Principles Of International Commercial Contracts Research Articles

The Unidroit Principles and the inflexibility of code as law: reconciling smart contracts with general clauses

Abstract Smart contracts are a set of digital technologies enabling the automation of certain aspects of contractual performance and/or remedies. These technologies follow a deterministic, if/then logic that is often difficult to reconcile with the inherent malleability of contract law. This article scrutinizes this tension, with specific reference to the International Institute for the Unification of Private Law’s (Unidroit) Principles of International Commercial Contracts (PICC). The article argues that some recurring PICC general clauses (such as good faith and reasonableness) play a crucial role in ensuring fairness. Therefore, their operation should not be constrained by smart contracts. To the contrary, the parties to an international commercial contract should use technology to empower arbitrators to make full use of the flexibility inherent to the PICC and issue (partially) self-enforcing awards.

The right to avoid the international sale of goods contract: Comparison of Viet Nam to CISG and PICC

Foreign trade is an indispensable activity in the globalization era. Researching the liabilities of parties in performing the sale contracts and the avoidance right of parties in the contracts is a vital issue. Therefore, this article compared Vietnamese Commercial Law 2005 with the United Nations Convention for the International Sale of Goods (CISG) and Principles of International Commercial Contracts (PICC) regarding the avoidance of sale contracts, including the three aspects, fundamental breach, failure in performance obligations of contract at the end of adding time, and anticipatory breach. The findings not only enable Vietnamese merchants to master international rules in establishing foreign trading but also show differences and similarities between Vietnamese law and international rules. By doing that, this article puts forward some implications for rebuilding the definition of “fundamental breach” in Vietnamese commercial law. Also, this paper suggested that the avoidance clause of the Vietnamese law should include the claim to terminate the agreement of the innocent party due to the non-performance party’s failure to fulfill contractual duties at the end of adding time, and the other party will be constituted an “anticipatory breach”.

When the goose stops laying golden eggs: supervening loss of trust in long-term contracts under the PICC

Purpose The purpose of this paper is to examine the supervening loss of inter-organisational trust in long-term commercial contracts. The underlying research question is whether contract law – the legal institution regulating economic exchanges – should intervene and enable a party to a long-term commercial contract to extricate itself from a situation where a relationship of trust has broken down irretrievably. Design/methodology/approach This paper uses doctrinal methodology and theoretical conceptualisation to answer the underlying research question. The legal instrument chosen for analysis purposes is the UNIDROIT Principles of International Commercial Contracts. This paper also draws on extant literature on inter-organisational trust (including conceptual and empirical studies) to support the arguments and propositions. Furthermore, this study proceeds to assess the substantive justifiability of the proposed remedial measure using four normative values: legal certainty and predictability, protection of the performance interest, economic efficiency and the preservation of the relation. Findings The central argument put forward in this paper is the reformulation of draft Article 6.3.1 proposed by the UNIDROIT Working Group on Long-Term Contracts, which confers a novel right to terminate for a compelling reason. This paper presents a multidimensional model of inter-organisational trust that would serve as the conceptual framework for the proposed reformulation of the provision and establishes a coherent juridical basis for the legal solution that would accord with the Principles of International Commercial Contracts’ general remedial scheme. As for the normative assessment, this paper demonstrates that the proposed remedial measure would significantly promote efficient outcomes and positively serve the norms of legal certainty, protection of the performance interest and the preservation of the relation. Originality/value This paper addresses the lacuna in current legal scholarship in relation to the adverse socio-economic effects following trust violation and deterioration in inter-organisational relationships. Additionally, the propositions and findings should contribute to the workings of the UNIDROIT in adopting new rules and principles that would serve the special requirements of cross-border trade.

