Reproduced with the permission of the author

Joern Rimke [*]

I. Introduction

II. Force Majeure and Hardship -- The Concepts in General

III. Different Approaches of Domestic Legal Systems

IV. Article 79 CISG

V. Force Majeure and Hardship Clauses

VI. The Use of Standard Forms of Contract

VII. The UNIDROIT Principles of International Commercial Contracts

VIII. Recommendation as to Force Majeure and Hardship Clauses

IX. Conclusion

I. Introduction

A basic and universally accepted principle of contract law is "pacta sunt servanda". It means that the party to an agreement is responsible for its non-execution, even if the cause of the failure is beyond his power, and was not or could not be foreseen at the time of signing the agreement.[1] The principle reflects natural justice and economic requirements, because it binds a person to its promises and protects the interests of the promisee. Since effective economic activity is not possible without reliable promises, the importance of this principle has to be underlined.[2]

On the other hand, practice has demonstrated that on many occasions this principle may lead to the opposite of its aim.[3] That is to say, the situation existing at the conclusion of the contract may subsequently have changed so completely that the parties, acting as reasonable persons, would not have made the contract, or would have made it differently, had they known what was going to happen.[4] This situation is not very likely to arise if short term contracts are at stake, with a rather easy structure, where non-performances are exchanged against money. In international trade, however, many contracts are of a more complicated structure, and even if they are not long term contracts, they exist frequently over a substantive period. International trade transactions generally imply a greater element of uncertainty due to the fact that they are subject to political and economic influences in foreign countries.[5]

Different legal concepts deal with this problem of changed circumstances and provide for the discharge of one or both parties when a contract has become unexpectedly onerous or impossible to perform. The classical concept of force majeure is primarily directed at settling the problems resulting from non-performance, either by suspension or by termination. Concepts like imprévision or hardship are mainly directed at the adaptation of the contract.

Although all legal systems take notice of the situation of changed circumstances, the conditions under which they admit the defence of force majeure vary. The adaptation of the contract, furthermore, is not accepted universally. Therefore attempts have been made to tackle these problems on an international level. In particular, the United Nations Convention on Contracts for the International Sale of Goods (1980)[6] addresses the issue of changed circumstances. It avoids reference to the existing concepts as it developed a system of its own. This concept, however, is generally not regarded as being able to solve the problem entirely.

Parties to international sales transactions, therefore, frequently include special clauses, dealing with matters of hardship and force majeure, into their contracts. This paper aims to give some idea of the concepts of hardship and force majeure in the context of international sales transactions. The concepts will be first discussed on a theoretical basis. The different approaches to the situation of changed circumstances in the major legal systems, will then be shown. Article 79 CISG will be introduced, interpreted and its scope determined. Thus it will be possible to ascertain if, to what extent, and what kind of clauses, dealing with the matter of changed circumstances, should be inserted into international sales contracts. Then force majeure and hardship clauses are discussed in more detail. Finally the use of standard forms of contract, with special regard to the UNIDROIT Principles of International Commercial Contracts, will be considered, and a recommendation as to force majeure and hardship clauses will be given.

II. Force Majeure and Hardship -- the Concepts in General

The two major legal concepts dealing with the problem of changed circumstances are those of force majeure and hardship. In order to understand the interpretation and discussion of Article 79 CISG, and the deliberations on force majeure and hardship clauses in international sales contracts, the two concepts first have to be considered on a general and theoretical basis.

1. Force majeure

The concept of force majeure, providing for the discharge of one or both parties when a contract has become impossible to perform, has evolved progressively in international trade practice, by assuming many original and autonomous features distinct from similar legal concepts.[7] The approach of municipal legal systems to situations of force majeure varies from country to country. Despite these circumstances, certain general characteristics of the conception of force majeure can be determined.

The roots of the classical concept lie in the Code Napoléon from which the words force majeure (an irresistible compulsion or coercion) are taken.[8] An English court's interpretation of the words held that they have a more extensive meaning than "act of God" or "vis major"[9]. "Act of God" is defined as an event happening independently of human volition, which human foresight and care could not reasonably anticipate or avoid.[10] According to the said judgment, the words force majeure could cover the dislocation of business, owing to a universal coal strike or accidents to machinery, but not bad weather, football matches or a funeral. In Brauer & Co. v. James Clark[11] it was held that a party could not rely on force majeure simply because the price it was required to pay for the goods was considerably in excess of the price at which it had contracted to sell them.

In more general terms, it can be said that force majeure occurs when the performance of a contract is impossible due to unforeseeable events beyond the control of the parties[12] The following is a possible definition of force majeure:

"Force majeure occurs when the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which the performance is called for would render it impossible. I promised to do this but I cannot due to some irresistible unforeseeable and uncontrollable event."[13]

A similar definition is contained in Article 7.1.7 of the UNIDROIT Principles of International Commercial Contracts where, under the headline of "Force majeure", it is stated that a party's non-performance is excused if that party proves that the non-performance 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.

The aim of the classical concept of force majeure, as that of Article 7.1.7 of the UNIDROIT Principles, is to settle the problems resulting from non-performance, either by suspension or termination.

2. Hardship

The concept of hardship is usually discussed in the context of hardship clauses, which are frequently introduced into contracts in international trade. The term "hardship", however, has also been used in legislation, e.g., in the Australian National Security (Landlord and Tenant) Regulations and the Landlord and Tenant (Amendment) Act 1948-1964. With respect to those rules courts had to interpret the term "hardship" and determine its scope. Thus it was held that hardship, as used in the National Security Regulations, may be regarded as the subjective effect of a detrimental nature upon the person concerned.[14] In another decision, hardship, in the Landlord and Tenant Act, was said to include any matter of appreciable detriment whether financial, personal or otherwise.[15]

The circumstances in which hardship generally exists (as usually set out in hardship clauses) normally incorporate three elements: first, they must have arisen beyond the control of either party; self-induced hardship is irrelevant. Secondly, they must be of fundamental character. Thirdly, they must be entirely uncontemplated and unforeseeable.[16]

A clear descriptive definition of hardship is contained in the UNIDROIT Principles. It reads as follows (Article 6.2.2):

The concept of hardship intends to solve problems of such fundamentally altered circumstances by adapting the contract to the new situation.

3. Differences between the two concepts

The concepts of hardship and force majeure seem to be related to each other, particularly since they share some features: they both cater to situations of changed circumstances. The difference between the two concepts is mostly described in such a way: hardship is at stake where the performance of the disadvantaged party has become much more burdensome, but not impossible, while force majeure means that the performance of the party concerned has become impossible, at least temporarily.[17]

But, moreover, there seems to be a functional difference between the two concepts. Hardship constitutes a reason for a change in the contractual program of the parties. The aim of the parties remains to implement the contract.[18] Force majeure, however, is situated in the context of non-performance, and deals with the suspension or termination of the contract.

III. Different Approaches of Domestic Legal Systems

The approach of municipal legal systems to the problem of changed circumstances varies from country to country. Although all these concepts are related to each other, since they share important features, the distinction between them is extremely important in drafting choice of law clauses in international contracts. It is furthermore important to have knowledge about the law that will apply when a force majeure or hardship clause is left out of a contract, and no unified international rules are applicable. Moreover, it is submitted that in order to have relevance and serve a purpose, force majeure and hardship clauses should differ from the doctrine that would be applicable to the problem of changing circumstances, if such clauses were left out of the contract. Thus, the scope of those doctrines has to be determined.

Their illustration and comparison will also give a deeper insight in the structure and functioning of the concepts of force majeure and hardship in general. For this purpose English, American, French, German and South African law and their approaches to the situation of changed circumstances will now be analysed.

1. England

Consistent with the common law approach of strict liability for breach, the traditional common law rule was that conditions rendering performance impossible, that occurred after the execution of a contract, did not excuse performance.[19] The reason for this was stated in Paradine v. Jane [20] where the King's Bench held that:

Such a rigid interpretation prevailed in the United Kingdom until 1863. It was in the case Taylor v. Caldwell [21] that the court changed its traditional opinion: the strict rule should only apply when the contract is positive and absolute, and not subject to any condition either express or implied. The court held that in contracts where performance depends on the continued existence of a given person or thing, "a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance."[22] With this theory of the impliedcondition, the doctrine of impossibility was introduced into English law.[23] The concept of frustration, which developed from the doctrine of impossibility, is based on the sole interpretation of the intent of the parties. If, due to an act of God, the performance of a contract is to take place under circumstances which are totally different from what the parties envisaged, then the agreement is frustrated.[24] The concept originates from the famous Coronation cases.[25] Here an apartment was rented for one day because it afforded a privileged view of the Coronation parade of Edward VII. When the parade was cancelled due to the King's illness, the landlord sued for the rent. The court, however, decided the contract to be frustrated because its execution was fundamentally and essentially different from what the parties had intended.

According to the doctrine of frustration, as the concept dealing with situations of changed circumstances in English law today, a contract can be frustrated by impossibility, physical (destruction of the subject-matter) or for legal reasons (illegality), or by the occurrence of a radical change in circumstances, so that the foundation of the contract has gone and if it were kept alive, it would amount to a new and different contract.[26] The doctrine, by covering situations which do not amount to the impossibility of the performance, is thus wider than the concept of force majeure.

When a contract is frustrated, a judge cannot amend or adjust it to the new situation. Frustration simply discharges the contract. Although the prerequisites of frustration are rather similar to those required by the concept of hardship, the former is finally, by disallowing the adaptation of the contract, directed at another aim.

