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Reproduced with permission of the author, Thesis, University of Copenhagen-Faculty of Law (2011)

Hardship in International Sales

CISG and the UNIDROIT Principles

Rolf Kofod

Abstract

When a party to a contract governed by CISG is suddenly struck by unforeseen events causing his performance to become a considerably larger burden, he has a natural interest in some sort of remedy. The otherwise very successful Convention has been subject of intense discussion about whether or not such issues of hardship are governed by Article 79. On the basis of scholarly opinions, a literal interpretation of Article 79 and arguments presented by case law, this paper concludes that hardship is in fact governed by CISG.

This conclusion provides the foundation of a further study of hardship and the remedy provided by Article 79. The focus is more specifically directed towards the question of whether the UNIDROIT Principles Articles 6.2.2 and 6.2.3 can be utilized as meaningful interpretative aid to CISG. This issue is mainly examined through a study of to what extend CISG Article 7 authorises influence from other sources. The answer to this rather disputed question is that Article 7 limits the interpretative aid to a clarification of the principles on which CISG is based. Hence, the UNIDROIT Principles can provide for a clarification of the hardship concept, but cannot supplement the remedy set forth by CISG Article 79.

1. INTRODUCTION

The United Nations set the sails of the Convention on the International Sale of Goods (CISG) in 1988. The ambition was to create a uniform set of rules to support the ever-growing international trade. The Convention has become vastly successful and can count most of the world’s largest economies as its contracting states.

Although CISG has moved the legal rules for international trade in a far more uniform direction, there are still issues which need clarification. One of them is the question regarding hardship. Courts and scholars have eagerly been discussing whether or not hardship is governed by CISG, but to this date no definitive consensus has been reached. This has rendered an uncertain and confusing state of law on the matter.

Many legal systems contain solutions to hardship situations, such as the German Wegfall der Geschäftsgrundlage, but the CISG is nevertheless silent in regards on the question of hardship. A situation of hardship arises when an event occurs after the conclusion of the contract and fundamentally alters the equilibrium of the contract, e.g. a sudden substantial increase in the price of a certain raw material.

Many approaches have been laid out to solve the issue thus the focus in the following sections will be narrowed in to suit the following research question:

This paper will try to determine whether hardship situations under an international contract for the sale of goods are governed by CISG. If that is the case, it will be examined if the UNIDROIT Principles Article 6.2.2 and 6.2.3 can be utilized as meaningful interpretative aid to CISG art. 79.

This study will begin with a brief introduction to the doctrines of force majeure and hardship including an analysis comparing the UNIDROIT Principles with the CISG and German national law. The focus of this paper lies with the correlation between the CISG and the UNIDROIT Principles, but the mechanisms of force majeure and hardship will not be dealt with in depth.

The UNIDROIT Principles have been the focal points of many scholarly discussions regarding this subject. This is mainly due to their somewhat unrefined reputation as a restatement of "general principles" or lex mercantoria, and are particular interesting in the light of the relatively new and groundbreaking decision of the Belgian Court of Cassation in 2009, which will be introduced later on in this study.

The following discussions presuppose situations where the CISG is applicable and have not been opted out or supplemented by the parties. Furthermore, this paper first and foremost focuses on the interplay between CISG and the UNIDROIT Principles.

2. THE LEGAL BASIS

Introduction to Force Majeure and Hardship

It is important to distinguish between force majeure and hardship as they are triggered by different impediments and provide different remedies. However they both deal with the consequences of changed circumstances after a contract has been agreed upon. In order to lay the fundament for the discussions in this paper, especially in relation to the complex Article 79 in the CISG, both force majeure and hardship are introduced.

2.1 Force Majeure

The more successful concept of the two is force majeure, which has gained a strong footing in contracts and courts. Force majeure occurs when a party’s obligation to a contract has become impossible due to unforeseeable circumstances beyond the control of the parties. Such circumstances could be natural catastrophes or other "acts of God".

The party invoking Article 79 as a defence of his non-performance has to prove that the failure to perform was due to an impediment beyond his control. Furthermore, the impediment must neither have been reasonably possible to foresee at the time of the conclusion of the contract, nor reasonably impossible to overcome. This burden of proof presents a substantial limitation of the application of Article 79.[1]

Articles relating to force majeure can both be found in Article 79 of the CISG and in the UNIDROIT Principles Article 7.1.7. The wordings of these two provisions are very closely related.

