bluuebunny/crossref_metadata_2025 huggingface dataset:
Authors: Naudé Tjakie
Published: June 2017

This commentary focuses on Article 2.1.19 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning contracting under standard terms. Art 2.1.19 stipulates that where one party or both parties use standard terms in concluding a contract, the general rules on formation apply, subject to Articles 2.1.20–2.1.22. It spells out three cumulative criteria for provisions to qualify as ‘standard terms’: the terms must be drafted in advance; they must be for general and repeated use by one party; and they must actually be used without negotiation with the other party. This commentary discusses express vs implied incorporation of standard terms as well as special requirements for incorporation of arbitration and jurisdiction clauses.
Authors: Naudé Tjakie
Published: June 2017

This commentary focuses on Article 2.1.21 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning conflict between standard terms and non-standard terms. Art 2.1.21 stipulates that in case of conflict between a standard term and a term which is not a standard term, the latter prevails. This article has also been characterized as ‘a principle in international trade’ in a French court decision. The non-standard terms may be set out in the same document as the standard terms or in a separate document. This commentary also discusses the burden of proof relating to the existence of a conflicting term which is not a standard term.
Authors: Naudé Tjakie
Published: June 2017

This commentary focuses on Article 2.1.22 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning battle of forms. The ‘battle of forms’ arises where the parties reach agreement on the essential terms, usually through a reply to an offer which identifies itself as an acceptance, but both parties indicate, more or less automatically, that their respective standard terms should govern the contract. Since the standard terms often conflict with each other, the question arises whether a contract has actually been concluded at all and, if so, which of the inconsistent standard terms should apply in a given situation. In this regard, Art 2.1.22 follows the ‘knock-out’ doctrine. This commentary discusses battle of forms and the general rules on offer and acceptance, requirements for application of the knock-out rule, result of applying the knock-out rule, battle of conflicting choice of law clauses and jurisdiction clauses, and other possible solutions to the battle of forms and the case for the knock-out doctrine.
Authors: Krebs Thomas
Published: June 2017

This commentary focuses on Article 2.2.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the establishment and scope of the authority of the agent. Art 2.2.2 contains two paragraphs that distinguish between the conferral or establishment of authority on the agent on the one hand, and the extent or scope of that authority on the other. While Art 2.2.2(1) provides that authority can be granted expressly or impliedly (establishment), Art 2.2.2(2) explains how the extent that authority is to be determined. Generally, it is for the person relying on an agent's authority to bear the burden of proof that it existed at the time the agent acted.
Authors: Krebs Thomas
Published: June 2017

This commentary focuses on Article 2.2.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning disclosed agency. Art 2.2.3 stipulates that where an agent acts within the scope of its authority and the third party knew or ought to have known that the agent was acting as an agent, the acts of the agent shall directly affect the legal relations between the principal and the third party and no legal relation is created between the agent and the third party. However, the acts of the agent shall affect only the relations between the agent and the third party, where the agent with the consent of the principal undertakes to become the party to the contract. This commentary discusses the requirements of disclosed agency, the consequences of disclosed agency, and burden of proof relating to the requirements of disclosed agency.
Authors: Krebs Thomas
Published: June 2017

This commentary focuses on Article 2.2.8 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning sub-agency. In most countries, the default rule is that the agent is not permitted to delegate its authority. This rule is generally based on the confidential nature of the agency relationship. Art 2.2.8 stipulates that an agent has implied authority to appoint a sub-agent to perform acts which it is not reasonable to expect the agent to perform itself. This commentary discusses the requirements of sub-agency, the consequences of delegation of authority, cases where the sub-agent affects the legal relations of the third party, and burden of proof relating to sub-agency.
Authors: Krebs Thomas
Published: June 2017

This commentary focuses on Article 2.2.9 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning ratification. Art 2.2.9 provides that an act by an agent that acts without authority or exceeds its authority may be ratified by the principal. On ratification the act produces the same effects as if it had initially been carried out with authority. The third party may, by notice to the principal, specify a reasonable period of time for ratification. If the principal does not ratify within that period of time it can no longer do so. This commentary discusses the prerequisites of ratification, the requirements for ratification, effects of ratification, and burden of proof relating to ratification.
Introduction to Chapter 3 of the PICC
Authors: Huber Peter
Published: June 2017