SHAREHOLDERS’ AGREEMENTS AND UNIDROIT PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS

The article examines the issue of the foreign law as an applicable law of shareholders’ agreement at companies established under the laws of Ukraine. The emergence of shareholders’ agreement in the legal system of Ukraine, as well as the changes that have taken place during the last decades regarding the possibility of applying foreign law to contractual corporate relations, have been studied. Because of authority of English common law among Ukrainian legal practitioners, there is an attitude among them to choose it as the foreign law that will be applied to shareholders’ agreement. At the same time, there are significant differences in the basic principles of common law and continental legal family, which includes the legal system of Ukraine. On the other hand, the law of Ukraine will remain the applicable law for the rest of corporate relations in the relevant companies insofar as it is its lex societatis (i.e. everything with except of obligations of the parties to the shareholders’ agreement). Taking into account all the above, a conclusion was made to introduce a document equidistant from both legal systems and able to ensure a high quality regulation of general issues of contract law, namely the UNIDROIT Principles of International Commercial Contracts, among instruments providing regulation of relations under shareholders’ agreement. It is proposed to use one of the standard UNIDROIT clauses in order to determine the hierarchy between the provisions of foreign national law and the UNIDROIT Principles, as well as their correlation with the provisions of the shareholders’ agreement itself. It was also concluded that the UNIDROIT Principles might be applied to shareholders’ agreement even in the absence of a foreign element to establish a regulation of a contractual relations at the level of the best international standards.

Assignment of Contracts: Italian Law and the UNIDROIT Principles of International Commercial Contracts in Parallel

In contemporary business relations, the possibility for one party to a contract to transfer all of its rights and obligations under the contract to a third party by way of a voluntary act is of great utility. While the possibility to do this generally exists in jurisdictions across Europe, the rules by which it must be done can differ under the relevant national laws, not to mention the fact that a specific legal regime is not articulated in most civil codes. Against this background, this paper compares the approaches taken in Italian law and the uniform rules elaborated at an international level in the UNIDROIT Principles of International Commercial Contracts.

Structure and principles of international commercial contracts

The presented article describes in detail the main conditions, content, obligations of the seller and the buyer, according to the concluded international commercial contracts. International commercial agreements mediate the international business activities of the parties and differ from similar internal transactions, as well as transactions that, although complicated by a foreign element, are concluded with the participation of the consumer. The first stage refers to the period of the emergence of medieval law as a law merchant, representing a set of international trade customs that regulated the political community of merchants who traveled from port to port and from fair to fair. The second stage was marked by the emergence of national legal systems under the influence of the understanding of law as a national phenomenon and the approval of the idea of national sovereignty. The modern third stage, was marked by a movement from national isolation to universal unification, which allowed, on the basis of multilateral negotiations, to develop and adopt uniform legal norms.

Through the normative prism: a critical appraisal of the PICC’s provisions on anticipatory non-performance

Abstract The position of the Unidroit Principles of International Commercial Contracts (PICC) as a potential unifying influence and resource within the global competitive market for law is indelibly linked to the justifiability and desirability of the black letter rules embodied in the instrument. This article critically analyses the PICC’s provisions on anticipatory non-performance using two common law-oriented normative paradigms: economic efficiency and relational norms. It argues that the PICC’s remedial scheme for anticipatory non-performance satisfies the normative prescriptions of economic analysis of law in that the self-help measures available represent majoritarian default rules and facilitate early mitigation of loss, thereby maximizing the parties’ net exchange surplus. Furthermore, the article contends that the PICC’s remedial scheme is sensitive to the relational nature of commercial contracts such that it fosters the parties’ commitment, communication, cooperation, and trust, which are vital values in developing and maintaining relational assets.

Good Faith Principles in International Business Contract Law

This study aims to analyze the principles of good faith in international business contract law. The results showed that the principle of good faith is an honest transaction which has 3 main elements, namely: First, good faith and honest transactions as the basic principles underlying the contract; Second, the principles of good faith and honest transactions in the UPICCS (UNIDROIT Principles of International Commercial Contracts) emphasize the practice of international trade; Third, the principles of good faith and honest transactions are compelling. The objective is to encourage the application of the principles of good faith and fair dealing in all international commercial transactions. The manifestation of efforts to promote legal harmonization can be seen when contracts or national laws do not find the necessary rules, or there is a legal vacuum (gaps), so the principles of UNIDROIT (The International Institute for the Unification of Private Law) can be used as a reference.

