Breach of Contract: A Converging Concept and Its Future in Civil Law

Abstract

The purpose of the research is to analyse the convergence of the concept of ‘breach of contract’ as construed under common law and civil law and to identify potential paths for further development of civil law in this field. I find that the common law’s approach to breach of contract is better suited to meet the needs of sophisticated contracting parties and that certain signs of civil law’s move towards the common law approach should be viewed as an indication of a general trend. Common law traditionally applies a broad and uniform notion of breach of contract. It encompasses circumstances that would not fall within the scope of the ‘non-performance of an obligation’ under civil law. The reason therefore is that civil law’s contractual liability is conditioned upon a breach of a pre-existing primary obligation to perform. Any other sort of contractual liability, which is not attached to a breach of a primary performance obligation, needs to be construed under different liability theories. Conversely, under common law the liability for breach of contract does not require a violation of a primary performance obligation; therefore, it can apply also in cases where it is not possible to construe any primary duty of performance. This is particularly the case of warranties. Ultimately, what can be handled under common law with the uniform concept of breach of contract, under civil law may require separate liability theories (indemnity-type liability), which are redundant in common law. Recent developments in civil law, however, provide clear signs of convergence between the civil law’s and common law’s liability theories. Two examples I use for my research is the ‘non-conformity’ under modern European sales law and the evolving approach to initial impossibility. I find that they signal a move towards the common law’s approach, as they attach liability for breach of contract to cases where there may be no primary performance obligation. **I claim that these examples should be viewed as an indication for a general trend, which would meet the expectations of professional contracting parties. Even though these statutory examples may appear isolated, the pattern of practice in complex contracting clearly demonstrates the relevance of developing a reliable liability theory for cases, where there may be no primary duty of performance. Both legal certainty and flexibility would benefit from one liability theory which would include promises not giving rise to any primary duty of performance. Finally, I discuss potential ways in which civil law could integrate these cases in its general liability theory.