The UNIDROIT Principles of International Commercial Contracts

Abstract

UNIDROIT, a specialized organization of the United Nations which promotes the unification of law, published Principles of International Commercial Contracts in May 1994.1 This publication has already been the subject-matter of several conferences2 and publications.3 This paper first discusses the purpose of the UNIDROIT Principles (I.). It then covers the relevance of these Principles for the conduct of contract negotiations (II.) and the drafting of international contracts (III.). The UNIDROIT Principles do not constitute a legal system in the strict sense (IV.). However, they contain useful guidelines for arbitrators (V.). The Principles, which are reproduced hereafter, comprise in 120 Articles, the basic principles on the formation, validity, interpretation and performance/non-performance of international contracts. The Principles cover contract in general.4 Different types of contracts, e.g. sales, as well as loans construction contracts, may be governed by the Principles. However, the Principles do not contain specific rules for each of these contracts. For instance, they do not cover the transfer of property by sales or the nominated subcontractor in construction contracts. The Principles reflect 14 years of research and discussion by an international drafting committee. They are intended to be acceptable for lawyers from different legal systems. Moreover, the Principles are intended to be neutral. They were not drafted in the interest of a specific party or lobbying group. They will strike a fair balance between the rights and obligations of all parties to contracts. The different Articles contain the basic rules. Each Article, however, should be read together with the ‘Comments’ with that Article, which explain and illustrate the proposed rule in a more detailed fashion. The Comments are an integral part of the Principles. The text of the Articles without the Comment, as reproduced hereafter, is thus insufficient. A proper understanding of the Articles requires also …