Source: http://www.cisg.law.pace.edu/cisg/principles/uni80.html
Timestamp: 2019-04-19 08:28:29+00:00

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A party may not rely on the non-performance of the other party to the extent that such non-performance was caused by the first partys act or omission or by another event as to which the first party bears the risk. A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission.
Where the harm is due in part to an act or omission of the aggrieved party or to another event as to which that party bears the risk, the amount of damages shall be reduced to the extent that these factors have contributed to the harm, having regard to the conduct of each of the parties.
Article 80 CISG is located in Part III of the Convention in the section "Exemptions". The article provides an excuse for a failure to perform of a party when this failure is caused by an act or omission of the other party. This statement, while seemingly self-evident, is nonetheless, an important part of the general principle of good faith. Other than article 7(1) CISG, its point of reference is not the interpretation of the Convention but the contractual relationship between the parties. Thereby Article 80 CISG can be seen as an anchor within the Convention regarding the obligation between the parties to observe good faith in their relationship forbidding contradictory behavior. But despite the general character of Article 80 CISG, its scope and meaning has yet to be ascertained. The aim of this comparative editorial is to contribute to establishing such an ascertainment and to investigate whether and in which way the counterpart provisions of UNIDROIT Principles can be of help thereby.
The first issue to be examined is whether the act or omission of the party causing the other party's failure to perform has to be of a certain quality and, if so, of what quality? Generally, any conduct of a party is sufficient to activate Article 80 CISG. It is not a condition that the act or omission were the promisee's fault, also an exemption under Article 79 CISG is irrelevant. Nor is it necessary that the act or omission of the promisee constituted a breach of contract. Nevertheless, in cases in which the contract calls for a certain behavior and the promisee complies with this requirement, the mere causation of a breach of the promisor in terms of conditio sine qua non cannot be sufficient to invoke Article 80 CISG; acting in accordance with a contractual requirement to perform a certain action cannot be of the disadvantage of a party. Accordingly, this must be valid for an omission. Therefore, the typical situations in which Article 80 CISG becomes relevant are inadequate or missing cooperation by the promisee followed by the promisor's failure to properly perform his obligations. This is illustrated by several court decisions in which Article 80 CISG was applied: Seller informed buyer in advance that no further goods would be delivered under the contract which constituted an anticipatory breach of the contract. Consequently, buyer was excused for withholding the payment. In another case buyer was excused for not opening a letter of credit because seller failed to inform buyer about the place of loading. Buyer was barred from relying on the non-conformity of the goods since buyer refused the seller's offer to cure without justification.
As far as the basic requirements are concerned, the corresponding provision in the UNIDROIT Principles, Article 7.1.2, is equivalent with Article 80 CISG. Art. 7.1.2 UNIDROIT Principles requires an act or omission of the party invoking non-performance which caused this non-performance. Although this is not expressly stated in the text or the Official Comments on the UNIDROIT Principles, the provision, like Article 80 CISG, is based on the premise that if an act or omission becomes a contractual obligation a fulfillment of the latter cannot be a relevant act or omission under Art. 7.1.2 UNIDROIT. But the application of this provision does not depend on the promisee's act or omission being a non-performance or even a non-excused non-performance. The only difference between both provisions results from the additional clause contained in Article 7.1.2 UNIDROIT Principles which refers to events as to which the promisee bears the risk as potential grounds for exemption of the other promisor. Therefore, cases in which the performance of the party is prevented by events not caused by the promisee are expressly included in the scope of Article 7.1.2 UNIDROIT Principles. In the illustration contained in the Official Comments on this Article, the case is even contemplated in which the promisor caused its non-performance but the risk of this very event was contractually allocated to the promisee.
