får man häva ett avtal,25 § köplagen,avtalsrätt,köpavtal,hävning av köpavtal,väsentlighet.},
  language     = {swe},
  note         = {Student Paper},
  title        = {Väsentlighetskravet för hävning av kommersiella köp av lös egendom - Särskilt om dess innebörd och tillämpning i svensk och engelsk rätt},
  year         = {2018},
}