Port Closure Due to the Covid-19 Pandemic in the Law of Carriage of Goods By Sea and Unidroit Principles of International Commercial Contracts

Port closure as an effort to slow the spread of the Covid-19 virus has had various impacts, such as port congestion which has led to delays and drastically increased transportation costs. This study examines the impacts caused by port closures and legal remedies that can be taken based on international sea transport law. Losses due to port closures cannot be borne by the carrier based on the conventions of sea shipping law as long as the carrier can prove that the fault was not his own. The closure of the port can be categorized as a hardship, in which there are fundamental changes that affect the agreement, namely the increase in shipping costs and delays. efforts that can be made based on the UPICC are renegotiation, and if it fails, the parties can seek a dispute settlement through the courts. In implementing the agreement, the parties must prioritize the principle of good faith and prove that the losses incurred and losses did not originate from themselves.

Termination for breach: the prospects of the Unidroit Principles of International Commercial Contracts to interpret and supplement the Indian law of contract

Abstract Predicated on English law, termination for the breach of contract in India is regulated by the Indian Contract Act, 1872 and the Sale of Goods Act, 1930. However, these legislations do not adopt uniform criteria while stipulating the circumstances in which the parties may exercise their right to rescind the contract for breach. The complex nature of the rules on termination for breach has rendered the Indian law of contract unsuitable to govern domestic or transnational agreements. This article examines the plausible role of the International Institute for the Unification of Private Law’s (Unidroit) Principles of International Commercial Contracts (PICC) in developing the Indian law of contract. It argues in favour of a complete overhaul of the legal principles on which the parties’ right to rescind a contract for breach is based on the ground that these reflect a pro-termination instead of a favor contractus approach. Consequently, the author urges Indian lawmakers to consider employing the provisions of the PICC on the subject as a model to develop the law of the Republic to foster international trade and facilitate justice among litigants. Although an amendment to the Indian law of contract would be ideal, the judiciary should, in the meantime, refer to the PICC while adjudicating disputes arising from the breach of contracts to interpret and supplement the Indian law according to well-defined and internationally accepted standards.

Development of Rotterdam Rules for Harmonisation of Legal Instruments based on Economic and Political Conditions of UNIDROIT for Renewable Energies of Carbon Emissions

Purpose: Commercial transactions have binding obligatory and regulations that are restricted within a particular jurisdiction. However, the bill of lading for international carriage of goods must be performed and exercised resulting to extension of executory principles based on International Commercial Contracts (UNIDROIT) with a particular focus of interest on renewable energies for corporate economic goals towards sustainable development. This paper aims to develop statutory interpretation, based on Rotterdam Rules, to show the relationship between waste to energy technology and sustainable development. This helps in illustrating environmental tax for carbon emissions of energy management based on life cycle of drugs.
 Methodology: Life cycle of drugs involves contractual agreements pertaining to sustainable development and waste to energy technologies. Its carbon emissions must be properly controlled and diverted to renewable energies in order to fulfill the economic success and political safety of sustainable development. The carriage of goods by sea involves legal instruments, such as Hamburg, Hague, and Hague-Visby Rules under principles of International Commercial Contracts (UNIDROIT). Rotterdam Rules covers a broader spectrum and more substantial elements of regulatory functions encompassing Hague, Hague-Visby, and Hamburg Rules.
 Findings: Development of carbon tax is a statutory interpretation for economic success of the company towards philanthropic sustainable development in relation to public interests of human rights. Rotterdam Rules developed a means to enforce the substantial elements for validity of Hague, Hague-Visby, and Hamburg Rules in terms of carbon emissions for renewable energies based on sustainable development goals. Hence, the waste to energy technology provided a means of interpreting their economic progress in relation to law of the environment comparable to another jurisdiction.
 Recommendation: In order to achieve economic and political stability, there must be a functional equivalence between waste to energy technology and sustainable development, hence, carbon emissions from commercial transactions of International Carriage of Goods must not serve as an impediment to economic success based on laws of the company and the environment, thus, it must fulfill the goals of political sustainable development resulting to renewable energies.