Chapter 3 deals with the validity of a contract governed by the UNIDROIT Principles of International Commercial Contracts (PICC). A number of provisions have been amended, introduced, or repositioned in line with the 2010 version of the PICC. The chapter is now subdivided into three Sections. The first Section defines the concept of validity and sets out several rules that distinguish the concept of validity under the PICC from different concepts in domestic legal systems. The second Section spells out the grounds for avoidance (mistake, fraud, threat, gross disparity) and governs the details of avoidance. The third Section is concerned with the issue of illegality.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.1.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the validity of a mere agreement. Art 3.1.2 stipulates that a contract is concluded, modified or terminated by the simple agreement of the parties, without any further requirement. The prime purpose of Art 3.1.2 is to exclude any further requirements that the applicable domestic law might set up in that respect and to create legal certainty. This commentary discusses the impact of the doctrine of cause on the consideration and enforceability of the contract and on cases that would be dealt with under the label of immorality or illegality. It also considers the exclusion of the doctrine of real contract.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning initial impossibility. Art 3.1.3 excludes those domestic rules that invalidate a contract simply because there is initial impossibility or simply because (‘the mere fact that’) one party was not entitled to dispose of the assets concerned. As a result of Art 3.1.3, neither initial impossibility nor lack of power to dispose of the assets as such makes a contract invalid. However, this does not mean that initial impossibility or lack of power to dispose of the assets has no consequences. On the contrary, these cases are treated under the PICC's rules on non-performance or mistake. Art 3.1.3 applies irrespective of how the relevant domestic law classifies its rule that initial impossibility (or initial lack of power of disposition) leads to invalidity. It also does not cover other domestic rules on invalidity.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.1.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the mandatory character of the provisions of Chapter 3 of the PICC on fraud, threat, gross disparity and illegality. Art 3.1.4 essentially prohibits contractual exclusion of the provisions of Chapter 3 relating to the more ‘serious’ grounds for invalidity, namely fraud, gross disparity, and illegality. It is therefore an exception to Art 1.5, which generally permits exclusion or modification by the parties. The ‘provisions’ referred to in Art 3.1.4 presumably are those relating to remedies. Art 3.1.4 only relates to excluding rights before the moment when such a right arises.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.2.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning relevant mistake. Art 3.2.2 outlines the specific requirements that must be met if a mistake is relevant under the PICC. There are three different types of requirement: the mistake must reach a certain degree of seriousness, the other party must not be worthy of protection in its reliance on the contract, and the mistaken party must be worthy of protection. This commentary discusses the purpose of Art 3.2.2, the seriousness of mistake, cases where the other party or the mistaken party is not worthy of protection, burden of proof relating to relevant mistake, and consequences of relevant mistake.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.2.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning fraud. In line with some major jurisdictions and international instruments, the PICC draw a distinction between fraud and mistake as grounds for avoidance. Art 3.2.5 stipulates that a party may avoid the contract when it has been led to conclude the contract by the other party's fraudulent representation, including language or practices, or fraudulent non-disclosure of circumstances which, according to reasonable commercial standards of fair dealing, the latter party should have disclosed. This commentary discusses the relationship between fraud and mistake, the requirements for fraud, the consequences of fraud, fraud involving third parties, and exclusion of liability for fraud.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.2.7 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning gross disparity. A basic tenet of the PICC is that the parties should be free to enter into a contract and to determine its content. Under Art 3.2.7, however, a party may avoid the contract or an individual term of it if at the time of the conclusion of the contract, the contract or term unjustifiably gave the other party an excessive advantage. This commentary discusses the background and general purpose of Art 3.2.7, the requirements for gross disparity, the consequences of gross disparity, gross disparity involving third parties, and exclusion of liability for gross disparity.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.2.8 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning third persons. Chapter 3 of the PICC generally deals with the situation where one party to the contract uses an improper method to obtain consent. However, it is quite conceivable that a third person who is nor a party to the contract could influence its conclusion in an improper manner. The question then arises whether avoidance is still possible. The solution of Art 3.2.8 is essentially to allow the party whose consent has been obtained in an improper manner to avoid the contract if the defect can be attributed to the other party to the contract. Art 3.2.8 treats fraud, threat, or gross disparity as equally serious grounds for invalidity. This commentary discusses the general purpose and application of Art 3.2.8 and considers other three-party situations where the victim of a threat by a third party could avoid the contract.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.2.9 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning confirmation. Under Art 3.2.9, if the party entitled to avoid the contract expressly or impliedly confirms the contract after the period of time for giving notice of avoidance has begun to run, avoidance of the contract is excluded. Art 3.2.9 serves two purposes. On the one hand, it restricts the right to avoid the contract in a certain type of situation where the avoidance would be contrary to good faith. On the other hand, it emphasizes the fact that the party entitled to avoid the contract under the preceding provisions is not obliged to do so, but may also elect to treat the contract as valid. This commentary discusses the requirements for confirmation, whether express or implied, and the ground for avoidance, time for confirmation, and the effect of confirmation on the right to avoid the contract.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.2.10 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the loss of right to avoid a contract. Where one party is entitled to avoid the contract for mistake, Art 3.2.10 aims at giving the other party the chance to save the contract by assenting to the contract in the way the mistaken party understood it. The justification for this rule is that it would be contrary to good faith if the mistaken party were able to insist on the avoidance of the contract for mistake even though the contents of the contract are adapted to this party's mistaken conceptions. In other words, the rules on mistake are meant to protect the mistaken party from the consequences of its mistake, but not to grant it a right to ‘repent’. This commentary discusses the requirements for the loss of right to avoid a contract, along with its consequences.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.2.12 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning time limits for exercising the right to avoid the contract. Art 3.2.12 stipulates that notice of avoidance shall be given within a reasonable time, having regard to the circumstances, after the avoiding party knew or could not have been unaware of the relevant facts or became capable of acting freely. Where an individual term of the contract may be avoided by a party under Article 3.2.7, the period of time for giving notice of avoidance begins to run when that term is asserted by the other party. In relying on a ‘reasonable time’ period rather than setting out a clearly defined period of time (for example, two years after conclusion of the contract), Art 3.2.12 follows the common law model rather than the typical civil law solution. This commentary discusses the commencement and duration of ‘reasonable time’ period as well as the consequences of failure to avoid a contract within time limit.
Authors: Huber Peter
Published: June 2017

