This article has been written by Madhumita Raut pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution course from LawSikho. 

This article has been edited and published by Shashwat Kaushik.

Introduction

The debate on whether to treat treaties as a mere contract has posed serious thoughts to the academicians and the legal fraternity under international law. This has been made using textualism and contract theory in the analysis of the duties and objectives of the involved parties. This essay is intended to deal with the complex dimension of treaties and contracts and to clearly show how textualism and contract theory critically influence the way international agreements are interpreted.

In simpler terms, a treaty and a contract are formal documents through which some legal kinds of rights are created for parties, specifying their rights and duties under such documents in the expectation that these commitments will be honoured. However, in general, the environment and the entities have typically been different and varied.

Basically, treaties and contracts are formal agreements that create legal obligations for the parties involved. These are the parties’ rights and duties in expectation that their commitments are honoured, but the circumstances under which they operate and the parties different from each other.

Define the contract and treaties

A contract is a legally binding agreement between two or more individuals or businesses. It outlines the rights and obligations of each party and is enforceable by a court of law. Contracts can cover a wide range of activities, such as commercial deals, property transactions, and job agreements. They are typically written documents, but they can also be oral agreements.

In order to be valid, a contract must meet certain legal requirements. These requirements include:

• Offer: One party must make an offer to the other party. The offer must be clear and specific, and it must identify the subject matter of the contract.
• Acceptance: The other party must accept the offer. The acceptance must be unconditional and unequivocal.
• Consideration: There must be an exchange of something of value between the parties. This can be money, goods, services, or a promise to do something.
• Capacity: The parties must have the legal capacity to enter into a contract. This means that they must be of legal age and sound mind.
• Legality: The purpose of the contract must be lawful.

Treaties, on the other hand, are formal agreements between two or more sovereign states or international bodies. They are typically written documents and are governed by international law. Treaties cover a wide range of topics, such as commerce, security, human rights, and environmental protection.

Treaties are legally binding on the parties that have entered into them. They are typically negotiated by representatives of the different states or international bodies involved and are then signed by the heads of state or government. Treaties are often subject to ratification by the legislatures of the parties involved.

The Vienna Convention on the Law of Treaties is the principal legal document governing treaties. It sets out the rules for the negotiation, conclusion, and interpretation of treaties. The Vienna Convention also provides for the peaceful settlement of disputes between parties to a treaty.

Contracts and treaties are both legally binding agreements. However, there are some key differences between the two. Contracts are typically between individuals or businesses, while treaties are between states or international bodies. Contracts are governed by national law, while treaties are governed by international law. Finally, contracts are typically less formal than treaties. In that vein, treaties resemble contracts in the field of international law and require mutual agreement and the assumption of obligations by parties. Such a description resembling the nature of contractual arrangements is indeed justified by legal descriptions and historical examples that, in fact, prove that signatories have high levels of commitment.

Core values of contract

The recognition by states of the solemnisation of an agreement through mutual assent is hardly going to evoke the word “contract” to be the first to come to mind for most. Yet this metaphor of treaties as contracts plays an important role in the practice of international law precisely because it fills a vital gap in our understanding between concepts of an informal agreement and the near incomprehensible, intricate web of obligations and expectations that have culminated among nations. While not truly private contracts, a comparison may be drawn from what the two share in common, giving a clear meaning as to the importance and significance that treaties have in international law.

In fact, treaties, analogous to contracts within the frame of contract law, are essentially an agreement between sovereign states, dispersed in most of the cases in a written form like ratification or accession, which marks acceptance to receive the provisions of the treaty; such an agreement sets a structure of interlocking or interconnected reciprocal duties.

Similarly, treaties, like well-drawn contracts, are very specific and clear in laying out the rights and duties of the parties. This amount of detail makes the treaty language purposely worded so that there is no margin for ambiguity in its interpretation, which could lead to causes of misunderstanding likely to sour international relations. Each article’s language is meant to become a cog in the cooperative mechanism and take care of a range of concerns, from trade rules to disarmament agreements.

The heart of a treaty is, like the parties in a contract, dependent on its execution. The states shall be compliant dreamily in carrying the obligations, act affirmitively in observing the steps depicted in the treaty, and cease from doing the acts contrary to the purposes of the treaty.

Whereas courts are the enforcers of private contracts, with respect to treaties, the situation is more nuanced in the international arena. Even though there isn’t a single body to enforce these treaties, mechanisms do exist: from publicity to countermeasures, from diplomatic pressure to finally finding ways through the international tribunals in case of non-compliance.

Admitting the likenesses involves the acknowledgement of subtle distinctions. States, unlike people in a contract, exist within the realms of sovereignty and autonomy. The difference is shown in much stricter formalities in the creation of a treaty and some specific grounds in the termination of the same, beyond merely the breaking of rules of a contract.

Treaties and contracts may belong to separate fields, yet some contractual law framework is very insightful for such a vast world of international agreements. Realisation of common features contributes to the understanding of how states relate to one another and interact within the enormous field of international relations. But the further reach which treaties have always had, as the tools of diplomacy and the embodiments of the hopes of the nations in the pursuit of common goals, has gone beyond the pale of the realm of contracts.

This has made textualism relevant in treaty analysis as an interpretative method that makes a priority of the meaning of the manifest text. An endeavouring method that reveals the exact text of treaties and the consensus intentions that it creates between the states at the time.

Proponents of textualism have confidence in it due to its accuracy and objectivity. They further state that all that constitutes a treaty are clear and plain words. This minimises the uncertainties and contributes to predictable expectations on the part of the nations. This construction is part of the demands under Article 31(1) under the Vienna Convention on the Law of Treaties, which insists that there should be “good faith and the natural meaning that should be accorded the terms of the treaty to the context in which it used in light of the end and the objective of the treaty.”

