COMPARATIVE PRIVATE LAW
NON-PERFORMANCE REMEDIES
University of Oslo
Prof. Giuditta Cordero Moss
Case I – Destruction of
subject-matter (1)
• Sale of car components built on specifications
• An earthquake destroys the facilities and the
stored components
• Non-delivery causes stop of car production:
– buyer looses increase of sales because important car
event is missed;
– buyer looses extraordinary profit due to extremely
profitable contract;
– buyer incurred expenses to charter ships that were
not used due to non-delivery
• Supply contract is in force for 5 more years
• What can the buyer do?
Destruction of subject-matter (1)
• All: Seller is excused.
Buyer may terminate
contract/contract
ceases to exist
Case II – Destruction of
subject-matter (2)
• Sale of car components built on
specifications
• A fire destroys the facilities and the stored
components
• The fire alarm had not been installed due
to illness of the person in charge of
security in the seller’s company
• Consequences as above.
• What can the buyer do?
Destruction of subject-matter (2)
• Norwegian, German
law: Seller has to
reimburse loss of
increased profit, loss
of extraordinary (?)
profit, incurred
expenses. Buyer may
terminate contract
• Italian, English law,
UNIDROIT, PECL,
CISG : Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract
Case III – Act of god
(factum principis) (1)
• Sale of car components built on
specifications
• New governmental regulations forbid
export of various technical equipment, i.a.
car components
• Consequences as above.
• What can the buyer do?
Act of god (1)
• All: Seller is excused.
Buyer may terminate
contract/effects cease
Case IV – Act of god
(factum principis) (2)
• Sale of car components built on
specifications
• The seller’s export licence is withdrawn
because of the seller’s non-compliance
with governmental requiremenets
• Consequences as above.
• What can the buyer do?
Act of god (2)
• Norwegian, German
law: Seller has to
reimburse loss of
increased profit, loss
of extraordinary (?)
profit, incurred
expenses. Buyer may
terminate contract
• Italian, English law,
UNIDROIT, PECL,
CISG: Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract
Case V – Supplier’s failure
• Sale of car components built on specifications
• The aluminium supplier fails to deliver aluminium
on time for the production of the components
• The aluminium supplier is a recognised supplier
on the market, but due to internal reorganisation
it is experiencing inefficiency
• Consequences as above.
• What can the buyer do?
Supplier’s failure
• Norwegian, Italian,
German law:
Seller is excused. Buyer
may terminate contract
• English law: Seller has to
reimburse loss of
increased profit, incurred
expenses . Buyer may
terminate contract
• UNIDROIT, PECL, CISG:
Buyer may request
specific performance or
terminate contract. Seller
has to reimburse loss of
increased profit, incurred
expenses .
Case VI – Unaffordability (1)
• Sale of car components built on
specifications
• Due to unexpected weather conditions the
ship cannot leave the harbour unless an
ice-breaker is especially ordered from
abroad
• Consequences as above.
• What can the buyer do?
Unaffordability (1)
• Norwegian, German,
Italian law,
UNIDROIT, PECL:
Contract renegotiated
or terminated
• English law, CISG:
Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract
Case VII – Unaffordability (2)
• Sale of car components built on
specifications
• The price of aluminium increases
significantly, and sale of the components
at the agreed price would result in
considerable losses for the seller
• Consequences as above.
• What can the buyer do?
Unaffordability (2)
• Norwegian, German law:
Buyer may request specific
performance or terminate
contract. Seller has to
reimburse loss of increased
profit, loss of extraordinary (?)
profit, incurred expenses
• Italian law, CISG: Buyer may
request specific performance
or request termination. Seller
has to reimburse loss of
increased profit, incurred
expenses.
• English law, UNIDROIT,
PECL: Seller has to
reimburse loss of
increased profit, incurred
expenses. Buyer may
terminate contract
Case VIII – Unaffordability (3)
• Sale of car components built on
specifications
• The price of aluminium increases
significantly, and due to its numerous
obligations the seller cannot pay for its raw
materials
• Consequences as above.
• What can the buyer do?
Unaffordability (3)
• Norwegian, German law:
Buyer may request specific
performance or request
termination. Seller has to
reimburse loss of increased
profit, loss of extraordinary (?)
profit, incurred expenses.
• Italian law, CISG: Buyer may
request specific performance
or request termination. Seller
has to reimburse loss of
increased profit, incurred
expenses.