How is one to deal with this regime under Article 80 CISG? What can be deduced from the fact that an additional clause is missing which would clarify that events not caused by the promisee can also lead to an exemption? One possible conclusion is that the scope of Article 80 CISG is indeed narrower than that of Article 7.1.2 UNIDROIT Principles. A second possible conclusion is, however, that the additional clause in Article 7.1.2 UNIDROIT Principles is of merely declaratory nature. The fact that such clarification does not appear in Article 80 CISG has no impact on the interpretation of this article. The understanding of Article 80 CISG as expression of the general principle of the observance of good faith  demands that a broad interpretation is adopted, i.e., the latter conclusion. This is because it is only appropriate to exempt a party from a non-performance the reason for which lies in the other party's sphere of risk. Virtually, this is the basic idea underlying Article 80 CISG as well as Article 7.1.2 UNIDROIT Principles. The causation of the non-performance by the promisee is merely the most evident case in which the latter bears the risk, simply due to the causation of the problem. As a result, the scope of Article 80 CISG generally corresponds to this of Article 7.1.2 UNIDROIT Principles despite the different wording with regard to events not caused by the promisee. In this respect one could even understand Article 7.1.2 UNIDROIT Principles as clarification of the elliptic wording of Article 80 CISG.
Article 80 CISG requires that the promisor's failure to perform is caused by the act or omission of the promisee. Article 80 CISG itself does not indicate that the causal link between the act or omission of a party and the failure of the other party to perform has to be of a certain quality. In particular, a mechanism to limit the relevant consequences -- like the requirement of foreseeability in Article 74 CISG -- is not employed by Article 80 CISG. There is also no restriction to direct causation either, indirect causation is generally sufficient. The only prerequisite which can be taken from the wording is that a causal link of any kind between the act or omission of the promisee and the failure of the promisor to perform any of its obligation does exist. Nevertheless, the mere activation of a chain of causation cannot always be appropiate as the only criterion under Article 80 CISG. In cases in which the failure to perform is not the only logical consequence of the promisee's act or omission, i.e., if the promisor could potentially overcome the consequences of the promisee's conduct, an evaluative contemplation of the causal link between act or omission and failure to perform is necessary. It has to be determined in which cases the promisor can be expected to overcome consequences of the promisee's conduct. Should seller be expected to inquire if buyer fails to properly specify the goods? If seller refuses to deliver the goods since buyer had not complied with its duty to pay the price arising from an earlier contract, is the non-delivery caused by the buyer's failure to pay? It is difficult to abstractly determine the line beyond which a causation in the sense of Article 80 CISG should be denied. However, the basic condition is that the promisee's act or omission impair proper performance by the promisor at all. And if this condition is met, it has to be decided from case to case which effort could reasonably be expected of the promisor to comply with its contractual obligations despite the consequences of the promisee's act or omission.
As well as Article 80 CISG, Article 7.1.2 UNIDROIT Principles requires a party's non-performance to be caused by the other party's act or omission. The wording of Article 7.1.2. UNIDROIT Principles does not go any further than Article 80 CISG: it merely affirms the need for a causal link without specifying this causal connection. Thus, the provision itself cannot be used as tool to determine causation in the sense of Article 80 CISG. It can be derived from the Official Comments to Article 7.1.2 UNIDROIT Principles that the most important situation which should be covered by this article is that of performance of a party being made impossible in whole or in part. Although the diction concerning the causation of the non-performance by an event for which the promisee bears the risk is less decisive using the description "may result from an event." the underlying concept is that performance becomes impossible due to the very event. This, however, does not mean that the UNIDROIT Principles prohibit an evaluative interpretation of the causal link between act or omission and non-performance. Though, with regard to the issue of causation, Article 7.1.2 UNIDROIT Principles does not provide any information which could contribute new aspects to determining causation in the sense of Article 80 CISG.
Another issue discussed in connection with causation under Article 80 CISG is how to deal with the situation in which both parties contributed to the failure of the promisor to perform its obligations. The provision itself remains silent on this point. The only possible reference in the wording is the use of the expression "to the extent". However, relying on this formulation seems rather scholastic. The main argument for applying Article 80 CISG to cases in which the failure to perform was caused by both parties should be a factual one: within a contractual relationship the parties to the contract constantly have to interact with each other. Therefore, applying Article 80 CISG only to cases of exclusive causation by one party would inapproriately narrow the scope of this provision. The decision which act or omission of the promisee should be considered as the relevant trigger of the chain of causation under Article 80 CISG requires a contemplation of the contributions made by both parties to the contract. Thus, Article 80 CISG has to be applied to cases in which both parties caused the promisor's failure to perform as well. When applying Article 80 CISG to such a case the respective contributions of the parties to this result should be evaluated and weighed up. Where an adaption of the remedy reflecting the respective contributions of the parties is not practicable, the general rule should be that the promisee cannot rely on the promisor's failure to perform if the former's contribution is preponderant to that of the latter.