2. United States

Also based on the doctrine of impossibility and its further developments, the United States doctrines are defined carefully in both the US Restatement (Second) of Contracts[27] and the Uniform Commercial Code.[28]

Section 261 of the Restatement (Second) is entitled "Discharge by supervening Impracticability" and reads as follows:

The Uniform Commercial Code, in Section 2-615, entitled "Excuse by failure of presupposed conditions" also employs the term "Impracticable". In both statutes this term encompasses "impossible".[29] The relevant paragraph of U.C.C. Section 2-615 reads:

U.C.C. Section 2-615 Paragraph (b) contains an allocation requirement in case only part of a seller's capacity to perform is affected. Paragraph (c) states a notice requirement. According to its wording U.C.C. Section 2-615 excuses only the seller from the delivery of the goods contracted for. The general belief, however, is that this provision is to be considered equally applicable to buyers.[30]

The concept of commercial impracticability, discharging a party's duty even though the event has not made performance absolutely impossible, has been adopted in order to call attention to the commercial character of the context in which the excuse defence is used.[31] However, courts have been reluctant to accept anything short of impossibility as an excuse for performance.[32]

It can be seen that the United States' approach to situations of changed circumstances is wider than that of the classical concept of force majeure. Since it does not allow the adaptation of the contract and because of the court's way of treating "impracticability" it is, however, not as far-reaching as the concept of hardship.

3. France

Under French law the line is drawn between the impossibility of the performance on the one hand, i.e., force majeure, and, on the other hand, circumstances which destabilise the contract where economic conditions are such that fundamental and far-reaching changes occur. The latter is called the doctrine of imprévision.[33]

In France the principle pacta sunt servanda (as incorporated in Article 1134 of the French Civil Code) prevails over the principle rebus sic stantibus.[34] This means that, if the contract does not contain any provision regarding events of changing circumstances, the performance of the contract will be enforced without any changes to the contract.[35] A judge is not supposed to appraise the economic situation of the parties or to rule in equity against the wording of a contract. In principle, the only excuse for non-performance of the contract is force majeure. The doctrine of imprévision has not been adopted by French courts.

Article 1142 of the French Civil Code stipulates that any obligation to do or not to do, is dissolved by damages whenever the debtor does not execute the obligation. However, Article 1148 specifies that damages are not due in the case of force majeure. Although the courts have applied those Articles in a strict way, some change and more flexibility is noticeable in recent case law. Although courts do not apply the doctrine of imprévision, they have not explicitly rejected it.[36]

The application of Article 1148 requires four conditions to be fulfilled simultaneously:

Article 1148, in recognising that a contract can be discharged due to force majeure, is not mandatory law. Parties are free to give their definition to force majeure events and the judge has to respect such definition.

Since the roots of the classical concept of force majeure lie in the Code Napoléon, this concept and the present approach to the problem of changed circumstances in France, correspond widely. A greater degree of flexibility in the latter has been noted only recently. The doctrine of imprévision is the counterpart of the concept of hardship. The former, however, is not part of French law.

4. Germany

The German approach to the problem is rather flexible. Under German law the rule pacta sunt servanda is certainly not adhered to anymore in the strictest sense. This is not surprising in a country where, after the first world war, the value of the menu in a restaurant could change between the placing of the order and the arrival of the bill.

As a general rule, section 275 of the Bürgerliches Gesetzbuch discharges the debtor of his obligation if, after the conclusion of the contract, its performance was rendered impossible for reasons other than negligence, his own fault, or the negligence of his employees. The impossibility of performance (Unmöglichkeit) can be of a physical or legal nature. The performance may still be possible later without unreasonable damage to the other party.

As a consequence of the first world war, some judges and legal scholars started advocating the doctrine of Unmöglichkeit for application on economic impossibility. According to them the debtor cannot be forced to comply with efforts or sacrifices which are beyond what parties reasonably envisaged in good faith. This doctrine is called the "Opfergrenze".[38]

The doctrine of Opfergrenze is a suitable stepping stone to the famous German doctrine of the Wegfall der Geschäftsgrundlage. According to the latter, every contract has a basic aim, and emanates from a basic intention of the parties, which cannot be achieved or realised in the absence of an existing environment, for example the prevailing economic and social order, the value of the currency, normal political conditions, etc.[39] This definition of the Geschäftsgrundlage bears close resemblance to the rebus sic stantibus[40] doctrine in international public law treaties.[41]

A line should be drawn between the so-called "ergänzende Vertragsauslegung" (an interpretation of the contract which fills gaps) and the Geschäftsgrundlagenlehre. According to the former, which requires a gap in the contract, the function of the judge is to complete a contract, whereby he should give an interpretation of what the parties actually would have wanted if a given event had been contemplated.[42] According to the Geschäftsgrundlagenlehre the judge is not only allowed to complete a contract but, depending on the object of the contract, to change its terms or terminate it.[43]

There is very little difference -- and if so, not an essential difference -- between the reasoning in the classical force majeure concept and the German reasoning in the Unmöglichkeit. Furthermore, the doctrine of the Wegfall der Geschäftsgrundlage, aiming at an adaptation of the contract, is very similar to the concept of hardship.

Until 1919 it was generally assumed that there was no difference between South African law and English law on the effect of supervening impossibility.[44] The English approach was adopted in a number of cases until the case of Peters, Flamman and Co v. Kokstad Municipality[45] was decided. Here it was stated that "if a person is prevented from performing his contract by vis major or casus fortuitus . . . he is discharged from liability."[46]

In applying this principle, that supervening impossibility discharges the contract, impossibility must be given the same meaning as when initial impossibility is under consideration,[47] i.e., the impossibility must be absolute (as opposed to probable and relative) and it must not be the fault of either party.[48] Most important is the fact that, if vis major or casus fortuitus has made it uneconomical for a party to carry out its obligations, it does not mean that it has become impossible,[49] and since Peters, Flamman there is no room in South African law for the English doctrine of frustration.

The decision in the recent case of Kok v. Osborne and Another, [50] however, could be a first step to recognition of the concept of commercial impossibility in South African law. The plaintiff in this case (Mrs. Kok) entered as the buyer into a contract of sale because she wrongly assumed that the seller had already been paid by a third person. The court held that the contract between the litigants hinged on the assumption that the defendant indeed had been paid, which in fact did not happen, and that the contract failed due to supervening impossibility of performance. Here the court was of the opinion that South African law recognises commercial impracticability as a form of supervening impossibility just as the English law does.[52]

This decision, however, has been heavily criticised by commentators for different reasons. Thus it is said that the doctrine of frustration of the English law is not a recognised part of South African law.[52] Moreover it is rightly stated that supervening impossibility is not applicable in the present case.[53] For these reasons it is not very likely that the case of Kok v. Osborne and Another constitutes the starting point for a change in the South African approach to the problem of changing circumstances.

Thus, one can conclude that the South African approach corresponds with the concept of force majeure. Situations of hardship do not discharge a party of its liability.

IV. Article 79 CISG

Article 79 is the provision of the CISG that deals with situations of changed circumstances. More precisely, it deals with the circumstances in which the buyer or seller may be excused from performance of his contractual obligations, because of an extraneous event that is judged sufficiently important to warrant the excuse. This is a situation which is referred to as frustration, force majeure or Wegfall der Geschäftsgrundlage in the different legal systems.[54]

In the following chapters the significance of Article 79, as part of the United Nations Convention on Contracts for the International Sale of Goods (Vienna 1980), for international trade, and its legislative history will be outlined and its contents, scope of application and legal effect will be analysed and evaluated.

Never before has the increase in international commerce been as significant as it has been during recent decades. Many difficulties occur in the context of an international sale of goods, as a consequence of the considerable differences in the national rules governing the law of sales. Thus, the expanding volume of international sales requires a common understanding of the legal rights and duties among partners to an international transaction.[55]

The CISG is understood as a modern uniform substitute for the wide array of foreign legal systems.[56] It is based on the Uniform Law for the International Sale of Goods (ULIS) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF), drafted by the "Rome Institute"[57]. These two Conventions had a rather limited success, only nine countries have become members,[58] Therefore, the United Nations Commission on International Trade Law (UNCITRAL), in a further attempt to unify the law governing the international sale of goods, prepared the Draft Convention on Contract for the International Sale of Goods. This was finalised at a diplomatic conference in Vienna in 1980 and entered into force in 1988.

Nations are now ratifying or acceding to this Convention at a pace comparable to that of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, when it was promulgated.[59] The latter is said to be the most successful instance of international legislation in the history of commercial law.[60] The CISG harmonised interests and ideas of different legal systems and of countries on different levels of economic development. It is thus a text which is suited for implementation in countries of the civil law and the common law, and of economies which are developed and those which are developing.

According to Article 1 the Convention applies to international contracts of sale of goods (if the parties have not rejected its application in their contract -- Article 6) when the States, where the parties have their places of business, are in different Contracting States, or the rules of private international law lead to the application of the law of a Contracting State. Since more than 50 countries have already ratified the Convention, among them major trading nations like the United States, Germany, France or China, the Convention can apply to a large number of transactions. This number will continue to increase with the accession of further countries to the CISG.

Only ten years after entering into force the Convention can already be called a success. Its significance for international sales transactions will increase in future years.

1. The role of legislative history

As has already been said, the CISG was created to free international commerce from a babel of diverse domestic legal systems. The ultimate goal of the Convention is the uniform application of the uniform rules.

The Convention will often be applied by tribunals (judges or arbitrators) who are intimately familiar with their own domestic law only. These tribunals will be subject to a natural tendency to read the international rules in the light of the legal ideas of those specific systems. In order to control the damage there will be long-range correctives through international critique of questionable interpretations; to this end measures have been taken for the collection and publication of case-law produced under the Convention, e.g., CLOUT (Case Law On UNCITRAL Texts). These measures, however, take time to become effective. Fortunately, there need to be no delay in using the legislative history, which sets out the evolution of the uniform law, to counteract the tendency to view the Convention through the lenses of domestic law. The Convention's legislative history provides an international reference point in applying the uniform international law, and its record clarifies the purpose and intent of the Convention's words.[61]

Article 79 is a revised version of the exemption clause in ULIS (Article 74). Its development, as a part of the CISG, went through three stages: (1) The UNCITRAL Working Group (1970-1977); (2) Review by the full Commission (1977-1978); (3) The Diplomatic Conference (1980).

