Browse

This commentary focuses on Article 6.1.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the time of performing a contractual obligation. Art 6.1.1 determines when a party has to perform its contractual obligations. This is the time, or within the period of time, explicitly or impliedly stipulated in the contract within a reasonable time after the conclusion of the contract. This commentary discusses the notion of timely performance and the consequences of untimely performance, time of performance fixed by the parties, time of performance according to the default rule, obligee's failure to co-operate in regard to timely performance, changes in time of performance, and the burden of proof relating to time of performance.

This commentary focuses on Article 6.1.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning performance of a contractual obligation at one time or in instalments. Whenever the obligor is given the right to perform its contractual obligations during a certain period of time, the question arises whether the obligor has to perform at one single moment during this period or whether it may choose to perform in lots. According to Art 6.1.2, the principle is performance at one time. The legitimate interest of the obligee not to be disturbed repeatedly for the same obligation seems to prevail over the interest of the obligor to offer its obligation in portions. This commentary discusses performance at one time as a rule, performance in instalments as an exception to the rule, effect of performance in instalments on counter-performance, and burden of proof relating to performance of a contractual obligation at one time or in instalments.

This commentary focuses on Article 6.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning partial performance of a contractual obligation. Art 6.1.3 addresses the question of whether the obligee has the right to reject partial performance or, conversely, whether the obligor has the right to discharge itself at least partly when the time of performance is due. This commentary discusses the content and scope of application of Article 6.1.3, definition of partial performance with regard to contractual obligations, right of the obligee to reject partial performance and obligation to accept partial performance, and legal consequences of acceptance or rejection of partial performance. It also considers the right of rejection in case of only partly possible performance, defective performance, and performance in excess. Finally, it looks at burden of proof as it relates to partial performance.

This commentary focuses on Article 6.1.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning order of performance of a contractual obligation. Art 6.1.4 deals with the sequence of performance and counter-performance if the parties have undertaken reciprocal obligations in a bilateral contract. This commentary discusses the content and scope of application of Art 6.1.4, the role of Art 6.1.4 in determining the time of performance for the counter-performance and in determining the order of performance of due contractual obligations, performances to be taken into consideration when determining the time and order of performance, legal consequences of disregarding the order of performance, and burden of proof relating to order of performance.

This commentary focuses on Article 6.1.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning early performance of a contractual obligation. Art 6.1.5(1) stipulates that the obligor is not entitled to early performance. Early performance is equated with non-performance and may be rejected by the obligee without any further justification. The problem of premature performance only arises if the parties have fixed a date or a period of performance with a definite starting date. This commentary discusses the rule disallowing early performance of contractual obligations, an exception to the rule, and consequences of acceptance of early performance with particular emphasis on additional expenses, remedies for non-performance, right of obligor to discount, and time of counter-performance.

This commentary analyses Article 6.1.6 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the place of performance of a contractual obligation. The place of performance is the place at which the obligor has to perform the acts necessary to honour its obligation. According to Art 6.1.6, monetary obligations must be discharged at the place of business of the obligee and non-monetary obligations at the place of business of the obligor. This commentary discusses the relevance of place of performance, problems related to interpretation of stipulations regarding place of performance, default rule for determining place of performance, place of performance for non-performance and restitution claims, the notion of place of business and consequences of a change in place of business or a change of parties, legal consequences related to performance at a wrong place, and burden of proof relating to place of performance.

This commentary analyses Article 6.1.7 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning payment by cheque or other instrument. According to Art 6.1.7, payment may be made in any form used in the ordinary course of business at the place for payment. However, an obligee who accepts a cheque, any other order to pay or a promise to pay, is presumed to do so only on condition that it will be honoured. This commentary discusses cashless payment in general and the payment methods accepted by the PICC, the structure of cashless payment methods and their systematization, payment through ‘push-orders’ and ‘pull-orders’, effects of acceptance of a pull-order on the payment obligation, place and time of performance of pull-order, risk of loss or theft of pull-order, and risk of pull-orders being dishonoured.

This commentary analyses Article 6.1.8 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning payment by funds transfer. According to Art 6.1.8, payment may be made by a transfer to any of the financial institutions in which the obligee has an account. In case of payment by a transfer, the obligor's obligation is discharged when the transfer to the obligee's financial institution becomes effective. From the moment the funds transfer to the obligee's financial institution becomes effective, the obligation becomes extinct and the obligor's liability for loss or delay ends. This commentary discusses place of performance for fund transfers,, time when the obligation is discharged, timely performance, countermand, and delay or loss in the process of transferring funds.

