The Change of commercial contractual relations influenced by sustainability clauses
ENThe Cambridge Dictionary (n.d.) defines sustainability as “the quality of being able to continue over a period of time.” Doubtless, sustainability is now often understood in a slightly different sense. One of the core documents defining the sustainability goals of the United Nations describes sustainable development as that which “meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development 1987, p. 2). Mostly, it is associated with the activities of various stakeholders intended to reach the pursued environmental and social objectives. However, in certain cases it even goes beyond that. For the purposes of this chapter, the topic of sustainability clauses in business contracts will be analyzed and explained in close connection with corporate social responsibility (CSR). These definitions are not used interchangeably; the proximity and importance of each one of them to the other is noted. Corporate social responsibility (CSR) is “(…) a business practice that considers the impact a company has on society, employees, and other stakeholders. A CSR strategy is implemented by an organization to: minimize harm, practice fair business, be responsible along a global supply chain, exercise philanthropy and create a self-oriented human resource management system” (Green Business Bureau 2022). For the sake of clarity and the precision of terminology, there is a need to define the term commercial used in this chapter. The term commercial should be explained, as it can have different meanings in various jurisdictions. The term commerce can be defined as activity that includes all forms of the purchase and sale of goods and services (Butterfield 2003, p. 340).The legal doctrine of Lithuania defines commercial activity as a permanent, independent, i. e., personal, activity that is developed at one’s own risk in order to make a profit, and that is related to buying and selling things or providing services to other persons for remuneration (Mikelėnas et al. 2001, p. 23). In this article, commercial contracts shall be defined as contracts concluded between businesspeople (business-to-business or B2B contracts). However, it cannot be doubted that sustainability goals are included not only in commercial contracts, but also in other types of agreements. Nevertheless, they are beyond the scope of this chapter. Scholars point out that “currently, increasing attention is being paid to the issues of sustainability and social responsibility. The measure of a company’s success is not only its profitability, but rather its overall evaluation relies on quantitative and qualitative characteristics, increasingly reflecting the company’s interaction with its surroundings” (Myšková and Hájek 2018, p. 1). Furthermore, as the pursuit of sustainability may conflict with the pursuit of profit, the general perception and consciousness of business society must change. This tendency has an obvious impact on commercial contracts and their execution. On the other hand, most businesspeople are used to clear and specific clauses in their contracts. However, contractual clauses defining parties’ obligations in the area of sustainability (sustainability contract clauses) are usually not clear and precise. Moreover, the content of such obligations differs from the other commercial and legal clauses in the contract, leading to confusion and uncertainty regarding full compliance with such sustainability obligations. Sustainability goals are pursued not only by the policies of governments and supranational institutions, but also by the conduct of businesses.Sustainability contractual clauses may be included into commercial contracts even in cases when their inclusion is not mandatory under applicable laws and regulations. Such clauses are relatively new to commercial contractual practices, and contract parties deal with great uncertainty related to them. Contractual regulation is mainly influenced by three major contract law theories: classical, relational, and social contract law doctrines. The ground rules of contract law were established by the traditional (classical) contract law instruments – starting with the norms establishing freedom of contract and pacta sunt servanda, as well as the privity of the contract and clear consequences in case of non-compliance. Relational and social contract law theories reflect modern tendencies and changes, considering the external factors of the contractual relationship and, going even further, requesting the consideration of the interests of the society, even if the contract is purely private and commercial. This chapter reflects some of the aspects of sustainability contractual obligations in the view of each of these contract law theories, explaining how sustainability contract clauses deviate from conventional classical contract law instruments and, in other cases, how sustainability objectives pursued by businesses reflect the relational and social contract law theories as an example of their influence on modern contract law. It is expected that such an explanation with a theoretical background will help to understand how sustainability contract clauses should be applied. Thus, the aim of this chapter is to reflect on the peculiarities of sustainability contract clauses, showing the difficulties in their application induced by deviation from classical contract law rules and suggesting probable solutions via the consideration of how they reflect relational and social contract law doctrines. [Extract, p. 153-154]