Zaključenje ugovora i pravna sigurnost - primena međunarodnih standarda u srpskom ugovornom pravu

The paper addresses the rules governing the conclusion of contract from the aspect of the prevailing international standards in this area and their comparison with the appropriate solutions of the Serbian Law of Obligations. The international standards in the field of conclusion of contracts have been analysed primarily in the light of the relevant rules of the CISG, as one of the most widely accepted international conventions in the field of contract law, while also giving due consideration to the solutions of other important international documents and projects of uniform contract law, such as UNIDROIT Principles of International Commercial Contracts, Principles of European Contract Law and the Draft Common Frame of Reference for European Private Law. Among the plethora of issues relevant to the conclusion of the contract, the paper places the focus on those which seem most important from the perspective of their comparative analysis with the solutions of the Serbian Law of Obligations: negotiations, offer (contents of the offer, to whom the offer is addressed, revocability of the offer), acceptance of the offer (contents of the statement indicating acceptance of the offer) and the time of conclusion of the contract. Each of these issues has been separately analysed and evaluated in an endeavour to identify those solutions that contribute to achieving a higher degree of legal certainty in the relations arising from the contract conclusion, without standing in the way of party autonomy in this area.

The PICC in Chinese Courts

Abstract This article offers, for the first time, a comprehensive survey of all accessible (28) Chinese cases in which Chinese judges or lawyers invoked the Unidroit Principles of International Commercial Contracts (PICC) as applicable law or otherwise made a reference to the PICC. The survey has a particular focus on the use of the PICC to interpret or supplement domestic law, which is widely assumed to have no direct impact on the decisions of local courts. Through a detailed analysis that explores the often-times subtle connection between the PICC and judicial reasoning in Chinese courtrooms, the survey rebuts the ‘no direct impact’ thesis and demonstrates and expounds a range of significant roles the PICC may play in this respect. In doing so, this article also illustrates the case-guiding effect of previously little-known case comments—the dominant vehicle by which Chinese judges presently make the above use of the PICC.

APPLICATION OF HARDSHIP RULE UNDER THE UNIDROIT PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS IN INDONESIA

This article examines the concept of hardship rule based on the UNIDROIT Principles of International Commercial Contracts (hereinafter called UPICC) and how it compares with force majeure regulated by the Indonesian Civil Code (hereinafter called ICC), as well as to analyze how it is applied in the Indonesian court decisions. This study uses a normative legal research method. The study shows that the meaning of the hardship rule under the UPICC is an event that has fundamentally changed the balance of a contract, resulting in a very high implementation value for the party performing, or the value of the implementation of the agreement is drastically reduced for the receiving party. Hardship and force majeure both occur in circumstances that preclude the obligation to perform that cannot be anticipated in advance, and the fault of either party does not cause the situation. The hardship rule emphasizes changes in circumstances by one of the parties to the contract caused by the contract value that changes significantly, causing significant losses for one of the parties, and hardship offers renegotiation for the parties. Meanwhile, force majeure is emphasized when the parties are unable to carry out all or part of the agreed performance which is generally caused by natural and social events, and force majeure offers contract suspension and termination of the contract. Indonesia has implicitly implemented this hardship in the legal system by referring to the principle of justice.