This commentary focuses on Article 3.2.13 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning partial avoidance of a contract. Art 3.2.13 requires that the ground of avoidance affect only individual terms of the contract. While this scenario is easily conceivable with regard to cases of mistake, fraud or gross disparity, it will only rarely happen that a threat can be limited to certain parts of the contract. Cases that satisfy this requirement generally fall into one of two categories. The first category consists of the ‘terms’ cases, while the second category consists of the ‘items’ cases. This commentary discusses partial avoidance as general rule, avoidance of entire contract as exception, and how partial avoidance may lead to restitution.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.2.14 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the retroactive effect of avoidance of a contract. Under Art 3.2.14, avoidance takes effect retroactively; that is, the contract is regarded as never having existed, and not merely as non-existent from the moment of avoidance. Unfulfilled obligations fall away and performances made in fulfilment of obligations have to be returned, according to Art 3.2.15. However, this is only a general proposition. Where avoidance only relates to certain terms of the contract, the other terms, whether fulfilled or unfulfilled, are left undisturbed, unless it would be unreasonable to do so. This commentary discusses the effect of retroactive avoidance in general, as well as its effect on contractual obligations, including unfulfilled and unaffected obligations and fulfilled obligations.
Authors: du Plessis Jacques
Published: June 2017

This commentary focuses on Article 3.2.15 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the duties of restitution that arise after avoidance of the whole or part of a contract. On avoidance either party may claim restitution of whatever it has supplied under the contract, or the part of it avoided, provided that such party concurrently makes restitution of whatever it has received under the contract, or the part of it avoided. This commentary discusses the content of the duty to restore, the consequences of restitution being impossible or inappropriate, application of the general rules relating to obligations to the restitutionary obligations created by Art 3.2.15, and burden of proof for the requirements of a restitutionary claim arising after avoidance.
Introduction to Section 3.3 of the PICC
Authors: Cuniberti Gilles
Published: June 2017

