Transcript Remedies for breach of information duties in DCFR

Remedies for breach of
information duties in DCFR
Eric Clive
Introduction
• No specific rules in DCFR on financial services
• If rules are added, sanctions for breach of
duties should be clearly specified
• There are however some pre-contractual
information duties in DCFR
DCFR II.-3:101(1)
• … business has a duty to disclose to the other
person such information concerning the
goods, other assets or services to be supplied
as the other person can reasonably expect …
DCFR II.-3:109(2) and (3)
• (2) …business has such obligations under the
contract as the other party has reasonably
expected as a consequence of the absence or
incorrectness of the information
• (3) … business … is liable for any loss caused
to the other party to the transaction by such
failure
DCFR II.–7:201(1)(a)
• the party, but for the mistake, would not
have concluded the contract or would have
done so only on fundamentally different
terms and the other party knew or could
reasonably be expected to have known this
DCFR II.–7:201(1)(b)(iii)
• the other party
(iii) caused the contract to be concluded in
mistake by failing to comply with a precontractual information duty …
DCFR II.–7:201(2)
• (2) However a party may not avoid the
contract for mistake if:
(a) the mistake was inexcusable in the
circumstances; or
(b) the risk of the mistake was assumed,
or in the circumstances should be borne, by
that party.
Other possible remedies
• Fraud – but must be intention to induce
mistake
• Unfair exploitation – but not meant for this
type of case
• Infringement of mandatory rules – probably
not applicable in this type of case and, even if
applicable, probably no remedy
Conclusion
• Damages (by various routes)
• No nullity (unless via avoidance for mistake)