Article 7.1.2 UNIDROIT Principles also does not expressly address the issue of a failure to perform caused by both parties. The only indication that this case is contemplated is - just as in Article 80 CISG - the formulation "to the extent that such non-performance was caused by the first party's act or omission [...]" (emphasis added). But different from the CISG, the UNIDROIT Principles expressly address a similar situation in Article 7.4.7 dealing with "Harm due in part to aggrieved party". The counterpart provision in the CISG, Article 77, is restricted to mitigation of loss already occurred and does not expressly deal with the situation in which the occurence of the harm is also due to the conduct of the promisor. The basic approach of Article 7.4.7 UNIDROIT Principles is to assess the promisee's contribution to the harm and and to correspondingly reduce the amount of damages. Thereby, the conduct of the parties is also to be taken into account. It seems sensible to apply this approach under Article 7.1.2 UNIDROIT Principles as well. The only difficulty arises from the fact that Article 7.1.2 is not only applicable to damages but like Article 80 CISG to all remedies. Consequently, the relevant adaption cannot always be implemented by reducing a pecuniary claim. However, Article 7.4.7 shows that the UNIDROIT Principles generally allow for an evaluation of the respective contributions of the parties to a non-performance and for a corresponding adaption of the consequences of this non-performance. The Official Comments to Article 7.4.7 UNIDROIT Principles make clear that Article 7.1.2 is also based on this idea naturally presuming that the latter provision comprises cases where the non-performance is in part caused by the promisee. This result matches with the conclusion reached under Article 80 CISG. Therefore, the above analysis of the UNIDROIT Principles offers a plausible argument to interpret Article 80 CISG in that particular manner as well. Considering that the UNIDROIT Principles do provide a guideline in Article 7.4.7 on how to deal with causation of non-performance by both parties whereas the Convention is silent on this point, the UNIDROIT Principles could, concerning this matter, also be consulted in establishing the proper interpretive approach to be taken under Article 80 CISG.
Article 80 CISG prohibits a party from relying on a failure of the other party to perform to the extent that such failure was caused by the first party. Two consequences can be deduced for the extent of exemption: First, the promisor is exempted from all legal consequences arising from this failure to perform, meaning the promisee may not resort to any remedy which is based on this failure to perform. Other than Article 79 CISG, Article 80 CISG is not restricted to an exemption from damages, but the promisee is also barred from relying on another remedy, e.g., price reduction, specific performance, etc. Second, the promisor is exempted only to the extent the failure was caused by the promisee. This means that the promisee is not generally excluded from any remedy but still can rely on any other failure of the promisor to perform not caused by the promisee. If, for example, the failure of the buyer to provide certain information concerning the shipping causes late delivery, the seller is exempted from damages due to the late delivery. However, this does not prevent buyer from avoiding the contract if seller fundamentally breached the contract by delivering non-conforming goods.
The effect of Article 7.1.2 UNIDROIT Principles is similar: The exemption provided by this article is extended to all remedies, but only to the extent the non-performance was due to the interference of the promisee. Article 7.1.2 UNIDROIT Principles is not applicable to cases of the interference acting only as a partial impediment to performance and concerning a non-performance of any other obligation independently from the promisee's act or omission. Again, Article 80 CISG and its counterpart provision are basically equivalent so that the UNIDROIT Principles cannot introduce new aspects to the interpretation of Article 80 CISG.
The comparison of Article 80 CISG and Article 7.1.2 UNIDROIT Principles shows a wide congruency between the two provisions. The relevant requirements and effects are basically the same. But this automatically leads to the fact that the issues to be resolved by interpretation are also similar. In so far, the respective provisions do not indicate a certain direction for interpreting one another. However, where the formulation of Article 7.1.2 UNIDROIT Principles deviates from the one employed by Article 80 CISG and the result of interpretation is nevertheless the same, Article 7.1.2 UNIDROIT Principles can arguably be seen as an important affirmation of the proper interpretation of Article 80 CISG.
* Research Assistant at the European Legal Studies Institute, University of Osnabrück, Germany.
