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Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.1 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the definition of non-performance. Article 7.1.1 defines non-performance as ‘failure by a party to perform any of its obligations under the contract, including defective performance or late performance’. Non-performance under Art 7.1.1 also includes violations of accessory obligations, such as a duty of confidentiality or the duty to co-operate, including the accessory obligations of the aggrieved party. This commentary discusses reasons for non-performance, the concept of ‘default’, the relationship between non-performance and non-conformity, vicarious liability for contractual obligations, and the burden of proof relating to non-performance.

Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.2 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning interference by the other party. Art 7.1.2 deals with the situation known as mora creditoris — the obligee's failure to perform its duty to co-operate in order to allow the performance of the other party. It also addresses the situation in which the obligor's failure to perform is not due to a lack of co-operation by the obligee, but to another event for which the obligee bears the risk. The obligee that is responsible for the other party's resulting failure to perform is estopped from invoking non-performance. Art 7.1.2 is thus a particular instance of the general principle of the prohibition of venire contra factum proprium. This commentary also discusses partial interference, legal consequences of failure to perform, and the burden of proof relating to interference.

Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.3 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of a contracting party to withhold or suspend performance. Art 7.1.3 lays down the exceptio non adimpleti contractus and confers on a contracting party the right to withhold or suspend performance if the other party does not comply with its obligations. Where the parties are to perform simultaneously, either party may withhold performance until the other party tenders its performance. Where the parties are to perform consecutively, the party that is to perform later may withhold its performance until the first party has performed. This commentary discusses the requirements for allowing the suspension of performance, including non-performance of the other party. It also considers order of performance, partial performance, and legal consequences of withholding or suspending performance.

Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.4 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the non-performing party's right to cure its non-performance. Under Art 7.1.4, the non-performing party is allowed to cure its non-performance. The aggrieved party is obliged to allow cure if it has no legitimate interest in refusing. If the non-performing party offers cure, the remedies of the aggrieved party are only available after the other party has had a second chance to perform or cure its performance. This commentary discusses the requirements with respect to cure by non-performing party, the right of the non-performing party to cure its non-performance even after a notice of termination by the aggrieved party, and legal consequences of cure.

Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.5 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the additional period for performance allowed by the aggrieved party in a case of non-performance. Art 7.1.4 stipulates that the aggrieved party can only react to the other's party proposal to cure its non-performance by accepting appropriate and prompt cure. Under Art 7.1.5, the aggrieved obligee may adopt a proactive approach to non-performance. The obligee can set the obligor an additional period of time for finally performing its obligations. Art 7.1.5 also allows the obligee to resort to the full panoply of remedies after the period has lapsed, particularly to termination, even if the delay in performance is not fundamental. This commentary discusses the requirements for fixing an additional period of time, as well as the legal consequences of allowing an additional time limit for performance.

Ch.7 Non-performance, s.1: Non-performance in general, Art.7.1.6 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.1.6 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning exemption clauses. According to Art 7.1.6, a clause which limits or excludes one party's liability for non-performance, or which permits one party to render performance substantially different from what the other party reasonably expected, may not be invoked if it would be grossly unfair to do so. The possibility of striking down exemption clauses by virtue of Art 7.1.6 is an exceptional control mechanism. Art 7.1.6 acts as a specific safeguard against unfair exemption clauses. The scope of this provision applies not only to exemption clauses in standard terms, but also to individually negotiated exemption clauses. An exemption clause may not be invoked if it would be grossly unfair to do so. This commentary also discusses the legal consequences of an exemption clause being ‘grossly unfair’.

Ch.7 Non-performance, s.2: Right to performance, Art.7.2.1 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.2.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of an aggrieved party to require performance of monetary obligations. Art 7.2.1 stipulates that a creditor of a monetary obligation is always entitled to require payment of an agreed sum of money. This rule is an expression of the principle pacta sunt servanda. The PICC distinguish between the right to request performance of a monetary obligation and the right to demand performance of non-monetary obligations. A right to require payment is usually known as the ‘action for an agreed sum’ or ‘action for the price’, whereas performance of non-monetary obligations is referred to as ‘specific performance’. This commentary discusses the conditions for the right to demand payment, the effect of the currency in which payment is due on the application of Art 7.2.1, and cases where the right to require payment may be excluded.

