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Reproduced with permission from 27 American Journal of Comparative Law (1979) 231-245

[This is a commentary on the counterpart to force majeure contained in Article 65 of the 1978 Draft Convention. For comparison of Article 65 of the 1978 Draft with CISG Article 79, see the match-up of CISG Article 79 and Article 65 of the 1978 Draft.]

Force Majeure and Frustration

Barry Nicholas

A comparative lawyer may claim that one of the functions of his discipline ought to be to provide a key to the conceptual presuppositions with which a lawyer from another system approaches a given subject; he may further claim that possession of this key is particularly useful in attempts at drafting international legislation, in which UNCITRAL has been engaged since its creation. It is true that at the international level, as at the national, the disagreements which are ultimately the most intractable are those relating to legislative policy. However, at the international level an identity of formulation may conceal a failure to agree on policy, and conversely, what appears to be a disagreement on policy may be no more than a difference in the choice of concepts. One must be on the lookout for superficial harmony which merely mutes a deeper discord and for verbal conflict which hides a fundamental identity of aim. In both cases the key lies in the conceptual presuppositions of each system or family of systems. The deeper discord escapes notice because the same formula means different things according to the frame-work in which it is read; the fundamental agreement on the end to be achieved is not seen because the conceptual routes which lead that to end are different.

At the international level there is the further difficulty that, although one may in one's more optimistic moments imagine for the future an international common law of commerce, the present fact is that each piece of legislation can only cover one particular field such as Limitation, Carriage of Goods by Sea, Negotiable Instruments or, more widely, but still within a relatively narrow area, Sales of Goods. At the national level, such a piece of limited legislation is constructed against the known background of a particular legal system, but international legislation has no background other than the proper law of each particular contract, and the draftsmen must therefore attempt to ensure that provisions of their legislation are not nullified or circumvented by resort to some rule or institution of a national system. For example, the Draft Convention on Contracts for the International Sale of Goods does not, in principle, deal with questions of validity, which are therefore left to national systems. Naturally however, it does deal with the question of "non-conformity," i.e., with liability for defects in the goods. But in some systems, notably French law, the scope of the doctrine of mistake, which is an aspect of validity, is so wide as to provide an accommodating alternative to the stricter remedies for "non-conformity." Should the Convention provide that in cases of non-conformity recourse should not be had to remedies by way of mistake, or should it accept the logic that, if its coverage stops short of questions of validity, it cannot legislate to exclude remedies for non-validity? [1] Wherever one cuts the seamless web there will be loose ends.

Here we shall be concerned with art. 65 of the Draft Convention which, enigmatically cross-headed "Exemptions" (like its counterpart in ULIS art. 74), attempts to grapple with at least some of the problems dealt with in national systems under such headings as "force majeure," "cause étrangère," "impossibility" (with or without epithets), "frustration," "Wegfall der Geschäftsgrundlage." In this setting, the most prominent were the first and the third of the above difficulties: the agreement which conceals disagreement, and the problem of loose ends. Apart from the more obvious divergences of view on matters of policy, difficulties centered on the definition the circumstances in which "exemption" would occur, and on the extent to which the legal consequences flowing from such "exemption" should be set out in the Draft Convention. The difficulty of definition lay in producing a formula which would have the same meaning in different systems, and the difficulty in regard to legal consequences lay in deciding how far these could be left to the proper law without producing an undue diversity of practical result or alternatively, how far it was reasonable to include in a draft law of sales of goods a detailed set of remedies for a situation which is not specific to contracts of sale and which indeed is likely to affect them only relatively rarely.

It will be convenient to consider both ULIS and the Draft Convention from these two points of view -- finding an unambiguous formula and delimiting the consequences -- provided that it is borne in mind that the two are not mutually exclusive.