Article 74 ULIS was criticised during the discussions of the Working Group. The clause was thought to make it too easy for the promisor to excuse his non-performance of the contract. Grounds for relief were not only physical or legal impossibility, or circumstances which fundamentally altered the character of the performance owed, but the provision could also apply to situations where performance had unexpectedly been made more difficult. Several members of the Working Group were therefore in favour of restricting the grounds for relief and making them more objective.[62] The Working Group set up a drafting party, but it could not agree on a revised wording. It submitted a draft which was provisionally adopted by the drafting party (Alternative A) and an alternative proposal of the Norwegian observer (Alternative B).[63]

Following a study by the British delegate, the Working Group adopted a version which largely followed Alternative A. This based the promisor's liabitity on fault, but transferred the basic concept of the "impediment" taken from Alternative B into the first paragraph.[64] The version was adopted as Article 50 in the 1976 Geneva Draft.[65]

In reformulating the grounds for exemption in Article 51 of the 1977 Vienna Draft, the former Article 50, the requirement of the promisor not being at fault was abandoned and replaced by an objective test of the "impediment beyond control".[66] The 1978 New York Draft adopted Article 51 of the Vienna Draft almost unchanged as Article 65.[67]

At the Vienna Conference, the Norwegian delegation proposed that paragraph (3) be supplemented by stating that if a temporary impediment ceased and the circumstances had radically changed to such an extent that it would clearly be unreasonable to continue to hold the promisor to his obligation, he should be released from that obligation. It was, however, argued that such an extension would introduce the théorie de l'imprévision into the Convention, and the proposal was therefore rejected. There was, nevertheless, agreement that the limitation in paragraph (3) should be deleted, i.e. that an exemption was "only" for the period during which the impediment existed.[69]

The meaning and purpose of the different provisions of Article 79 will now be considered in more detail.

1. The general rule - paragraph (1)

Paragraph (1) sets out the conditions under which a party is not liable for a failure to perform any of his obligations. The expression "failure to perform" does not specify the nature of the non-performance. The scope of this expression thus has to be analysed first.

The term "failure to perform" must be considered here in the broadest sense of the word. Accordingly the non-performance may be total or partial, delayed or defective.[70] Article 79 refers to any obligation, no matter which party is concerned. The buyer and the seller are thus subject to the same conditions. The obligation to deliver conforming goods also comes within the scope of Article 79.[71]

The text is silent on the point of the time of the impediment's occurrence. Here the question arises as to whether Article 79 applies in situations where the impediment existed at the time of the conclusion of the contract, and was unknown to both parties. The Secretariat Commentary on the 1978 Draft affirms, without justifying its position, that Article 79 applies to this case.[72] Since national laws often provide that contracts regarding impossible performances are void, some authors believe that, because of Article 4(a),[73] domestic law has to be applied so that the Convention becomes irrelevant in this context.[74] However, in this case, it can be said that domestic laws which accord legal recourse in situations where a party errs about the goods to be delivered, would not apply under the Convention. This is in instances in which these problems are specifically and conclusively regulated by the Convention, as is the case in Article 79.[75]

Thus Article 79, in its general wording, applies to non-performances that may have occurred at any time.

Three elements must be proved by a non-performing party who seeks to establish that it is not liable for failure to perform: (a)The failure was due to an impediment beyond his control; (b) The impediment was reasonably unforeseeable at the time of the conclusion of the contract; (c) The impediment was reasonably impossible to overcome. These elements constitute the traditional components of force majeure.[76]

(1) Impediment beyond control

For an exemption to be granted, the non-performance of the contract must be due to an "impediment". Article 74(1) ULIS used the word "circumstances". By adopting the word "impediment" the Vienna Conference aimed at emphasizing the objective nature of the hindrance rather than its personal aspect.[77] However, this wording is very general and the actual meaning of the term "impediment" is unclear. This causes problems in determining the scope of the exemption provided by Article 79. These problems, however, will be dealt with in a later chapter.

In requiring that the impediment must be beyond the control of the party concerned, the scope of the latter's risk is determined. The question of fault is not involved here since this concept has been set aside by the Convention. Within the control of the seller, for example, are all those factors which are connected with an orderly organisation of his manufacturing and/or procurement process, as the personnel's qualification, the technical equipment and the disposition of the required financial means to ensure manufacture and procurement.[78] In the case of generic goods the seller always bears the risk of procuring the goods. Other goods may be obtained to replace those that are lost.[79]

(2) Unforeseeability of the impediment

The requirement that the impediment must be reasonably unforeseeable is consistent with the basic idea that if the event were foreseeable, the defaulting party should be considered as having assumed the risk of its realisation. Foreseeability should relate not only to the impediment per se but also to the time of its occurrence. The closure of the Suez Canal was, for example, foreseeable in the more or less distant future.[80]

Everything regarding foreseeability, however, is a matter of measure, and it seems difficult to provide more details in a general text.

(3) Reasonably impossible to avoid or overcome

The parties are under the obligation to counteract the impediments. Firstly, disturbances have to be avoided. In order to achieve this, measures need to be taken against impediments which are generally looming ahead.[81] Secondly, if a disturbance has already revealed itself, it has to be overcome as speedily as possible. To overcome means to take the necessary steps to preclude the consequences of the impediment.[82] The basis of reference is what can reasonably be expected from the party concerned, and that is what is customary, or what similar individuals would do in a similar situation. This criterion is, however, rather vague and it will often be difficult to distinguish between what is possible and what is impossible to overcome. The issue raises the question of the distinction between impossibility and imprévision or hardship, and whether cases of the latter fall within the scope of Article 79. This question is probably the most discussed problem in the context of Article 79, and of major significance for this paper. It will therefore be considered separately in another chapter.

2. Non-performance by a third person - paragraph (2)

The third person must be someone who has been engaged to perform the whole or a part of the contract. It does not include suppliers of the goods or of raw materials to the seller.[83] There must be an "organic link" between the main contract and the sub-contract.[84]

3. Temporary impediment - paragraph (3)

Article 79(3) deals with an impediment for a limited time, but makes no provision as to an impediment affecting part of the contract. Unlike some legal systems, Article 79 does not speak of nullity of "the contract" but instead asserts that a party is not liable for failure to perform "any" of its "obligations" -- language that permits exemption to the extent that the impediment applies. Article 51(1) reflects a policy that is consistent with this result: "(1) If the seller delivers only part of the goods . . . articles 46-50 (provisions on remedies for breach) apply in respect or the part that is missing . . ."[85]

4. Duty to notify - paragraph (4)

In the case of a failure of notification it should be noted that the damages for which the non-performing party is liable, are only those arising out of the failure of the other party to have received the notice, and not those arising out of the non-performance.[86]

5. Legal effect of the exemption - paragraph (5)

Paragraph (5) restrains the effects of the exemption to one remedy alone and reserves to the party who did not receive the agreed performance all of its remedies except damages. These remedies include the right to reduce price (Article 50), the right to compel performance (Articles 46 and 62), the right to avoid the contract (Articles 49 and 64) and the right to collect interest as separate from damages (Article 78).

It could be argued that paragraph (5) entails unrealistic results. It would allow an action for specific performance in a case where the goods are destroyed and the performance is thus physically impossible.[87] A German proposal to extinguish the obligor's obligation to perform if the grounds for exemption existed, was, however, rejected at the Vienna Conference. The foremost reason for the rejection was the fear that a release from the obligation to perform could also extinguish collateral rights and secondary claims such as interest. It was also argued that, in cases where obligations are physically impossible to fulfil, the domestic legal doctrine of impossibilium nulla est obligatio (applicable according to Article 28[88]) would generally prevent a demand for performance anyway.[89] The general belief expressed at the Vienna Conference that judgment for a physically impossible performance would neither be sought nor obtained, should lead to a reasonable limitation of Article 79(5).[90]

There is no rule contained in the CISG that specifically refers to situations where, due to radically changed circumstances, the performance of one of the parties has become much more onerous and difficult. This problem, therefore, has to be considered in the context of Article 79. As already stated, the question of whether situations of hardship are covered and provided for by Article 79, is the probably most discussed problem concerning Article 79. In order to ascertain how parties drafting their contracts should respond to the applicability of the CISG (and thus of Article 79), it is also of major significance for this paper. The problem will now be analysed.

1. Direct reference to domestic laws

The Convention has developed a system of its own with regards to impediments, which in fact results from a slow maturation process that began with ULIS. The autonomy, illustrated by the lack of reference to accepted wording and concepts of domestic laws (force majeure, frustration, impracticability, Wegfall der Geschäftsgrundlage) renders the interpretation of Article 79 extremely difficult, because one cannot resort to these laws as a guide.[91]

Many commentators, however, state that Article 79 is "vague or imprecise" and contains "elastic words" that will be read in the content of each system's view.[92] It is said that the general wording of Article 79, which makes use of phrases like "due to an impediment" and "not reasonably expected to overcome", leaves room for judicial interpretation. The judge or arbitrator will have a natural tendency to refer to similar concepts in his own law.[93] Because Article 79 is a "chameleon-like" example of "superficial harmony", its character permits it to take on that meaning that best conforms to the reader's background.[94] For example, an English court using the doctrine of frustration could apply this extensive approach without further consideration to Article 79 -- and cover both impossibility and unforeseen but surmountable contingencies. A French court would not follow suit.

The reference to domestic laws in interpreting Article 79 jeopardises uniformity in the application of the Convention. This uniformity is the Convention's major goal, as set out in Article 7(1).

