Remedies for non-performance：Perspec

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Remedies for non-performance：Perspectives from CISG, UNIDROIT Priniciples and PECLINTRODUCTIONThe growth of international trade makes some kind of unification necessary. Increased trade overseas has drawn attention to the problems that are caused by the different ways in which countries have chosen to regulate international sales. And the legal community has tried to facilitate overseas trade through efforts to harmonize national laws by legislative or non-legislative means.Against such a background, the analysis in this contribution is focused on the CISG, UNIDROIT Principles and PECL -- three of the most important international instruments for the regulation of international commercial transactions which combine elements from both civil law and common law systems. In so doing, this contribution provides a comparative analysis of these instruments. It is merely thought that comparison is, probably, one of the most efficient ways to underline some of the unique features inherent in some legal regimes and to develop solutions to existing theoretical problems. However, as most of the authors dealing with the vast domain of this area would have done, the author in this contribution has never meant to make an exhaustive examination of international commercial law, bearing in mind that the ability of a single contribution to deal with its many issues is limited. The approach offered here is to review some of the key issues frequently befell in international trade, based on those generally accepted principles or elaborate rules as evidenced by international restatements or conventions and usages and practices or so-called lex mercatoria that is widely known to and regularly observed in international commercial transactions.Particularly, it is said that no aspect of a system of contract law is more revealing of its underlying assumptions than is the law that prescribes the relief available for non-performance (breach). Issues relating to the remedial provisions are difficult and central substantive issues, which will no doubt be the focus of a large part of the discussion and deliberation surrounding application of commercial law on both a domestic and an international level. Therefore, the study in this contribution focuses, in light of traditional and modern theories, on the remedial scheme established under each of the three bodies of rules, namely Part III (partial) of the CISG, Chapter 7 of the UNIDROIT Principles and Chapters 8 and 9 of the PECL. In practical terms, these sectors are the substantive heart of the particular instruments. It is where the corresponding solutions to a large proportion of real world disputes in commercial transactions are to be found.The comparative analysis contained speculates on the potential similarities and differences of these sectors, intending to enunciate rules which are common in international commercial law and at the same time to select the s

olutions which seem best adapted to the special requirements of international trade. One should note, however, that to the extent this contribution doesn’t give absolute priority to any one of the three instruments, whenever it is necessary to choose between conflicting rules and sometime then to derive a number of general principles which apply to all of the rules, what’s decisive to the criterion used is not just which rule is mandatory or adopted by the majority of jurisdictions, but rather which of the rules under consideration have the most persuasive value and/or appear to be particularly well suited for international commercial transactions.Summary of ContentsPART I GENERAL REVIEW Chapter 1 Sources of Inspiration Chapter 2 Remedies Available upon Non-performance PART II PRESERVING PERFORMANCE Chapter 3 Specific Performance Chapter 4 Nachfrist for Late Performance Chapter 5 Cure by Non-performing Party Chapter 6 Price Reduction for