Article 79 does not expressly mention the term force majeure, but is nevertheless, clearly governing the classical force majeure situations.[2] This peculiarity is interesting in connection to the question of whether hardship is also contained within this provision.

2.2 Hardship

Hardship applies in cases where the performance of a party has not become impossible, but the grounds on which the contract was formed has changed dramatically and made the performance of a party onerous. The generally accepted definition of hardship in the UNIDROIT Principles Article 6.2.2 states the following.

There is hardship where the occurrence of events fundamentally alter the equilibrium of the contract either because the cost of a party’s performance has increased or because the value of the performance a party receives has diminished, and

a) The events occur or become known to the disadvantaged party after the conclusion of the contract;

b) The events could not reasonably have been taken into account by the disadvantaged party at the time of the conclusion of the contract;

c) The events are beyond the control of the disadvantaged party.

Whether or not the alteration of the equilibrium is "fundamental" depends on the given circumstances.[3] Such circumstances can according to the official comments to the UNIDROIT Principles [4] either be a substantialincrease in cost of performance or a substantialdecrease in the value of the performance received by one party. This may for instance be an explosive rise in the prices of materials or an extreme devaluation of a currency.

The official comments formerly suggested that a "fundamental" alteration is likely to be satisfied by a 50% and upwards increase in the value of the performance.

According to Article 6.2.3, the legal effect of hardship is that the party confronted by an impediment can request renegotiation of the parts of the contract, which were affected by the unforeseen altered circumstances. Failing successful renegotiation within reasonable time, a court will upon request from either party be given the power to adapt the terms of the initial agreement in order to restore equilibrium of the contract. If the court is unsuccessful at that, it can terminate the contract.

In a situation under the UNIDROIT Principles where both the requirements of force majeure and hardship are satisfied, the party struck by the impediment can choose which action to pursue.[5] The choice will likely depend on the party’s wish to either be excused of his non-performance (Article 7.1.7) or to renegotiate the terms and thereby opting for continuation of the contract (Article 6.2.3).

2.2.1 History

The underlying principle of hardship dates back to Roman law and the doctrine of clausula rebus sic stantibus [6] (things thus standing). This principle is similar to the mechanism we know, providing an exemption to the rigid main rule of pacta sunt servanda (promises must be kept). In the 19th century the concept of hardship was rejected because scholars found it vague and unclear, but it experienced a renaissance in French law in the 20th century as a result of the unrest caused by the First World War.[7]

2.2.2 Perspective

The concept of hardship is known in many legal systems under various names, such as frustration, imprévision, wegfall der Geschäftsgrundlage.[8] However in countries with the common law legal tradition, the "sanctity" of the contract is not easily yielded. Common law systems do as a main rule not recognise theories supporting the hardship doctrine, and there are neither any conclusive decisions relieving a party of his liability in a situation of hardship.[9]

As seen above, the UNIDROIT Principles contain an express liability exemption with reference to both hardship and force majeure. CISG Article 79 on the other hand does not expressly mention any of these concepts. Since the publication of the CISG, courts as well as scholars have been occupied by the perplexity of the Convention’s stand on the matter of hardship. Yet to this day the question remains unsettled and a no less heated subject. This issue will be thoroughly examined in the analysis below.

2.3 German law

In order to round off the introduction to hardship, the following section will focus on German national law. This short presentation will try to put the concept of hardship into perspective.

The German approach to hardship is perhaps one of the most evolved. This can probably be ascribed to historical events [10] such as the hyperinflation in the 1920’s, which resulted in numerous cases of hardship.

The German civil code, Bürgerliches Gesetzbuch (BGB) is based on Roman Law and took effect 1st of January 1900 after more than 25 years of drafting. The German equivalents of force majeure "Unmöglichkeit" and hardship "wegfall der Geschäftsgrundlage" are governed expressly in the BGB, though the latter concept was not incorporated before 2002.

The German hardship doctrine states that the basic intentions of the parties to a contract cannot be realised if key factors in the environment surrounding the contract has changed – this notion is similar to the principles of clausula rebus sic stantibus mentioned above.[11]

The solution to circumstances where an event fundamentally alters the contract is provided in § 313 I of the BGB, and allows a judge to reestablish the equilibrium of the contract, or if this fails, to terminate it. The resemblance to the UNIDROIT Principles is clearly seen.