2. Reference to domestic laws according to Article 7(2)

The fact that Article 79 presents problems of application might tempt one to consider the solution of that problem by applying Article 7(2). Article 7(2) permits recourse to the law applicable by virtue of the rules of private international law when questions are not expressly settled by the Convention. The problem of hardship could thus be regulated by rules of domestic law if there was a gap in the Convention as regards the promisor's invocation of radically changed circumstances, making its performance more onerous.

The history of Article 79, however, rules out the assumption of the existence of such a gap. Thus, UNCITRAL in its preparation of the 1977 "Sales" Draft, considered that the following provision be added:

In support of this proposal it was stated that one of the most important problems for parties to a contract of sale of goods, was the problem of changed circumstances which could not have been foreseen by the parties at the time of the conclusion of the contract. These changes could result in excessive difficulties for one of the parties. The Committee, however, did not retain this proposal.[95] Furthermore, a Norwegian proposal, submitted at the Vienna Conference, was rejected because it was feared that the théorie de l'imprévision would be introduced into the Convention by the suggested alteration.[96]

The problem of hardship has thus been considered during the drafting process of Article 79, but a provision specifically dealing with it has deliberately not been included into the Convention. Therefore, the history of Article 79 excludes the possibility that there is a gap in the Convention as to the matter of hardship. Article 79's purpose of a definite setting of limits of the promisor's responsibility for breach of contract supports this conclusion. Domestic laws cannot be resorted to according to Article 7(2). If the domestic law applicable under conflicts rules were applied to fill a supposed gap, there would be a danger of the CISG's liability system "bursting", because domestic legal systems differ greatly from each other as regards their rules on hardship or imprévision.[97]

3. Comparative law approach

To avoid the problem of undermining this objective of the Convention, it has been suggested that a comparative law approach be applied in interpreting Article 79. This approach seeks guidance from the prevailing patterns and trends of modern domestic law insofar as they are consistent with the necessities of international trade.[98] The approach is supported by the fact that comparative studies, stimulated in part by the Convention, are proceeding apace. The idea of a comparative law approach is, however, subject to criticism.[99] Although it may prove rewarding in other circumstances, it would yield only limited results in the present case as no specific overall trend may be traced.[100]

4. Contract practices as a guide

Contract provisions on impediments to performance have special value since impediments arise in a countless variety of circumstances. Contracts can and do take account of the conditions and needs presented by various types of transactions. Here the contractual practice can help to obtain ideas for the interpretation of the grounds for exemption of Article 79.[101] Clauses, model contracts, etc., which have prevailed in a certain context, can play a role in this regard. Principles of efficiency and fairness can best be distilled from contracts prepared with the cooperation of members from all the different interest groups involved. The UNIDROIT Principles of International Commercial Contracts, which contain force majeure and hardship clauses, for example, state in their Preamble (Purpose of the Principles) that the Principles may be used to interpret or supplement international uniform law instruments. The role of the UNIDROIT Principles in this regard will be dealt with in a later chapter.

5. History of Article 79 as a guide

The drafting history of Article 79 does reveal some interpretative insights as to the problem discussed here. The drafters of the forerunner of Article 79 CISG, Article 74 ULIS, have already faced the dilemma of which obligations to excuse from non-performance. At the 1964 Hague Conference, the controversy centred on the choice between the terms "circumstances" and "obstacles", as the triggering events for excuse. The German delegation urged the decision to use the term "circumstances" because it feared that the use of "obstacle" might refer only to supervening and external events. This is in contrast to the more personal issue regarding the seller's due care or fault, and might bar excuse based on an extreme and onerous change in economic circumstances.[102]

As has been shown[103], Article 74 ULIS was already criticised during the discussions of the UNCITRAL Working Group. Since the clause could also apply to situations where performance had unexpectedly been made more difficult, it was thought to make it too easy for the promisor to excuse his non-performance of the contract. Therefore the wording of Article 74 was revised and the term "circumstances" was replaced by "impediments". This meant that there was the intention to narrow the scope of the exemption and to introduce an objective and more certain criterion.[104] Thus Article 79 CISG represents a retreat from the more lenient grounds for excuse in ULIS.

A Norwegian proposal at the Vienna Conference was rejected because it was feared that the doctrine of imprévision would be introduced into the Convention by the suggested amendment. This fact also shows that the drafters of Article 79 intended to exclude cases where performance merely became more difficult from the scope of this provision.

However, there was agreement at the Vienna Convention that the limitation in paragraph (3) should be deleted, i.e., that an exemption was "only" for the period during which the impediment existed.[105] This agreement can be interpreted as indicating that, after a temporary impediment has ceased, a final exemption for the promisor, on account of a change in circumstances, cannot at least be ruled out.[106]

6. Wording of Article 79

The legislative history of Article 79 indicates that the promisor cannot claim relief on the ground that its performance has become unforeseeably more difficult or unprofitable. However, the majority of commentators want to allow those changes in circumstances to be seen as impediments, in serious cases. According to some of these authors this is a natural consequence of the literal interpretation of the provision of Article 79.[107] The issue here is the obligation to avoid and/or overcome the impediment. If one takes this wording literally and applies it to the main case of changed circumstances, i.e., to the changes in the ratio between performance and counter-performance, it has to be noted that the subsumption is not actually that extraordinary.[108]

However, the insurmountable character of the impediment is defined rather strictly even though it is submitted to the requirement of reasonableness. The borderline between impracticability and a reasonably insurmountable impediment is, of course, uncertain.[109] The application of Article 79 to unanticipated economic difficulties should be consistent with the general principles applicable to this provision:

Thus, the Convention is said to refer to a more flexible standard than that of traditional force majeure, but it is undoubtedly stricter than frustration or hardship.[111]

7. The principle of good faith as a basis for exemption

Another approach to the problem of an extreme and onerous change in circumstances, is to base exemption in those cases on the principle of good faith, stated in Article 7(1) CISG. This approach is taken mainly by German commentators, who refer to cases of imprévision or great difficulty to perform as "economic impossibility" (wirtschaftliche Unmöglichkeit).[112]

In the event of a subsequent, unforeseeable impediment to performance as a result of a material change in economic conditions, there must be a "limit of sacrifice" (Opfergrenze). Beyond this, in view of the severe economic disadvantages involved, the promisor can no longer be expected to perform the contract.[113] Some authors base this result on Article 79 in connection with Article 7(1)[114]. Others, taking an outsider position and denying that economic impossibility constitutes an impediment in the meaning of Article 79, find it purely on the requirement that good faith in international transactions is to be promoted.

In the latter case, renegotiation of the contract may be allowed in extreme situations.[115] This position, however, has rightly been heavily criticised: The principle of good faith must not be used to bypass explicit provisions of the Convention (here in particular Article 79(5), stating the legal effects of the exemption). Furthermore, the notion of good faith is practically of no avail to the judge. If it were to be regarded as the legal basis of the theory of imprévision in international sales, harmony would be jeopardised and the aim of the Convention, as stated in Article 7(1) would not be attained.[116]

8. Case law

Only very little case law on Article 79 exists at this stage. In one case, decided upon in 1989 and involving an Egyptian buyer and a Yugoslavian seller, an ICC arbitral tribunal ruled that a 13% rise in the world market price of steel was neither sudden nor substantial nor unforeseeable, and would therefore not exempt the seller from his obligation to perform under Article 79.[117] In another case, which came under the ruling of a Russian arbitral tribunal, a seller claimed that he should be discharged from liability because the manufacturer of the goods contracted for refused to supply them. The tribunal held that the seller should bear liability for failure to fulfil his obligation because he was unable to establish that he could not have been expected to take that obstacle into account, or to avoid or overcome the obstacle or its consequences.[118]

There is only one case that purports to expressly deal with the question of whether instances of hardship fall within the scope of Article 79. This is the decision of the Italian Tribunale Civile di Monza in the case Nuova Fucinati S.p.A. v. Fondmetall International A.B.[119] An Italian seller of metal (Nuova Fucinati) sought to be excused from his sales contract with a Swedish buyer (Fondmetall Int'l) on the grounds of hardship. In terms of the February 3, 1988 contract, the seller was to deliver 1,000 tons of ironchrome. The contract permitted the buyer to choose a delivery date between March 20, 1988 and April 10, 1988.

Between the date the contract was entered into and the date selected by the buyer for delivery, the price of the ironchrome increased by almost 30%. Apparently, the contract did not contain a clause specifically providing for excuse of performance in cases of force majeure. At a hearing before the court, the seller argued that the contract should be avoided because of "supervening excessive onerousness" caused by the market price increase.

The court avoided the contract due to non-performance by the seller, and rejected the request of the seller for dissolution on the basis of supervening excessive onerousness. Although the court held that the Convention did not apply in this case, it concluded that even if Article 79 had applied, it only provided release from a duty made impossible by a supervening impediment, similar to the rule in Article 1463 of the Italian Civil Code. According to the court, Article 79 -- in contrast to Article 1467 of the Civil Code -- does not seem to contemplate the remedy of dissolution of contract for supervening excessive onerousness.

The distinction between "impossible" and "excessively onerous" performance is a crucial one in the court's reasoning, because it highlights the important role of the structure of the Italian Civil Code in the outcome of the case. From the court's first mentioning of Article 79 CISG, Italian domestic law was used as a frame of reference for deciding the meaning of an "impediment" to performance. Even if the court had found that the Convention did apply to the dispute at hand, it would have read the "impediment" term as meaning "impossible" -- that which is suggested by the Civil Code.[120]

This case, which excludes situations of hardship from the scope of application of Article 79, illustrates the aforec-mentioned danger that judges interpreting Article 79 would refer to similar concepts in their own law.

9. Conclusion

The majority of commentators rightly want to allow for changes in circumstances, making performance more expensive or difficult, to be seen as impediments in serious cases. Although the reasonings differ, there is evidence that the barrier evoked by the use of the term "impediment" is not limited to physical or legal bars to performance.