Non-conformity PART III TERMINATION Chapter 7 Right to Termination Chapter 8 Fundamental Non-performance Chapter 9 Anticipatory Non-performance Chapter 10 Termination of Breached Installment or Part Chapter 11 Declaration of Termination Chapter 12 Effects of Termination PART IV DAMAGES Chapter 13 General Measure of Damages Chapter 14 Limits to Claims for Damages Chapter 15 Damages upon Termination Chapter 16 Agreed Payment for Non-performance Chapter 17 Recovery of Attorneys’ Fees Chapter 18 Payment of Interest PART V EXCUSES Chapter 19 Change of Circumstances Chapter 20 Force Majeure Chapter 21 Hardship Chapter 22 Force Majeure & Hardship Clauses Table of ContentsPART I GENERAL REVIEW Chapter 1 Sources of Inspiration 1.1 Introduction 1.2 Overview of the Studied Instruments 1.2.1 CISG 1.2.2 UNIDROIT Principles 1.2.3 PECL 1.2.4 Brief Comparison 1.3 Major Sources of Information Chapter 2 Remedies Available upon Non-performance 2.1 Introduction 2.2 The Concepts: Breach of Contract vs. Non-performance 2.3 Remedial Schemes of the Studied Instruments 2.3.1 CISG Part III (Partial)2.3.2 UPICC Chapter 72.3.3 PECL Chapters 8, 92.3.4 Concluding Remarks2.4 Structure of this Book PART II SAVING CONTRACTPART III TERMINATIONPART IV DAMAGESPART V EXCUSESPART II PRESERVING PERFORMANCE Chapter 3 Specific Performance 3.1 Comprised Approach under the CISG 3.1.1 Introduction3.1.2 Primacy of Specific Performance under Art. 46/623.1.3 Forum’s Rule under Art. 283.2 Buyer's Right to Specific Performance: CISG Art. 46 3.2.1 Introduction3.2.2 General Rule: Art. 46(1)3.2.2.1 Right to require performance3.2.2.2 Non-resorting to inconsistent remedies3.2.3 Right to Demand Cure: Arts. 46(2) and 46(3)3.2.3.1 In general3.2.3.2 Delivery of s

ubstitute goods: Art. 46(2) 3.2.3.3 Right to repair: Art. 46(3)3.2.3.4 Time limit restriction3.2.3.5 A summary3.3 Seller's Right to Specific Performance: CISG Art. 62 3.3.1 Rationale of Art. 623.3.2 General Application3.3.2 Potential Problems3.4 Uniform Remedy in UPICC/PECL 3.4.1 Introduction3.4.2 Performance of Monetary Obligation3.4.2.1 Money due generally recoverable3.4.2.2 Money not yet due 3.4.3 Performance of Non-monetary Obligation: In General3.4.4 Exceptions to Performance of Non-monetary Obligation3.4.4.1 The principle and exceptions3.4.4.2 Performance impossible3.4.4.3 Unreasonable burden3.4.4.4 Performance from another source available3.4.4.5 Performance of an exclusively personal character3.4.4.6 Unreasonable delay in requiring performance3.4.5 Right to Require Remedying of Defective Performance3.4.6 Other IssuesChapter 4 Nachfrist for Late Performance 4.1 General Considerations 4.2 Rationale Underlying the Optional Approach 4.2.1 Optional Approach under the Studied Instruments4.2.2 Underlying Rationale4.2.3 Granting Additional Period in Two Situations4.3 Setting of a Nachfrist Notice 4.3.1 Transmission of the Intention4.3.1.1 Form of the notice4.3.1.2 Risk in transmission4.3.2 Fixing of the Time-limit4.3.2.1 Fixed period4.3.2.2 Reasonable length4.4 Effects of Serving a Nachfrist Notice 4.4.1 Remedies Available/Suspended during the Period4.4.2 Early End of the Existing Uncertainty upon Rejecting Notice4.4.3 Termination upon Expiry of the Extension4.4.3.1 In general4.4.3.2 CISG approach4.4.3.3 UPICC/PECL approachChapter 5 Cure by Non-performing Party 5.1 Introduction 5.2 Conditions for Invoking Cure 5.2.1 In General5.2.2 Reasonableness of Notice5.2.3 Appropriateness of Cure5.3 Seller’s Right to Cure and Buyer’s Right to Termination 5.4 Effects of Effective Notice 5.4.1 Right to Inquire vs. Duty to Accept Cure5.4.2 Suspension of Inconsistent Remedies5.4.3 Retained Rights of the Aggrieved PartyChapter 6 Price Reduction for Non-conformity 6.1 General Considerations 6.2 Features of CISG Art. 50 6.2.1 Unique Role and Justification6.2.2 Self-help Remedy6.2.3 Seeming Advantages6.3 In Contrast with Damages 6.3.1 Introduction6.3.2 Distinctions from Damages under the CISG6.3.2.1 Diverse ratio legis6.3.2.2 Different manner in calculation6.3.2.3 Other differences6.3.2.4 A summary6.3.3 An Alternative to Damages6.3.3.1 Introduction6.3.3.2 In conjunction with force majeure6.3.3.3 In case of falling market6.3.3.4 Upon difficulty in proving damages6.3.3.5 A summary6.4 Essentials of CISG Art. 50 6.4.1 Scope of Application6.4.1.1 General application in case of non-conformity6.4.1.2 Ambiguity over defects in title6.4.2 Exercise of the Right