In 1993 a German court was presented with a case between a German seller of electronic hearing aid and an Italian buyer. The CISG governed the contract.[12] The domestic concept of Wegfall der Geschäftsgrundlage was considered but the court found it inapplicable. The court argued that CISG Article 79 covered the German principle equivalent of hardship and in their opinion the issue was settled within the Convention, hence leaving no room a domestic approach.[13] The consideration of the court in this decision is an example of the problems courts are facing in situations of hardship under CISG.

3. ANALYSIS

3.1 Hardship governed by the CISG?

Before considering the soundness of utilising the UNIDROIT Principles’ section on hardship as interpretative aid to CISG Article 79, this paper will begin methodically with the examination of whether the CISG governs hardship situations at all.

As mentioned in the introduction, the CISG does not expressly mention hardship. Therefore, the first problem is to determine whether hardship is contained within the meaning of CISG Article 79.

It may seem odd to force a concept into Article 79, which is not a part of the "black letter" text. Conversely, in the opinion of many scholars, Article 79 is vague and imprecise,[14] hence leaving room for a broad interpretation of its terminologies, such as "impediment".

3.3.1 Validity

Another approach, which introductorily needs to be addressed, is based on the fact that CISG excludes validity issues as a main rule (except as otherwise expressly provided in the convention), cf. Article 4. Some national legal systems regard hardship as a validity issue,[15] e.g. the Danish Contracts Act (Aftaleloven § 36).[16] According to this assumption, the hardship doctrine would be excluded from the scope and therefore not governed by CISG. National laws would in that case provide a substitute solution resulting in differing legal outcomes from country to country.

Validity as a solution has been analysed by various scholars. Although some supports the idea,[17] [18] the results have been quite unfavorable to this theory,[19] [20] [21] as this would be directly in contrast to the goal of a uniform application of international commercial law.[22] Consequently, this approach will not be addressed further in this paper.

3.1.2 Impediment

The rational method to examine whether or not hardship is governed by the CISG, is to try to determine if hardship qualifies as an "impediment" in the sense of Article 79. If the answer to this question is positive, it does not necessarily mean that hardship will also be able to trigger the legal consequences of Article 79. This would also depend on the heavy burden of proof described above, which some argue cannot be lifted in a situation of hardship. It is argued that "hardship impediments" (lacking the strength of force majeure) are never reasonably unforeseeable. The reason behind this statement is that impediments such as fluctuations in the market are historically recurring events, which should be considered when entering into a contract. This is however not written in stone, and is beyond the scope of this paper.

In essence the issue is to determine if anything short of "impossibility" will suffice as an impediment under Article 79. On this "scale" the concept hardship covers the area "below" impossibility. In theory, hardship ranges from a moderate increase of the burden to perform under the contract to extremely onerous.

Some interpret "impediment" limited only to events resulting in impossibility of performance.[23] In support hereof, parts of the legislative history of CISG Article 79 states that a hardship clause was expressly rejected. However, this seems to be a rather unrefined analysis of the drafting proceedings.[24]

A much more convincing explanation has been pointed out, in that the intention of leaving out hardship was to find a common ground for the world’s different legal systems to meet. By avoiding reference to hardship or any other similar concept such as force majeure, frustration or wegfall der Geschäftsgrundlage, the term "impediment" manages to summarise these principles under one provision by a rather elastic wording.[25] This view goes hand in hand with the fundamental idea of the Conventions goal of a uniform application of international sales law.

Most scholars support a broader interpretation of Article 79 – also allowing "changes in circumstances" (short of impossibility), to be seen as impediments under Article 79.[26] [27] [28] Also a literal interpretation of the wording implies a somewhat elastic provision in which the concept of hardship could effortlessly be contained within.[29] The performance must nonetheless have become exceedingly more difficult in order to qualify as an "impediment".[30]

In conclusion, the arguments in favor of allowing a flexible interpretation of "impediment" in the CISG Article 79 appear most convincing. This is, however, not to be understood as a wide open door letting the concept of hardship into the CISG in its full figure.

Only severe situations of hardship are to be "impediments" within CISG. To get closer to a more precise estimate on where to find the borderline dividing hardship would demand a far more extensive examination and some more conclusive case law on the matter.

The consequence of allowing hardship into CISG would not have a groundbreaking impact on future case law as mentioned above. The very limited possibility of actually being able satisfy the heavy burden of proof in Article 79(1), is not less strict in case of a hardship impediment.