The Uniform Law on the International Sale of Goods (1964)

ULIS, Art. 74

1. Where one of the parties has not performed one of his obligations, he shall not be liable for such non-performance if he can prove that it was due to circumstances which, according to the intention of the parties at the time of the conclusion of the contract, he was not bound to take into account or to avoid or to overcome; in the absence of any expression of the intention of the parties, regard shall be had to what reasonable persons in the same situation would have intended.
2. Where the circumstances which gave rise to the non-performance of the obligation constituted only a temporary impediment to performance, the party in default shall nevertheless be permanently relieved of his obligation if, by reason of the delay, performance would be so radically changed as to amount to the performance of an obligation quite different from that contemplated by the contract.
3. The relief provided by this Article for one of the parties shall not exclude the avoidance of the contract under some other provision of the present Law or deprive the other party of any right which he has under the present Law to reduce the price, unless the circumstances which entitled the first party to relief were caused by the act of the other party or of some person for whose conduct he was responsible.

Difficulty of Definition

At the Hague in 1964 the United Kingdom expressed the view that the preceding formulation corresponded to English law.[2] The extent to which this comfortable opinion resulted from a failure to read the text with the eyes of those not brought up in the Common law tradition can be appreciated if one reads the very thoroughly argued and documented interpretation given by Hans Stoll, in the massive German Kommentar of the Law, edited by Professor Dölle.[3]

There are certainly two elements which look familiar to an English lawyer.[4] The approach in para. 1 is through an "objective" interpretation of the contract, and this recalls the characteristic Common law method of dealing with contractual problems and in particular (historically speaking) with impossibility and frustration. And the formula at the end of para. 2 would serve very well as a statement of the criterion which English courts apply to determine whether contract is frustrated.[5]

There are however differences more important than these similarities. Para. 1 represents a quite different approach -- that, for example, of the French law of cas fortuit or force majeure.[6] French law thinks (a) in terms of exemption from liability in damages, as opposed to the English law of frustration, which regards the contract as altogether terminated, and (b) in terms of non-performance of one (or more) of the party's obligations, as opposed to English law, which looks for a failure to perform the entire contract. Moreover (c), the test implied in the ULIS requirement that the non-performance be "due to circumstances which . . . he was not bound to take into account . . ." is quite different from the English criterion for frustration. (An idea comparable to frustration is embodied in para. 2, but serves there only to determine when continued delay -- as opposed to non-performances of other kinds -- will constitute more than merely a defence to a claim for the damages flowing from that delay.) More fundamentally, the idea underlying para. 1 of the ULIS provision is that of fault liability. And this, by contrast with the Common law starting point of absolute liability, is a characteristic of all Civil law systems. The gulf between the two on this point is of course reduced, on the one hand, by the Common law's admission of the doctrine of frustration and, on the other hand, by the Civil law systems placing the burden of proof of the absence of fault on the party who has failed to perform. (This reversal of the burden is found in para. 1: ". . . if he can prove . . .")

We may now look a little further at these three differences. (a) The approach in para. 1 by way of exemption from liability echoes the French law and systems derived from it, whereas para. 2, rather confusingly, speaks in terms of release from the obligation, as German law does.[7] But whichever way the matter is expressed, the exemption or exoneration is one which only the non-performing party can invoke. It would not have been surprising if English law had proceeded in a similar fashion and implied a term excluding liability in the events which have occurred, but the implied term introduced by Taylor v. Caldwell [8] has been treated as one which terminates the contract and which can therefore be invoked by either party.[9] This broaches, however, the question of the consequences which should flow from "exemption" and is therefore laid aside for further consideration below.[10]

(b) The exemption is available when a party has not performed "one of his obligations." This is entirely consistent with the usual Civil-law approach. A contract is seen as creating a number of obligations or duties, and there may be a failure to perform any one or more of these (though in the case of a contract of sale the obligations of the seller are obviously more complex and more likely to give rise to questions of exemption than those of the buyer). This approach in terms of obligations of the parties is adopted both in ULIS and in the Draft Convention, but for the Common lawyer it is uncomfortable for two related reasons: he does not usually think in terms of obligations of the parties, and, more importantly, his doctrine of frustration applies to the whole contract or to nothing. He does not think in terms of obligations or duties of the parties because most of what the Civil law expresses as obligations created by law are expressed by the Common law as the contents of implied terms.[11] Thus the Sale of Goods Act 1893 and the Uniform Commercial Code speak of duties (or obligations) of the seller and buyer only in regard to delivery of the goods and payment of the price respectively,[12] and these constitute the minimum content without which a contract of sale cannot exist at all. The rest of the content is seen as deriving from implied terms.

