The ContractStandards Framework
Contract Standards Framework
The Contract Standards Framework is a model used to describe the components of exchange agreements. It provides a unifying schema to organize the elements of a transaction and can used to compare contracts, test theories, and create economic models of legal agreements.
Other frameworks will also be proposed for organizational agreements (such a business formation), distribution agreements (such as wills and trusts), and others.
The exchange framework is composed of a grid of three rows and three columns.
Transaction: the first row describes the business arrangement.
- Bargain: The nature of the transaction, describing the value given and received by each party.
- Exchange: The mechanics of the exchange, detailing how the consideration will be exchanged or received.
- Term: The period of time during which the parties are bound by the terms of the agreement.
Assurances: The second row describes the statements, actions, and circumstances that each party requires to assure that they receive the benefits of their bargain.
- Statements: The assertions regarding the exchange validating the value of the consideration offered.
- Conditions: The actions, events, and circumstances that must occur as requirements for the parties to make the exchange.
- Obligations: The ongoing promises and commitments made by each party.
Insurances: The third row describes what happens in the event of breach of the agreement or other circumstances preventing the parties from realizing the benefits of the bargain. Depending on the merits of each case, the terms of a contract are enforceable by courts of law.
- Rights: The actions and powers available to the parties in the event of breach (or threatened breach) of contract.
- Remedies: The recovery or other rights of redress that each party may receive in the event of breach or failure of the agreement.
- Adjudication or General Provisions: The “law” of the agreement, detailing how the agreement is interpreted and enforced.
In the following weeks, the Contract Standards blog will explore all elements of the framework.