Principle of Sanctity of Contract
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A Principle of Sanctity of Contract is a contractual principle that upholds the binding nature of contractual agreements (emphasizing that parties should honor their contractual obligations as they were originally agreed upon, without undue interference from external forces).
- Context:
- It can (typically) be a fundamental principle in Contract Law, reflecting the importance of contractual stability and reliability.
- It can (typically) promote economic efficiency by allowing parties to rely on the enforceability of their agreements.
- It can (typically) be closely related to the Latin maxim "pacta sunt servanda" (agreements must be kept).
- It can (typically) vary in strength and application across different legal jurisdictions and systems.
- It can (often) be balanced against other legal principles, such as those protecting against unfair or unconscionable contracts.
- It can (often) be subject to exceptions in cases of illegality, public policy concerns, or changed circumstances.
- It can (often) be challenged by modern legal developments, such as consumer protection laws or doctrines of frustration.
- It can (often) be a subject of debate in legal and economic scholarship regarding its benefits and limitations.
- ...
- Example(s):
- As when courts enforce contracts as written, even if the outcome seems harsh to one party,
- As when Legal systems limit the circumstances under which a contract can be voided or modified by the court.
- As when International trade agreements rely on this principle to ensure stability in cross-border transactions.
- As when Arbitration clauses are upheld to honor the parties' original agreement on dispute resolution.
- As when specific performance is ordered as a remedy to enforce the exact terms of a contract,
- ...
- Counter-Example(s):
- Doctrine of Unconscionability, which allows courts to invalidate unfair contracts.
- Force Majeure, which provide for contract modification or termination in extraordinary circumstances.
- Consumer protection laws that allow for cooling-off periods or easy contract cancellation in certain situations.
- Equitable doctrines like Promissory Estoppel, which can modify contractual obligations based on reliance.
- Statutory Regulations that impose mandatory terms in certain types of contracts, overriding the parties' original agreement.
- See Also: Freedom of Contract, Pacta Sunt Servanda, Contract Enforcement, Public Policy in Contract Law, Economic Analysis of Contract Law, Legal Formalism, Legal Realism.