There is little difficulty, however, in making the terminological conversion from implied terms to obligations. What is more difficult for the Common lawyer is to envisage "frustration" of a single obligation. Suppose for example that a contract for the sale of a quantity of goods provides that the seller shall pack them in individual plastic containers, and before the seller can execute the contract, legislation in his country forbids the export of plastic, and the seller therefore substitutes other containers; or suppose that governmental intervention causes a delay in delivery (but not such as to fall within para. 2). The effect of para. 1 is to deny to the buyer, as French law would, the right to claim damages. The Common law, however, has allowed impossibility of performance to be absorbed into the category of frustration, and (as another aspect of this approach) attributes to both only the single catastrophic effect of terminating the contract. For these reasons, the Common law has difficulty in knowing how to deal with partial impossibility. This can be seen in the English textbooks, which either do not discuss the question or (while recognizing that this is a faulty analysis) treat it tentatively as an aspect of frustration.[l3] The tentativeness of the treatment is not surprising, since the case-law is scanty and anything but clear. The courts have often found it possible to avoid the question of principle by recourse to the usual Common law device of interpreting the contract, thus finding that the parties have provided for the events which have occurred or that the contract was not intended to impose the usual absolute obligation, but only an obligation to use due care. But there are a few cases which face the question more directly. There are dicta in the old case of Hadley v. Clarke,[l4] reinforced by the approval of Cleasby B. in Jackson v. Union Marine Insurance Co., Ltd.,[l5] to the effect that an obstacle to performance which, it were permanent, would be a ground for declaring the contract to be at an end, will, if it is merely temporary, have no effect whatever. This black-or-white approach excludes the possibility that a temporary or partial obstacle, while not bringing the contract to an end, might be a defence to an action for damages for the delay or for the partial performance.

It is perhaps not surprising that the problem has been directly faced in cases concerning leases. On the assumption that a lease cannot usually be frustrated,[16] the question of the effect of impossibility of performance of individual covenants is the more nakedly posed. It is unhelpful to adopt the black-or-white approach and say that the impossibility must be such as to terminate the entire lease. The question is whether, granted that the lease remains in force, impossibility of performance may be a defence to an action on an individual covenant. The well-known case of Bailey v. de Crespigny [17] can be interpreted as giving an affirmative answer this question, but in Eyre v. Johnson,[18] Denning J. adopted an approach which echoes the dicta in Hadley v. Clarke [19] and Jackson v. Union Marine Insurance Co. Ltd.: [20] "although illegality which completely forbids the performance of a contract may give rise to frustration in some cases, illegality as to the performance of one clause which does not amount to frustration in any sense of the word, does not carry with it the necessary consequence that the party is absolved from paying damages." In so far as it refers to leases, this proposition is in conflict with dicta in the House of Lords in Cricklewood Property and Investment Trust Ltd. v. Leighton's Investment Trust Ltd.,[21] and it met with dissent in a recent case at first instance, [22] but for the purposes of the present discussion it is significant as indicating the difficulty that English law has in understanding the approach of para. 1 of ULIS art. 74. The extent to which this approach is alien to the Common law can be measured when one finds that the German lawyer has no difficulty in applying it to the obligation to deliver conforming goods: [23] the seller can plead that his failure to perform this obligation (i.e., his delivery of defective goods) is "due to circumstances which he was no bound to take into account." But the Common lawyer, who approaches this article with the idea of frustration in mind, neither thinks of single obligation nor expects them to be "frustrated." This particular example, however, involves also the third difference mentioned above, which we may now consider.

(c) It has been said above that the test embodied in the words "due to circumstance which . . . he was not bound to take into account . . ." is quite different from the criterion for frustration, and that it is in fact linked to the Civil law principle that contractual liability is based on fault (qualified by the principle that, in the type of case with which we are here concerned, the burden of proof is on the party who has failed to perform). Leaving aside the problem, just discussed, of partial or temporary non-performance, another significant difference between English law and Civil law systems is that English law will require the non-performing party to show that performance of the contract is impossible or, in the words of para. 2 of art. 74, has "so radically changed as to amount to performance of an obligation quite different from that contemplated by the contract." In contrast, Civil law systems, though differing vastly in the rigor of their interpretation, are in broad agreement that he must negative fault by showing that his non-performance is attributable to a cause beyond his foresight or control. Thus it has been held in France [24] that a buyer who had two months in which to collect some wine and who was prevented from doing so at the end of that period by a deluge of rain which made the roads impassable, was not in default, whereas an English court would no listen to such an argument. And in both France [25] and Germany [26] strikes are at least in some circumstances sufficient to exempt a contracting party from liability. In the same way, Professor Tunc's commentary on ULIS [27] envisages that para. 1 might cover some cases in which non-performance was "due to" an unforeseen rise in prices, a possibility which would astonish a Common lawyer (and indeed a French lawyer though not a German) [28].