1. Honnold, Uniform Law of International Sales Under the 1980 United Nations Convention, Art. 80 para. 436 (3rd ed. 1999 Deventer).
2. Staudinger/Magnus, Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, Wiener UN-Kaufrecht (CISG), Art. 80 para. 5 (1999). The general principle of the Convention prohibiting contradictory behavior ("non concedit venire contra factum proprium") also becomes manifest in the following provisions: Articles 16(2)(b), 29(2) second sentence, 50 second sentence CISG. See for material concerning this principle as a "general principle" of transnational law: The Transnational Law Database, available at <http://tldb.uni-koeln.de/php/pub_show_principle.php?pubdocid=907000>.
3. Germany 31 January 1997 Oberlandesgericht [Appelate Court] Koblenz, available online at <http://cisgw3.law.pace.edu/cases/970131g1.html>; Schlechtriem/Stoll, Commentary on the UN Convention on the International Sale of Goods (CISG), Art. 80 para. 7 (1998).
4. Schlechtriem/Schwenzer/Stoll/Gruber, Kommentar zum einheitlichen UN-Kaufrecht -CISG-, Art. 80 para. 3 (4th ed. 2004).
5. Staudinger/Magnus, supra note 2, Art. 80 para. 9; Bianca/Bonell/Tallon, Commentary on the International Sales Law, Art. 80 note 2.3 (1987); Herber/Czerwenka, Internationales Kaufrecht, Art. 80 para. 3 (1991). Although it is difficult to find an example for an act or omission causing the failure to perform of the other party which does not amount to a breach of contract itself, it is possible in cases of misunderstandings, etc. between the parties. This is, however, only true, if one does not understand Article 80 CISG as to qualifying a certain conduct as breach of contract.
6. In most cases, the contract will not require that a party should omit a certain action but will rather order the other party to act.
7. Switzerland 31 May 1996, Zürich Chamber of Commerce, Arbitral Award, available online at <http://cisgw3.law.pace.edu/cases/960531s1.html>; see also Albert H. Kritzer, Editorial remarks on this case (available at above URL).
8. Austria 6 February 1996 Oberster Gerichtshof [Supreme Court], available at <http://cisgw3.law.pace.edu/cases/960206a3.html>; see for further case law Franco Ferrari/Harry Flechtner/Ronald Brand, ed., The Draft UNCITRAL Digest and Beyond: Cases, Analysis and Unresolved Issues in the UN Sales Convention, pp. 835-840 (2004).
9. Germany 31 January 1997 Oberlandesgericht [Appelate Court] Koblenz, available online at <http://cisgw3.law.pace.edu/cases/970131g1.html>.
10. The different terminology in the UNIDROIT Principles using "non-performance" instead of "failure to perform" does not lead to a different meaning as can be seen by Article 7.1.1 UNIDROIT Principles defining non-performance as failure by a party to perform any of its obligations under the contract, including defective performance or late performance.
11. Art. 7.1.2 UNIDROIT Principles Comment 1.
12. Art. 7.1.2 UNIDROIT Principles Comment 2.
13. Honnold, supra note 1, Art. 80 para. 436.1; Schlechtriem/Stoll, supra note 4, Art. 80 para. 2.
14. Schlechtriem/Schwenzer/Stoll/Gruber, supra note 5, Art. 80 para. 4.
15. Effectively, the narrowing interpretation of the terms act or omission (cf. supra) represents already a limitation of causation in the sense of Article 80 CISG since in consequence not every condition set by the promisee is considered relevant as reason of the failure of the promisor to perform.
16. See Schlechtriem/Schwenzer/Stoll/Gruber, supra note 5, Art. 80 para. 5; Vincent Heuzé, La vente internationale de marchandises - Droit uniforme, note 478 (2nd. ed. 2000).
