Source: https://www.jus.uio.no/lm/unidroit.international.commercial.contracts.principles.1994.commented/6.1.3.html
Timestamp: 2018-11-19 13:06:16
Document Index: 788334250

Matched Legal Cases: ['arty\n3', 'arty\n2', 'arty\n2', 'arty\n3', 'arty\n3', 'arty\n4', 'arty\n4', 'Art. 6', 'Art. 6', 'Art. 6', 'Art. 6', 'Art. 1']

6.1.3 - Principles of International Commercial Contracts, 1994 - UNIDROIT
UNIDROIT Principles of International Commercial Contracts with Official Commentary [1994]
THE UNIDROIT GOVERNING COUNCIL [in 1994]
MEMBERS OF THE WORKING GROUP [1994]
OTHER PARTICIPANTS IN THE PROJECT
PREAMBLE - (Purpose of the Principles)
1. "International" contracts
2. "Commercial" contracts
3. The Principles and domestic contracts between private persons
4. The Principles as rules of law governing the contract
a. Express choice by the parties
b. The Principles applied as lex mercatoria
5. The Principles as a substitute for the domestic law otherwise applicable
6. The Principles as a means of interpreting and supplementing existing international instruments
7. The Principles as a model for national and international legislators
ARTICLE 1.1 - (Freedom of contract)
1. Freedom of contract as a basic principle in the context of international trade
2. Economic sectors where there is no competition
3. Limitation of party autonomy by mandatory rules
ARTICLE 1.2 - (No form required)
1. Contracts as a rule not subject to formal requirements
2. Possible exceptions under the applicable law
3. Form requirements agreed by the parties
ARTICLE 1.3 - (Binding character of contract)
1. The principle pacta sunt servanda
3. Effects on third persons not dealt with
ARTICLE 1.4 - (Mandatory rules)
1. Mandatory rules prevail
2. Mandatory rules applicable in the event of mere incorporation of the Principles in the contract
3. Mandatory rules applicable if the Principles are the law governing the contract
4. Recourse to the rules of private international law relevant in each individual case
ARTICLE 1.5 - (Exclusion or modification by the parties)
1. The non-mandatory character of the Principles
2. Exclusion or modification may be express or implied
3. Mandatory provisions to be found in the Principles
ARTICLE 1.6 - (Interpretation and supplementation of the Principles)
1. Interpretation of the Principles as opposed to interpretation of the contract
2. Regard to the international character of the Principles
3. Purposes of the Principles
4. Supplementation of the Principles
ARTICLE 1.7 - (Good faith and fair dealing)
1. "Good faith and fair dealing" as a fundamental idea underlying the Principles
2. "Good faith and fair dealing in international trade"
3. The mandatory nature of the principle of good faith and fair dealing
ARTICLE 1.8 - (Usages and practices)
1. Practices and usages in the context of the Principles
2. Practices established between the parties
3. Agreed usages
4. Other applicable usages
5. Application of usage unreasonable
6. Usages prevail over the Principles
ARTICLE 1.9 - (Notice)
Article 1.9 - (Notices)
1. Form of notice
2. Receipt principle
3. Dispatch principle to be expressly stipulated
4. "Reaches"
ARTICLE 1.10 - (Definitions)
1. Courts and arbitral tribunals
2. Party with more than one place of business
3. "Obligor" - "obligee"
4. "Writing"
CHAPTER 2 - FORMATION
ARTICLE 2.1 - (Manner of formation)
2. Conduct sufficient to show agreement
ARTICLE 2.2 - (Definition of offer)
1. Definiteness of an offer
2. Intention to be bound
ARTICLE 2.3 - (Withdrawal of offer)
1. When an offer becomes effective
2. Withdrawal of an offer
ARTICLE 2.4 - (Revocation of offer)
1. Offers as a rule revocable
2. Irrevocable offers
a. Indication of irrevocability contained in the offer
b. Reliance by offeree on irrevocability of offer
ARTICLE 2.5 - (Rejection of offer)
1. Rejection may be express or implied
2. Rejection only one cause of termination of an offer
ARTICLE 2.6 - (Mode of acceptance)
1. Indication of assent to an offer
2. Acceptance by conduct
3. Silence or inactivity
4. When acceptance becomes effective
ARTICLE 2.7 - (Time of acceptance)