The Effect of the Principles of International Commercial Contracts on the Hungarian and Romanian Regulations of Representation

The present study seeks to examine the impact of the Principles of International Commercial Contracts on the representation regulations of the Romanian and Hungarian civil codes, which entered into force in 2011 and 2013, to what extent did legislators took into account the results of the Principles, and whether there are any harmonization efforts in relation to these two legal systems. The imputability of the representative’s actions is a central issue in the mechanism of representation, so the analysis necessarily covers the representation concepts of the Principles of International Commercial Contracts and the examined national legal systems.

The Use of the UNIDROIT Principles and Other Transnational Principles of Commercial Law in Treaty Arbitration: Hazards and Opportunities

Abstract The UNIDROIT Principles of International Commercial Contracts and more generally transnational principles of commercial law are often relied on, not only by international commercial arbitral tribunals, but also by investment tribunals. In rare cases, investment tribunals have relied on such principles as applicable law per se. More frequently, transnational principles have been relied on to supplement the tribunal’s findings based on the applicable domestic or international law as ‘general principles of law recognized by civilized nations’ in the meaning of Article 38(1)(c) of the Statute of the International Court of Justice. In commercial arbitration, reliance on transnational principles aims at strengthening the tribunal’s conclusions and enhancing their acceptance by the parties, whereas in investment arbitration reliance on transnational commercial principles shows growing convergence between the ways in which general principles are understood and applied in domestic private law and public international law. Transnational principles of commercial law serve a useful purpose in corroborating tribunals’ conclusions based on domestic or international law. However, their use requires an appropriate choice-of-law methodology to avoid risks for the enforceability of awards.

The doctrine of hardship in contract law: comparative study

The article analyzes the doctrine of hardship in the contract law of Ukraine, France, Germany, England. The grounds for modify ing or terminating the contract due to a hardship are analyzed. A comparative analysis of the court ’ s powers to modify the contract in connection with a hardship is carried out . In French civil law the doctrine of l’imprévision covers all situations in which a party’s contractual obligations have become harder and more onerous to perform because of an unforeseen event posterior to the conclusion of the contract. The conception of hardship was introduced to Ukrainian Civil Code in 2004 for provide the contractual parties to overcome the negative impact of a change of circumstances that was unforeseeable at the time of the conclusion of the contract and renders performance excessively onerous for one of them . This provision is aimed, on the one hand, to restore the balance of interests in contractual relations and to reduce risks, and on the other hand, to keep the contract, as far as possible, preference given to the adaptation of the contract over its termination. Unfortunately, the case law indicates difficulty in implementing the provision of hardship. In English law doctrine is formed the concept of frustration. The only remedy for frustration in common law is termination of the contract; and termination is permanent – English law does not recognize partial frustration nor temporary frustration. German doctrine of hardship has been conceptualized into three aspects requiring a change of circumstances, the parties would not have concluded the contract if they had been aware of this change, and it would not be equitable for one party to deny the other party any amendment of the contract. German approach has been adopted in many harmonization projects and international instruments of contract law, in particular Principles on European Contract Law, Draft Common Frame of Reference, UNIDROIT Principles of International Commercial Contracts. In French, English and Germany law is established three different approaches to cases of contractual impossibility as an exception to pacta sunt servanda: contractual parties are not discharge unless performance has become impossible; as exception for impossibility to some cases; or as separate exception. The main problem nowadays is the lack of definition of “ significant change of circumstances ” in Ukrainian legislation and case law. Such a rule seems to increase legal uncertainty as the criteria of its implementation are vague and have not yet been firmly and precisely defined by case law. In most cases, the courts do not recognize the change of circumstances referred to by the party as significant. Ukrainian c ivil law doctrine defines “ significant change of circumstances ” as change of circumstances that did not depend on the will of parties and was the result of certain actions from the outside; and contains four features: was unforeseeable at the time of the conclusion of the contract, its duration and inevitability, arise without fault of the parties. The law of many states and international soft law gives courts power to modify or terminate the contract in case of change in circumstances. French Civil Code not contains certain grounds in the event of change in circumstances to modify or terminate the contract. They are the same as in case of contract modification or termination by parties. In contrast, Ukrainian legislator decreases significantly judicial intervention in contractual relations. The power of Ukrainian courts to modify the contract is based on the general principles of contractual freedom, if parties in contractual terms lay down modification the contract in case of change in circumstances that was unforeseeable at the time of the conclusion of the contract renders performance excessively onerous for a party.