The legal consequence of Article 79 is relieving the disadvantaged party of his liability. This might seem a bit too drastic in the light of an impediment short of impossibility. This problem leads us to the second part of this paper’s research question. Can the UNIDROIT principles be used as interpretative aid to the CISG and provide for more suitable consequences to a situation of hardship?

3.2 The UNIDROIT Principles as Interpretative Aid to CISG Article 79.

The CISG and the UNIDROIT Principles both lay down rules on international commercial contracts and have a strong resemblance in their subject matters.

The UNIDROIT Principles have a unique character. They were drafted by independent legal experts representing all major legal systems in the world.[31]

The CISG on the contrary enjoys the prominence of being an official treaty with more than 70 contracting states. This means that the CISG will take precedence unless the parties (or in some cases arbitral tribunals) have chosen otherwise.

The UNIDROIT Principles are interesting in relation to the CISG Article 79, because the former contain an express hardship clause. Primarily this can help define hardship. Secondly this may be able to provide a more suitable solution (adaption of the contract) to hardship issues under the CISG.

3.2.1 A Gap in the CISG

As discussed above, hardship may in some situations constitute an impediment in the meaning of Article 79. This can be seen as a gap in the CISG that may or may not be filled by Article 6.2.2 and 6.2.3 in the UNIDROIT Principles. In this context "gap" means that a matter is governed but not expressly settled by the CISG, thereby leaving certain questions unresolved.

To put the following in perspective, the method of gap-filling could just the same be discussed in regards of any other matter governed but not expressly settled by CISG. This method of "gap filling" is sanctioned in the CISG itself, cf. Article 7.

3.2.2 The CISG Article 7

Article 7(1) calls for an interpretation of the Convention with regard to promote uniformity and good faith in international trade. Article 7(2) acknowledges any shortcomings there may be in the Convention’s provisions by allowing outside interpretative aid to "matters governed but not expressly settled by the CISG".

Some scholars,[32] including the weighty opinion of the CISG Advisory Council,[33] have gone so far as to interpret good faith in Article 7(1) as a way to supplement the remedy in Article 79 including renegotiation or court mandated revision of the contract. Referring to the parties’ obligation to act in good faith as a basis to incorporate a remedy which is not mentioned anywhere in the CISG, appears to be at least one step to far.[34] The legal effects to resolve such a situation can be found explicitly in Article 79 and does not give reason to be bypassed with reference to good faith.[35]

Article 7(1) seeks a uniform interpretation of the Convention. Hereby, the CISG may indicate its support to the approach of letting the UNIDROIT Principles act as an instrument of interpretation.[36] Article 7(2) provides further assistance, stating the following:

"Questions concerning matters governed by this Convention which are not expressly settled in conformity with general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law".

According to this paragraph, gaps in the CISG must first and foremost be filled by general principles on which the CISG is based. Only in the absence hereof, may they be filled by "competing" domestic rules.[37] The reason behind this hierarchy is the fact that resorting to domestic law would create a very diverse application of hardship issues, which is in direct contrast to the goal of the Convention.[38]

Specifically regarding the issue of hardship, we have concluded above that the matter is falls under the scope of CISG. In other words, hardship is a matter governed by Article 79, but it may not be expressly settled within this provision.

There is very little case law addressing Article 7(2) as filling the gap in Article 79. However, an example hereof is the heavily criticised [39] case Nuova Fucinati S.p.a. v. Fondmentall International A.B. from 1993. To make matters worse the CISG was incorrectly found not to be applicable. Furthermore, the court stated that domestic hardship provisions could not be interpreted into CISG through Article 7(2), a statement that likewise was deemed wrong by scholars later on.[40] In relation hereto, it should be mentioned that the UNIDROIT Principles were not published before 1994, which explains why Article 6.2.2 was not invoked – this being the otherwise more appropriate method under Article 7(2).

By Article 7(2) CISG provides an interesting tool, which potentially could to fill the elusive gap in Article 79.[41] It should nonetheless be kept in mind when looking for ways to interpret the CISG that only the general principles on which CISG was based can be allowed as gap fillers.[42] [43] In order to be utilised as interpretative aid, Article 6.2.2 and 6.2.3 of the UNIDROIT Principles consequently have to be expressions of general principles behind the CISG.