ARTICLE 2.8 - (Acceptance within a fixed period of time)
Article 2.8 - (Accpeptance within a fixed period of time)
ARTICLE 2.9 - (Late acceptance. Delay in transmission)
1. Late acceptance normally ineffective
2. Offeror may nevertheless "accept" late acceptance
3. Acceptance late because of delay in transmission
ARTICLE 2.10 - (Withdrawal of acceptance)
ARTICLE 2.11 - (Modified acceptance)
1. Acceptance with modifications normally to be considered a counter-offer
2. Modifications which do not alter the nature of the acceptance
ARTICLE 2.12 - (Writings in confirmation)
1. "Writings in confirmation"
2. Writing in confirmation to be sent within a reasonable time after conclusion of the contract
3. Invoices
ARTICLE 2.13 - (Conclusion of contract dependent on agreement on specific matters or in a specific form)
2. Conclusion of contract dependent on agreement in a specific form
ARTICLE 2.14 - (Contract with terms deliberately left open)
1. Contract with terms deliberately left open
2. Open terms not in themselves an impediment to valid conclusion of contract
3. Failure of mechanism provided for by parties for determination of open terms
ARTICLE 2.15 - (Negotiations in bad faith)
ARTICLE 2.16 - (Duty of confidentiality)
1. Parties in general not under a duty of confidentiality
3. Damages recoverable
ARTICLE 2.17 - (Merger clauses)
ARTICLE 2.18 - (Written modification clauses)
ARTICLE 2.19 - (Contracting under standard terms)
1. Contracting under standard terms
2. Notion of "standard terms"
3. General rules on formation apply
ARTICLE 2.20 - (Surprising terms)
1. Surprising terms in standard terms not effective
2. Terms "surprising" by virtue of their content
3. Terms "surprising" by virtue of their language or presentation
4. Express acceptance of "surprising" terms
ARTICLE 2.21 - (Conflict between standard terms and non-standard terms)
ARTICLE 2.22 - (Battle of forms)
1. Parties using different standard terms
2. "Battle of forms" and general rules on offer and acceptance
3. The "knock-out" doctrine
CHAPTER 3 - VALIDITY
ARTICLE 3.1 - (Matters not covered)
Article .1 - (Matters not covered)
ARTICLE 3.2 - (Validity of mere agreement)
1. No need for consideration
2. No need for cause
3. All contracts consensual
ARTICLE 3.3 - (Initial impossibility)
1. Performance impossible from the outset
2. Lack of legal title or power
ARTICLE 3.4 - (Definition of mistake)
1. Mistake of fact and mistake of law
2. Decisive time
ARTICLE 3.5 - (Relevant mistake)
1. Serious mistake
2. Conditions concerning the party other than the mistaken party
3. Conditions concerning the mistaken party
ARTICLE 3.6 - (Error in expression or transmission)
1. Relevant mistake
2. Mistakes on the part of the receiver
ARTICLE 3.7 - (Remedies for non-performance)
1. Remedies for non-performance preferred
2. Actual and potential conflicts
ARTICLE 3.8 - (Fraud)
1. Fraud and mistake
2. Notion of fraud
ARTICLE 3.9 - (Threat)
1. Threat must be imminent and serious
2. Unjustified threat
3. Threat affecting reputation or economic interests
ARTICLE 3.10 - (Gross disparity)
Article 3.10 - ()
1. Excessive advantage
2. Unjustifiable advantage
a. Unequal bargaining position
3. Avoidance or adaptation
ARTICLE 3.11 - (Third persons)
1. Third person for whom a party is responsible
2. Third person for whom a party is not responsible
ARTICLE 3.12 - (Confirmation)
ARTICLE 3.13 - (Loss of right to avoid)
1. Performance of the contract as understood by the mistaken party
2. Decision to be made promptly
3. Loss of right to avoid
ARTICLE 3.14 - (Notice of avoidance)
2. Form and content of notice
3. Notice must be received
ARTICLE 3.15 - (Time limits)
ARTICLE 3.16 - (Partial avoidance)
ARTICLE 3.17 - (Retroactive effect of avoidance)
1. Avoidance generally of retroactive effect
ARTICLE 3.18 - (Damages)
1. Damages if ground for avoidance known to the other party
2. The measure of damages
ARTICLE 3.19 - (Mandatory character of the provisions)
ARTICLE 3.20 - (Unilateral declarations)
CHAPTER 4 - INTERPRETATION
ARTICLE 4.1 - (Intention of the parties)
1. Common intention of the parties to prevail
