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The duty of loyalty in Nordic law

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Title: The duty of loyalty in Nordic law
Author(s): Kulmala, Samuli
Contributor: University of Helsinki, Faculty of Law
Discipline: Contract law
Language: English
Acceptance year: 2014
Abstract:
The subject of this thesis is the duty of loyalty in the Nordic law of contracts. This study is of comparative law, and it aims to compare the definitions and explanations given for the duty of loyalty in the Nordic countries. The comparisons are made between Finland, Sweden, Norway and Denmark. This study could also be described as partly legal dogmatic, since the purpose of the comparisons is to find out what the legal meaning and effect of the duty of loyalty are. Since the duty of loyalty is a broad and general norm which applies to a number legal spheres, such as consumer and insurance contracts, the subject of this study needs to be delimited in order to keep the discussion coherent and focused. Because of this, the study will only inspect the duty of loyalty in the context of commercial contracts. In all of the Nordic countries, the duty of loyalty is an unwritten legal norm and/or a principle. The duty is generally defined as a duty of the contracting parties to reasonably consider each other’s interests and expectations without unreasonably risking their own. Many authors in jurisprudence have criticised this definition as vague and impalpable. Yet, at the same time, many authors see it as a norm that has gained more significance and influence in the law of contract, especially during the last decades. In Finland, there are many authors who have discussed the duty in articles and textbooks, but there is no doctoral thesis that focuses solely on the duty of loyalty. The situation is somewhat different in neighbouring countries, as several doctoral theses about the duty exist in Sweden and one in Norway. Aside from these theses, the academic discussion and debate has been vivid in all the Nordic countries. This study aims to gather and compile this discussion into a comparative analysis. Lastly, it presents a synthesis of these descriptions and discusses whether these descriptions could be merged into a notion of a Nordic duty of loyalty. The structure of this thesis consists of an introduction, followed by four chapters which concern the individual countries of this study. Each country is discussed in its own chapter. These chapters aim to describe the discussion and the debate in jurisprudence concerning the duty in the country in question. Each of these chapters consists of the following topics: 1.) the legal basis of the duty, 2.) the definitions given for the duty, 3.) how the duty has been defined in relation to other norms of contract law, 4.) the functions of the duty, 5.) its applications and lastly, 6.) the more specific elements attributed to the duty, such as its influence in different contracting phases and what specific obligations are thought to stem from it. The purpose of the first topic is to analyse the legal character of the duty. This will be done by inspecting the descriptions of the authors in jurisprudence and how the duty has been applied in court practice. The second topic describes the more specific definitions given for the duty in jurisprudence, and the third part seeks to find out how these definitions separate and define the duty in relation to the other norms of contract law, such as the bona fides, the principle of equity/reasonableness and the Contracts Act 36§. The fourth topic gives an account of the functions which authors have attributed to the duty, and the fifth one discusses the possible applications of the duty and what consequences disloyal conduct can give rise to. Examples of such consequences and legal remedies are the cancellation of contract, liability for damages and the voidableness of contract. The sixth part concerns the opinions of legal authors as to what type of concrete obligations the duty could generate and how it can actually supplement a contract. After the chapters discussing the individual countries, the sixth chapter will give a comparative analysis of the opinions and discussions mentioned in the aforementioned chapters. The sixth chapter consists of the same subtopics as chapters 2.-5. First and foremost, the author will analyse definitions and elements of the duty and discuss whether individual authors agree or disagree about them. Besides this, the author will also deliberate whether it is possible to find differences on national levels. The last chapter discusses the conclusions of the comparisons. The first part of this chapter will seek to give an illustration of what is, or could be, the broadest and the most comprehensive definition given for the duty in the Nordic countries. The author will also comment on the applicability of the duty in commercial contracts. As a counterweight to the first, the second part highlights the more critical and disinclined views towards the duty and seeks to summarize the debate.


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