By: Alexander Dorzhiev
Avoidance of Contract as a Remedy under The UN Convention on Contracts
for the International Sale of Goods, UNIDROIT Principles of International
Commercial Contracts and Principles of European Contract Law:
Comparative Analysis
Introduction:
International trades occur more commonly nowadays than they used to not so
long ago. Many different companies are importing and exporting their goods and
services internationally. Due to this fact, the need for proper legal regulation of such
deals became even more crucial.
Pacta sunt servanda (agreements must be kept) is a general rule of law that
forms the basis of international trade law, i.e. each party must perform the
obligations which it undertook upon itself. It makes a commercial deal more
predictable as each party understands what it is entitled to expect under the contract.
However, there are exceptions to this rule wherein certain cases a party may
be relieved of its duty to perform. However, it can occur only under extreme
circumstances as avoidance is a last resort measure due to the possible harsh
consequences it may cause for the other party1.
To claim performance avoided there needs to be a relevant decision of a
judiciary body. Due to its wide application in a large numbers of the existing legal
systems, the concept found its illustration in all of the major legal unification
instruments of contract law, i.e. The United Nations Convention on Contracts for the
International Sale of Goods (henceforth – the CISG), the UNIDROIT Principles of
International Commercial Contracts (henceforth – the UPICC) and the Principles of
European Contract Law (henceforth – PECL).
Although all of the legal instruments mentioned above acknowledge
avoidance as a viable remedy they differ in providing what could be qualified as
sufficient grounds for its invocation and how incurring avoidance affects the parties
to a contract and their relationship2. Hence, the goal of this coursework is to identify
these differences and what legal consequences they might cause.
1
Ulrich Magnus, The Remedy of Avoidance of Contract Under CISG - General Remarks and Special Cases, Journal of
Law and Commerce No 25 (2005-06) p. 423-425
2
Chengwei Liu, Effects of Avoidance: Perspectives from the CISG, UNIDROIT Principles and PECL and Case Law,
Nordic Journal of Commercial Law No 1 (2005), Ch. 1-5
Methodology:
As the title of the coursework suggests, the main method used for the analysis
would be comparative, as there is a need to identify the possible differences of the
same remedy being described by various legal instruments. Other important research
methods that would be required are explicative (to understand the nature of the
avoidance remedy) and impact analysis (how the different approaches affect the
decision-making process on granting the avoidance).
Literature review:
To conduct a comparative analysis, it is first required to understand how the
remedy of avoidance is described in each of the legal instruments. The most efficient
way to do it would be researching the commentaries to them drafted by notable legal
scholars. Among the most distinctive commentators of the CISG it is possible to
distinguish the works of Peter Schlechtriem (“UN Law on International Law”3) and
Ingeborg Schwenzer (“Commentary on the UN Convention on the International Sale
of Goods (CISG)”4, “International Sales Law”5).
Among the commentaries to the UPICC, the two which deserve the most
credit are the Official Commentary to the UPICC published by their drafters6 and
the Commentary on the UNIDROIT Principles of International Commercial
Contracts by Stefan Vogenauer7. As for the PECL, there is a set of commentaries
drafted by Danny Busch in a collaboration of several other scholars who specialize
in the respective sphere8.
After understanding the basics of avoidance from a perspective of their
respective legal instruments it is further necessary to look through similar
comparative analyses that have already been done by legal scholars. For instance,
there Chengwei Liu published a series of articles on the issue at hand (Effects of
Avoidance: Perspectives from the CISG, UNIDROIT Principles and PECL and
Case Law9; Declaration of Avoidance: Perspectives from the CISG, UNIDROIT
3
Peter Schlechtriem, Petra Butler, UN LAW on International Sales. The UN Convention on the International Sale of
Goods, Springer (2009)
4
Ingeborg Schwenzer, Christiana Fountoulaki, International Sales Law, Routledge-Cavendish (2007)
5
Peter Schlechtriem, Ingeborg Schwenzer, Schlechtriem & Schwenzer: Commentary on the UN Convention on the
International Sale of Goods (CISG), Oxford (2010)
6
UNIDROIT Principles of International Commercial Contracts (2016)
7
Stefan Vogenauer, Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC), Oxford
University Press Inc. (2015)
8
The Principles of European Contract Law and Dutch law: A Commentary, Kluwer Law International (2006)
9
Chengwei Liu, Effects of Avoidance: Perspectives from the CISG, UNIDROIT Principles and PECL and Case Law,
Nordic Journal of Commercial Law No 1 (2005)
Principles and PECL and Case Law10). This will provide a starting point for the
research as a whole as it outlines the basic issues in regards to the varying
approaches to the said remedy.
10
Chengwei Liu, Declaration of Avoidance: Perspectives from the CISG, UNIDROIT Principles and PECL and Case
Law, Nordic Journal of Commercial Law No 6 (2005)