Despite the fact that Article 79's "impediment" connotes a barrier that prevents performance, it refers to a more flexible standard than force majeure. It is, however, not evident how insurmountable the standard should be in practice. There may be a nuance between great difficulty of performance and absolute impossibility. Here, a case-by-case analysis is required. However, Article 79 is a rather young provision and there is very little case law dealing with it. In this absence of an "acquired patina of legal meaning", it is probable that elastic terms like "due to an impediment" will be read in the context of each system's view of the limits within which an excuse of that kind should be admitted.[121]

The discussion shows that at present it cannot be determined with sufficient certainty how the issue of radically changed circumstances, where the performance of one of the parties has become much more onerous and difficult, can be decided on the basis of the CISG. Furthermore, the appropriate legal remedy in such cases of hardship or imprévision is principally the right to renegotiate the contract, and to adapt it to the changed circumstances. The adaptation of the contract by the judge, however, is not expressly allowed by the Convention, and must therefore be regarded as impossible[122].

In the light of Article 6, therefore, contracting parties are urgently recommended to include in their contracts a provision which defines impediments and excuses, and the consequences thereof, in the manner desired by the parties.

V. Force Majeure and Hardship Clauses

The CISG was drafted in general terms, so as to avoid too much detail, as well as certain controversial issues, as it has been shown with regard to Article 79. Detailed attention to relevant issues in the contract itself is highly recommended. Under the Convention the contract is the important document or, as it has been put[123], the dominant theme of the Convention is the role of the contract made by the parties.

Force majeure and hardship clauses, frequently introduced into contracts for international sales transactions, deal with situations of changed circumstances. In these clauses the contracting parties define impediments and excuses and the consequences thereof. The sphere of operation and the purpose of force majeure and hardship clauses in international contracts will now be considered in more detail.

Some legal systems have not accepted hardship as an excuse for non-performance. Due to this fact, and the unwillingness of the courts and legislators in many countries to assist parties in modifying their contracts to fit fundamentally changed circumstances, hardship clauses have been introduced into these contracts.[124] The CISG has not resolved the existing problems. Hardship clauses may therefore be highly desirable in cases where the CISG applies.

Hardship clauses organise the revision of the contract whenever a change of circumstances significantly modifies the economy of the contract.[125] They apply to situations of changed circumstances in which the parties intend not to dissolve the contract but to continue it. Sometimes the parties are compelled by economic circumstances to consider the continuation rather than the dissolution of their contract, in spite of changed circumstances. The construction of a factory, for example, has to be completed, or the supply of crude oil or natural gas has to be continued, in spite of those changes.[126]

Hardship clauses always consist of two main parts. The first part of the clause defines the hypothesis when the clause applies. The second part deals with the effects of hardship, i.e., what happens whenever the hypothesis is realised.[127]

1. The hypothesis

The hypothesis of a hardship clause has two aspects: the clause sets out the circumstances in which hardship exists; it then describes the consequences or effect of these circumstances on the parties to the contract.[128]

Hardship clauses usually state that the circumstances at the time of the conclusion of the contract have changed. This change of circumstances must be serious or substantial, and beyond control of either party. Finally, the change must be entirely uncontemplated and unforeseeable.[129] The wording of hardship clauses can be very broad and refer to "events" as the circumstances which are to be considered. Sometimes, the wording is more specific, for example "monetary events", or specific changes in environmental conditions are taken into account. To sum up, it seems advisable to use broad wording, and then give a list of specific circumstances as an example and insert the circumstances that are excluded.[130]

The effect of the change in circumstances is that the contract is out of balance, leading to a substantial economic hardship. Here, some clauses set out the requirement that a party is prejudiced. This, however, seems too extensive. The use of more subjective criteria, such as "unfair" or "inequitable" should, because of their vagueness, also be avoided.[131]

2. Effect of a hardship clause

Usually, hardship clauses provide for revision of the contract. Some clauses set out criteria for the revision of the contract, for example "to restore the equilibrium between the parties as it was at the time of the conclusion of the contract". A more subjective approach would be, for example, "with fairness" or "equitable adjustment".[132]

In the case where no agreement between the parties can be reached, hardship clauses provide for sanctions. The stipulation of revision of a contract is only useful if it is followed by a sanction that deals with the situation when no agreement can reached. "A hardship clause without a sanction is hardly worth the paper on which it is written."[133] Sanctions are usually the termination of the contract or adaptation of the contract by a third person. In the latter case, provision can be made for the intervention of an arbitrator, an expert or even a court.

Force majeure clauses, often very detailed, are almost invariably included in international business contracts, irrespective of their proper or selected governing law.[134] However, they only have relevance if they differ from the doctrine of force majeure that would be applicable without the existence of such a clause.[135]

Force majeure clauses are generally drafted in such a way as to offer a definition of the concept, followed by a non-exhaustive list of the events agreed upon by the parties as constituting force majeure.[136] Furthermore, a duty of notification, obliging the affected party to give notice of the force majeure event, is often provided.[137] Finally, force majeure clauses set out the legal effect of a force majeure situation.

1. Situations of Force majeure

The prerequisites for a given event to constitute force majeure in international trade practice are less restrictive than in municipal laws. Thus, in some modern clauses, events of force majeure are defined as events that do not necessarily render the contract performance impossible, but hamper the normal discharge of the contract obligation, or make it exorbitant from a commercial standpoint.[138] An overlap with situations of hardship is evident here. Even the requirement of the unforeseeability of the event, always present in municipal law, is sometimes relaxed in international trade practice or, as suggested by some authors, omitted entirely.[139] The requirement of domestic laws, however, that the force majeure events must not be attributable to the obligee and must be irresistable or beyond the control of the parties, is also contained in force majeure clauses in international contracts.

It is recommended and usual practice that force majeure clauses, after defining the concept in a catch-all provision, set out a non-exhaustive list of agreed force majeure events. Examples of traditional events contained in such lists are tornadoes, lightning, floods, fires, earthquakes, and usually severe weather conditions.[140] The list of specific force majeure events included in international contracts has evolved in such a way as to include impediments to the ability of the parties to fulfil their obligations. These are in addition to the classical events of natural calamities and wars, and may be due to

2. Notice Requirement

Another feature often provided for in force majeure clauses, is a formal obligation of notification. Such a provision can require that a party that wishes to be excused from performance under the clause, give prompt notice of such an intention to the other party, unless the other party has actual notice.[142] Failure to provide such notice often results in drastic consequences where one cannot rely on the clause to excuse non-performance. However, such a situation is not thought to result automatically from a failure to provide timely notice; there is usually an express provision in the contract.[143]

3. Legal effect of force majeure

The general rule as to the consequences of a situation of force majeure, is that it implies first of all a disclaimer of liability for the effects of such an event, i.e., normally for the delay in performance, or for the failure to perform. This means that the promisor is not liable for damages, as he would be under the general doctrine of contract. The ultimate consequence is that the risk connected with the occurrence of the force majeure event is shifted from the promisor to the other party of the contract.[144]

Unlike in most municipal laws that adopt the notion of force majeure, in international trade practice, force majeure does not necessarily result in the termination of the contract. More often there is provision for two stages with respect to the effect of force majeure. In the first stage, either the duty to discharge the obligation is suspended for the duration of the force majeure condition, or the time of performance of the contract is extended for a specific period. If the event which constitutes force majeure is permanent, or continues after the expiration of that period, each party is entitled to terminate the contract.[145] If the force majeure condition ceases before the expiration of the additional period of time the contract revives without consequences.

In departing from the traditional approach towards drafting force majeure clauses, modern clauses of this kind contain renegotiation provisions, obliging the parties to renegotiate the terms of the contract and adapt it to the new circumstances.[146] Whether or not drafters put such provisions into their force majeure clauses will, inter alia, depend on what value they attach to their relationship.[147] As an alternative to renegotiation, or in the case of its failure, force majeure clauses also sometimes contemplate recourse to arbitration or some other kind of alternative dispute resolution, like a technical expertise procedure.[148] It is evident that these broad force majeure clauses, providing for the adaptation of the contract, again overlap with hardship clauses. In conclusion, unlike the approach of the CISG and municipal systems, international trade practice is evolving in the direction of preserving the agreement to the greatest degree possible.

Force majeure and hardship clauses traditionally differ in their sphere of application and their legal effects and, thus, in their aims in dealing with a situation of changed circumstances. Modern contract practice in international trade, however, has evolved in such a way that the difference between these two types of clauses has diminished.

VI. The Use of Standard Forms of Contract

The use of standard forms of contract is widespread in international trade.[149] These standard forms often explicitly make provision for the consequences of serious impediments to performance. They are valid if the parties have expressly or impliedly concluded their contract by reference to them.[150] Thus, for example, the standard contracts of the United Nations Economic Commission for Europe (ECE) are widely referred to in contracts between European parties. Sometimes, on the initiative of the European exporter, they are even used in contracts governing the export of goods from Europe to America, Africa or Asia.[151] Another example of rather common contract forms is that of the FIDIC[152] Conditions of Contract for Works of Civil Engineering Construction.[153]

Document No. 421 of the International Chamber of Commerce provides another approach to the introduction of standard force majeure clause into an international contract. It contains a rather elaborate model force majeure clause, and responds to many of the defects that have been ascribed to Article 79 CISG. The clause, however, does not provide for the adaptation of the contract.[154]

The parties to an international sales transaction can also agree that the UNIDROIT Principles of International Commercial Contracts shall govern their contract. The UNIDROIT Principles do not fit into any of the traditional categories of legal instruments that have up to now been prepared on an international level, as they are neither model clauses (such as Document No. 421 of the ICC) nor standard forms of contract.[155] However, in their preamble it is stated that the Principles shall be applied when parties have agreed that their contract be governed by them. The Principles, thus, may also have the function of standard forms of contracts.