17. See Schlechtriem/Schwenzer/Stoll/Gruber, supra note 5, Art. 80 para. 6; Arbitral Award, Zürich Chamber of Commerce, 31 May 1996, supra note 8: in this case seller alleged that buyer had not paid the price for goods which were already delivered. However, the Tribunal applied Article 80 CISG not in favor of seller but in favor of buyer, since later the seller informed buyer that it would not receive any further deliveries. This action "attributable to [seller], caused in the sense of Art. 80 Vienna Convention [buyer] to withhold payments". A similar case in which the application of Article 80 CISG was denied: Germany 19 April 1996 Aachen Landgericht [District Court], available at <http://cisgw3.law.pace.edu/cases/960419g1.html>: the contract calls for seller to deliver casks. Seller declared to deliver the goods only if buyer paid the remaining price for a machine which it had already delivered at an earlier time. Buyer claimed damages for non-delivery and seller could not invoke Article 80 CISG. Generally, to a right of retention arising from Article 80 CISG: Christoph Kern, Leistungsverweigerungsrechte im UN-Kaufrecht, available online at <http://cisgw3.law.pace.edu/cisg/biblio/kern2.html>.
18. Schlechtriem/Schwenzer/Stoll/Gruber, supra note 5, Art. 80 para. 6; Enderlein/Maskow/Strohbach, Internationales Kaufrecht, Art. 80 note 5.2 (1991); Achilles, Kommentar zum UN-Kaufrechtsübereinkommen (CISG), Art. 80 para. 3 (2000).
19. Although reasonableness seems to be an amorphous standard it is at least an acknowledged general principle of the Convention and therefore applicable in accordance with Article 7 para. (2) CISG. Cf. Ulrich Magnus, Die allgemeinen Grundsätze im UN-Kaufrecht, RabelsZ 59 (1995), p. 469-494.
20. Art. 7.1.2 UNIDROIT Principles Comment 1.
21. Art. 7.1.2 UNIDROIT Principles Comment 2.
22. Schlechtriem/Schwenzer/Stoll/Gruber, surpa note 5, Art. 80 para. 7; Peter Rathjen, Haftungsentlastung des Verkäufers oder Käufers nach Art. 79, 80 CISG, Recht der Internationalen Wirtschaft 1999, pp. 561-565.
23. Different view: Schlechtriem/Stoll, supra note 4, Art. 80 para. 5.
24. Staudinger/Magnus, supra note 2, Article 80 para. 14; Bianca/Bonell/Tallon, supra note 6, Art. 80 note 2.5; Herber/Czerwenka, supra note 6, Art. 80 para. 7; Peter Rathjen, supra note 23, p. 561; Germany 21 March 1996 Schiedsgericht der Handelskammer [Arbitral Tribunal of the Chamber of Commerce] Hamburg Arbitration proceeding, available at <http://cisgw3.law.pace.edu/cases/960321g1.html>. In this case the buyer relies on a breach of a framework agreement between seller and buyer. The Tribunal was weighing up the respective contributions of the parties to the failing of the framework agreement, i.e., mainly the refusal of both sides to comply with their duties arisen from the sales contract.
25. Namely, in cases in which the subject matter is not a pecuniary claim which could proportionately reduced.
26. Staudinger/Magnus, supra note 2, Art. 80 para . 14.
27. Although it is not expressly stated in Article 77 CISG, the provision also requires the aggrieved party to take reasonable measures to avoid the occurence of loss at all. Schlechtriem/Stoll, supra note 4, Art. 77 para. 6; Staudinger/Magnus, supra note 2, Art. 77 para. 8.
28. Art. 7.4.7 UNIDROIT Principles Comment 1: "[...] the general principle established by Art. 7.1.2 which restricts the exercise of remedies where non-performance is in part due to the conduct of the aggrieved party, [...]" (emphasis added).
29. Schlechtriem/Stoll, supra note 4, Art. 80 para. 10; Vincent Heuzé, supra note 17, note 479; Enderlein/Maskow/Strohbach, supra note 19, Art. 80 note 3.1.
30. Franco Ferrari/Harry Flechtner/Ronald Brand, supra note 9, p. 840.
31. See Staudinger/Magnus, supra note 2, Art. 80 para. 17.
32. Art. 7.1.2 UNIDROIT Principles Comment 1: "When the article applies, the relevant conduct does not become excused non-performance but loses the quality of non-performance altogether."
A party may not rely on the non-performance of the other party to the extent that such non-performance was caused by the first party's act or omission or by another event as to which the first party bears the risk.
This article can be regarded as providing two excuses for non-performance. However conceptually, it goes further than this. When the article applies, the relevant conduct does not become excused non-performance but loses the quality of non-performance altogether. It follows, for instance, that the other party will not be able to terminate for non-performance.