This emphasis, particularly in German law, on basing liability on fault (excluded by proof of absence of fault), explains the German desire at the Hague conference of 1964 to ensure that art. 74 would cover liability for defects.[29] This led to the substitution in the final text of "circumstances" for "obstacle," which had stood in the draft text. The significance of this change is not immediately obvious to a Common lawyer, but the purpose was to make it clear that the article could be applied even where the non-performance was "due to" a circumstance existing at the time of the making of the contract. This will of course necessarily be the case where the obligation in question is that of delivering conforming goods and the goods are already in existence when the contract is made. It should be noted however that by virtue of para. 3 the seller is not exempt from liability to have the price reduced, and the result is not therefore quite as surprising from the Common law point of view as it seems at first sight. Moreover, it will not be easy to find "circumstances" to which a defect is "due" and which the seller was not "bound to take into account." The most obvious possibility is that of fraudulent concealment by a third party supplier.

In short, the use of the word "circumstances" and, more particularly, of the very elastic "due to," affords relief to the non-performing party much more freely than does English (or indeed French) law, or, though less markedly, the UCC.[30] The United Kingdom's belief to the contrary in 1964 must presumably illustrate how far one can be misled by one's own conceptual presuppositions.

Extent of the Legal Consequences

If one examines art. 74 to discover the remedies of the aggrieved party, one finds that para. 3 preserves his right to reduce the price (art. 46) and to avoid the contract, with the consequence (art. 78) that restitution must be made by both parties of any performance received. In short, apart from reduction of price, there is no provision for a remedy more flexible than the all-or-nothing remedy of avoidance as for breach. And yet national systems often make provision for some judicial discretion in these circumstances.

That a remedy primarily directed to breach may not be well suited to dealing with the consequences of frustration, force majeure, etc. is easily seen. The party from whom restitution is claimed may have incurred expense in performance of the contract; if such expense has resulted in a benefit to the other party, that benefit may presumably be set off against the restitution claimed; but if the expense has not resulted in any benefit, there seems to be no basis for a set-off. More widely, avoidance (if accompanied by the consequences laid down in art. 78) may be too drastic a remedy where the non-performance is, as here, not due to any fault. If, for example, an f.o.b. buyer were unable, owing to circumstances within the meaning of para. 1, to give effective shipping instructions, the buyer would be exempted from damages for this non-performance, and it is obviously right that the seller should be relieved of liability for non-delivery, but it is not so obvious that he should be allowed to avoid the contract. For this would entitle him to restitution of any part-performance he might have rendered, on condition of restoring the price. This could cause injustice to the blameless buyer where the market is rising or to the blameless seller where the market is falling.

The Draft Convention (1978)

The corresponding provision in the Draft Convention is art. 65, which is again placed under the heading of "Exemption" (and is again the only article under that heading):

(1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.
(2) If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if he is exempt under paragraph (1) of this article and if the person whom he has engaged would be so exempt if the provisions of that paragraph were applied to him.
(3) The exemption provided by this article has effect only for the period during which the impediment exists.
(4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt.
(5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention.

Paras. (2) and (4) fill particular gaps left by the ULIS text, but do not raise any questions of wider interest. It is paras. (1), (3) and (5) which correspond to the ULIS text, and it will be seen that the most obvious changes are in matters of drafting: the new text is very much more economical and elegant in its formulation.

So far as matters of substance are concerned, the noticeable changes are (a) the substitution in para. (1) of "impediment" for "circumstances," and (b) the replacement of the old para. 2 by the new, and very brief, para. (3). It may be useful to consider the likely effect of these changes.

