Evolving General Principles of International Commercial Contracts: The Unidroit Principles and Favor Contractus

Abstract

It has been suggested that favor contractus constitutes a basic idea or general principle underlying the Unidroit Principles of International Commercial Contracts (UPICC). This principle aims to preserve the contractual relation by limiting the number of situations in which the existence or validity of the contract is questioned or in which it may be terminated. The focus of this paper is on the interplay between favor contractus and the traditional principles of freedom of contract and pacta sunt servanda. This is done by focusing on two particular problems in international contract practice: the battle of forms and unforeseen changed circumstances (hardship). Addressing these problems is particularly interesting because the UPICC introduce innovative provisions to deal with these situations. Within these innovative provisions, it is possible to detect the underlying idea of favor contractus, in particular the policies to favour the existence of a binding agreement in the context of the battle of forms and to preserve the contractual relation in case of hardship. At the same time, the rules dealing with the battle of forms seem to stretch the traditional rules on contract formation and challenge to a certain degree, the principle of freedom of contract. Likewise, the provisions dealing with hardship tend to clash with the principle of pacta sunt servanda. It is consequently interesting to see how these innovative rules dealing with particular problems relevant to international trade practice lead to the adaptation – or the evolution – of traditional principles of contract law or even the emergence of a new principle.