Ch.7 Non-performance, s.2: Right to performance, Art.7.2.2 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.2.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of an aggrieved party to require performance of non-monetary obligations. According to Article 7.2.2, a party may require performance from the other party who does not perform unless: performance is impossible in law or in fact; performance or, where relevant, enforcement is unreasonably burdensome or expensive; the party entitled to performance may reasonably obtain performance from another source; performance is of an exclusively personal character; or the party entitled to performance does not require performance within a reasonable time after it has — or ought to have — become aware of the non-performance. This commentary discusses the conditions and exceptions with respect to the right to require performance of a non-monetary obligation.

Ch.7 Non-performance, s.2: Right to performance, Art.7.2.3 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.2.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning repair and replacement as cure for defective performance. Under Art 7.2.3, the right to performance includes the right to require the defect to be cured by means of a repair or replacement. Art 7.2.3 is the counterpart of Art 7.1.4, which gives the non-performing party a right to cure non-performance by, for instance, repair or replacement. Art 7.2.3 provides a right for the aggrieved party to request such a cure. This commentary also discusses repair and replacement with respect to payment of money, along with other forms of curing defects.

Ch.7 Non-performance, s.2: Right to performance, Art.7.2.4 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.2.4 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning judicial penalty. Under Art 7.2.4, where the court orders a party to perform, it may also direct that this party pay a penalty if it does not comply with the order. The penalty shall be paid to the aggrieved party unless mandatory provisions of the law of the forum provide otherwise. Payment of the penalty to the aggrieved party does not exclude any claim for damages. This commentary explains judicial penalty and the court's discretionary power to determine whether or not to impose a judicial penalty, and mandatory provisions with regard to the beneficiary.

Ch.7 Non-performance, s.2: Right to performance, Art.7.2.5 »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary analyses Article 7.2.5 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the right of the aggrieved party to change the remedies sought. An aggrieved party has the freedom to choose between the available remedies (that is, termination, damages, or performance), provided that the requirements for these remedies are met. According to Art 7.2.5, an aggrieved party that has already demanded performance may in certain circumstances invoke another remedy (ius variandi). Where the decision of a court for performance of a non-monetary obligation cannot be enforced, the aggrieved party may invoke any other remedy. This commentary discusses the requirements that an aggrieved party must satisfy before it can change its remedy, the required time limit for a notice of termination, and the question of consistency of a demand for performance with other remedies.

Ch.7 Non-performance, s.1: Non-performance in general, Introduction to Section 7.1 of the PICC »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
Section 7.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with the concept of non-performance. It first presents a definition of non-performance before discussing the three main remedies: the right to performance, the right to terminate the contract, and the right to damages. It then outlines the conditions under which the parties can react to non-performance before any of the main remedies are invoked. First, the aggrieved party (the obligee) may withhold performance temporarily and it may fix an additional period of time for performance. Second, the non-performing party (the obligor) may have a right to cure non-performance and it may object to its liability for non-performance because of an exemption clause, interference of the obligee, or force majeure. This introduction to Section 7.1 discusses the relationship between the different remedies, with particular emphasis on the choice of remedy, accumulation of remedies, and non-performance and mistake. It also considers the general limitations to remedies for non-performance.

Ch.7 Non-performance, s.2: Right to performance, Introduction to Section 7.2 of the PICC »

Harriet Schelhaas
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
Section 7.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with the right to performance, one of the remedies available for the non-performance of a contract. It covers the right to require performance of monetary obligations, the right to require the performance of non-monetary obligations, cure for defective performance, penalties for non-compliance, and the right of the aggrieved party to change the remedies sought. Section 7.2 is not modelled on any particular domestic jurisdiction, or on an international treaty or set of rules. However, the discretionary power to attach penalties to a court order is modelled on French law.