2. Recourse to the understanding of reasonable persons
3. How to establish the common intention of the parties or to determine the understanding of reasonable persons
4. Interpretation of standard terms
ARTICLE 4.2 - (Interpretation of statements and other conduct)
1. Interpretation of unilateral acts
2. How to establish the intention of the party performing the act or to determine the understanding of a reasonable person
ARTICLE 4.3 - (Relevant circumstances)
1. Circumstances relevant in the interpretation process
2. "Particular" and "general" circumstances compared
3. "Merger" clauses
ARTICLE 4.4 - (Reference to contract or statement as a whole)
1. Interpretation in the light of the whole contract or statement
2. In principle no hierarchy among contract terms
ARTICLE 4.5 - (All terms to be given effect)
ARTICLE 4.6 - (Contra proferentem rule)
ARTICLE 4.7 - (Linguistic discrepancies)
ARTICLE 4.8 - (Supplying an omitted term)
1. Supplying of omitted terms and interpretation
2. When omitted terms are to be supplied
3. Criteria for the supplying of omitted terms
CHAPTER 5 - CONTENT
ARTICLE 5.1 - (Express and implied obligations)
ARTICLE 5.2 - (Implied obligations)
ARTICLE 5.3 - (Co-operation between the parties)
ARTICLE 5.4 - (Duty to achieve a specific result Duty of best efforts)
1. Distinction between the duty to achieve a specific result and the duty of best efforts
2. Distinction provides criteria for determining whether a party has performed its obligations
ARTICLE 5.5 - (Determination of kind of duty involved)
1. Criteria for determining the nature of the obligation
2. Nature of the obligation as expressed by the contract
3. Price or other terms of the contract
4. Degree of risk in performance of an obligation
ARTICLE 5.6 - (Determination of quality of performance)
1. Performance must be of average quality
2. Performance must be reasonable
ARTICLE 5.7 - (Price determination)
1. General rule governing price determination
2. Determination of price by one party
3. Determination of price by third person
4. Determination of price by reference to external factors
ARTICLE 5.8 - (Contract for an indefinite period)
CHAPTER 6 - PERFORMANCE
SECTION 1: Performance in General
ARTICLE 6.1.1 - (Time of performance)
ARTICLE 6.1.2 - (Performance at one time or in instalments)
ARTICLE 6.1.3 - (Partial performance)
1. Partial performance distinguished from performance at one time or in instalments
2. Obligee entitled in principle to reject partial performance
3. Obligee's right to reject partial performance conditional on its legitimate interest in so doing
4. Additional expenses entailed by partial performance to be borne by obligor
ARTICLE 6.1.4 - (Order of performance)
1. Simultaneous performance to be made when possible
2. Exception where performance requires a period of time
3. Relation of order of performance to withholding of performance
ARTICLE 6.1.5 - (Earlier performance)
1. Obligee in principle entitled to reject earlier performance
2. Obligee's right to reject earlier performance conditional on its legitimate interest in so doing
3. Effect of acceptance by obligee on its own performance of earlier performance of the other party's obligations
4. Additional expenses entailed by earlier performance to be borne by the performing party
ARTICLE 6.1.6 - (Place of performance)
1. Place of performance fixed by, or determined from, the contract when possible
2. Need for suppletive rules
3. Consequences of change in a party's place of business subsequent to conclusion of contract
ARTICLE 6.1.7 - (Payment by cheque or other instrument)
Article 6.1.7 - ()
1. General rule regarding form of payment
2. Presumption that payment will be honoured a condition for acceptance
ARTICLE 6.1.8 - (Payment by funds transfer)
2. Time at which the obligor's obligation is discharged by a funds transfer
ARTICLE 6.1.9 - (Currency of payment)
1. Monetary obligation expressed in currency different from that of place for payment
2. Impossibility for obligor to make payment in currency in which obligation is expressed
