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Abstract A number of motivations currently drive multinational corporations to the inclusion, monitoring, and enforcement of contract requirements for sustainability. These can be either as a result of investor demand for environment, social, and governance policies; regulatory requirements for inclusion of such contract stipulations; or the increasing litigation for conduct leading to environmental harm, but they can also be a result of reputational risk linked to the failure of adoption of such policies. This article examines the role of contract law in enforcing such requirements, which have traditionally been viewed with suspicion due to their unilateral nature. The article poses the features of the International Institute for the Unification of Private Law’s Principles on International Commercial Contracts as a beneficial regime to further the goals of sustainability through the use of contextual interpretation enabled through the good faith principle, the recognition of the importance of trade usages, and the limitations placed on party autonomy. The article posits that a major shift in the ideological orientation of contract law through the imposition of limitations on the pacta sunt servanda principle in order to protect the public interest is not warranted. Rather, tools such as contractual interpretation and the establishment of contractual standards of sustainability are better placed to ensure enforcement and compliance with the widely established practice of inclusion of sustainability standards and codes of conduct.
Nicholas Mouttotos (Sat,) studied this question.