|
>>>> Chinese Principles of International Commercial Contracts
Rome 1994
International Institute for the Unification of Private Law(UNIDROIT)
INTRODUCTION
Efforts towards the international unification of law have hitherto essentially taken the form of binding instruments, such as supranational legislation or international conventions, or of model laws. Since these instruments often risk remaining little more than a dead letter and tend to be rather fragmentary in character, calls are increasingly being made for recourse to non-legislative means of unification or harmonization of law.
Some of those calls are for the further development of what is termed "international commercial custom", for example through model clauses and contracts formulated by the interested business circles on the basis of current trade practices and relating to specific types of transactions or particular aspects thereof.
Others go even further and advocate the elaboration of an international restatement of general principles of contract law.
UNIDROIT's initiative for the elaboration of "Principles of International Commercial Contracts" goes in that direction.
It was as long ago as 1971 that the Governing Council decided to include this subject in the Work Programme of the Institute. A small Steering Committee, composed of Professors Rene David, Clive M. Schmitthoff and Tudor Popescu, representing the civil law, the common law and the socialist systems, was set up with the task of conducting preliminary inquiries into the feasibility of such a project.
It was not until 1980, however, that a special Working Group was constituted for the purpose of preparing the various draft chapters of the Principles. The Group, which included representatives of all the major legal systems of the world, was composed of leading experts in the field of contract law and international trade law. Most of them were academics, some high ranking judges or civil servants, who all sat in a personal capacity.
The Group appointed from among its members Rapporteurs for the different chapters of the Principles, who were entrusted with the task of submitting successive drafts together with Comments. These were then discussed by the Group and circulated to a wide range of experts, including UNIDROIT's extensive network of correspondents. In addition, the Governing Council offered its advice on the policy to be followed, especially in those cases where the Group had found it difficult to reach a consensus. The necessary editorial work was entrusted to an Editorial Committee, assisted by the Secretariat.
For the most part the UNIDROIT Principles reflect concepts to be found in many, if not all, legal systems. Since however the Principles are intended to provide a system of rules especially tailored to the needs of international commercial transactions, they also embody what are perceived to be the best solutions, even if still not yet generally adopted.
The objective of the UNIDROIT Principles is to establish a balanced set of rules designed for use throughout the world irrespective of the legal traditions and the economic and political conditions of the countries in which they are to be applied. This goal is reflected both in their formal presentation and in the general policy underlying them.
As to their formal presentation, the UNIDROIT Principles deliberately seek to avoid the use of terminology peculiar to any given legal system. The international character of the Principles is also stressed by the fact that the comments accompanying each single provision systematically refrain from referring to national laws in order to explain the origin and rationale of the solution retained. Only where the rule has been taken over more or less literally from the world wide accepted United Nations Convention on Contracts for the International Sale of Goods (CISG) is explicit reference made to its source.
With regard to substance, the UNIDROIT Principles are sufficiently flexible to take account of the constantly changing circumstances brought about by the technological and economic developments affecting cross-border trade practice. At the same time they attempt to ensure fairness in international commercial relations by expressly stating the general duty of the parties to act in accordance with good faith and fair dealing and, in a number of specific instances, imposing standards of reasonable behaviour.
Naturally, to the extent that the UNIDROIT Principles address issues also covered by CISG, they follow the solutions found in thatConvention, with such adaptations as were considered appropriate to reflect the particular nature and scope of the Principles(*).
Note: (*) See especially Arts. 1.8, 1.9, 2.2, in conjunction with 5.7 and 7.2.2.
In offering the UNIDROIT Principles to the international legal and business communities, the Governing Council is fully conscious of the fact that the Principles, which do not involve the endorsement of Governments, are not a binding instrument and that in consequence their acceptance will depend upon their persuasive authority. There are a number of significant ways in which the UNIDROIT Principles may find practical application, the most important of which are amply explained in the Preamble.
The Governing Council is confident that those to whom the UNIDROIT Principles are addressed will appreciate their intrinsic merits and derive full advantage from their use.
THE GOVERNING COUNCIL OF UNIDROIT
Rome, May 1994
PREAMBLE
(Purpose of the Principles)
These Principles set forth general rules for international commercial contracts.
They shall be applied when the parties have agreed that their contract be governed by them.