Section 3.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with illegality. This is an innovation of the third edition of the PICC. Previous editions expressly excluded immorality and illegality. The rationale for the exclusion was the complexity of questions of public policy and the diversity of national laws. When UNIDROIT inquired among its experts which topics should be included in a new edition, illegality emerged as one of the most widely supported topics. The conceptual possibility of a private instrument governing the application of mandatory rules was apparently not considered. Yet, the issue might reveal an essential limit to the relevance of the provisions of Section 3.3.
Authors: Cuniberti Gilles
Published: June 2017

This commentary focuses on Article 3.3.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the criteria for granting restitution as well as the rules governing restitution. According to Art 3.3.2, where there has been performance under a contract infringing a mandatory rule under Article 3.3.1, restitution may be granted where this would be reasonable in the circumstances. In determining what is reasonable, regard is to be had, with the appropriate adaptations, to the criteria referred to in Article 3.3.1(3). If restitution is granted, the rules set out in Article 3.2.15 apply with appropriate adaptations. The distinction introduced by Art 3.3.1 between mandatory rules that expressly prescribe their effects and those that do not is also relevant for Art 3.3.2.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 4.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning interpretation of unilateral statements and other conduct of a party. Under Art 4.2, the statements and other conduct of a party shall be interpreted according to that party's intention if the other party knew or could not have been unaware of that intention. If the preceding paragraph is not applicable, such statements and other conduct shall be interpreted according to the meaning that a reasonable person of the same kind as the other party would give to it in the same circumstances. This commentary discusses interpretation according to the intention of the party making the statement or engaging in the conduct, interpretation according to the understanding of reasonable persons, the relationship between Art 4.2(1) and (2), and burden of proof for parties wishing to invoke Art 4.2(1) or Art 4.2(2).
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 4.8 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the supplementation of an omitted term in a contract. According to Art 4.8, where the parties to a contract have not agreed with respect to a term which is important for a determination of their rights and duties, a term which is appropriate in the circumstances shall be supplied. In determining what is an appropriate term, regard shall be had to the intention of the parties; the nature and purpose of the contract; good faith and fair dealing; and reasonableness. This commentary discusses the interpretation, supplementation, and implication of contractual terms, omission of a term, and supplementation of an appropriate term.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.1.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning implied contractual obligations. According to Art 5.1.2, implied obligations stem from the nature and purpose of the contract as well as practices established between the parties and usages. Arts 5.1.1 and 5.1.2 cover the same ground as Art 4.8. It does not matter which of these provisions is applied.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning co-operation between the parties. Art 5.1.3 imposes a general duty of co-operation on the parties. The duty applies to all types of contract, although it is particularly important in long-term contractual relationships where the parties have to collaborate throughout the life of the contract to make it work. Art 5.1.3 requires each party to cooperate with the other party when such co-operation may reasonably be expected for the performance of that party's obligations. This commentary discusses limits to the duty of co-operation, legal consequences of a violation of the duty of co-operation, and burden of proof relating to the duty of co-operation.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.1.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the determination of the kind of duty involved. Art 5.1.5 provides criteria for determining the nature of contractual obligations. The question of whether an obligation involves a duty to achieve a specific result or a duty of best efforts is a result of the interpretation of the contract. Thus, Art 5.1.5 supplements the rules on contractual interpretation in Chapter 4 of the PICC. In determining the extent to which a party's obligation involves a duty of best efforts in the performance of an activity or a duty to achieve a specific result, regard shall be had to the way in which the obligation is expressed in the contract; the contractual price and other terms of the contract; the degree of risk normally involved in achieving the expected result; and the ability of the other party to influence the performance of the obligation.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.1.7 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the determination of contractual price. According to Art 5.1.7, where a contract does not fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have made reference to the price generally charged at the time of the conclusion of the contract for such performance in comparable circumstances in the trade concerned or, if no such price is available, to a reasonable price. This commentary discusses failure to determine the price by the parties, determination of the price according to the market price or a reasonable price, determination of the price by one of the parties, determination of the price by a third person, determination of the price with reference to external factors, and allocation of the burden of proof.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.1.9 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning release of a contractual right by agreement. Under Art 5.1.9, an obligee may release its right by agreement with the obligor. An offer to release a right gratuitously shall be deemed accepted if the obligor does not reject the offer without delay after having become aware of it. The terminology used in Art 5.1.9 was chosen with particular care. The term ‘release’ was preferred over the concept of ‘waiver’ that has no agreed meaning between the common law systems. This commentary argues that the use of ‘release’ is somewhat problematic from the perspective of U.S. contract law. It also discusses the agreement in terms of offer and acceptance, the legal consequences of a release by agreement, and the burden of proof relating to release of a contractual right by agreement.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.2.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the attributes of the third party. The provision aims to strike a balance between commercial flexibility and legal certainty. Art 5.2.2 stipulates that the beneficiary must be identifiable with adequate certainty by the contract but need not be in existence at the time the contract is made. It furthers the autonomy of the original parties by allowing them to accord a right to future persons. A lack of identifiability affects the validity of the contract between the original parties. The burden of proof that the third party is identifiable with adequate certainty by the contract is on the party asserting that a contract in favour of a third party has been validly concluded, usually the beneficiary or the promisee. This commentary discusses the rationale of Article 5.2.2, existence and identity of the third party, and legal capacity of the third party.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.2.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning a contract's exclusion and limitation clauses. According to Art 5.2.3, the conferment of rights in the beneficiary includes the right to invoke a clause in the contract which excludes or limits the liability of the beneficiary. There has to be express agreement of the parties to give the benefit of an exclusion or limitation clause to the beneficiary. This would be the case in the ordinary ‘Himalaya clause’, contained in bills of lading. The burden of proof is on the third party that invokes the clause excluding or limiting liability.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.2.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning defences of the promisor against the promisee and against the beneficiary. Art 5.2.4 stipulates that the promisor may assert against the beneficiary all defences which the promisor could assert against the promisee. The phrase ‘all defences’ has to be read as ‘all defences based on the contract from which the third party derives its right, but not those based on other relationships between the promisor and the promisee’. The promisor has to prove the existence of a defence against the promisee arising out of the contractual relationship which confers a right upon the beneficiary. The burden of proof is on the beneficiary if it wants to argue that the parties agreed not to make the promisor's defences available against the beneficiary.
Authors: Vogenauer Stefan
Published: June 2017

