THE RHYTHM AND BLUES OF CURACAO CONTRACT LAW
Principle of fairness and reasonableness
When considered in the perspective of the laws of Curacao, the reliance on or the enforcement of contractual terms and conditions contained in any agreement, may under certain circumstances be contrary to the overriding principle of ‘fairness and reasonableness’ (redelijkheid en billijkheid) which governs the relationship between the parties to an agreement. Prof. Tjittes calls this good faith principle the Rhythm & Blues of our legal system.
Civil law systems such as the Dutch, French, German, or our system, explicitly espouse and apply this principle, whereas common law systems (e.g. English common law) do not recognise a general doctrine of good faith. Let’s see how this principle affects existing contracts.
This principle may affect, inter alia, the reliance on and/or enforcement of contractual provisions such as the following (without any limitations):
- any provisions in a contract or document which provide that certain calculations or certificates shall be conclusive and binding; such provisions will not be effective if such calculations or certificates are founded on an arbitrary or unreasonable basis or are fraudulent or manifestly inaccurate; and will be open to judicial enquiry into the merits arising from any claim by any party thereto;
- any provision of any such contract or document vesting any party with a discretion or the power to determine a matter in its opinion with binding effect on the other party or parties; the laws of Curacao may require that such discretion or power be exercised reasonably or that such opinion is based on reasonable grounds; and
- any provision of any such contract or document stating that failure or delay in exercising any rights or remedies shall operate as a waiver of such rights or remedies (to the effect that under normal circumstances a delay or failure to exercise a right within the contractual period of time may operate as a bar to exercising such rights or remedies thereafter).
Furthermore, such principle of fairness and reasonableness may in the proper circumstances impose certain additional duties upon the parties concerned, notwithstanding any provision to the contrary.
Karel Frielink
Attorney (Lawyer) / Partner
(7 August 2011)
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