The word "impediment" is all that emerged in the end from a lengthy attempt to escape from the elasticity and imprecision (discussed above) of the ULIS requirement that non-performance be "due to circumstances . . ." and to formulate some more certain and objective criterion. A requirement that performance should be simply "impossible" would meet the case if the word were interpreted as it would be in the Common law, but the "exemption" would then be extremely narrow; and in any event the objection was made that German courts would probably give it the meaning, familiar in their own law, of "economic impossibility." [31] And while the addition of the criterion of "radical change" would meet the objection of excessive narrowness, and would present a formula familiar to Common law courts, it would do nothing to exclude the deceptive width of "economic impossibility." Difficulties such as these, coupled with simple differences of view on the question of policy, drove the draftsmen back to what is in substance the ULIS formulation, which at least has the unambitious virtue that its elasticity is reasonably obvious on its face. The advantage of "impediment" over "circumstances" was thought by some to be that it could not cover non-performance of the obligation to supply conforming goods,[32] but this seems very doubtful. We have seen that the most likely practical case is that of fraudulent concealment of a defect by a third party supplier, and this, at least in a fault-oriented system, can be seen as an "impediment" to the performance of the duty to supply conforming goods.[33]

The replacement of old para. 2 by the new para. (3) is of greater importance, though in the negative direction of markedly restricting the scope of the "exemption." We have seen that where the Common law thinks in terms of impossibility or frustration as an exception to a principle of absolute liability, an exception which has the effect of terminating the entire contract, ULIS art. 74 thinks in terms of force majeure as an application of a principle of fault liability, with the effect of barring a claim for damages for the non-performance of one or more obligations, while para. 2 of art. 74 departs from this general approach by introducing, for one situation only, the quite different principle of "radical change." Moreover this principle is appropriate to avoidance of the entire contract, rather than barring a claim for damages for non-performance of one or more obligations.

It was clear therefore that the combination in ULIS of these two consistent approaches was unhappy, since it confused two essentially different questions. The first question is the circumstances in which a non-performing party may be exempt from liability in damages. This question is dealt with in para.1 of the ULIS text. The second question is the circumstances in which non-performance may entitle one or other party to avoid the contract, and the consequences of such avoidance. A proposal was made to the Working Group which drafted the new Convention that these two questions should be dealt with in separate articles. In the event, this proposal was rejected and the new text contains only the first article. The answer to the second question must be sought either in the Convention's ordinary remedies for non-performance or in the proper law (with very varying results).

This decision to deal only with the first question accounts for the limited scope of new para. (3) in comparison with old para. 2. The new text provides adequately for the situation where the delay caused by the impediment has not "radically changed" the performance required by the contract, and the non-performing party is therefore adequately protected by being exempted from liability for the delay. But where there has been a "radical change," the law is silent. ULIS was illogical because it dealt with the second question in this particular context only. The new text is logical, but limited. It may therefore be of interest to consider the lines which the Convention's answer to the second question might have followed.[34]

Para. 5 of art. 65 preserves any remedies which either party may have, other than the remedy for damages. If one leaves aside the right to require performance [35] (which in this context resolves itself into a right, where appropriate, to require substitute performance), the same remarks apply as have been made above on para. 3 of the ULIS article. The remedy of avoidance for fundamental breach is not only inelegant in a situation in which ex hypothesi the non-performance is excusable; it is also inappropriate because of its inflexible, all-or-nothing character. So far as the non-performing party is concerned, the remedy of avoidance will be of value where his non-performance is partial (as in the case of the plastic containers, discussed above)[36] and the other party refuses to accept such performance as he is able to give, but it will be of no avail where his inability to perform relates to the whole (or a substantial part) of the contract. In particular it will be of no avail in the situation, partially covered by para. 2 of the ULIS text, in which, as a result of the impediment, there has been a "radical change" in the performance required of him, and he wishes to be released.

These difficulties could only be met by providing a remedy of avoidance, special to this situation, which would be available (a) to the non-performing party in case of "radical change," and (b) to the other party in circumstances which would otherwise amount to fundamental breach, and which would be more flexible than the remedy of avoidance for breach.

It is this last desideratum of flexibility which presents the greatest difficulty, in that the light of reason and the evidence of comparative law show that there is an embarrassment of choice among types of flexibility.

