Third-Party Impact on Consumer Contracts after the Conclusion of a Contract

Abstract

The main regulation in Danish contract law is that agreements are binding – pacta sunt servanda. This thesis’ purpose is to derive relevant and efficient economic rational, and to analyze accordingly previously case-law from the Danish court of law. This is to conclude, whether or not the danish court decision regarding price adjustment in contracts could be considered efficient in consumer contracts. The main foundation in this thesis is Aftaleloven § 36. Which makes it possible for the Danish court of justice to override inefficient agreement or just some of the agreed terms. This is mainly if an agreement could be considered unreasonable or contrary to good faith. Deciding whether a standard agreement in itself is reasonable or unreasonable the court can’t take feelings or moral opinions into consideration. Court’s decision should instead have in mind that contractual agreement is built on mutual trust whenever they are considering the use of Aftaleloven § 36. This thesis considers the optimal efficiens of a standard and whether a circumstance may cause the court not to apply the standard at all. Which means that this thesis considers economical efficient regarding whether an agreement should be discharged by the court or not. Economic efficiency regarding contracts occurs when contracts maximize the joint value of the parties. Contracting parties are bound by their own bound rationality, transaction cost, asymmetric information, risk, attributes for decisions etc. whenever a contract is agreed upon. Which makes up the attributes for the imperfect contract. Whenever an unexpected circumstance occurs, the form contract could be considered inefficient ex post. In other circumstances it would be more rational to override the terms of the standard by letting the courts supply the efficient terms. The thesis uses three main theories to analyze whether it could be beneficial to overrule form terms as price adjustment and to understand strategies of the courts in its decision-making – unconscionability, impracticability and good faith. The possibility for the use of Aftalelovens § 36 should nevertheless be limited to cases, where a reallocation of risk could increase the contractual value. From an economic perspective of law, a judicial perception this thesis concludes that in the case of form contract terms regarding price adjustment and when unexpected circumstances occur the Danish Court derive an economical efficient result.