With respect to situations of changed circumstances, the UNIDROIT Principles could offer sufficiently elaborate and widely accepted rules on hardship and force majeure. The group that prepared the rules was not bound by instructions of governments with their mostly conservative attitude towards new legal inventions. The combined knowledge of different facets of legal theory and practice in the group could be used in order to elaborate rules which fit international contractual practice.[156] For this reason the UNIDROIT Principles and their force majeure and hardship clauses will now be considered in more detail.

VII. The UNIDROIT Principles of International Commercial Contracts

The UNIDROIT Principles represent an attempt to unify international trade law. It was felt that international conventions or model laws are often fragmentary in character, and that model clauses and contracts, formulated by the interested business circles, are frequently drafted in a one-sided manner presupposing a more general regulatory system within which to operate.[157] The aim of UNIDROIT was to specifically elaborate a general regulatory system which could apply universally, and restate the general principles of contract law, reflecting all the major legal systems of the world.[158]

A special Working Group, set up in 1980, had the task of preparing the various draft chapters of the Principles. It consisted of members of the major legal and socio-economic systems of the world. These members, most of them academics, were leading experts in the field of comparative law and international trade law. They all sat in a personal capacity and did not express the views of their governments.[159] After the draft Principles had been transmitted to the Governing Council of UNIDROIT for final consideration, the Principles were published in June 1994.

Each article of the Principles is accompanied by a commentary forming an integral part of the rule itself, and explaining the reasons for the rule and the different ways in which it may operate in practice.

Since the Principles are not in the form of a convention or a model law, they do not have a binding effect. They will be applied in practice only because of their persuasive character. Application in five different contexts is possible.[160]

1. Application by incorporation into the contract

Where the parties agree that their contract shall be governed by the UNIDROIT Principles, the Principles are undoubtedly applicable, because they are incorporated into the contract like any other contractual clause.[161] Since such an agreement is normally considered a mere assent to incorporate the Principles into the contract, the law governing the contract still has to be determined on the basis of the private international laws of the forum. As a result, the Principles will bind the parties only to the extent that they do not contradict mandatory rules of the applicable law.[162]

2. Application by reference to lex mercatoria

According to the preamble, the Principles may also apply when the parties have agreed that their contract be governed by "general principles of law" or the lex mercatoria. Here the UNIDROIT principles provide both the arbitrator and the parties with some rules that clarify the vague concepts of "general principles" and lex mercatoria, as these have often been criticised as unpredictable and uncertain.[163]

3. The Principles as a model for legislators

The Principles may also serve as a model to national and international legislators, for the drafting of legislation in the field of general contract law, or with respect to special types of transactions. At an international level they could become an important term of reference for the drafting of conventions and model laws. Here, misunderstandings due to inconsistencies in terminology could be avoided if the terminology of the Principles were to be adopted as an international uniform glossary.[164]

4. The Principles as a substitute for the applicable domestic law

As set out in the preamble, the Principles may also be of relevance if the contract is governed by a particular domestic law, even although the application of the Principles is not provided for in the contract. This is the case, whenever dealing with a specific issue, it proves impossible to establish the relevant rule of that particular domestic law and a solution can be found in the Principles. However, recourse to the Principles as a substitute for otherwise applicable domestic law, is a last resort.[165]

5. Application as a means of interpretation and supplementing existing international instruments

The UNIDROIT Principles may further serve as instruments for the interpretation and gap-filling of international uniform law. The main idea is to preclude an easy resort to the domestic law indicated by the conflict of laws rule by the forum. The Principles provide guidelines for an "autonomous" interpretation -- an interpretation based upon the uniform law's international character. The judge or arbitrator is offered a rule that is likely to be more suitable to an international commercial contract than a domestic rule of contract law.[166] Supplementing an international instrument with the UNIDROIT principles has the additional advantage of enhancing consistency and fairness in the adjudication of international commercial disputes.

Article 7(1) CISG expressly sanctions this approach of the UNIDROIT Principles. Article 7(1) provides that in the interpretation of the Convention one must pay regard to its international character and to the need to promote uniformity in its application. The potential use of the UNIDROIT Principles as a means of interpreting and supplementing the CISG must be examined, however, in the light of Article 7(2) CISG.[167] This provision states that questions falling within the scope of the CISG, but not expressly settled by its text, are to be settled in conformity with the general principles on which the CISG is based. Only as a last resort should there be reference to the domestic law indicated by the conflict of laws rules of the forum.

However, the CISG fails to indicate which provisions are the "general principles" on which it is based. Moreover, it is not always easy to determine whether a given issue, which is not specifically addressed by the CISG, actually falls under its scope. In order to achieve the aim set out in Article 7(1) the UNIDROIT Principles could in instances be seen as a component part of the "general principles" underlying the CISG.[168] If it is possible to determine that a provision of the CISG contains a gap and a certain issue is not expressly dealt with in the Convention, the UNIDROIT Principles can be expressed as a possible basis for supplementing this provision.

6. Conclusion as to the application of the UNIDROIT Principles

In conclusion, it can be said that the UNIDROIT Principles apply only if incorporated into the contract, or if they find enough favour with an arbitrator or judge looking for a rule to fill a gap encountered in the regulation of a given international commercial contract.

In this paper, the relationship between Article 79 CISG and the provisions on situations of changed circumstances of the UNIDROIT Principles, is of specific interest. In order to develop this issue the relevant provisions of the Principles have to be introduced.

1. Article 7.1.7 - Force majeure

Article 7.1.7 of the UNIDROIT Principles seems to be very similar to Article 79 CISG. However, in Article 7.1.7 of the Principles, the function of force majeure as an exemption has been enlarged in comparison with the CISG. In Article 79 CISG the effect of the exemption is reduced to claims for damages only. The Principles use quite the opposite approach. They adhere to the principle that the excuse is general, but in paragraph (4) they make important exceptions in determining certain claims which are not affected by force majeure. These include the right to terminate the contract, or withhold delivery, or request interest in money due. Therefore, in the case of force majeure, performance cannot be claimed, and this refers also to damages and penalties.[169]

Article 79 CISG does not contain a gap that could be filled by the provision on force majeure of the UNIDROIT Principles. Although the wording of Article 79(5) would allow a claim for performance in situations where obligations are physically impossible to fulfil, it is believed that in domestic courts a judgment for a physically impossible performance would neither be sought nor obtained.[170] Therefore there are no compelling reasons to substitute the provision of Article 79 CISG with that of Article 7.1.7 of the UNIDROIT Principles.

2. Articles 6.2.1 to 6.2.3 - hardship

In contrast to the CISG, the UNIDROIT Principles dedicate an entire section -- comprised of three Articles -- to hardship. The first of these Articles (Article 6.2.1) stresses the exceptional character of hardship by emphasising the serious nature of the principle pacta sunt servanda.

Article 6.2.2 contains the definition of hardship. This definition has the form of a general description, and states that hardship is a situation where the occurrence of events fundamentally alters the equilibrium of the contract, provided that those events meet the requirements which are laid down in subparagraphs (a) to (d). Whether an alteration is "fundamental" will of course depend upon the circumstances in every case. The commentary on Article 6.2.2 states that if the performances are capable of precise measurement in monetary terms, an alteration amounting to 50% or more of the cost, or the value of the performance, is likely to amount to a "fundamental" alteration.[171] Article 6.2.2 states further that a "fundamental" alteration in the equilibrium of the contract may manifest itself in two different ways -- either there is an increase in the cost of the disadvantaged party's performance, or a decrease in the value of what it has to receive.

The additional criteria for an event to constitute hardship are: (1) the events occur or become known after the conclusion of the contract; (2) the events could not reasonably have been taken into account by the disadvantaged party; (3) the events are beyond the control of the disadvantaged party; (4) the risks must not have been assumed by the disadvantaged party.

The effects of hardship (Article 6.2.3) have both a procedural and a substantive law aspect.[172] The procedural aspect starts with the right of the disadvantaged party to request renegotiations. The request shall be made without undue delay and shall indicate the grounds on which it is based.[173] If the disadvantaged party fails to comply with these requirements, it does not lose its right to request renegotiations. This failure may, however, affect the finding as to whether hardship actually existed, and its consequences for the contract.[174]

If the parties fail to reach agreement on the adaptation of the contract to the changed circumstances within a reasonable time, Article 6.2.3 (3) authorises either party to resort to the court. Paragraph (4) provides certain substantial rules for this case, which give a legal basis for constructive legal decision making.[175] According to these rules, a court which finds that a hardship situation exists, may react in a number of different ways. It therefore has the possibility to terminate the contract (Paragraph (4)(a)). The court can also adapt the contract with a view to restoring its equilibrium (Paragraph (4)(b)). In so doing the court will seek to make a fair distribution of the losses between the parties. If neither termination nor adaptation is appropriate in certain circumstances, the only reasonable solutions are for the court to either

direct the parties to resume negotiations, or to confirm the terms of the contract as they stand.[176]

For judges and arbitrators, the provisions on hardship of the UNIDROIT Principles may serve as a means of interpretation of, or supplementation to Article 79 CISG. This requires that Article 79 contain a gap with respect to situations of hardship. It has been shown that it cannot be determined with sufficient clarity how the issue of radically changed circumstances can be decided upon, on the basis of Article 79 and the CISG in general. Furthermore, the adaptation of the contract by the judge is not expressly allowed by the Convention, and must therefore be regarded as impossible. It is also clear that the CISG does not contain a specific provision dealing with hardship.

However, it is generally believed (as is proven in the history of Article 79) that Article 79 does not contain a gap as to situations of imprévision or hardship.[177] Proposals, brought forward during the drafting process of the Convention, to make provision for those situations, were expressly rejected. Moreover, the purpose of Article 79 is to set definite limits on the promisor's liability for breach of contract. Judges and arbitrators therefore cannot use the provisions on hardship of the UNIDROIT Principles to interpret or supplement the CISG.