3.2.3 "General principles" Underlying the CISG

CISG was largely the basis of the drafting of the 14 years younger UNIDROIT-principles.[44] [45] As a chief principle, a later set of rules should be disregarded as a valid source of interpretation to an earlier one.[46]

However, both instruments are results of the same ideologies and ambitions to create a uniform set of rules for the international trade. This objective is clearly seen in the preambles. Furthermore, the UNIDROIT Principles state in the preamble: "[These Principles] may be used to interpret or supplement international uniform law instruments". Offering itself as an instrument of interpretation and supplementation to international uniform law instruments, such as the CISG, does not necessarily mean that they will be allowed to. Instead this depends entirely on whether the CISG supports the supplementation of its articles by the UNIDROIT Principles.[47]

The fact that both instruments are largely based on principles originating from the same legal systems is an argument in favour of using the UNIDROIT Principles in connection CISG. This is a view supported by most scholars [48] and court decisions [49] (to various extends).

On the other side, courts and arbitrators normally exclusively choose to apply the UNIDROIT Principles in connection with the CISG when the parties have specifically agreed upon it.[50]

Furthermore, as mentioned above, the UNIDROIT Principles were not a mere restatement of general principles as claimed by some.[51] They were also drafted as a "best solution"[52] to influence the future international trade rules.[53] Even though the UNIDROIT Principles were in large parts based on the CISG, the drafters also expanded on its articles.[54] Therefore the UNIDROIT Principles as a whole can probably not be said to constitute the general principles on which the CISG was based.[55] However, it is not possible to conclude that the UNIDROIT Principles Article 6.2.3 is not the specific principles underlying CISG Article 79.[56]

3.2.4 Adaption of the Contract

The following discussions will try to shed some light on whether the UNIDROIT Principles can provide an additional solution to situations of hardship under the CISG.

As stated above, it can be presumed that the remedy of Article 79 is out of reach in most cases of hardship. This is due to the hefty additional requirements in order to trigger the remedy. Therefore the question is whether the more subtle solution in Article 6.2.3 of the UNIDROIT Principles is compatible with the CISG. The solution under this provision is renegotiation by the parties or through the court. Renegotiation is seen a way to motivate the continuation of the contract, whereas Article 79 contemplates its termination.[57] A decision specifically relating to this question was passed by the Belgian Supreme Court on the 19th of June 2009.

3.2.5 Scafom International BV v. Lorraine Tubes S.A.S.

It is critical to understand that the interpretation of the CISG is not looked after by a single superior court,[58] which is otherwise the case in regards of some other international conventions. Furthermore, the case law on this particular subject is barely existing, which means that a case like Scafom is one of our most important guides to the interpretation of the CISG.

In the Scafom-case, a French seller and a Dutch buyer entered into a contract for the sale of steel tubes that were to be delivered in Belgium. The contract was governed by the CISG. After the conclusion of the contract but before delivery was due, the market price of steel increased by approx. 70% and the seller asked the buyer for a renegotiation of the contract.

The court ruled that hardship was governed but not settled by the CISG Article 79 and noted that the CISG does not provide any specific remedy on how to resolve hardship issues. This argument supports a strong tendency in the opinions of many legal scholars.[59]

The court further reasoned that the issue of hardship should be solved with reference to CISG article 7(1)(2), or in other words by the general principles of the Convention and with regard to its international character. On that basis, the court resorted to the UNIDROIT Principles and concluded that the unforeseen increases in the price of steel "gave rise to a serious imbalance" of the contract. Ultimately, the court granted the seller the right to request a renegotiation of the contract even though the parties had not agreed on this nor applied the UNIDROIT Principles to the contract.

This far-reaching decision opens up for the possibility of a party to invoke the hardship provisions in UNIDROIT Principles Article 6.2.2 and 6.2.3 as a supplement to the CISG. The premises of this ruling do not faithfully go hand in hand with the opinion of the CISG Advisory Counsel,[60] but the approach is nonetheless very similar.

3.2.6 Legislative History

To analyse the Scafom-decision we may again first and foremost resort to the legislative history of the CISG. The importance of this source of law must be emphasised [61] though not to be mistaken to be of any court binding status.

By looking through the glasses of those responsible for the Convention, we are able to apply a uniform interpretation in line with the underlying principles of the CISG. This will counteract the tendency of forcing different domestic law approaches onto the CISG,[62] which are slowly undermining the foundations on which the Convention is built.