3. Determination of applicable rate of exchange
ARTICLE 6.1.10 - (Currency not expressed)
ARTICLE 6.1.11 - (Costs of performance)
ARTICLE 6.1.12 - (Imputation of payments)
ARTICLE 6.1.13 - (Imputation of non-monetary obligations)
ARTICLE 6.1.14 - (Application for public permission)
a. Broad notion of "public permission"
4. Nature of obligation to take the "necessary measures"
ARTICLE 6.1.15 - (Procedure in applying for permission)
1. Time for filing an application
3. Duty to give prompt notice of the grant or refusal of the permission
4. Duty to give notice "whenever appropriate"
5. Consequences of the failure to inform
ARTICLE 6.1.16 - (Permission neither granted nor refused)
1. No decision taken as regards the permission
2. Termination of the contract
3. Permission affecting individual terms only
ARTICLE 6.1.17 - (Permission refused)
1. Application for permission rejected
2. Legal consequences of a refusal of permission
a. Refusal of permission affecting validity of the contract
b. Refusal rendering performance of the contract impossible
SECTION 2: HARDSHIP
ARTICLE 6.2.1 - (Contract to be observed)
1. Binding character of the contract the general rule
2. Change in circumstances relevant only in exceptional cases
ARTICLE 6.2.2 - (Definition of hardship)
1. Hardship defined
2. Fundamental alteration of equilibrium of the contract
a. Increase in cost of performance
b. Decrease in value of the performance received by one party
3. Additional requirements for hardship to arise
a. Events occur or become known after conclusion of the contract
b. Events could not reasonably have been taken into account by disadvantaged party
c. Events beyond the control of disadvantaged party
d. Risks must not have been assumed by disadvantaged party
4. Hardship relevant only to performance not yet rendered
5. Hardship normally relevant to long-term contracts
6. Hardship and force majeure
7. Hardship and contract practice
ARTICLE 6.2.3 - (Effects of hardship)
1. Disadvantaged party entitled to request renegotiations
2. Request for renegotiations without undue delay
3. Grounds for request for renegotiations
4. Request for renegotiations and withholding of performance
5. Renegotiations in good faith
6. Resort to the court upon failure to reach an agreement
7. Court measures in case of hardship
CHAPTER 7 - NON-PERFORMANCE
SECTION 1: NON-PERFORMANCE IN GENERAL
ARTICLE 7.1.1 - (Non-performance defined)
ARTICLE 7.1.2 - (Interference by the other party)
1. Non-performance caused by act or omission of the party alleging non-performance
2. Non-performance caused by event for which party alleging non-performance bears the risk
ARTICLE 7.1.3 - (Withholding performance)
ARTICLE 7.1.4 - (Cure by non-performing party)
2. Notice of cure
3. Appropriateness of cure
4. The aggrieved party's interest
5. Timing of cure
6. Proper forms of cure
7. Suspension of other remedies
8. Effect of a notice of termination
9. Right of aggrieved party to damages
10. The aggrieved party's obligations
ARTICLE 7.1.5 - (Additional period for performance)
ARTICLE 7.1.6 - (Exemption clauses)
1. The need for a special rule on exemption clauses
2. "Exemption clauses" defined
3. Exemption clauses to be distinguished from forfeiture clauses
4. Exemption clauses and agreed payment for non-performance
5. Cases where exemption clauses may not be relied upon
6. Consequence of inability to rely on exemption clauses
ARTICLE 7.1.7 - (Force majeure)
1. The notion of force majeure
2. Effects of force majeure on the rights and duties of the parties
3. Force majeure and hardship
4. Force majeure and contract practice
SECTION 2: RIGHT TO PERFORMANCE
ARTICLE 7.2.1 - (Performance of monetary obligation)
ARTICLE 7.2.2 - (Performance of non-monetary obligation)
1. Right to require performance of non-monetary obligations
2. Remedy not discretionary
3. Exceptions to the right to require performance
a. Impossibility
b. Unreasonable burden
c. Replacement transaction
d. Performance of an exclusively personal character
e. Request within reasonable time
ARTICLE 7.2.3 - (Repair and replacement of defective performance)