This commentary focuses on Article 5.2.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of the parties to modify or revoke the beneficiary's right. Art 5.2.5 enables the parties to deviate from the principle pacta sunt servanda. According to Art 5.2.5, the parties may modify or revoke the rights conferred by the contract on the beneficiary until the beneficiary has accepted them or reasonably acted in reliance on them. This commentary discusses the consequences of modification and revocation of the beneficiary's right, joint agreement of the parties to modify or revoke the beneficiary's right, how parties can effect modification and revocation, immutability and irrevocability of the right conferred upon the beneficiary, and burden of proof relating to modification and revocation.
Authors: Rowan Solène
Published: June 2017

This commentary focuses on Article 5.3.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the types of condition covered by Section 5.3 of the PICC. Art 5.3.1 identifies the two types of condition that are recognized in the PICC: suspensive condition and resolutive condition. Whether a condition is suspensive or resolutive is a question of interpretation of the contractual intention of the parties. A contract or a contractual obligation may be made conditional upon the occurrence of a future uncertain event, so that the contract or contractual obligation only takes effect if the event occurs (suspensive condition) or comes to an end if the event occurs (resolutive condition). This commentary discusses the scope of Section 5.3, the distinction between ‘suspensive’ and ‘resolutive’ conditions, conditions whose fulfilment is entirely dependent on the will of the obligor, time limit stated by the condition, and illegal conditions.
Authors: Rowan Solène
Published: June 2017

