What Is a Clause in Contract Law

In the case of construction contracts, an escalation clause may provide for increases in the price of the work or materials contractually agreed based on a change in the market price or an increase in an index, for example. B the consumer price index. In leases, this clause may result in increased rental costs as maintenance and operating costs increase. In the case of real estate sales, an escalation clause may provide for an increase in the purchase price if higher bona fide offers are made by third parties on the property. In the area of loans, an indexation clause may allow an increase in the interest rate under certain conditions. It should not be concluded that the contractual clause is completely moribund today. Even before recent decisions, it still formed the basis for some judicial review of the relevance of the objective justification for a declared exercise of police power by a State legislature, and in the case of legislation affecting creditors` rights of appeal, it still represents a solid and tangible obstacle to the erosion of legislation. This is also not surprising, given that, as we have seen, such rights came first in the minds of the authors of the clause. The Court`s position on bankruptcy laws, takeover laws, exemption laws, expert opinion laws and the like has always been that they cannot be used retroactively,57noteSee Edwards v. Kearzey, 96 U.S. 595 (1878); Barnitz vs.

Beverly, 163 U.S. 118 (1896). and the general lesson of these earlier cases is confirmed by the Court`s decisions between 1934 and 1945 in some cases involving state moratorium laws. In Home Building & Loan Ass`n v. Blaisdell,58footnote290 U.S. 398 (1934). the main case, a closely divided court, upheld the Minnesota Moratorium Act of April 18, 1933, which denounced the existence of a severe financial and economic depression for several years and the frequency of sales of mortgage foreclosures at inadequate prices, claiming that these conditions had created an economic emergency that required the exercise of the state`s police power, authorized its courts to extend the time limit for the withdrawal of attachments from the additional period which they considered fair and equitable, but in no case beyond 1 May 1935. Thus, in a first case, we find a Crown Records Act that applies to documents dated before the law was passed.45FootnoteJackson v. Lamphire, 28 U.S. (3 pet.) 280 (1830).

See also Phalen v. Virginia, 49 U.S. (8 How.) 163 (1850). Subsequent cases brought police violence into contact with private and public contracts in its most usual phases. Lottery tickets that were valid at the time they were issued were necessarily invalidated by a law prohibiting lottery activities;46FootnoteStone v. Mississippi, 101 U.S. 814 (1880). Contracts for the sale of beer that were in effect at the time of their conclusion were also repealed by a state prohibition law;47FootnoteBeer Co. v. Massachusetts, 97 U.S.

25 (1878). and employment contracts were amended by subsequent employer liability and workers` compensation laws.48Note New York Cent. R.R.c. White, 243 U.S. 188 (1917). In this case and in the two previous ones, the legislative act in question did not repeal the existing Treaties. Similarly, a contract between the plaintiff and the defendant did not prevent the State from making a concession to the defendant that rendered the contract worthless;49notemanigault v. Springs, 199 U.S. 473 (1905). A collective agreement between two railway companies also did not prevent the state from charging different rates;50FootnotePortland Ry.

v. Oregon R.R. Comm`n, 229 U.S. 397 (1913). Nor did a contract between a utility and a customer prevent the agreed rates from being replaced by those set by the state.51FootnoteMidland Co.c. Kansas City Power Co., 300 U.S. 109 (1937). Similarly, a contract to transport water across a state`s borders did not prevent the state from prohibiting such transportation.52FootnoteHudson Water Co.c. McCarter, 209 U.S. 349 (1908).

Contracts are used in virtually every industry, and many of the contract clauses used apply to every industry. In fact, certain contractual clauses are likely to appear in almost all drafted contracts. In particular, commercial contracts usually contain a standard set of terms and conditions. Here are six key clauses found in commercial contracts: The term private contract is, of course, not exhaustive. A judgment, although issued in favour of a creditor, is not a contract within the meaning of the Constitution,21FootnoteMorley v. Lake Shore Ry., 146 U.S. 162 (1892); New Orleans vs. New Orleans Water-Works Co., 142 U.S.

79 (1891); Missouri & Ark. L. & M. Co.c. Sebastian County, 249 U.S. 170 (1919). But see Livingston`s Tenant v. Moore, 32 U.S. (7 pet.) 469, 549 (1833); and Garrison v.

New York, 88 U.S. . .