• English law, UNIDROIT, PECL:
Seller has to reimburse loss of
increased profit, incurred
expenses. Buyer may
terminate contract
Case IX – Choice between
contracts
• Sale of car components built on
specifications
• Destruction of part of the seller’s storage
• Volumes in store sufficient to meet
obligations towards one buyer, but not all
buyers
• Consequences as above.
• What can the buyer do?
Choice between contracts
• Norwegian, Italian,
German law:
Seller is excused. Buyer
may terminate contract
• English law: Seller has to
reimburse loss of
increased profit, incurred
expenses . Buyer may
terminate contract
• UNIDROIT, PECL, CISG:
Buyer may request
specific performance or
terminate contract. Seller
has to reimburse loss of
increased profit, incurred
expenses . (?)
Norwegian law
• Breach of contract, main remedies:
– Specific performance + damages
– Termination (only if fundamental breach) + damages
• Hardship: adjustment of contract terms
• Force majeure:
– Sale: excludes damages (as long as impediment lasts). Creditor
may terminate.
– Construction: duration extended
– Other contracts: contract suspended or terminated
Norwegian law
• Damages:
– Assumption: liability
– Adequate causation (direct damages)
– Irrespective of degree of negligence (but:
evaluation of what is adequate is affected)
– Casus mixtus: gross negligence or wilful
misconduct: also inadequate causation
German law
• Breach of contract, main remedies:
– Specific performance + damages
– Payment instead of performance + damages
– Termination (only upon notice) + damages
• Hardship: adjustment of terms or
termination
• Force majeure: excludes damages (as long as
impediment lasts). Creditor may terminate
German Law
• Damages:
– Assumption: negligence
– Adequate causation (also indirect damages, if
reasonable)
– Irrespective of degree of negligence
Italian law
• Breach of contract, main remedies:
– Specific performance + damages
– Termination (only if fundamental breach and debtor’s
negligence) + damages
• Hardship: termination (may be avoided by adjustment
of terms)
• Force majeure: contract suspended or
ceases to have effect
Italian law
• Damages
– Assumption: strict liability and good faith
– Foreseeable damages
– If wilful misconduct: also unforseeable
damages
English law
• Breach of contract, main remedies:
– Damages
– Termination (only if fundamental breach) + damages
– Specific performance (at court’s discretion, only if: (i)
damages are inadequate, (ii) does not cause great hardship on
debtor)
• Hardship: as in breach of contract
• Frustration: kills the contract
English law
• Damages
– Assumption: strict liability
– Foreseeable: (i) usual course of things, (ii)
reasonably contemplated
CISG
• Breach of contract, main remedies:
– Specific performance (but, art 28: domestic law) +
damages
– Termination (only if fundamental breach or, if delay, upon
notice) + damages
• Hardship: as in breach of contract
• Force majeure: excludes damages (as long as
impediment lasts). Creditor may terminate
CISG
• Damages
– Assumption: strict liability
– (i) Foreseeable as (ii) possible consequences
on basis of (iii) known circumstances
UNIDROIT
• Breach of contract, main remedies:
– Specific performance (not if: impossible, hardship,
alternative,personal, lapse of time) + damages
– Termination (only if fundamental breach or, if delay, upon
notice) + damages
• Hardship: adjustment of terms or
termination
• Force majeure:excludes damages (as long as
impediment lasts)
UNIDROIT
• Damages
– Assumption: strict liability
– Foresseable as likely
PECL
• Breach of contract, main remedies:
– Specific performance (not if: impossible, hardship,
services, alternative) + damages
– Termination (only if fundamental breach or, if delay, upon
notice) + damages
• Hardship: adjustment of terms or
termination
• Force majeure:excludes damages (as long as
impediment lasts)
PECL
• Damages
– Assumption: strict liability
– Foresseable as likely
Common features
Main differences – specific
performance
• Main remedy
–
–
–
–
Norway
Germany
Italy
CISG
• Restricted use
– England
– PECL
UNIDROIT
Main differences – assumption for
damages
• Negligence
– Norway (?)
– Germany
– Italy (?)
• Strict liability
–
–
–
–
England
CISG
PECL
UNIDROIT
Main differences - Causation
• Adequate causation
– Germany
– Norway
• Foreseeability
–
–
–
–
Italy
England
CISG
PECL
UNIDROIT
Main differences – effects of force
majeure
• Excuse from damages
– All
• Use of other remedies
– All but England, Italy
• Temporary
– All but England
• Automatic termination
– England
– Italy (but not if
temporary)
Main differences - Hardship
• Renegotiation or
termination
– All but England and
CISG
• Treated as breach
– England
– CISG