Source: http://www.cisg.law.pace.edu/cisg/text/peclcomp26.html
Timestamp: 2018-01-23 17:37:12
Document Index: 500136094

Matched Legal Cases: ['art. 1', 'art. 1', 'art. 1', 'art. 4', 'art. 1184', 'art. 1453', 'art. 1124', 'art. 1124', 'art. 2262', 'art. 189', 'art. 1453', 'art. 1124', 'art. 1648', 'art. 6', 'art. 1648', 'art.436', 'art. 3', 'art. 154', 'art. 1117', 'art. 1441', 'art. 4', 'art. 6']

Guide to Article 26
Match-up of Article 26 with the European Principles
Match-up of CISG Article 26 with PECL Article 9:303
For the PECL definition of "reasonable", go to PECL art. 1:302 [Reasonableness] and the comment and notes that accompany this provision. For the PECL definition of "non-performance", go to PECL art. 1:301(4) and the comment and notes that accompany this definition. Relevant to the PECL 9:303(3)(a) phrase "knows or has reason to know" is PECL art. 1:305 [Imputed Knowledge and Intention] and the comment and notes that accompany this provision.
"Termination" and "avoidance" under the PECL [See also PECL Article 4:112]
As noted above, "termination" is the PECL counterpart to the CISG term "avoidance". The PECL does, however, use its own term "avoidance" in a different context: in the context of "invalidity and avoidance". The subject of Chapter 4 of the PECL is validity. In that context, there is a PECL article 4:112 entitled Notice of Avoidance. This article states: "Avoidance must be by notice to the other party."
Editorial remarks COMPARATIVE ANALYSIS
[See also commentary by the author on this subject in: John Felemegas ed., An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law, Cambridge University Press (2006) 133-138.]
Comment and notes on PECL 9:303 and 4:112
Like the commentary to the UNIDROIT Principles and the U.S. Restatements, the comments to the PECL help explain the text. The PECL notes identify civil law and common law antecedents and related domestic provisions. With the permission of the Commission on European Contract Law, these comments and notes are presented below. The source of this material is Ole Lando & Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000) 413-416, 274-275.
Comment and notes on PECL art. 4:112
Article 9.303 of the Principles is markedly different to systems such as the FRENCH, BELGIAN, ITALIAN or SPANISH which at least in general principle require court proceedings to effect termination: see FRENCH , BELGIAN and LUXEMBOURG CC art. 1184(2), ITALIAN CC art. 1453 and SPANISH CC art. 1124 (though in SPAIN a notice of termination may be effective if it is [page 415] accepted by the defaulting party: Diez-Picazo, II, 722; Lacruz-Delgado II, 1, � 26, 204; and Ministerio de Justicia, art. 1124). The time limit on the court's power to order termination is the general period of limitation (see French CC art. 2262 and C Com. art. 189 bis; Italian CC art. 1453(1) and (2); Spanish CC art. 1124); but in the case of defective goods the buyer, if he elects for résolution, must do so dans un bref délai, French and BELGIAN CC art. 1648. ITALIAN CC arts. 1454, 1456 and 1457, and Belgian caselaw, recognise exceptions to the rule that the creditor needs a court order to terminate: see Dirix and van Oevelen, R.W.1992-93, 1236; van Ommeslaghe R.C.J.B. 1986, nos. 98-100; M.E. Storme T.B.B.R./R.G.D.C. 1991, 110-11, no. 12. Article 9:303 also differs from rules such as the GERMAN and AUSTRIAN Nachfrist procedure noted earlier (see note to Article 8:106) which may require that the debtor be given reasonable notice before the contract is terminated even in cases other than simple delay.