This commentary focuses on Article 5.3.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the effect of suspensive and resolutive conditions. Art 5.3.2 explains how suspensive and resolutive conditions operate. When a suspensive condition is fulfilled, the contract or obligation becomes effective. On the fulfilment of a resolutive condition, the contract or obligation ceases to have effect and the obligation to perform is discharged. Suspensive and resolutive conditions therefore have symmetrically opposite effects. In both cases, however, the binding force of the contract or obligation is at stake. This commentary also discusses non-retroactivity as a principle.
Authors: Rowan Solène
Published: June 2017

This commentary focuses on Article 5.3.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning a contracting party's interference with the fulfilment of a condition. If fulfilment of a condition is prevented by a party, contrary to the duty of good faith and fair dealing or the duty of co-operation, that party may not rely on the non-fulfilment of the condition. If fulfilment of a condition is brought about by a party, contrary to the duty of good faith and fair dealing or the duty of co-operation, that party may not rely on the fulfilment of the condition. This commentary also discusses duty to use all reasonable efforts to cause the condition to be fulfilled and remedies for interference with the fulfilment of a condition.
Authors: Rowan Solène
Published: June 2017

This commentary focuses on Article 5.3.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the duty to preserve the rights of a party. Art 5.3.4 imposes obligations on the parties during the period of suspension of the condition. It requires the parties not to act, contrary to the duty to act in accordance with good faith and fair dealing, act so as to prejudice the other party's rights in case of fulfilment of the condition. Art 5.3.4 applies to both suspensive and resolutive conditions, but it should arguably apply with less intensity to resolutive conditions. This commentary discusses the prejudicial act that breaches the duty of good faith and fair dealing, the relationship between Arts 5.3.3 and 5.3.4, remedies for breach of Art 5.3.4, and the intensity of the obligation.
Authors: Atamer Yesim
Published: June 2017

This commentary focuses on Article 6.1.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the time of performing a contractual obligation. Art 6.1.1 determines when a party has to perform its contractual obligations. This is the time, or within the period of time, explicitly or impliedly stipulated in the contract within a reasonable time after the conclusion of the contract. This commentary discusses the notion of timely performance and the consequences of untimely performance, time of performance fixed by the parties, time of performance according to the default rule, obligee's failure to co-operate in regard to timely performance, changes in time of performance, and the burden of proof relating to time of performance.
Authors: Atamer Yesim
Published: June 2017

This commentary focuses on Article 6.1.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning performance of a contractual obligation at one time or in instalments. Whenever the obligor is given the right to perform its contractual obligations during a certain period of time, the question arises whether the obligor has to perform at one single moment during this period or whether it may choose to perform in lots. According to Art 6.1.2, the principle is performance at one time. The legitimate interest of the obligee not to be disturbed repeatedly for the same obligation seems to prevail over the interest of the obligor to offer its obligation in portions. This commentary discusses performance at one time as a rule, performance in instalments as an exception to the rule, effect of performance in instalments on counter-performance, and burden of proof relating to performance of a contractual obligation at one time or in instalments.
Authors: Atamer Yesim
Published: June 2017

This commentary focuses on Article 6.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning partial performance of a contractual obligation. Art 6.1.3 addresses the question of whether the obligee has the right to reject partial performance or, conversely, whether the obligor has the right to discharge itself at least partly when the time of performance is due. This commentary discusses the content and scope of application of Article 6.1.3, definition of partial performance with regard to contractual obligations, right of the obligee to reject partial performance and obligation to accept partial performance, and legal consequences of acceptance or rejection of partial performance. It also considers the right of rejection in case of only partly possible performance, defective performance, and performance in excess. Finally, it looks at burden of proof as it relates to partial performance.
Authors: Atamer Yesim
Published: June 2017