On the other hand, the theory of contract has a more evolved perception as it sees the treaties more in the character of contracts rather than merely bargaining between states and rests on the premises of the original intentions of the parties concerned or a cooperative spirit and principles of faith. The proponents of this idea, among whom is also Ian Brownlie, accept that international relations are in the process of continuous change and attempt to interpret treaties to the advantage of seeking legal obligation and good faith principles.

The principle of pacta sunt servanda, or “contracts must be honored,” serves to make this more binding. This principle works from the basic tenet of contract theory that entities are bound to and will abide by their part of the agreement. Just like the concept of contractual relationships is an imperative in international law, so too is the command for states to hold their obligations under treaties reprehensible in both law and morality.

The application of contract theory to international law is, however, problematic. There may well be an imbalance in power relationships amongst states that can distort intentions. Further, unforeseen developments may make original interpretations redundant. Contextual elements, such as subsequent practices in terms of how the States have implemented the treaty and travaux préparatoires (the history of the negotiations), become very important in comprehending the ongoing spirit of cooperation.

Textualism and contract theory are likewise paramount factors in treaty interpretation, but their greater practice, in most cases, encounters suspicion and controversy. For example, the text of a treaty can be vague, resulting in a dispute over interpretation. In addition, the fact that recourse is had to one textual or contractarian interpretation without considering the surrounding context may give rise to an approach, subsequently recognised, of seeming to know the intentions of states in a most mechanical and restrictive manner.

Nevertheless, critics point out that a rigorous adherence to textualism could end up ignoring any larger context—either preparatory works or any further agreements that could serve as clues to the true intentions. It remains one of the most controversial aspects in the expression of a delicate balance during treaty interpretation: either a literal interpretation or a broader contextual analysis.

This interaction shows the subtle balance between the notions of treating treates as contracts: a dynamic interplay among textualism, contract theory, and the broader context. Through the use of textualism, there is a systematised way of reading treaty language, but through contract theory, there is a focus on principal aspects of equity and good faith. Each will bring out the subtlety of the balance involved and, at the same time, take into account a context broader and yet directly affecting the interpretation of the texts of the considered treaty.

Such changes in the overall perspective of international law with respect to the interpretation of the treaties exhibit a holistic viewpoint involving textualism and the contract theory. All of these balance to be sensitive to the clarity of textualism and the openness that an understanding of the larger context may give in reaching satisfactory and practical international conclusions.

Criticisms and challenges

While textualism and contract theory serve as valuable tools for interpreting treaties, they have not been immune to challenges and criticisms. One of the main issues with these approaches is the ambiguity of treaty language. The meaning of words and phrases in a treaty can be open to multiple interpretations, leading to diverging opinions among parties. This ambiguity can be caused by factors such as imprecise drafting, inconsistent terminology, and the use of vague or undefined terms. As a result, different parties may interpret the same treaty provision in different ways, leading to potential disputes and disagreements.

Another criticism of textualism and contract theory is that they tend to focus solely on the text of the treaty and the intentions of the parties at the time it was drafted. This narrow interpretation fails to take into account the dynamic nature of international law and the evolving context in which treaties operate. Over time, circumstances may change, new technologies may emerge, and societal values may shift. As a result, the original intentions of the parties may no longer be relevant or appropriate in the current context. A strict adherence to textualism or contract theory may therefore lead to an inflexible and outdated interpretation of the treaty, limiting its ability to adapt to changing circumstances.

Furthermore, textualism and contract theory often overlook the broader purposes and objectives of treaties. These approaches prioritise the literal meaning of the text and the legal obligations created between the parties, but they may not fully consider the underlying goals and objectives that motivated the creation of the treaty in the first place. By focusing solely on the text, these approaches may miss the opportunity to interpret the treaty in a way that promotes its overall purpose and effectiveness.

Critics also argue that textualism and contract theory can be overly formalistic and legalistic. They may prioritise technical legal rules and principles over practical considerations and the broader implications of treaty interpretation. This can lead to an overly rigid and narrow interpretation of the treaty, which may not be conducive to achieving the desired outcomes or resolving disputes effectively.

To address these challenges, some scholars and practitioners have proposed alternative approaches to treaty interpretation. These approaches may involve considering the context of the treaty, its purpose and objectives, and the subsequent practice of the parties. By taking a more holistic and purposeful approach to treaty interpretation, it is possible to overcome some of the limitations of textualism and contract theory and ensure that treaties are interpreted in a way that is both faithful to the intentions of the parties and responsive to the evolving needs of the international community.

Conclusion

In sum, these textualist devices are an aid to unlocking the complexity underwritten in treaties-as-contracts, and contract theory gives a lens through which to understand the fairness and good faith that underpin them. Adjudication of these conflicting imperatives requires sophistication in the recognition of context to give meaning to treaty provisions literally.

As the world legal order keeps changing, however, that proper meaning—textualism married to the law of contracts—will keep being a norm in the interpretation of the treaty, in the fulfilment of obligations of parties, and in the maintenance and observation of rule of law in the community of nations. The fine balance between rigidity of textualism and fluidity of contextual understanding will have to be a sensitive, critical one if worthwhile; just international pacts are to be reached.

References

• The Indian Contact Act 1872
• Vienna Convention on the Law of Treaties between States and International Organizations or between International Organisations 1986
• Avtar Singh, Law of Contract and Specific Relief, 13th edition 4- 200 (EBC, 2021).
• P.W. Alson, “Principles of International Law: Theory and Practice”, First Edition, Chapter 10 (Cambridge, 2015).
• Brownlie,  Principles of Public International Law,  7th edition (Oxford University Press, 2008)
• https://www.toppr.com/guides/business-laws/indian-contract-act-1872-part-i/essentials-of-a-contract/