Parties to a contract which is governed by the CISG, however, are free to agree on the applicability of the UNIDROIT Principles to their contract. In this case, the Principles' provisions on hardship become a part of their agreement and thus supplement Article 79 CISG.[178]. It is also possible for the parties to include only the Principles' hardship provisions into their contract. In view of the narrow scope of Article 79 and the uncertainties surrounding it, the contractual supplementation of Article 79 with the respective provisions of the UNIDROIT Principles may be strongly advisable. The parties can, depending on the needs and features of their transaction, adapt the provisions of the Principles so as to take into account these needs and features.[179]

VIII. Recommendation as to force majeure and hardship clauses

As it has been shown, provision should be made for situations of changed circumstances in international commercial contracts. Because of the shortcomings of the CISG with regards to this problem, it is also advisable in situations where the Convention applies to the contract.

With respect to these provisions it is suggested that, for the sake of uniformity, simplicity and efficiency, the contract should contain only one clause covering the problem of changed circumstances. Here, the scope of a force majeure clause can be broadened as far as the limits of the freedom of contract permit.[180] As it has been shown,[181] this is already the case in modern contractual practice where force majeure clauses overlap to a great extent with provisions on hardship. Despite the fact that the concept of hardship also relates to changed circumstances, such a force majeure clause should be considered capable of covering the entire problem.[182]

A clause of this kind can be drafted along the lines of classical hardship clauses (for example Articles 6.2.1 to 6.2.3 of the UNIDROIT Principles), whereby one ensures that situations where performance has become impossible, are also covered. The adaptation of the contract to the changed circumstances should also be put forward as a possible remedy.

In general it must be said, depending, of course, on the scope and duration of the transaction in question, that the topic of changed circumstances is too important to be addressed in standardised force majeure or hardship clauses.[183] If necessary, those standard clauses should be tailored to the needs of the contract in which they must serve.

IX. Conclusion

The concepts of hardship and force majeure constitute exceptions to the principle "pacta sunt servanda". They apply in situations where the circumstances existing at the conclusion of the contract have subsequently changed so drastically that the parties would not have made the contract, or would have made it differently, had they known what was going to happen. Here, hardship occurs where the performance of the disadvantaged party has become much more burdensome, but not impossible, while force majeure means that the performance of the party concerned has become impossible, at least temporarily. The classical concept of force majeure is primarily directed at settling the problems resulting from non-performance, either by suspension or by termination. The concept of hardship, however, is mainly directed at the adaptation of the contract.

The conceptions of municipal legal systems, dealing with situations of changed circumstances, are orientated on the two basic concepts of force majeure and hardship and, thus, share important features. Nevertheless, these conceptions also differ from each other, and no specific overall trend may be traced.

The problem of changed circumstances is especially an issue in the field of international trade. Here, many contracts have a complicated structure, and even if they are not long-term contracts, they frequently exist over a significant period of time. They are, furthermore, subject to political and economic influences in foreign countries. This means that international trade transactions can imply a great deal of uncertainty.

In an attempt to tackle the problem of changed circumstances on an international level, and to create uniformity, the CISG addresses this issue in Article 79. It avoids reference to existing concepts as it developed a system of its own. This concept, however, is not able to solve the problem entirely. It is even likely that Article 79 will be the Convention's least successful provision. The most discussed problem in the context of Article 79, is if radically changed circumstances -- where the performance of one of the parties has become much more onerous and difficult, but not impossible -- fall within the scope of this provision. Because of Article 79's vagueness, however, it cannot be determined with sufficient certainty how this issue can be decided on the basis of the CISG. The adaptation of the contract by the judge is, moreover, not expressly allowed by the Convention, and must therefore be regarded as impossible. For these reasons contracting parties are urged to include into their contracts a provision dealing with the matter of changed circumstances, in the manner desired by the parties.

Standard forms of contract containing force majeure and hardship clauses are frequently introduced into international commercial contracts. With respect to situations of changed circumstances the UNIDROIT Principles could offer sufficiently elaborate and widely accepted rules on hardship and force majeure. By implementing these rules into their contract, parties could supplement the narrow and vague provisions of Article 79 CISG. However, when parties draft their own force majeure clauses, it is recommended that, for the sake of uniformity, simplicity and efficiency, the contract contain only one clause covering the problem of changed circumstances.

FOOTNOTES

* 1999 Submission, Essay Competition, Institute of International Commercial Law of the Pace University School of Law. Study project presented in partial fulfilment of the requirements for the degree of Master of Laws at the University of Stellenbosch, South Africa.

1. Puelinckx, "Frustration, Hardship, Force majeure, imprévision, Wegfall der Geschäftsgrundlage, Unmöglichkeit, Changed Circumstances", 1986 Jnl. Int'l Arb. 47.

2. Maskow "Hardship and Force Majeure", 1992 Amer. Jnl. Comp. L. 657 658.

3. Maskow, 1992 Amer. Jnl. Comp. L. 658.

4. Schmitthoff, Schmitthoff's Export Trade 8 ed (1986) 146.

5. Horn, in: Kötz, v. Bieberstein (ed), Die Anpassung langfristiger Verträge im internationalen Wirtschaftsverkehr (1984) 9.

6. Hereafter referred to as CISG or the Convention.

7. Draetta, "Force Majeure Clauses in International Trade Practice", 1996 Int'l Business L. Jnl. 547.

8. Walker, The Oxford Companion to Law (1980) 478; James Stroud's Judicional Dictionary II (1986) 1008.

9. Matsoukis v. Priestman & Co [1915] 1 K.B. 681.

10. Walker, Oxford Companion 14.

11. [1952] W.N. 422.

12. Den Haerynck, Drafting Hardship Clauses in International Contracts, in: Campbell (ed),

Structuring International Contracts (1996) 231 232.

13. Puelinckx, 1986 Jnl. Int'l Arb 50.

14. Returned Soldiers, etc. League of Australia Incptd. v. Abbott (1946) S.A.S.R. 270.

15. F.G. O'Brien Ltd v. Elliott [1965] N.S.W.R. 1473.

16. Schmitthoff, "Hardship and Intervener Clauses", 1980 Jnl. of Business L. 82 85.

17. Maskow, 1992 Amer. Jnl. Comp. L. 663.

18. Maskow, 1992 Amer. Jnl. Comp. L. 664.

19. Draetta, 1996 Int'l Business L. Jnl. 548.

20. 82. Eng. Rep. 897 (K.B. 1647).

21. (1863), 3 B & S 826.

22. (1863), 3 B & S 826 at 839.

23. Draetta, 1996 Int'l Business L. Jnl. 548.

24. Puelinckx, 1986 Jnl. Int'l Arb. 49.

25. E.g., Krell v. Henry (1903) 2 K.B. 740.

26. Schmitthoff, Export Trade 154.

27. Restatement (Second) of Contracts (1979).

28. Uniform Commercial Code (1979).

29. Draetta, 1996 Int'l Business L. Jnl. 549.

30. Declercq, "Modern Analysis of the Legal Effect of Force Majeure Clauses in Situations of Commercial Impracticability", 1995 Jnl. L. & Comm. note 19.

31. Declercq, 1995 Jnl. L. & Comm. 213 222.

32. Draetta, 1996 Int'l Business L. Jnl. 549; Deqlercq, 1995 Jnl. L. & Comm. 222.

33. Puelinckx, 1986 Jnl. Int'l Arb. 55.

34. According to the latter a contract shall cease to be obligatory as soon as the circumstances on which it is founded have substantially changed.

35. Den Haerynck, Drafting Hardship Clauses 232.

36. Puelinckx, 1986 Jnl. Int'l Arb. 55; Den Haerynck, Drafting Hardship Clauses 233.

37. Puelinckx, 1986 Jnl. Int'l Arb. 56.

38. Larenz, Lehrbuch des Schuldrechts I, 14 ed (1987) 330; Puelinckx, 1986 Jnl. Int'l Arb. 60.

39. Larenz, Schuldrecht 324.

40. Rebus sic stantibus: at this point if affairs; in these circumstances

41. Puelinckx, 1986 Jnl. Int'l Arb. 60. The doctrine provides that the contract ceases to be obligatory as soon as the circumstances on which it is founded have substantially changed.

42. Larenz, Schuldrecht 331,332.

43. Larenz, Schuldrecht 329.

44. Christie, The Law of Contract in South Africa, 2 ed (1991) 563.

45.

⁴⁵ 1919 AD 427.

47. 1919 AD 427 435.

47. Christie, Contract 563.

48. Christie, Contract 107.

49. MacDuff & Co Ltd v. Johannesburg Consolidated Investment Co Ltd, 1924 AD 573 601-2.

50. 1993 (4) SA 788 (SEC).

51. 1993 (4) SA 788 802 A-G.

52. Pretorius, Floyd, "Mistake and Supervening Impossibility of Performance", 1994 THRHR 325, 328.

53. Ramsden "Could Performance Have Been Impossble in Kok v. Osborne & Another?", 1994 SA Merc LJ 340 342.

54. Kritzer, International Contract Manual - Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods - Detailed Analysis (1994) 623.

55. Posch, On the Law of International Sale of Goods: An Introduction, in: Lafili, Gevurtz & Campbell (ed) Survey of the International Sale of Goods (1986) 3.