This commentary focuses on Article 6.1.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning order of performance of a contractual obligation. Art 6.1.4 deals with the sequence of performance and counter-performance if the parties have undertaken reciprocal obligations in a bilateral contract. This commentary discusses the content and scope of application of Art 6.1.4, the role of Art 6.1.4 in determining the time of performance for the counter-performance and in determining the order of performance of due contractual obligations, performances to be taken into consideration when determining the time and order of performance, legal consequences of disregarding the order of performance, and burden of proof relating to order of performance.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.7 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning payment by cheque or other instrument. According to Art 6.1.7, payment may be made in any form used in the ordinary course of business at the place for payment. However, an obligee who accepts a cheque, any other order to pay or a promise to pay, is presumed to do so only on condition that it will be honoured. This commentary discusses cashless payment in general and the payment methods accepted by the PICC, the structure of cashless payment methods and their systematization, payment through ‘push-orders’ and ‘pull-orders’, effects of acceptance of a pull-order on the payment obligation, place and time of performance of pull-order, risk of loss or theft of pull-order, and risk of pull-orders being dishonoured.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.11 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the costs of performance of an obligation. Art 6.1.11 balances the interests of the parties and burdens each party with the costs of its own performance. According to this provision, each party shall bear the costs of performance of its obligations. This commentary considers costs of performance in cases where place of performance lies with the obligor or the obligee, or where place of performance is a third place. It also addresses costs due to changes in the place of performance and the right of a party to claim reimbursement of costs.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.13 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning imputation of non-monetary obligations. In most jurisdictions, there is no special provision regarding the imputation of non-monetary obligations. Either the statutory provisions are formulated to cover all fungible obligations, be they monetary or otherwise, or the courts accept an analogous application of the imputation rule for monetary obligations. In contrast, Art 6.1.13 clarifies that such imputation rules can be applied mutatis mutandis to all other fungible obligations. If, for example, the obligor has to deliver identical cargoes of cement under different contracts, appropriation is first made according to the specifications of the obligor. In the absence of such specifications, Art 6.1.12(2) stipulates that the right of imputation should pass to the obligee.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.14 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the problem of public permission requirements. According to Art 6.1.14, where the law of a State requires a public permission affecting the validity of the contract or its performance and neither that law nor the circumstances indicate otherwise: if only one party has its place of business in that State, that party shall take the measures necessary to obtain the permission; in any other case the party whose performance requires permission shall take the necessary measures. This commentary discusses the concept of public permission requirements, the nature of obligation to take necessary measures, duty to disclose public permission requirements and to co-operate, legal effects of missing public permission, and burden of proof relating to public permission.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.15 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the procedure in applying for public permission. According to Art 6.1.15, the party required to take the measures necessary to obtain the permission shall do so without undue delay and shall bear any expenses incurred. The party's obligation to apply for a public permission without undue delay should be seen as part of the general duty to handle the entire application procedure with due diligence. This commentary discusses the time of application for public permission, expenses related to permission, duty to give notice of results of application, and the consequences of the responsible party's failure to notify its counterpart of the grant or refusal of the permission without undue delay.
Authors: Atamer Yesim
Published: June 2017

This commentary analyses Article 6.1.17 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning cases where a request for public permission was filed with the relevant authority but was rejected. According to Art 6.1.17, the refusal of a permission affecting the validity of the contract renders the contract void. If the refusal affects the validity of some terms only, only such terms are void if, having regard to the circumstances, it is reasonable to uphold the remaining contract. Where the refusal of a permission renders the performance of the contract impossible in whole or in part, the rules on non-performance apply. This commentary discusses cases where application for public permission was refused, as well as the effect of refusal on the validity of contract and on performance.
Authors: McKendrick Ewan
Published: June 2017

This commentary analyses Article 6.2.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the definition of hardship. The definition of hardship can be broken down into two elements. The first consists of the opening lines of Art 6.2.2, in particular the phrase ‘fundamentally alters the equilibrium of the contract’. The second consists of the four matters referred to in Art 6.2.2(a)–(d). According to Art 6.2.2, there is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party's performance has increased or because the value of the performance a party receives has diminished. Art 6.2.2(d) deals with the assumption of risk.
Authors: McKendrick Ewan
Published: June 2017

This commentary analyses Article 6.2.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the effects of hardship. In case of hardship, Art 6.2.3 stipulates that the disadvantaged party is entitled to request renegotiations. The request does not entitle the disadvantaged party to withhold performance. Upon failure to reach agreement within a reasonable time, either party may resort to the court. If the court finds hardship it may either terminate the contract at a date and on terms to be fixed or adapt the contract with a view to restoring its equilibrium. This commentary also considers the burden of proof relating to hardship.
Introduction to Section 7.1 of the PICC
Authors: Schelhaas Harriet
Published: June 2017

