V. GENERAL CONTRACT LAW Conflict rules: see Ch. 2 Most national legal systems have no specific rules for cross-border transactions or international contracts in general International instruments ? Soft law and some model laws on specific questions: - Soft law : Unidroit « Principles », PECL (Lando-commission), possible Optional instruments*. Conflict rule will determine whether accepted as « law » or merely as contract clauses - Model laws, e.g. Uncitral model law electronic commerce; Draft Common Frame of reference (DCFR) - *Examples of existing optional instruments: CISG, European trademark, societas europea, international last will, european procedures. V. UNIDROIT PICC Unidroit Principles for International Commercial contracts - « Principles », i.e. no Convention or Model Law - First edition 1994 - Enlarged edition 2004 - Endorsed by Uncitral 2007 Intended field of application: international commercial contracts Regulated matters: Formation (incl. Representation), Validity (defects of consent, specific clauses), Interpretation, « Contents », Performance Non- performance and remedies, Set-off, Contractual Assignment of rights, Transfer of obligations, Limitations of Actions (Prescription) In progress: illegality, plurality of debtors or creditors, conditional obligations, unwiding of failed contracts (restitutution) Not regulated: other grounds of invalidity, non-contractual assignment V. UPICC PREAMBLE Preamble: Purpose of the Principles) These Principles set forth general rules for international commercial contracts. They shall be applied when the parties have agreed that their contract be governed by them. They may be applied when the parties have agreed that their contract be governed by general principles of law, the lex mercatoria or the like. They may be applied when the parties have not chosen any law to govern their contract. They may be used to interpret or supplement international uniform law instruments. They may be used to interpret or supplement domestic law. They may serve as a model for national and international legislators. See also 1.4. : applicable insofar as the conflict rule allows it V. UPICC– INTERPRETATION AND GAP-FILLING Art. 1. 6 (Comp. 7 CISG) – Autonomous interpretation (Interpretation and supplementation of the Principles) (1) In the interpretation of these Principles, regard is to be had to their international character and to their purposes including the need to promote uniformity in their application. (2) Issues within the scope of these Principles but not expressly settled by them are as far as possible to be settled in accordance with their underlying general principles. But ALSO duty to act in good faith: Art. 1.7 (Good faith and fair dealing) (1) Each party must act in accordance with good faith and fair dealing in international trade. (2) The parties may not exclude or limit this duty. And art. 1.9 Usages and practices V. UPICC– GENERAL PROVISIONS JURIDICAL ACTS Art. 1.1: Freedom of contract Art. 1.2: No form required Art. 1.3: Binding character of contract Art. 1.7: Duty to act according to good faith & fair dealing How intention is determined – interpretation of acts: Art. 4.1 and 4.2 - (4.1. for contracts, 4.2 for unilateral acts) Usages and practices – Art. 1.9 Rules on notices in 1.10 V. UPICC– FORMATION Very similar to CISG 2.1.1.: conclusion of the contract by offer and acceptance or by conduct of the parties that is sufficient to show agreement. Rules on offer and acceptance similar to CISG Art. 2.1.12 (Writings in confirmation) Art. 2.1.14 (Contract with terms deliberately left open) Art. 2.1.17 and 2.1.18 on merger clauses and clauses on modification in a particular form. Going beyond CISG: Art. 2.1.15 on liability for negotiations (or breaking off) in bad faith Specific rules for battle of forms (2.1.22) (NB. Comparative law: usually knock out; Engl = last shot; NL = first shot) V. UPICC– AUTHORITY OF AGENTS Not in CISG , inspired by Unidroit Convention (not in force) Deals with authority, i.e. external relationship Not internal relationship (agency contract) (2.2.1) Authority by grant (express or implied) (2.2.2); authority based on belief caused by the principal (2.2.5 (b)) Direct relationship in case of disclosed agency (2.2.3) In principle no direct relationship in case of undisclosed agency (2.2.4) Liability if the agent acts outside authority: positive interest (2.2.6) Art. 2.2.7 on conflicts of interest, Art. 2.2.9 on ratification Art. 2.2.10 on effect of internal termination of autority V. UPICC– VALIDITY Not in CISG Deals with defects of consent: Mistake: 4 cases of mistake (shared, caused, left in error, contract not yet relied upon) + requirement of material difference, no gross negligence, risk not assumed or to be bourne Error in expression or transmission: treated as mistake of the sender Fraud Threats Gross disparity or excessive advantage (with abuse of circumstances) General rules on « avoidance » and its effects (in CISG avoidance means termination; here avoidance means annullment) Effect= retroactive; restitution = non-contractual obligation V. UPICC– CONTENTS Various rules Under interpretation: supplying an omitted term (Art. 4.8) where important for the determination of their rights and duties Art. 5.1.2: implied obligations stem from (a) the nature and purpose of the contract; (b) practices established between the parties and usages; (c) good faith and fair dealing; (d) reasonableness. Art. 5.1.3. Duty to co-operate Art. 5.1.4. Distinction duty result / merely best efforts Art. 5.1.7. Price determination mechanisms: normal price; unilateral unless manifestly unreasonable; third party decision Art. 5.1.8. Contract for an indefinite period: ending by notice with reasonable time Art. 5.2.1. ff. Contracts in favour of third parties; rule on defences V. UPICC– CONTENTS Art. 5.2.1. ff. Contracts in favour of third parties; rule on defences --- stipulator beneficiary (3rd party) (provision) (original contract) resulting relationship promisor V. UPICC - PERFORMANCE Modalities of (performance) of the obligation: Time of performance (Art. 6.1.1.) Order of performance (Art. 6.1.4.) in principle simultaneous Place of performance (Art. 6.1.6) - Money: creditor’s place (« obligee ») - Other: debtor’s place (« obligor ») Monetary obligations: means of payment, currency etc. (6.1.7 ff.) Rules where public permission required for performance Hardship (change of circumstances) Art.: 6.2.1 ff. Performance as extinction of an obligation Art. 6.1.12-13: imputation of performance V. UPICC – NON-PERFORMANCE « Non-performance » of an obligation as general (unitary) concept) (Art. 7.1.1, shift from «(breach of) contract » to « obligation ») In view of the availalbe remedies distinction between: - non-performance caused by the creditor itself (7.1.2): no remedy - non-performance excused under 7.1.7 (force majeure): only withholidng performance, termination and interest on money due - non-performance cured without delay (7.1.4): only withholding performance, damages - non-performance not excused: all remedies Rule on exemption clauses: only if not grossly unfair (7.1.6) V. UPICC – REMEDIES FOR NON-PERFORMANCE Withholding performance (7.1.3.) (the rule on anticipatory breach as in CISG is missing) (but implied in 7.3.3) Right to (enforce) (specific) performance - always for monetary obligations (7.2.1) (no exception for cases where you can sell it elsewhere) - in principle for other obligations (7.2.2) unless impossible or unlawful, unreasonably burdensome, reasonably available elsewhere, strictly personal character; must be requested within a reasonable time Termination (next slide) Damages (s. further) V. UPICC – REMEDIES : TERMINATION Grounds for termination: - fundamental non-performance (7.3.1. (1) (2)) - after an additional period granted for performance (Nachfrist, 7.1.5. and 7.3.1 (3)) - in case of anticipatory fundamental non-performance: 7.3.3. and 7.3.4. Mode of termination (7.3.2): - by notice - in case of late or defective performance: within a reasonable time Scope of termination: all obligations, unless extended over time and divisible (7.3.6 (2)) Effects of termination: - release from (outstanding) obligations (7.3.5 (1)) - restitution of performances (in kind or in money) (7.3.6. (1)) - surviving clauses (7.3.5 (3)) - damages reserved (7.3.5 (2)) V. UPICC – REMEDIES : DAMAGES Except where non-performance is excused (7.4.1.) General measure of damage: - positive interest (see 7.4.2 (1), incl. lost profit) - includes non-pecuniary loss (7.4.2. (2)) - includes loss of a chance (7.4.3.) - limited by foreseeability test (7.4.4) - restriction where due to creditor or non-mitigation (7.4.7, 7.4.8) - includes costs of mitigation (7.4.8 (2)) Calculation of damage: - Late payment: interest (plus further damage) (Art. 7.4.9); interest rate in 7.4.9 (2, place of payment); dies interpellat pro homine (7.4.10) - reasonable substitute transaction: price difference (plus further damage) (Art. 7.4.5) - current price (Art. 7.4.6) Agreed payment for non-performance: clauses binding unless grossly excessive in relation to actual harm (7.4.13) V. UPICC – SET-OFF Obligations of the same kind between 2 parties Can be set-off by notice by one party where: - its own obligation is payable (entitled to perform) - the obligation of the other party is (a) due and (b) ascertained or arising from the same contract No « retroactive » effect V. UPICC – ASSIGNMENT OF RIGHTS Assignment = transfer of a right (property) Scope: - contractual assignment of contractual rights - not in a negotiable instrument (9.1.2.) Limits to assignability - where significantly more burdensome (9.1.3.) - partially assignable ? If divisible (9.1.4) - no-assignment clauses have NO effect (1) for rights to payment of money and (2) in case of good faith of assignee (9.1.9) Requirements for assignment: - existence of the right ? For future rights with retroactive effect (9.1.6) - mere agreement assignor / assignee (neither notice nor consent required for the transfer as such) (9.1.7) Duty to perform of the debtor: according to (order of ) notice and possibly adequate proof of assignment (9.1.10, 9.1.11, 9.1.1) V. UPICC – ASSIGNMENT OF RIGHTS All defences available + set-off available at time of notice (9.1.13) (valuta) + transfer of property assignor assignee (substituted creditor) (provision) (original contract) resulting relationship (substituted creditor) debitor cessus V. UPICC – NEW DEBTORS Ch. 9.2. Substitution or addition of debtor. 3 Types: - substitution: original debtor discharged - subsidiary liability of the original debtor - solidary liability of old & new debtor (« joint and several » in Eng. law) Several more specific institutions or instruments can be classified in this scheme. V. UPICC – LIMITATION OF ACTIONS System of a double period: 3 / 10 years (10.2) - 3 years from (constructive) knowledge - 10 years from the day the right can be exercised Renewal of limitation period by acknowledgment (irrespective of 10 years) (10.4) Suspension in case of proceedings (judicial, arbitral and similar): 10.5 to 10.7 Prolongation until one year after impediment (force majeure) ceases: 10.8 Effects of expiration: - « weak effect » (art. 10.9); no restitution because not « undue » (10.11) - set-off possible until assertion of prescription (10.10) V. E-COMMERCE Some provisions of the Uncitral model law 1996 (1998) - « Data messages » cover EDI, e-mail, telegram, telex and telecopy - Art. 5: Information shall not be denied legal effect merely because it is in the form of a data message - Art. 6: Writing < accessible so as to be usable for subsequent reference - Art. 7: Signature - Art. 8: Whether a data message can be an « original » - Art. 13: Attribution of data messages (who is the sender) - Art. 15: (1) time of dispatch and (2) of receipt UN Convention on the Use of Electronic Communications in International Contracts 2005 (not in force) EU Directive 1999/93 on electronic signatures: - different degrees of e-signature; legal effects EU Directive 2000/31, framework directive e-commerce - Art. 9 Treatment of contracts: equivalence (some exceptions) - Rules relating to information duties, conclusion contract, receipt, ...
Pages to are hidden for
"General Contract"Please download to view full document