International business transactions


Comparison to UNIDROIT Hardship



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OUTLINE International Business Transactions
Comparison to UNIDROIT Hardship

  • No provision in CISG analogous to hardship principles.

  • So what happens when Article 79 is not triggered? Is Article 79 the exclusive change in circumstances rule covered by CISG, or is there basis for saying hardship rule is also applicable even though it is not in CISG??



UNIDROIT Principles

  • Contain two overlapping sets of protections from unanticipated events: force majeure and hardship

    • Two sets of rules

      • in one, performance is stopped and question is as to liability

      • in other, performance is continuing and question is whether equilibrium will be restored

  • Force Majeure

    • written after CISG and essentially adopts standards of Art 79

    • ARTICLE 7.1.7 (Force majeure)

      • (1) Non-performance by a party is excused if that party proves that the nonperformance was due to an impediment beyond its control and that it could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.

      • Also contains subsection on temporary impediments and on giving notice

    • Consequences

      • Affect party is not liable for its failure to perform, but the other party is still entitled to exercise remedies other than a damage claim (and presumably a demand for specific performance)

  • Hardship
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