Two distinct situations are contemplated. In the first, one party is unable to perform either wholly or in part because the other party has done something which makes performance in whole or in part impossible.
1. A agrees to perform building work on B's land beginning on 1 February. If B locks the gate to the land and does not allow A entry, B cannot complain that A has failed to begin work. B's conduct will often amount to non-excused non-performance either because of an express provision entitling A to access to the land or because B's conduct infringes the obligations of good faith and cooperation. This result does not however depend on B's non-performance being non-excused. The result will be the same where B's non-performance is excused, for instance because access to the land is barred by strikers.
The Principles contemplate the possibility of one party's interference acting only as a partial impediment to performance by the other party and in such cases it will be necessary to decide the extent to which non-performance was caused by the first party's interference and that to which it was caused by other factors.
Another possibility is that non-performance may result from an event the risk of which is expressly or impliedly allocated by the contract to the party alleging non-performance.
2. A, a builder, concludes a construction contract to be performed on the premises of B who already has many buildings on those premises which are the subject of an insurance policy covering any damage to the buildings. If the parties agree that the risk of accidental damage is to fall on B as the person insured, there would normally be no reason to reject the parties' allocation of risk since risks of this kind are normally covered by insurance. Even therefore if a fire were to be caused by A's negligence, the risk may be allocated to B although it would clearly need more explicit language to carry this result than would be the case if the fire which destroyed the building were the fault of neither party.
In application of the general principle established by Art. 7.1.2 which restricts the exercise of remedies where non-performance is in part due to the conduct of the aggrieved party, the present article limits the right to damages to the extent that the aggrieved party has in part contributed to the harm. It would indeed be unjust for such a party to obtain full compensation for harm for which it has itself been partly responsible.
The contribution of the aggrieved party to the harm may consist either in its own conduct or in an event as to which it bears the risk. The conduct may take the form of an act (e.g. it gave a carrier a mistaken address) or an omission (e.g. it failed to give all the necessary instructions to the constructor of the defective machinery). Most frequently such acts or omissions will result in the aggrieved party failing to perform one or another of its own contractual obligations; they may however equally consist in tortious conduct or non-performance of another contract. The external events for which the aggrieved party bears the risk may, among others, be acts or omissions of persons for whom it is responsible such as its servants or agents.
1. A, a franchisee bound by an "exclusivity" clause contained in the contract with B, acquires stock from C because B has required immediate payment despite the fact that the franchise agreement provides for payment at 90 days. B claims payment of the penalty stipulated for breach of the exclusivity clause. B will obtain only part of the sum due thereunder as it was B who provoked A's non-performance.
2. A, a passenger on a liner effecting a luxury cruise, is injured when a lift fails to stop at the floor requested. B, the shipowner, is held liable for the consequences of A's injury and seeks recourse against C, the company which had checked the lifts before the liner's departure. It is proved that the accident would have been avoided if the floor had been better lit. Since this was B's responsibility, B will not obtain full recovery from C.
The conduct of the aggrieved party or the external events as to which it bears the risk may have made it absolutely impossible for the non-performing party to perform. If the requirements of Art. 7.1.7 (Force majeure) are satisfied, the non-performing party is totally exonerated from liability.
Otherwise, the exoneration will be partial, depending on the extent to which the aggrieved party contributed to the harm. The determination of each party's contribution to the harm may well prove to be difficult and will to a large degree depend upon the exercise of judicial discretion. In order to give some guidance to the court this article provides that the court shall have regard to the respective behaviour of the parties. The more serious a party's failing, the greater will be its contribution to the harm.
3. The facts are the same as in Illustration 1. Since it was B who was the first not to observe the terms of the contract, B is deemed to have caused A's failure to respect the exclusivity clause. B may only recover 25% of the amount stipulated in the penalty clause.
4. The facts are the same as in Illustration 2. Since the failings of B and C seem to be equivalent. B can only recover from C 50% of the compensation it had to pay A.
This article must be read in conjunction with the following article on mitigation of harm (Art. 7.4.8). While the present article is concerned with the conduct of the aggrieved party in regard to the cause of the initial harm, Art. 7.4.8 relates to that party's conduct subsequent thereto.

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