Section 7.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with the concept of non-performance. It first presents a definition of non-performance before discussing the three main remedies: the right to performance, the right to terminate the contract, and the right to damages. It then outlines the conditions under which the parties can react to non-performance before any of the main remedies are invoked. First, the aggrieved party (the obligee) may withhold performance temporarily and it may fix an additional period of time for performance. Second, the non-performing party (the obligor) may have a right to cure non-performance and it may object to its liability for non-performance because of an exemption clause, interference of the obligee, or force majeure. This introduction to Section 7.1 discusses the relationship between the different remedies, with particular emphasis on the choice of remedy, accumulation of remedies, and non-performance and mistake. It also considers the general limitations to remedies for non-performance.
Authors: Schelhaas Harriet
Published: June 2017

This commentary analyses Article 7.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of a contracting party to withhold or suspend performance. Art 7.1.3 lays down the exceptio non adimpleti contractus and confers on a contracting party the right to withhold or suspend performance if the other party does not comply with its obligations. Where the parties are to perform simultaneously, either party may withhold performance until the other party tenders its performance. Where the parties are to perform consecutively, the party that is to perform later may withhold its performance until the first party has performed. This commentary discusses the requirements for allowing the suspension of performance, including non-performance of the other party. It also considers order of performance, partial performance, and legal consequences of withholding or suspending performance.
Authors: Pichonnaz Pascal
Published: June 2017

This commentary analyses Article 7.1.7 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning force majeure. According to Art 7.1.7, force majeure can be broadly defined as ‘the result of an impediment beyond a party's control and which that party could not reasonably have taken into account at the time of conclusion of the contract, or have avoided or overcome it or avoided or overcome its consequences on the ability to perform’. In other words, when non-performance is triggered by an event which could be qualified as force majeure, the obligor is no longer liable for damages. However, force majeure does not remove the ‘non-performance’ as such; as a consequence, the aggrieved party still has the right to terminate the stranded contract. This commentary discusses the relationship between the application of force majeure clauses and contractual practice, Art 7.1.7(1) as a default rule, consequences of force majeure, and burden of proof relating to force majeure.
Introduction to Section 7.2 of the PICC
Authors: Schelhaas Harriet
Published: June 2017

Section 7.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with the right to performance, one of the remedies available for the non-performance of a contract. It covers the right to require performance of monetary obligations, the right to require the performance of non-monetary obligations, cure for defective performance, penalties for non-compliance, and the right of the aggrieved party to change the remedies sought. Section 7.2 is not modelled on any particular domestic jurisdiction, or on an international treaty or set of rules. However, the discretionary power to attach penalties to a court order is modelled on French law.
Authors: Schelhaas Harriet
Published: June 2017

This commentary analyses Article 7.2.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of an aggrieved party to require performance of monetary obligations. Art 7.2.1 stipulates that a creditor of a monetary obligation is always entitled to require payment of an agreed sum of money. This rule is an expression of the principle pacta sunt servanda. The PICC distinguish between the right to request performance of a monetary obligation and the right to demand performance of non-monetary obligations. A right to require payment is usually known as the ‘action for an agreed sum’ or ‘action for the price’, whereas performance of non-monetary obligations is referred to as ‘specific performance’. This commentary discusses the conditions for the right to demand payment, the effect of the currency in which payment is due on the application of Art 7.2.1, and cases where the right to require payment may be excluded.
Authors: Schelhaas Harriet
Published: June 2017

This commentary analyses Article 7.2.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning repair and replacement as cure for defective performance. Under Art 7.2.3, the right to performance includes the right to require the defect to be cured by means of a repair or replacement. Art 7.2.3 is the counterpart of Art 7.1.4, which gives the non-performing party a right to cure non-performance by, for instance, repair or replacement. Art 7.2.3 provides a right for the aggrieved party to request such a cure. This commentary also discusses repair and replacement with respect to payment of money, along with other forms of curing defects.