While drafting the CISG the working group considered another wording of Article 79. A wording that would allow a party facing excessive damages due to unexpected events to be able to request an amendment of the contract, or alternatively to terminate it. This addition was explicitly rejected because the drafters were cautious not to give too much relief to a non-performing party.[63] Thus, the express mention of hardship was actively considered but did not make it into the Convention. For this reason, it would clearly be wrong to interpret a renegotiation-solution into Article 79 on the basis of Article 7(2).

The UNIDROIT Principles can therefore only help to clarify the general principles underlying CISG [64] but not introduce a "new" solution to Article 79. This argument seems perhaps the most convincing of all and should not be overheard.

Furthermore, parties to a contract governed by the CISG, have the authority to derogate and supplement the provisions in the Convention, cf. Article 6. Consequently, they do not have to rely on the unsteady state of law provided in CISG Article 79. This argument is not in itself decisive but does favour the opinion of not using renegotiation as a solution under the CISG.

Article 7 demands a high level of abstraction but the solution set forth by the CISG

Advisory Council and the Scafom-decision seem to stretching the CISG Article 7 beyond its limits.[65]

It appears there is dominance in the arguments restricting the influence of the UNIDROIT Principles, thus not allowing a supplementation in form of renegotiation as a solution to hardship under CISG Article 79.

In conclusion Article 7(2) is not a wide open door allowing CISG to be undermined. Article 7(2) merely provides a possibility for interpretative aid outside of the CISG in a degree coherent with the wording of Article 7(2) – simply clarifying principles on which CISG isbased. This means that the solution lies somewhere between two extremes. The UNIDROIT Principles as a whole does not constitute the "general principles" mentioned in Article 7(2).[66] Instead of this the UNIDROIT Principles should be closely analysed with reference to the matching provision in the CISG before accepted as interpretative aid. Arguing in favour of an "adaption" seems to be more a political announcement than a conclusion of a factual examination of the Convention.

The "missing" remedy under Article 79 simply reflects its rejection of a specific remedy in situations of hardship.[67] The so-called gap in Article 79, which has been addressed throughout most of this paper is after all not a gap. Therefore, the remedy available in such situations are a liability exemption provided that the requirements in Article 79 have been satisfied.

4. BEST SOLUTION

Imagine a party facing a massive devaluation of the currency of his country due to a completely unforeseeable political crisis. Such a situation is not unlikely when looking across the world today. The question is whether it would it be fair to let the unfortunate party bear that burden of risk by himself? Surely, the other party would not mind getting a sudden substantial discount on the contract, but would he not prefer to share those kinds of risks with the other party in future? The tables could easily have been turned.

It is clear that a moderate case of hardship should not exempt a party from liability. After all, taking risks and profiting on it is the foundation of trade. But where a totally unforeseen situation causes extreme hardship to party, CISG Article 79 should be able to provide relief. Furthermore, stating that economic fluctuations are always foreseeable seems to be quite an overstatement of merchant’s abilities to see into the future.

However, a state of law supporting this view is wishful thinking in regards to the CISG. Although there may be more suitable solutions to hardship situations than the one provided by CISG, we cannot supplement the Convention with a remedy from the UNIDROIT Principles. Until the legislators have revised the Convention, the parties to a contract may only rely on the remedy in Article 79 in a situation of hardship unless if they choose to supplement it themselves.

5. CONCLUSION

The countless contributions from scholars on how to resolve the subject of hardship under the CISG are made with good reason. The diversity of reasoning and conclusions in both case law and academic articles clearly indicates the challenges set forth by Article 79.

Based on the arguments of a literal interpretation of Article 79. Together with the legislative history and the main purpose with the Convention, we can with reasonable certainty conclude that hardship is governed by the CISG.

The more disputed subject regarding hardship relates to the remedy. The CISG does provide a remedy in Article 79, but the CISG Advisory Board and The Belgian Court of Cassation have nevertheless, on the basis of Article 7(2), been roaming outside the CISG to find a more "appropriate" remedy.

The CISG Article 7 does authorise interpretative aid from the outside as long as this is limited to a clarification of principles on which the CISG is based. However, searching for a more suitable solution by groping around in the UNIDROIT Principles and forcing it onto CISG is not sanctioned. Therefore the answer to the second part of the research question is not straightforward. The UNIDROIT Principles Article 6.2.2 can be utilised as interpretative aid to the CISG in defining hardship, but the remedy in Article 6.2.3 cannot.