1. Right to performance in case of defective performance
2. Cure of defective performance
ARTICLE 7.2.4 - (Judicial penalty)
1. Judicially imposed penalty
2. Imposition of penalty at discretion of the court
4. Judicial penalties distinguished from damages and from agreed payment for non-performance
5. Form and procedure
6. Penalties imposed by arbitrators
7. Recognition and enforcement of decisions imposing penalties
ARTICLE 7.2.5 - (Change of remedy)
1. Aggrieved party entitled to change of remedy
2. Voluntary change of remedy
3. Unenforceable decision
4. Time limits
ARTICLE 7.3.1 - (Right to terminate the contract)
1. Termination even if non-performance is excused
2. Right to terminate the contract dependent on fundamental non-performance
3. Circumstances of significance in determining whether non-performance is fundamental
a. Non-performance substantially depriving the other party of its expectations
b. Strict performance of contract of essence
c. Intentional non-performance
d. No reliance on future performance
e. Disproportionate loss
4. Termination after Nachfrist
ARTICLE 7.3.2 - (Notice of termination)
ARTICLE 7.3.3 - (Anticipatory non-performance)
ARTICLE 7.3.4 - (Adequate assurance of due performance)
1. Reasonable expectation of fundamental non-performance
2. Right to withhold performance pending adequate assurance of performance
3. Termination of the contract
ARTICLE 7.3.5 - (Effects of termination in general)
1. Termination extinguishes future obligations
2. Claim for damages not affected
3. Contract provisions not affected by termination
ARTICLE 7.3.6 - (Restitution)
1. Entitlement of parties to restitution on termination
2. Restitution not possible or appropriate
3. Contracts to be performed over a period of time
4. Other rules applicable to restitution
5. Rights of third persons not affected
SECTION 4: DAMAGES
ARTICLE 7.4.1 - (Right to damages)
1. Right to damages in general
2. Damages may be combined with other remedies
3. Damages and pre-contractual liability
ARTICLE 7.4.2 - (Full compensation)
1. Aggrieved party entitled to full compensation
2. Damages cover loss suffered, including loss of profit
3. Damages must not enrich the aggrieved party
4. Damages in case of changes in the harm
5. Compensation of non-material harm
ARTICLE 7.4.3 - (Certainty of harm)
1. Occurrence of harm must be reasonably certain
2. Determination of extent of harm
3. Harm must be a direct consequence of non-performance as well as certain
ARTICLE 7.4.4 - (Foreseeability of harm)
ARTICLE 7.4.5 - (Proof of harm in case of replacement transaction)
1. Amount of harm presumed in case of replacement transaction
2. Further damages recoverable for additional harm
ARTICLE 7.4.6 - (Proof of harm by current price)
1. Amount of harm presumed when no replacement transaction
2. Determination of "current price"
3. Further damages recoverable for additional harm
ARTICLE 7.4.7 - (Harm due in part to aggrieved party)
1. Contribution of the aggrieved party to the harm
2. Ways of contributing to the harm
3. Apportionment of contribution to the harm
4. Contribution to harm and mitigation of harm
ARTICLE 7.4.8 - (Mitigation of harm)
1. Duty of aggrieved party to mitigate harm
2. Reimbursement of expenses
ARTICLE 7.4.9 - (Interest for failure to pay money)
1. Lump sum compensation for failure to pay a sum of money
3. Additional damages recoverable
ARTICLE 7.4.10 - (Interest on damages)
ARTICLE 7.4.11 - (Manner of monetary redress)
1. Lump sum or instalments
2. Indexation
ARTICLE 7.4.12 - (Currency in which to assess damages)
ARTICLE 7.4.13 - (Agreed payment for non-performance)
1. Agreed payment for non-performance defined
2. Agreed payment for non-performance in principle valid
3. Agreed sum may be reduced
4. Agreed payment for non-performance to be distinguished from forfeiture and other similar clauses
(1) The obligee may reject an offer to perform in part at the time performance is due, whether or not such offer is coupled with an assurance as to the balance of the performance, unless the obligee has no legitimate interest in so doing.