to Price Reduction6.4.3 Calculation of Proportional Reduction6.4.3.1 Decisive point: time of delivery6.4.3.2 Place for comparing6.4.4 Limited by the Cure6.5 Status of the Price Reduction under UPICC/PECL 6.5.1 Exclusion under the UNIDROIT Principles6.5.2 Inclusion under the European PrinciplesPART III TERMINATION Chapter 7 Right to Termination 7.1 General Considerations 7.2 Grounds for Termination 7.3 Concluding Remarks Chapter 8 Fundamental Non-performance 8.1 General Considerations 8.2 Foreseeable Substantial Detriment 8.2.1 Introduction8.2.2 Substantial Detriment8.2.2.1 Existing detriment8.2.2.2 Substantial deprivation8.2.2.3 Discernible expectations8.2.3 Foreseeability8.2.3.1 Introduction8.2.3.2 Test for foreseeability8.2.3.3 Time for foreseeability8.2.3.4 Burden to prove unforeseeability8.3 Other Elements in Defining Fundamental Non-performance 8.3.1 Strict Compliance of Essence8.3.2 Intentional Non-performance8.3.3 No Reliance on Future Performance8.3.4 Disproportionate Loss 8.4 Concluding Remarks Chapter 9 Anticipatory Non-performance 9.1 General Considerations 9.2 Grounds for Suspension 9.3 Seller’s Right to Stop Goods in Transit upon Suspension 9.4 Duty to Give Notice in Exercising Suspension 9.5 Restoring Performance by Giving Adequate Assurance 9.6 Termination upon Anticipatory Fundamental Non-performance 9.6.1 In General9.6.2 Clear Indication of A Fundamental Non-performance9.6.3 Notice Given in case of Termination9.7 Adequate Assurance of Due Performance 9.7.1 Purpose of Rule9.7.2 Non-receipt of Adequate Assurance9.8 Concluding Remarks Chapter 10 Termination of Breached Installment or Part 10.1 Termination of Installment Contracts: CISG Art. 73 10.2 Termination of Future Installments: CISG Art. 73(2) 10.3 Termination of a Contract as a Whole: CISG Art. 73(3) 10.4 Partial Termination: CISG Art. 51 10.5 Combined Approach: PECL Art. 9:302 10.6 Concluding Remarks Chapter 11 Declaration of Termination 11.1 No Automatic Termination 11.2 Informality of the Notice 11.3 Transmission of the Intention 11.4 Risk in Communication 11.4.1 CISG Approach11.4.2 Receipt Principle under the UNIDROIT Principles11.4.3 Combined Approach under the PECL11.5 Time Limit for the Declaration: in General 11.6 Declaration within Reasonable Time 11.6.1 Definition of Reasonable Time11.6.2 CISG Approach11.6.3 UPICC/PECL Approach11.6.4 Concluding RemarksChapter 12 Effects of Termination 12.1 Introduction 12.2 Relief of Future Performance 12.3 Retrospective or Prospective Approach 12.4 Unaffected Rights and Obligations after Termination 12.4.1 Continuing Right to Claim Damages12.4.2 Unaffected Clauses Intended to Apply despite Termination12.5 Restitut

ion 12.5.1 In General12.5.2 Entitlement of Parties to Restitution on Termination12.5.3 Restitution under the PECL12.5.3.1 Property reduced in value: Art. 9:30612.5.3.2 Recovery of money paid and property: Arts. 9:306, 9:30712.5.3.3 Concluding remarks12.5.4 Restitution of Benefits Received12.5.5 Exceptions: Restitution Not Possible or Appropriate12.5.5.1 CISG approach: making restitution a prerequisite for avoidance12.5.5.2 UPICC/PECL approach: focusing on the allowance upon impossible restitution12.5.5.3 Comparative perspectives12.5.5.4 Concluding remarksPART IV DAMAGES Chapter 13 General Measure of Damages 13.1 Right to Damages 13.2 Full Compensation 13.3 Recoverable Losses 13.4 Compensation of Non-pecuniary Loss 13.5 Computation of Losses and Gains Chapter 14 Limits to Claims for Damages 14.1 General Considerations 14.2 Foreseeability of