Three hypothetical cases may help to show where the problems lie. It is assumed that the question whether a party may avoid has been settled as indicated above.

Case (1). The contract provides for the goods to be delivered by instalments and for the price to be paid on completion of all deliveries. After half the deliveries have been made, the authorities in the seller's country prohibit further export of the goods in question. The buyer is unable to return the goods. The market value of the goods has risen, but the actual benefit to the buyer is less than either the market value or the proportionate part of the price. (The benefit to the buyer would be impaired, for example, when the purpose for which he needed the goods can only be met by a complete delivery, and there will be long delay in obtaining substitute goods from any alternative source.)

Case (2). Let us assume a contract for delivery by instalments, followed by a prohibition on further exports, as in Case (1). The buyer is unable to return the goods because he has re-sold at a price considerably higher than the contract price and higher also than the current market price; or he cannot return them because he has incorporated them in a building, and the cost of obtaining substitute goods is higher than the contract price.

Case (3). The seller has contracted to make and supply goods to the buyer's specification; the price is to be paid on delivery. Before the goods have been delivered, but after the seller has incurred considerable expense in preparatory work (such as design or the acquisition of machine tools), export of the goods is prohibited, and some impediment within the meaning of art. 65 prevents the buyer from taking delivery.

In all these cases the seller has incurred expenditure, but has received no benefit. In Case (1) the benefit to the buyer is less than the value of the goods, however computed. In Case (2) the benefit to the buyer is higher than the value of the goods. In Case (3) there his no benefit to the buyer at all.

There seem to be in principle five possible solutions.

(a) One solution is that adopted by ULIS [37] and the Draft Convention,[38] which requires the buyer to return the goods, or, if that is impossible, to account for the benefits which he has derived from the goods. The consequences are these: In Case (1) the seller will get less than the market value on the goods and less than a proportionate part of the price; in Case (2) he will get the benefit of the buyer's advantageous re-sale or the rise in the market price; in Case (3) he will get nothing.

(b) A second approach would allow the seller to claim the amount of the benefit to the buyer, provided that this does not exceed the expenditure incurred by the seller. This is the solution commonly applied by those systems which have a general doctrine of unjustified enrichment.[39] The practical result will be the same in Solution (a) for Case (1) and Case (3). In Case (2) however, the seller will be limited to the amount of his expenditure. (This may be higher than the contract price if the seller made a bad bargain in the first place.)

(c) A third solution would allow the seller to claim the amount of the benefit to the buyer, provided that this does not exceed the proportionate part of the contract price. The practical result will be, the same as in Solutions (a) and (b) for Cases (1) and (3), but the limit on the seller's recovery in Case (2) will be different. This is the solution of the American Restatement -- Contracts.[40]

(d) The fourth approach would allow the seller to claim the amount of the benefit to the buyer, provided that this is not less than the proportionate part of the contract price. The result will be the same as in as in Solution (a) for Case (2), and the same as in Solution (a), (b) and (c) for Case (3), but in Case (1) the buyer will bear the loss caused by the termination of the contract.

(e) A fifth approach would be a system of discretionary apportionment of benefits and losses. This can of course be adapted to produce any of the results already considered for Cases (1) and (2), but it alone can provide a solution to Case (3) which does not simply leave the loss on the seller. A system on these lines is adopted in England [41] and in some other Common law jurisdictions.

Though any of these five solutions could in theory be adopted, there are objections to at least three of them.

Solution (e), though perhaps the best in terms of ideal justice, involves a considerable exercise of judicial discretion and a corresponding amount of uncertainty, and is probably inappropriate in an international context.

Solution (b) presents considerable difficulties in determining what part of the total expenditure of the seller is to be attributed to the performance of this particular contract. (The same difficulty would of course affect Solution (e).)

Solution (d) is objectionable because it treats a contract for delivery by instalments for a price payable on completion as amounting necessarily to a series of separate contracts for a proportionate part of the price, whereas Solution (e) treats it as only presumptively so amounting, and allows the buyer to rebut the presumption by showing that the actual benefit is less than the proportionate part of the price. (Solution (a) ignores the question.)