This commentary analyses Article 6.1.9 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning currency of payment. Art 6.1.9 addresses the problems that can arise if the required currency for payment (‘currency of account’) and the legal currency at the place of payment differ; that is, if a foreign money obligation features in the contract. The main questions that arise from such a scenario are whether there is a right of conversion — the right to effect or ask for payment in the legal currency of the place of payment — and, if so, which party is entitled to exercise that right and which is the applicable rate of conversion. This commentary discusses the obligor's right to pay in either contractual or legal currency, the obligee's right to request payment in either contractual or legal currency, application of exchange rate when payment is on time and when the obligor is in default, problems related to devaluation or revaluation, and burden of proof with respect to currency of payment.

This commentary analyses Article 6.1.10 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning monetary obligation that is not expressed in a particular currency. In principle, the parties define in their contract in which currency the debt is to be calculated. If the contract is silent in this respect and the common intention of the parties cannot be established by interpretation, Art 6.1.10 stipulates that the currency at the place of performance is decisive. The need to apply the subsidiary rule of Art 6.1.10 arises, for example, when parties have not fixed the price at all. If it is not clear under the contract which currency is contracted for, the burden of proof falls on the party that claims that it is a currency other than the currency at the place of performance.

This commentary analyses Article 6.1.11 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the costs of performance of an obligation. Art 6.1.11 balances the interests of the parties and burdens each party with the costs of its own performance. According to this provision, each party shall bear the costs of performance of its obligations. This commentary considers costs of performance in cases where place of performance lies with the obligor or the obligee, or where place of performance is a third place. It also addresses costs due to changes in the place of performance and the right of a party to claim reimbursement of costs.

This commentary analyses Article 6.1.12 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning imputation of payments. Art 6.1.12 addresses the problems that arise when the obligor has more than one debt with the same obligee but the sum paid is not sufficient to cover all debts. In that case, the obligee must know which of the several obligations are to be discharged. This commentary discusses the scope of application and taxonomy of Art 6.1.12 with regard to imputation of payments, the obligor's right to impute, the obligee's subsidiary right to impute, imputation by law, applicability of Art 6.1.12 in the case of partial payment, and burden of proof relating to imputation of payments.

This commentary analyses Article 6.1.13 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning imputation of non-monetary obligations. In most jurisdictions, there is no special provision regarding the imputation of non-monetary obligations. Either the statutory provisions are formulated to cover all fungible obligations, be they monetary or otherwise, or the courts accept an analogous application of the imputation rule for monetary obligations. In contrast, Art 6.1.13 clarifies that such imputation rules can be applied mutatis mutandis to all other fungible obligations. If, for example, the obligor has to deliver identical cargoes of cement under different contracts, appropriation is first made according to the specifications of the obligor. In the absence of such specifications, Art 6.1.12(2) stipulates that the right of imputation should pass to the obligee.

This commentary analyses Article 6.1.14 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the problem of public permission requirements. According to Art 6.1.14, where the law of a State requires a public permission affecting the validity of the contract or its performance and neither that law nor the circumstances indicate otherwise: if only one party has its place of business in that State, that party shall take the measures necessary to obtain the permission; in any other case the party whose performance requires permission shall take the necessary measures. This commentary discusses the concept of public permission requirements, the nature of obligation to take necessary measures, duty to disclose public permission requirements and to co-operate, legal effects of missing public permission, and burden of proof relating to public permission.

This commentary analyses Article 6.1.15 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the procedure in applying for public permission. According to Art 6.1.15, the party required to take the measures necessary to obtain the permission shall do so without undue delay and shall bear any expenses incurred. The party's obligation to apply for a public permission without undue delay should be seen as part of the general duty to handle the entire application procedure with due diligence. This commentary discusses the time of application for public permission, expenses related to permission, duty to give notice of results of application, and the consequences of the responsible party's failure to notify its counterpart of the grant or refusal of the permission without undue delay.

This commentary analyses Article 6.1.16 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning cases where the application for public permission is neither granted nor refused. Once the party in charge has taken all necessary measures without undue delay and with reasonable care and diligence, both parties can do nothing other than await the decision of the relevant authority. But the situation may arise where the authorities remain inactive and neither grant nor refuse the application. Art 6.1.16 offers a solution to this ‘nothing happens’ situation and gives the parties a chance to resolve it. This commentary considers cases where the application for permission was filed but no decision was taken, as well as the consequences if missing permission affects the contract in general or if missing permission affects only certain terms of the contract.

This commentary analyses Article 6.1.17 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning cases where a request for public permission was filed with the relevant authority but was rejected. According to Art 6.1.17, the refusal of a permission affecting the validity of the contract renders the contract void. If the refusal affects the validity of some terms only, only such terms are void if, having regard to the circumstances, it is reasonable to uphold the remaining contract. Where the refusal of a permission renders the performance of the contract impossible in whole or in part, the rules on non-performance apply. This commentary discusses cases where application for public permission was refused, as well as the effect of refusal on the validity of contract and on performance.