Ch.12 Exemptions

Subject(s):

Exemption from liability — Force majeure and contract — Termination/unwinding of contract — UN Sales Convention and damages

This chapter studies the effects of unforeseen circumstances on a contract. The approach to changed circumstances varies from country to country, and there is simply no uniformity in approach. The classic concepts of force majeure and hardship are the basis on which attempts have been made to solve the problem of non-performance of a contract. Generally speaking, the aim of force majeure is to settle a contract through either suspension or termination of obligations. However, termination of a contract is always the last resort. The United Nations Convention on Contracts for the International Sale of Goods (CISG) attempts to keep the contract alive as long as is practicably possible. Article 79 indicates that a settlement of the dispute and hence a continuation of contractual obligations is possible. Only in cases where the impediment falls under articles 49 and 25 can the contract be avoided.