What is pacta sunt servanda?
What is the meaning of this principle in contract law?
How is this principle relevant to international law?
We will look at its meaning, legal definition, how it is viewed in civil law systems, common law and in international law, compare it to the doctrine of abuse of contractual rights and freedom to contract and more.
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Pacta sunt servanda meaning
Pacta sunt servanda (sunt servanda or pacta servanda) is a Latin phrase that translates to English as “agreements must be kept” or “promises must be kept”.
In other words, when parties enter into a contract, they must respect the terms and conditions of the contract representing the expression of their agreement.
This principle refers to the binding nature of a contract and the parties’ subjective will to be bound by those terms.
Based on this principle, not only the parties to a contract must keep their agreement and be bound to one another but the courts must also uphold the will of the parties to be bound.
Both in international law along with civil and common law systems, to legally honour contractual obligations or an agreement is key.
Definition
According to USLegal, pacta sunt servanda is defined as:
It is the principle in international law which says that international treaties should be upheld by all the signatories.
What is notable with the pacta sunt servanda legal definition is that it is linked to its application in international law whereby signatories to a treaty must perform their obligations in good faith.
Origin
The first time in recorded history where the principle of “pacta sunt servanda” was used appears to be in the writings of the canonist Cardinal Hostiensis going back to the thirteen century AD.
The pacta sunt servanda has been considered fundamental to all legal systems for centuries.
This was an uncodified rule for centuries until it was expressed in multilateral declarations, such as in the Declaration of London of 1871, as of the middle of the nineteenth century.
The Vienna Convention on the Law of Treaties is the first convention making express reference to pacta sunt servanda in its preamble as follows:
It is also mentioned in its article 26 stating that every treaty in force is binding upon the parties and the agreement must be kept:
Doctrine of pacta sunt servanda
International law
In international law, the notion of pactum sunt servanda (“agreements must be kept” or “treaties shall be complied with”) is one of the most important and oldest international principles governing international relations.
Under this doctrine, signatories to an international treaty must keep their agreement in such a way as to give the international treaty a binding effect.
Every state party to a treaty or convention must expect that the other states will keep their agreement and be expected to keep their agreement.
Civil law
In civil law jurisdictions, the doctrine is used to impose a duty to respect the terms of a contract and perform contractual obligations in good faith.
Some civil law jurisdictions have adopted further specific statutes with respect to good faith dealings in commerce and commercial contracts in such a way that they keep their promises and act on the expression of their agreement.
Trading parties must act according to the general legal principle of good faith in executing and upholding their agreement with one another.
Common law
In common law jurisdictions, just like in civil law systems, respect contractual agreements represent a foundational concept in contract law.
There are a few common law principles that may be considered in relation to pacta sunt servanda such as:
- Reasonableness standard
- Good faith and fair dealing
- Privity of contract
- Liberty to contract
When parties freely and voluntarily enter into a contract (liberty to contract), in accordance with the principles of pacta sunt servanda and privity of contract, the parties must honour their obligations.
To sign an agreement or enter into an oral contract, there is an understanding that the parties intend to abide by the terms of the contract and act in such a way as to give the agreement its intended meaning.
Abuse of contractual rights vs autonomy of the will
When parties enter into an agreement with one another, they must perform and execute their obligations.
In other words, the contracting parties must benefit from the intended consideration driving them to enter into a contract.
This means the parties to a contract must act on their promise (pacta sunt servanda).
However, a court may need to manage conflicting principles such as:
- Freedom of contract (the autonomy of the will)
- Abusive of contractual rights
On the one hand, the parties must have the autonomy to decide on what grounds they intend to be legally bound to one another.
On the other hand, the parties must execute their obligation in good faith and without the exercise of contractual rights in an abusive manner.
Although the parties to a contract must keep their agreement or have the right to demand execution from the other party, the overall conduct of the parties must remain governed by the notion of good faith and fair dealing.
Pacta sunt servanda FAQ
What is pacta sunt servanda contract law
In contract law, the pacta sunt servanda principle is a fundamental legal principle requiring that those who freely enter into a contract must honour the terms of their agreement.
It is presupposed in law that by entering into a contract, the parties have the intention to abide by the terms expressing their agreement.
For the stability of the contracting institution, parties to a contract must expect the terms of the contract to be binding between them and ultimately enforced by the court.
What does pacta sunt servanda mean
Pacta sunt servanda meaning in law can be divided into two broad categories:
- International law (public law)
- Contract law (private law)
In international law, pacta sunt servanda means that parties to a convention or international treaty must obey its terms in good faith and do what’s necessary to give act to their agreement.
In contract law, whether you are in a common law system or civil system, pacta sunt servanda means contracting parties must respect the terms of their contract.
Contracts must be legally binding and the parties must execute what they have agreed to execute and expect to receive what they expected to receive in return.
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