The enforceable promise

Most disputes are about what nobody said. Publish in the code the rules that apply unless the parties agree otherwise:

• A contract binds when two parties able to contract — adults of sound mind, not under threat — agree terms certain enough to perform: who, what, how much, when.
• Goods must match their description and be fit for their ordinary purpose.
• Payment is due within 30 days of delivery unless agreed otherwise — the default the EU sets between businesses (Directive 2011/7/EU) — and interest runs on late payment at a published rate.
• A claim must be brought within a fixed period — England allows 6 years for contract — so old disputes end.

The UNIDROIT Principles of International Commercial Contracts are a complete, neutral model to copy from.

An oral contract is valid, but it is decided later by whoever has the better witnesses. Require writing for land, loans, building work, employment beyond a season, and anything over a stated value. England has required writing for contracts over land since the Statute of Frauds of 1677.

A written contract states the parties and where they live; what each will do; the price and when it is paid; the date and place of delivery; what happens if either side fails; and the date. Both parties sign, two witnesses sign, and each party keeps an identical copy. For land and large loans, a third copy goes to the public register.

Most contracts are the same few deals: a sale of goods, hire of labour, a loan, a lease, a building job. Publish a one-page standard form for each, in plain language, with blanks for the parties, price and dates.

Standard forms make contracts cheap to write, easy to read and quick to judge: the court has seen the terms before. Parties may change any clause, but must strike it through and initial the change on both copies, so a changed term is never hidden.

When a contract is broken, the court puts the injured party where performance would have put them: the value of what was promised, less what they saved, plus losses both sides could foresee when they agreed. Where money cannot replace the thing — a particular piece of land, a unique object — the court orders the promise performed.

A clause fixing a sum for breach is enforced only if it is a genuine estimate of the loss; a sum set to frighten the other side is a penalty and is not enforced. The injured party must limit the loss: a seller left with goods sells them elsewhere and claims only the difference.

A right that takes years and most of its value to collect does not exist. For contract claims:

1. A written claim, with a copy of the contract, filed and served on the other party.
2. A written reply within 14 days, the period England's civil courts allow, or judgment for the claimant by default.
3. Mediation first, one meeting with a trained mediator, for any claim the parties will try to settle.
4. A hearing within a stated period, documents exchanged beforehand.
5. Judgment in writing with reasons.

For small claims, below a published value: one judge, no lawyer needed, simple forms, and a fee that is small against the claim. Publish the average time from claim to judgment every year, and treat a rise as a fault to fix.

An unpaid judgment is collected by a court officer from the debtor's money, goods, or a fixed share of wages — never all of the wages. Exempt what a household needs to live and work: basic household goods, the tools of the debtor's trade, and food for a set period.

Never imprison for debt. A prisoner cannot earn what they owe, and the threat drives people to worse borrowing. Article 11 of the International Covenant on Civil and Political Rights forbids it.

Some debts cannot be paid. Insolvency settles them in an order set in advance: a court officer takes the debtor's non-exempt property, sells it, and pays secured creditors from their security first, then divides the rest in proportion to what each creditor is owed. After a fixed period of honest cooperation — England uses one year — the remaining debts are discharged and the debtor starts again.

Without discharge, a failed venture ends a working life; with it, people take on the ventures a growing economy needs. Fraud — hiding assets, borrowing with no intent to repay — bars discharge.

Freedom of contract assumes both sides could read the terms and refuse them. The court does not enforce:

• Contracts made by force, threat or fraud, or with children, except for necessities.
• Terms hidden in small print that a reasonable person would not expect, unless they were pointed out.
• In standard contracts offered on a take-it-or-leave-it basis, terms that tilt rights significantly against the weaker party — the test in the EU's unfair-terms rules (Directive 93/13/EEC).
• Contracts for an unlawful purpose.

Record each refusal with its reasons in the case register, so the next drafter knows.