COURT DECISION LIST

Recht der Internationalen Wirtschaft (RIW) 1993, 760-761; Die deutsche Rechtsprechung auf dem Gebiete des internationalen Privatrechts im Jahre (IPRspr) 1993 No. 141, 316-317; District Court (Landgericht) Aachen, 14 May 1993 [42 O 136/92] Available in English at: http://cisgw3.law.pace.edu/cases/930514g1.html

I Contratti (1993) 580-583; Il Foro italiano (1994 I) 916-923; Giurisprudenza italiana (1994 I) 146-154 [cited as 14 January 1993]; Rivista di Diritto Internazionale Privato e Processuale 30 (1994) 367-372 ; Italy 14 January 1993 District Court Monza (Nuova Fucinati v. Fondmetall International) Available in English at: http://cisgw3.law.pace.edu/cases/930114i3.html

Hof van Cassatie [Supreme Court] Belgium, 19 June 2009, Belgium 19 June 2009; Court of Cassation [Supreme Court] (Scafom International BV v. Lorraine Tubes S.A.S.) Available in English at: http://cisgw3.law.pace.edu/cases/090619b1.html


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Puelinckx, A.H. "Frustration, Hardship, Force Majeure, Imprévision, Wegfall Der Geschäftsgrundlage, Unmöglichkeit, Changed Circumstances." 3 J Int’l Arb 1986, No. 2, at 47 et seq.

Rimke, Joern. "Force Majeure and Hardship: Application in International Trade Practice with Specific Regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000).

Schwenzer, Ingeborg. "Force Majeure and Hardship in International Sales Contracts." 39 VUWLR (2008).

Slater, Scott D. "Overcome by Hardship: The Inapplicability of the Unidroit Principles' Harship Provisions to Cisg." Florida Journal of International Law (1998).

Veniziano, Anna. "Unidroit Principles and Cisg: Change of Circumstances and Duty to Renegotiate According to the Belgian Supreme Court." (2010).


FOOTNOTES

1. Joseph Lookofsky, Understanding the CISG, Third (Worlwide) ed. (Copenhagen: DJØF, 2008). Page 139f.

2. Anna Veniziano, "UNIDROIT Principles and CISG: Change of Circumstances and duty to renegotiate according to the Belgian Supreme Court," (2010). Page 143.

3. Michael Joachim Bonell, "Unidroit Principles in Practice : Caselaw and Bibliography on the Unidroit Principles of International Comercial Contracts.," (2006). Page 327

4. The UNIDROIT Principles, 2004 Edition, comments to Article 6.2.2

5. The UNIDROIT Principles, 2004 Edition, comment 6 to Article 6.2.1 and Mads Bryde Andersen & Joseph Lookofsky, Lærebog i Obligationsret I, vol. 3. Udgave (2010). Page 195.

6. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG," CISG Advisory Counscil (2007). Paragraph 26.

7. Frederic R. Fucci, "Hardship and Changed Circumstances as Grounds for Adjustment or Non-Performance of Contracts, Practical Considerations in International Infrastructure Investment and Finance" Thelen Reid & Priest (2006)., section 1A

8. Harry M Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.," Belgrade Law Review, Year LIX (2011) no. 3. Page 87.

9. Fucci, "Hardship and Changed Circumstances as Grounds for Adjustment or Non-Performance of Contracts." Introduction

10. A.H. Puelinckx, "Frustration, Hardship, Force Majeure, Imprévision, Wegfall der Geschäftsgrundlage, Unmöglichkeit, Changed Circumstances," 3 J Int’l Arb 1986, No. 2, at 47 et seq. Page 60

11. Joern Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts," Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000). Page 206-207

12. LG Aachen, UNILEX, No. 43 0 136/92 (May 14, 1993).

13. Scott D. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG," Florida Journal of International Law (1998). Page 254-255.

14. Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Page 218

15. Joseph Lookofsky, "Not Running Wild With The CISG," Journal of Law and Commerce Vol 29:141 (2009). Page 163f.

16. Lookofsky, Lærebog i Obligationsret I, 3. Udgave. Page 195.

17. Lookofsky, "Not Running Wild With The CISG." In general + page 168.

18. Lookofsky, "Walking the Article 7(2) Tightrope Between CISG and Domestic Law," 25 Journal of Law and Commerce (2005-06). Page 100-101.

19. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG." Paragraph 34 and 36.