Long-term contracts and the Unidroit PICC: towards a realistic regulation

Abstract The 2016 Unidroit Principles of International Commercial Contracts (PICC) were the first instrument that explicitly regulated long-term contracts in international commerce. Its main goal was to actualize uniform contract law for the emerging needs of international commerce. Despite this effort, scholars have briefly researched how uniform contract law instruments address international commerce as an economic reality or whether the PICC’s attempt is adequate. The gap in uniform contract law’s—particularly the PICC’s—literature on long-term contracts is odd compared to the completeness of economic literature on the matter. After revealing the pitfalls of the PICC’s regulation, demonstrating the convenience of a thorough review of the economics of long-term contracts, this article elaborates on the necessary character of the connection between uniform contract law and economics. It further reviews the economic research on the factors that prompt long-term contracting and the mechanisms that economic agents designed to address their needs. The overhaul reveals that two paradigmatic economic structures—competitive and cooperative—generally determine the design of long-term contracts. Finally, the article addresses the consequences of including the paradigmatic economic structures of long-term contracts in the PICC rules on contract interpretation and gap-filling.

Hersch and Elihu Lauterpacht and the relevance of private law sources for international law: from theory to practice against the background of international law's evolution and the adoption of the Unidroit Principles

Abstract Private law sources in international law were a main object of study of Sir Hersch Lauterpacht, who is considered one of the greatest international lawyers of the last century. In his time, the International Institute for the Unification of Private Law’s Principles of International Commercial Contracts (PICC) did not exist. The first version of the PICC was only published in 1994, more than three decades after his death. In the year 2000, the disputing parties of an investment treaty arbitration case concluded before a tribunal chaired by his son, Sir Elihu Lauterpacht, a settlement agreement dated 20 March 2000, which would later be embodied in an International Centre for Settlement of Investment Disputes Additional Facility arbitral award issued by the tribunal on 18 September 2000, where they incorporated slightly modified PICC provisions. The present article will argue that private law sources are still important in certain areas of international law, such as investment arbitration. In investment arbitration, they are not only important in presence of contracts but they can also arguably be useful for the interpretation of treaties. Investment tribunals have indeed recognized the importance of the PICC for both the interpretation of contracts (transnational agreements) and the interpretation of treaties (international agreements).

Transpanting the Unidroit Contract Principles into the Qatar Financial Center: a fresh paradigm for wholesale legal transplants?

Abstract The Qatar Financial Center (QFC) decided to adopt a set of Contract Regulations that are effectively the equivalent of its contracts statute. The QFC does not have a civil code. The Regulations are largely predicated on the Unidroit Principles of International Commercial Contracts (PICC). Even so, its drafters introduced, in addition, elements peculiar to the common law of contracts that are not found in the PICC, and the QFC Court, which is largely composed of a common law-inclined bench, has made it clear in many of its cases that common law judgments and English statutes can and will serve as authority in the interpretation of the Contract Regulations. The situation is further complicated by the fact that the Regulations are meant to apply in a broader legal system (that of Qatar), which recognizes several elements of Islamic law in the context of public policy—although generally Islamic law plays a very minor role, if at all, in the ordinary Qatari law of contracts. Despite the complexity underlying the Contract Regulations, its relevant success—to date—is firmly premised on the fact that the process of legal transplantation was not undertaken in a vacuum, but, rather, it is a ‘living instrument’ that is acceptable and, above all, useful to its stakeholders. Much like other contract law-related legal transplants taking root in other special economic zones, so too the QFC Contract Regulations represent an excellent paradigm as to how wholesale legal transplants can be undertaken.