The notice must generally be within a reasonable time of the non-performance. This corresponds broadly to many systems: e.g. DANISH Sale of Goods Act �� 27, 32 ("promptly" or "within a short time"); FINNISH and SWEDISH Sale of Goods Acts, �� 29, 32, 39, 59 ("reasonable time"); DUTCH BW art. 6:89 ("promptly"); FRENCH, BELGIAN and LUXEMBOURG CC art. 1648 for garantie des vices cachés ("dans un bref délai") and, in Belgium, in some other cases on the basis of good faith, see Cass. 18 May 1987, Arr. Cass. 546 and Cass. 8 Apr. 1988, Arr. Cass., no. 482; IRELAND "promptly and decisively", Clark 420; UK Sale of Goods Act 1979, ss.34 and 35 (and see Treitel, Contract 711); PORTUGUESE CC art.436(2); or the same result may be reached by application of the doctrine of good faith, e.g. in SPAIN and in GERMANY, see Staudinger (-Otto) � 325 no. 96. AUSTRIAN and GERMAN law have special time limits for claims to terminate in cases of defects, e.g. ABGB �� 932, 933, HGB � 377.
Some systems offer protection to the debtor by requiring that he be given reasonable notice before the contract is terminated: for example the German Nachfrist procedure noted earlier (see note to Article 8:106), under which the aggrieved party cannot demand performance after the notice period has expired, so that the non-performing party will know that after that date he no longer has to perform his obligations. Where a commercial contract containing a Fixgeschäft is not performed on time no Nachfrist is required, but the aggrieved party must notify the non-performing party promptly if he does not want to terminate, HGB �376 (1) sentence 2. In other cases where no Nachfrist is required the aggrieved party may lose his right to terminate if he does not exercise it promptly (e.g. in the case of a non-commercial Fixgeschäft: Palandt (-Heinrichs) � 361 No. 3). DUTCH law also requires notice of default, unless the contract provides for a fixed time for performance, or the creditor must conclude from a communication by the debtor that the latter will fail to perform (BW 6:82 and 6:83).
COMMENT AND NOTES: PECL Article 4:112: Notice of Avoidance
Avoidance may be effected by the party entitled to avoid the contract or communication; it is not necessary to seek a court order to avoid the contract. Under Article 1:303 the receipt principle applies and the avoidance will not be effective unless the notice reaches the other party.
Conduct unequivocally indicating that a party no longer considers itself bound by the contract will amount to avoidance if it is known to the other party.
Illustration: A takes a job as manager with B's firm after B makes fraudulent statements about the commission which previous managers have made with the firm. After A discovers the truth, he takes a job with another company. The contract is avoided as soon as B reads of this in the newspaper even if A has not communicated his avoidance directly to B.
Provided the time limit for avoidance has not passed (see Article 4:113), a party may give notice of avoidance by raising the ground of avoidance as a defence when an action is brought against it by the other party.
In some systems the effect of some of the grounds for invalidity mentioned in this chapter is that the contract is altogether void (e.g. for erreur obstacle in FRENCH law and mistake at common law in ENGLISH law). In such case the party need not take any step to avoid the contract, though action may be necessary to recover property, money or payment for services transferred.
Where the contract is merely voidable, in many of the legal systems of Member States, a contract may be avoided on the traditional grounds of invalidity by simple notice to the other party, e.g. GERMAN BGB � 143; DUTCH BW art. 3:49; NORDIC law (Gomard, Kontrakret 142); ENGLISH and IRISH law (notice dispensed with if third party has deliberately gone into hiding and party seeking to avoid has taken all reasonable steps such as notifying police: Car & Universal Finance Co Ltd v. Caldwell [1965] 1 Q.B. 625, CA); SCOTS law (notice to police insufficient, McLoed v. Kerr 1965 SC 253). However a court action is required in GREECE, CC art. 154; in FRANCE, BELGIUM and LUXEMBOURG (CCs art. 1117), unless the annulment is accepted by the other party; and similarly in ITALIAN law (CC art. 1441) and PORTUGUESE law, Lima/Varela, I 264; Ascensão 440; Fernandes 393). In AUSTRIAN doctrine and court practice the opinion prevails that avoidance on the ground of error requires a court decision, and that it is not sufficient to [page 274] direct an informal notice to the other party. However this is doubtful as the ABGB does not require court proceedings.
Several systems have a different regime for unfair terms, under which the term is simply of no effect and so notice of avoidance is not needed. E.g. FRENCH CCons art. L.132.1 (above, note to art. 4:110), (reputée non écrite), similarly BELGIAN Act of 14 July 1991; LUXEMBOURG; GERMAN AGBG. Under the Directive, Member States are to provide that unfair terms will not be binding on consumers, art. 6(1).[page 275]