20. Anja Carlsen, "Can the Hardship Provisions in the UNIDROIT Principles be Applied when the CISG is the Governing Law?," Pace Law School Institute of International Commercial Law (1998).

21. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court."

22. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG." Paragraph 36.

23. Sarah Howard Jenkins, "Exemption for Nonperformance: UCC, CISG, UNIDROIT Principles -- A Comparative Assessment," 72 Tulane Law Review (1998). Page 2024

24. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG." Paragraph 28.

25. Gabriël Moens, International trade and business law review, v.4 (2005). Page 162f.

26. Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Page 222-223.

27. Ingeborg Schwenzer, "Force Majeure and Hardship in International Sales Contracts," 39 VUWLR (2008). Page 713.

28. Lookofsky, "Not Running Wild With The CISG." Page 157f.

29. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG." Paragraph 26.

30. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.." Page 5 out of 14.

31. Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Page 233

32. Christoph Brunner, Force Majeure and Hardship Under General Contract Principles: Exemption for Non-Performance in International Arbitration (2008). Page 218f.

33. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG."

34. Lookofsky, "Not Running Wild With The CISG." Page 22ff

35. Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Page 223-224

36. Ibid. Page 235-236

37. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.." Page 6 out of 14.

38. Alejandro M. Garro, "Comparison between provisions of the CISG regarding exemption of liability for damages and the counterpart provisions of the UNIDROIT Principles," Pace Law School Institue of International Commercial Law (2005). Section IV, paragraph 6.

39. Lookofsky, "Walking the Article 7(2) Tightrope Between CISG and Domestic Law." Page 100-101

40. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG." Page 254-255.

41. Lookofsky, "Walking the Article 7(2) Tightrope Between CISG and Domestic Law." Section 2.

42. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.." Page 94-95.

43. Lookofsky, "Walking the Article 7(2) Tightrope Between CISG and Domestic Law." Page 87-89.

44. Albert H. Kritzer, "General observations on use of the UNIDROIT Principles to help interpret the CISG," Pace Law School Institute of International Commercial Law (June 2009).

45. John Y. Gotanda, "Using the UNIDROIT Principles to Fill Gaps in the CISG," Contract Damages: Domestic & International Perspectives (Hart Publishing) (2007). Page 5

46. Veniziano, "UNIDROIT Principles and CISG: Change of Circumstances and duty to renegotiate according to the Belgian Supreme Court." Page 141.

47. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG." Page 245.

48. Kritzer, "General observations on use of the UNIDROIT Principles to help interpret the CISG."

49. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG." Page 238-240

50. Gotanda, "Using the UNIDROIT Principles to Fill Gaps in the CISG." Page 13.

51. Carlsen, "Can the Hardship Provisions in the UNIDROIT Principles be Applied when the CISG is the Governing Law?." Section IV, A.

52. Moens, International trade and business law review, v.4. Page 168

53. Gotanda, "Using the UNIDROIT Principles to Fill Gaps in the CISG." Page 17

54. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG." Page 239

55. Veniziano, "UNIDROIT Principles and CISG: Change of Circumstances and duty to renegotiate according to the Belgian Supreme Court." Page 145.

56. Ibid. Page 146

57. Harry M Flechtner, "Issues Relating to Exemption ("Force Majeure") Under Article 79 of the United Nations Convention on Contracts for the International Sale of Goods ("CISG")." PITT LAW (April 2008).

58. Lookofsky, "Not Running Wild With The CISG." Page 142 + 169.

59. Veniziano, "UNIDROIT Principles and CISG: Change of Circumstances and duty to renegotiate according to the Belgian Supreme Court." Page 144.

60. Ramberg Bergsten Bonell Garro and others, "Opinion No. 7, Exemption of Liability for Damages Under Article 79 of the CISG." Paragraph 26-40.

61. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.." Page 97.

62. Rimke, "Force Majeure and hardship: Application in international trade practice with specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts." Page 211.

63. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG." Page 258.

64. Veniziano, "UNIDROIT Principles and CISG: Change of Circumstances and duty to renegotiate according to the Belgian Supreme Court." Page 142.

65. Gotanda, "Using the UNIDROIT Principles to Fill Gaps in the CISG." Page 17.

66. Slater, "Overcome by Hardship: The Inapplicability of the UNIDROIT Principles' Harship Provisions to CISG."

67. Flechtner, "The exemption Provisions of the Sales Convention, Including Comments on "Hardship" Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court.." Page 94-95.


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