Loss 14.2.1 In General14.2.2 Test for Foreseeability14.2.3 Party Concerned and Reference Point14.2.4 Evaluation of Foreseeability14.2.5 Content of Foreseeability14.2.6 Concluding Remarks14.3 Certainty of Harm 14.4 Contribution to Harm 14.4.1 In General14.4.2 Ways of Contributing to the Harm14.4.3 Remedies Affected by the Contribution14.4.3.1 Remedies available upon non-performance caused solely by the contribution14.4.3.2 Damages proportionately reduced due to partial contribution14.5 Duty to Mitigate 14.5.1 In General14.5.2 Reasonable Measures Taken14.5.3 Effects of Failure to MitigateChapter 15 Damages upon Termination 15.1 General Considerations 15.2 Damages upon Substitute Transactions 15.2.1 Introduction15.2.2 Presupposed Situations Calling for Concrete Calculation15.2.3 Substitute Transaction must be Reasonable Substitute15.3 Damages upon Current Price 15.3.1 Introduction15.3.2 Presupposed Situations Calling for Abstract Calculation15.3.3 Determination of “Current Price”15.3.3.1 In general15.3.3.2 Reference point15.3.3.3 Relevant place15.4 Further Damages Chapter 16 Agreed Payment for Non-performance Chapter 17 Recovery of Attorneys’ Fees 17.1 General Considerations 17.1.1 Introduction17.1.2 Recoverability under “Loser-pays” Principle17.1.3 Excluded by “American Rule”17.2 CISG Decisions Concerning Attorneys’ Fees 17.3 Problematic Recovery under Art. 74 CISG Chapter 18 Payment of Interest 18.1 Introduction 18.2 General Entitlement to Interest 18.3 Additional Damages 18.4 Interest on Damages 18.5 Accrual of Interest 18.6 Rate of Interest PART V EXCUSES Chapter 19 Change of Circumstances 19.1 Introduction 19.2 Underlying Doctrine: rebus sic stantibus 19.3 Different Approaches to Changed Circumstances 19.3.1 Historical Review19.3.2 National Doctrines19.3.3 International Persp

ective19.3.3.1 Public international law19.3.3.2 International commercial practice19.3.4 Conclusion19.4 Definitions of Force Majeure and Hardship 19.4.1 Force Majeure19.4.2 Hardship19.4.3 Comparison19.5 General Approaches in the Studied Instruments 19.5.1 Approach under the CISG19.5.2 Approach under the UNIDROIT Principles19.5.3 Approach under the PECL19.5.4 Concluding RemarksChapter 20 Force Majeure 20.1 Introduction 20.2 Relevant Texts 20.2.1 Exemptions: CISG Art. 7920.2.2 Force Majeure: UPICC Art. 7.1.720.2.3 Excuse Due to an Impediment: PECL Art. 8:10820.2.4 Comparison20.3 General Rule 20.3.1 Scope of Excusable Non-performance20.3.2 Existence of Qualifying Impediment20.3.2.1 Introduction of a new word20.3.2.2 Interpretation of the word20.3.2.3 Problematic situations20.3.3 Conditions for Exempting Impediment20.3.3.1 Beyond control20.3.3.2 Unforeseeable20.3.3.3 Unavoidable or insurmountable20.3.3.4 Causation20.4 Responsibility for Third Parties 20.5 Temporary Impediment 20.6 Duty to Notify 20.7 Effects 20.7.1 In General20.7.2 Effect on Right to Damages20.7.3 Effect on Right to Performance20.7.4 Effect on Right to TerminationChapter 21 Hardship 21.1 Gap in the CISG? 21.2 Interplay Between CISG Excuse and UPICC/PECL Hardship 21.2.1 Hardship: UPICC Arts. 6.2.1 through 6.2.321.2.2 Change of Circumstances: PECL Art. 6:11121.2.3 Gap-filling Application of Hardship Provisions?21.3 Conditions for Invoking Hardship 21.3.1 In General21.3.2 Crucial Point: Fundamental Alteration of Equilibrium21.3.3 Additional Requirements for Hardship to Arise21.3.3.1 Time factor: occurrence after conclusion21.3.3.2 Unforeseeability21.3.3.3 Risk not assumed21.4 Effects of Hardship 21.4.1 In General21.4.2 Triggering of Renegotiation21.4.2.1 Request for renegotiation21.4.2.2 Renegotiation in good faith21.4.3 Court Measures in case of Hardship21.4.4 Concluding RemarksChapter 22 Force Majeure & Hardship Clauses 22.1 General Considerations 22.2 Force Majeure Clause 22.2.1 Introduction22.2.2 Drafting Considerations22.3 Hardship Clause 22.3.1 Introduction22.3.2 Drafting Considerations22.4 Overlapping of the Clauses 22.5 Use of Standard Forms: ICC No. 421 (partial)