P
pearlazula
Guest
Hi,
If I have a clause in the contract that stipulates "no adverse change in the law" (e.g. a new tax is imposed on one of the parties by the government, or a new law is created that prevents one of the parties from keeping one of its promises - contract would be finished in 10 months, but because of the new law the party will only be able to finish it later) otherwise the contract can be terminated, would this be considered a "condition subsequent or an implied term"? If so, is the whole contract terminated or only the affected part?
If I don't have such a clause in the contract, and there is a change in law as per the above, would this be considered a "contractual frustration", or the court understand that this is not an "unforseen event" and should have been contemplated by the parties - that is, it is not a contractual frustration, so the contract cannot be terminated?
The main purpose of the contract is a joint venture agreement to develop land into new subdivisions. So, the changes in law would just mean extra cost and more time for the development to be completed. But can it be considered a government intervention - and so, be a contractual frustration?
In any case, can the money already invested by one of the parties be recovered? What happens with the work already started by the other party?
Thank you!
If I have a clause in the contract that stipulates "no adverse change in the law" (e.g. a new tax is imposed on one of the parties by the government, or a new law is created that prevents one of the parties from keeping one of its promises - contract would be finished in 10 months, but because of the new law the party will only be able to finish it later) otherwise the contract can be terminated, would this be considered a "condition subsequent or an implied term"? If so, is the whole contract terminated or only the affected part?
If I don't have such a clause in the contract, and there is a change in law as per the above, would this be considered a "contractual frustration", or the court understand that this is not an "unforseen event" and should have been contemplated by the parties - that is, it is not a contractual frustration, so the contract cannot be terminated?
The main purpose of the contract is a joint venture agreement to develop land into new subdivisions. So, the changes in law would just mean extra cost and more time for the development to be completed. But can it be considered a government intervention - and so, be a contractual frustration?
In any case, can the money already invested by one of the parties be recovered? What happens with the work already started by the other party?
Thank you!