(2) Additional expenses caused to the obligee by partial performance are to be borne by the obligor without prejudice to any other remedy.
The situation covered by Art. 6.1.3 should be distinguished from that of Art. 6.1.2. The provision on "[p]erformance at one time or in instalments" attempts to solve a preliminary question which concerns only certain special cases. If a party's performance can be rendered at one time or in instalments and if the contract does not make it clear or determinable how that party is to perform, it must in principle perform at one time.
Art. 6.1.3 (Partial performance) has a more general scope. It provides that at the time performance is due the obligee may in principle reject an offer of partial performance. This applies at maturity, irrespective of whether what is due then is a global performance or an instalment of a wider obligation (which, in some cases, has been previously determined on the basis of Art. 6.1.2).
1. A owes US$ 1,000,000 to a bank and it has been agreed that A will pay back US$ 100,000 on the first day of each month, starting in January. On 1 April A offers to reimburse only US$ 50,000, and the balance two weeks later. In principle, the bank is entitled to refuse A's proposal.
When performance is due at maturity (be it the whole performance or an instalment), that which is due must be performed completely. In principle, the obligee may reject an offer of partial performance, whether or not it is coupled with an assurance as to the balance of the performance, since it is entitled to receive the whole of what was stipulated. Subject to what will be said below, partial performance normally constitutes a breach of contract. A party who does not obtain full performance at maturity may resort to the available remedies. As a rule, the obligee has a legitimate interest in requiring full performance of what was promised at the time that performance is due.
The obligee may of course also refrain from rejecting the offer to perform in part, while reserving its rights as to the breach, or may accept it without any reservation, in which case partial performance can no longer be treated as a non-performance.
2. A wishes to open a branch office in Brussels and rents the necessary office space in a building under construction, due to be finished in time for the move on 1 September. On that date, only four of the ten offices are made available for A, with an assurance that the remaining six will be ready in one month. In principle, A may refuse to move into those four offices.
There may be situations where the obligee's legitimate interest in receiving full performance is not apparent and where temporary acceptance of partial performance will not cause any significant harm to the obligee. If the party tendering partial performance proves this to be the case, the obligee cannot then refuse such partial performance (subject to para. (2)), and there is no non-performance in such cases. This may be seen as a consequence of the general principle of good faith and fair dealing enunciated in Art. 1.7.
3. An airline promises to transport 10 automobiles from Italy to Brazil in one single consignment due to be delivered on a definite date. When performance is due, some circumstances make it difficult, although not impossible, for the airline to find sufficient space in a single aircraft. The airline suggests making two successive deliveries within a week. It is established that this will cause no inconvenience to the purchaser of the cars, which will not actually be used before the following month. In such a case the obligee has no legitimate interest in refusing partial performance.
If partial performance is accepted, it may entail additional expenses for the obligee. In all cases, such expenses are to be borne by the other party. If partial performance amounts to a non-performance (as it usually does), these expenses will be part of the damages, without prejudice to any other available remedy. If partial performance does not amount to a non-performance (the obligee has been shown not to have any legitimate interest in rejecting the offer of partial performance, or has found the offer to be acceptable without reservation), it will only be entitled to those expenses.
4. The facts are the same as in Illustration 3. If the purchaser has to meet additional expenses on account of having to make double arrangements for picking up the cars at the airport, those extra costs will be borne by the airline.