56. Kritzer, Practical Applications of the CISG - Highlights 1.

57. International Institute for the Unification of Private Law (UNIDROIT).

58. Posch, International Sale 6.

59. Kritzer, Practical Applications of the CISG - Highlights 1.

60. More than 100 states have ratified this Convention.

61. Honnold, Documentary History of the Uniform Law for International Sales (1989) 2.

62. Honnold, Documentary History 185.

63. Honnold, Documentary History 185.

64. Stoll, in: Schlechtriem (ed) Commentary on the UN Convention on the International Sale of Goods (1998) 602.

65. Honnold, Documentary History 349.

66. Honnold, Documentary History 349-350.

67. Stoll, in: Schlechtriem Commentary on the CISG 602.

68. Honnold, Documentary History 602-603.

69. The final official text of Article 79 CISG reads:

70. Enderlein/Maskow, United Nations Convention on Contracts for the Internaional Sale of Goods (1992) 320; Tallon, in: Bianca & Bonell (ed) Commentary on the International Sales Law - The 1980 Vienna Sales Convention (1987) 576; Magnus, in: Honsell (ed) Kommentar zum UN- Kaufrecht (1997) 986; Ziegler, Leistungsstörungsrecht nach dem UN-Kaufrecht (1995) 218; Keil, Die Haftungsbefreiung des Schuldners im UN-Kaufrecht (1993) 33.

71. Tallon, in: Bianca, Bonell Commentary 577; Ziegler, Leistungsstörungsrecht 218; Enderlein/Maskow, Commentary 321; Nicholas, "Force Majeure and Frustration", 1979 Amer. J. Comp. L. 231 240; different opinion by Honnold, Uniform Law for the International Sales under the 1980 United Nations Convention, 2 ed (1991) 534-537.

72. Honnold, Documentary History 445.

73. Stating that the Convention is not concerned with the validity of the contract.

74. Tallon, in: Bianca, Bonell Commentary 578.

75. Kritzer, Practical Applications of the CISG - Detailed Analysis 628; To the same effect: Enderlein/Maskow, Commentary 323, Piltz Internationales Kaufrecht (1993) 162; Stoll, in: Schlechtriem, Commentary on the CISG 610.

76. Compare definitions under II.1 and III.3 supra.

77. Tallon, in: Bianca, Bonell Commentary 579.

78. Enderlein/Maskow, Commentary 322.

79. Tallon, in: Bianca, Bonell Commentary 582; Stoll, in: Schlechtriem Commentary on the CISG 613-614; Magnus, in: Honsell UN-Kaufrecht 688.

80. Tallon, in: Bianca, Bonell Commentary 580, 581.

81. Enderlein/Maskow, Commentary 324.

82. Tallon, in: Bianca, Bonell Commentary 581.

83. Secretariat Commentary, in: Honnold Documentary History 446.

84. Kritzer, Practical Applications of the CISG - Detailed Analysis 631.

85. Honnold, Commentary 459.

86. Secretariat Commentary, in: Honnold Documentary History 446.

87. Tallon, in: Bianca, Bonell Commentary 588.

88. Article 28 states that no court is bound to enter a judgment for specific performance unless the court would do so under its own law.

89. Honnold, Documentary History 604-606.

90. Kritzer, Practical Applications of the CISG - Detailed Analysis 642.

91. Enderlein/Maskow, Commentary 320; Tallon in: Bianca, Bonell Commentary 574.

92. Kritzer, Practical Applications of the CISG - Detailed Analysis 623.

93. Tallon, in: Bianca, Bonell Commentary 594.

94. Kritzer, Practical Applications of the CISG - Detailed Analysis 624.

95. Honnold, Documentary History 350.

96. See Chapter IV.B, supra.

97. Stoll, in: Schlechtriem Commentary on the CISG 618; Rudolph Kaufrecht der Export- und Importverträge (1996) 399.

98. Honnold, Commentary 537.

99. Tallon, in: Bianca, Bonell Commentary 595; Enderlein/Maskow, Commentary 320.

100. See Chapter III supra.

101. Honnold, Commentary 532-533; Enderlein, Maskow Commentary 320.

102. Weitzmann, "Validity and Excuse in the U.N. Sales Convention", 1997 Jnl. L. & Comm. 265; Nicholas, 1979 Amer. Jnl. Comp. L. 238; Honnold, Commentary 534-535.

103. See Chapter IV.B.2 supra.

104. Honnold, Commentary 535; Nicholas 1979 Amer. Jnl Comp. L. 240.

105. Honnold, Documentary History 603.

106. Keil, Haftungsbefreiung 190-191; Stoll in: Schlechtriem Commentary on the CISG 603.

107. Honnold, Commentary 543; Enderlein/Maskow, Commentary 325.

108. Enderlein/Maskow, Commentary 325.

109. Tallon, in: Bianca, Bonell Commentary 592.

110. Honnold, Commentary 544.

111. Tallon, in: Bianca, Bonell Commentary 592.

112. Stoll, in: Schlechtriem Commentary on the CISG 618; Enderlein/Maskow Commentary 25; Keil, Haftungsbefreiung 191; Rudolph, Kaufrecht 399.

113. Rudolph, Kaufrecht 399; Keil, Haftungsbefreiung 191.

114. Keil, Haftungsbefreiung 191.

115. Rudolph, Kaufrecht 399; Stoll, in: Schlechtriem Commentary on the CISG 618.

116. Tallon, in: Bianca, Bonell, Commentary 594.

117. ICC Arbitration Case No. 6281 of 1989 at http://cisgw3.law.pace.edu/cases/896281i1.html

118. Case Law on UNCITRAL Texts, CLOUT abstract no. 102.

119. Tribunale Civile di Monza 14 January 1993 at http://cisgw3.law.pace.edu/cases/930329i3.html

120. Weitzmann, 1997 Jnl. L. & Comm. 265.

121. Kritzer, Practical Applications of the CISG - Detailed Analysis 640.

122. Tallon, in: Bianca, Bonell Commentary 592.

123. Honnold, Commentary 47.

124. Schmitthoff, 1980 Jnl. Business L. 84.

125. Den Haerynck, Hardship Clauses 234.

126. Schmitthoff, Export Trade 648.

127. Den Haerynck, Hardship Clauses 235.

128. Schmitthoff, 1980 Jnl. Business L. 85.

129. Schmitthoff, 1980 Jnl. Business L. 85.

130. Den Haerynck, Hardship Clauses 237; Horn, Vertragsanpassung 27.

131. Den Haerynck, Hardship Clauses 238.

132. Den Haerynck, Hardship Clauses 239.

133. Schmitthoff, 1980 Jnl. Business L. 88.

134. Draetta, 1996 Int'l Business L. Jnl. 550; Schmitthoff, Export Trade 164.

135. Declercq, 1995 Jnl. L. & Commerce 213.

136. Draetta, 1996 Int'l Business L. Jnl. 551.

137. Declercq, 1995 Jnl. L. & Commerce 244.

138. Draetta, 1996 Int'l Business L. Jnl. 552; Horn, Vertragsanpassung 27.

139. Declercq, 1995 Jnl. L. & Commerce 248; Draetta, 1996 Int'l Business L. Jnl. 552.

140. Declercq, 1995 Jnl. L & Commerce 233.

141. Draetta, 1996 Int'l Business L. Jnl. 552.

142. Horn, Vertragsanpassung 33.

143. Draetta, 1996 Int'l Business L. Jnl. 552.

144. Draetta, 1996 Int'l Business L. Jnl. 553.

145. Schmitthoff, Export Trade 165; Horn, Vertragsanpassung 33-34.

146. Declercq, 1995 Jnl. L. & Commerce 245; Horn, Vertragsanpassung 34; Draetta 1996 Int'l Business L. Jnl. 551.

147. Declercq, 1995 Jnl. L. & Commerce 245.

148. Draetta, 1996 Int'l Business L. Jnl. 551.

149. Stoll, in: Schlechtriem Commentary on the CISG 624; Bartels, Motomura "Haftungsprinzip, Haftungsbefreiung und Vertragsbeendigung bein Internationalen Kauf", 979 RabelsZ 649 669; Stoll, in: Dölle (ed) Kommentar zum Einheitlichen Kaufrecht (1976) 463.

150. Stoll, in: Schlechtriem Commentary on the CISG 624.

151. Stoll, in: Dölle Kommentar 463.

152. Fédération internationale des ingénieurs-conseils

153. Horn, Vertragsanpassung 11; Draetta, 1996 Int'l Business L. Jnl. 553.

154. Kritzer, Practical Applications of the CISG - Detailed Analysis 650-651; Draetta, 1996 Int'l Business L. Jnl. 554.

155. Bonell, "The UNIDROIT Principles of International Commercial Contracts: Why? What? How?", 1995 Tulane Law Review 1121, 1122.

156. Maskow, 1992 Amer. Jnl. Comp. L. 659.

157. Bonell, "Unification of Law by Non-Legislative Means: The UNIDROIT Principles for International Commercial Contracts", 1992 Amer. Jnl. Comp. L. 617.

158. Bonell, 1992 Amer. Jnl. Comp. L. 617 618.

159. Bonell, 1992 Amer. Jnl. Comp. L. 619.

160. Ferrari, "Defining the Sphere of Application of the 1994 UNIDROIT Principles of International Commercial Contracts", 1995 Tulane Law Review 1225, 1228; Bonell, 1992 Amer. Jnl. Comp. L. 625.

161. Ferrari, 1995 Tulane Law Review 1229.

162. Bonell, 1992 Amer. Jnl. Comp L. 630; Ferrari 1995 Tulane Law Review 1230.

163. Ferrari, 1995 Tulane Law Review 1232.

164. Bonell, 1992 Amer. Jnl. Comp. L 626.

165. Bonell, 1992 Amer. Jnl. Comp. L. 633.

166. Garro, "The Gap-filling Role of the UNIDROIT Principles in International Sales Law", 1995 Tulane Law Review 1149, 1152; Ferrari, 1995 Tulane Law Review 1234.

167. Garro, 1995 Tulane Law Review 155-1156.

168. Garro, 1995 Tulane Law Review 1156.