The choice therefore lies between Solution (a) and Solution (c). In regard to the forum there seems no merit in requiring the buyer to return the goods, if he can, since this will in some cases make the amount the seller recovers depend on the chance of whether the goods can be returned or not.

In the event, however, it was decided not to attempt any solution to these problems and therefore, by implication, to leave them to the proper law. As was said at the beginning of this article, until the millennium comes and there is an all-embracing international common law of commerce, there is bound to be a point at which each attempt at unifying some particular area of trade law stops short, and the proper law takes over. And it will always be a matter for debate where that point should be. In favor of the Draft Convention's approach to these problems, it can be said that the problems to be dealt with will not often occur in international sales of good and, in addition, that the range of possible solutions would have given rise to time-consuming controversy in UNCITRAL and might have endangered what agreement there was. In the unification of law there is always the risk that the best is the enemy of the good. But it is still important not to mistake the one for the other.


1. The Draft Convention, as approved by UNCITRAL, takes the latter course. See art. 4.

2. Diplomatic Conference on the Unification of Law governing the International Sale of Goods, The Hague, 2-25 April 1964, vol. II, Documents 167 (1966).

3. Dölle (ed.), Kommentar zum Einheitlichen Kaufrecht (1976) (hereinafter, Dölle, Kommentar).

4. And no doubt they are attributable to Common law influence: Dölle, Kommentar 439.

5. See Lord Radcliff in Davis Contractors Ltd v. Fareham U.D.C., [1956] A.C. 696, 728.

6. C. civ. arts. 1147, 1148.

7. For a brief account in English see Cohn, "Frustration of Contract in German Law," 28 J. Comp. Legis. & Int. Law 15 (1946).

8. (1863) 3 B. & S. 826.

9. See Nicholas, "Rules and Terms, Civil Law and Common Law," 48 Tul. L. Rev. 946, 955 et seq. (1974).

10. Text infra following n. 30.

11. Nicholas, supra n. 9 at 951.

12. Sale of Goods Act 1893, s. 27; UCC 2-301.

13. Chitty on Contracts (24th ed. 1977) at § 1414; see also Treitel, Law of Contract (4th ed. 1975) at 587. The matter is treated in Williston on Contracts (3rd ed.) at § 1956.

14. (1799) 8 T.R. 259.

15. (1874) L.R. 10 C.P. 125, 135.

16. Cricklewood Property Investment Trust Ltd. v. Leighton’s Investment Trust Ltd., [1945] A.C. 221; on which see Treitel, supra n. 13 at 601 et seq.

17. (1869) L.R. 4 Q.B. 180.

18. (1946) K.B. 481.

19. Supra n. 14.

20. Supra n. 15.

21. [1945] A.C. 221, 223 (Lord Russell), 244 (Lord Goddard).

22. Sturcke v. S.W. Edwards Ltd, (1971) 23 P. & C.R. 185, 190 (Goff J.).

23. See Dölle, Kommentar 443, 456.

24. Cass. req. 28 Nov. 1934, S. 1935.1.105.

25. Cass. com. 21 Nov. 1967, D. 1968.280; Mazeaud & Tunc, Traité théorique et pratique de la responsabilité civile,vol. 2 (6th ed.) at § 1587.

26. Dölle, Kommentar 454.

27. Supra n. 2, vol. 1, Records at 384, but he envisages no more than a possibility; Dölle, Kommentar 453, takes a restrictive view.

28. Cohn, supra n. 7.

29. Dölle, Kommentar 436.

30. 2-615.

31. See Cohn, supra n. 7.

32. Supra, text at n. 23.

33. The Secretariat’s Draft Commentary on the Draft Convention (A/CN.9/WG.2/WP.22) takes the other view. See UNCITRAL, Report on Tenth Session (1977) Annex I, paras. 446-449, VIII Yearbook 25 at 56.

34. What follows draws upon a paper submitted to the Working Group by the present writer.

35. Art. 42 of the Draft Convention deals with the buyer’s right to require performance by the seller. Cf. art. 58 on the seller’s right to require performance by the buyer.

36. Text, supra, following n. 13.

37. Art. 81.

38. Art. 69.

39. E.g. BGB § 818.

40. § 418.

41. Law Reform (Frustrated Contracts) Act 1943.

Pace Law School Institute of International Commercial Law - Last updated January 15, 1998

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