They may be applied when the parties have agreed that their contract be governed by "general principles of law", the "lex mercatoria" or the like.
They may provide a solution to an issue raised when it proves impossible to establish the relevant rule of the applicable law.
They may be used to interpret or supplement international uniform law instruments.
They may serve as a model for national and international legislators.
COMMENT
The Principles set forth general rules which are basically conceived for "international commercial contracts".
1. "International" contracts
The international character of a contract may be defined in a great variety of ways. The solutions adopted in both national and international legislation range from a reference to the place of business or habitual residence of the parties in different countries to the adoption of more general criteria such as the contract having "significant connections with more than one State", "involving a choice between the laws of different States", or "affecting the interests of international trade".
The Principles do not expressly lay down any of these criteria. The assumption, however, is that the concept of "international" contracts should be given the broadest possible interpretation, so as ultimately to exclude only those situations where no international element at allies involved, i.e. where all the relevant elements of the contract in question are connected with one country only.
2. "Commercial" contracts
The restriction to "commercial" contracts is in no way intended to take over the distinction traditionally made in some legal systems between "civil" and "commercial" parties and/or transactions, i.e. to make the application of the Principles dependent on whether the parties have the formal status of "merchants" (commercants, Kaufleute) and/or the transaction is commercial in nature. The idea is rather that of excluding from the scope of the Principles so-called "consumer transactions" which are within the various legal systems being increasingly subjected to special rules, mostly of a mandatory character, aimed at protecting the consumer, i.e. a party who enters into the contract otherwise than in the course of its trade or profession.
The criteria adopted at both national and international level also vary with respect to the distinction between consumer and non-consumer contracts. The Principles do not provide any express definition, but the assumption is that the concept of "commercial" contracts should be understood in the broadest possible sense, so as to include not only trade transactions for the supply or exchange of goods or services, but also other types of economic transactions, such as investment and/or concession agreements, contracts for professional services, etc.
3. The Principles and domestic contracts between private persons
Notwithstanding the fact that the Principles are conceived for international commercial contracts, there is nothing to prevent private persons from agreeing to apply the Principles to a purely domestic contract. Any such agreement would however be subject to the mandatory rules of the domestic law governing the contract.
4. The Principles as rules of law governing the contract
a. Express choice by the parties
As the Principles represent a system of rules of contract law which are common to existing national legal systems or best adapted to the special requirements of international commercial transactions, there might be good reasons for the parties to choose them expressly as the rules applicable to their contract, in the place of one or another particular domestic law.
Parties who wish to adopt the Principles as the rules applicable to their contract would however be well advised to combine the reference to the Principles with an arbitration agreement.
The reason for this is that the freedom of choice of the parties in designating the law governing their contract is traditionally limited to national laws. Therefore, a reference by the parties to the Principles will normally be considered to be a mere agreement to incorporate them in the contract, while the law governing the contract will still have to be determined on the basis of the private international law rules of the forum. As a result, the Principles will bind the parties only to the extent that they do not affect the rules of the applicable law from which the parties may not derogate.
The situation may be different if the parties agree to submit disputes arising from their contract to arbitration. Arbitrators are not necessarily bound by a particular domestic law. This is self-evident if they are authorised by the parties to act as amiable compositeurs or ex aequo et bono. But even in the absence of such an authorisation there is a growing tendency to permit the parties to choose "rules of law" other than national laws on which the arbitrators are to base their decisions. See in particular Art. 28(1) of the 1985 UNCITRAL Model Law on International Commercial Arbitration; see also Art. 42(1) of the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of other States (ICSID Convention).
In line with this approach, the parties would be free to choose the Principles as the "rules of law" according to which the arbitrators would decide the dispute, with the result that the Principles would apply to the exclusion of any particular national law, subject only to the application of those rules of domestic law which are mandatory irrespective of which law governs the contract (see Art. 1.4).
In disputes falling under the ICSID Convention, the Principles might even be applicable to the exclusion of any domestic rule of law.
B. The Principles applied as lex mercatoria
Parties to international commercial contracts who cannot agree on the choice of a particular domestic law as the law applicable to their contract sometimes provide that it shall be governed by the "general principles of law", by the "usages and customs of international trade", by the lex mercatoria, etc.
Hitherto, such reference by the parties to not better identified principles and rules of a supranational or transnational character has been criticized, among other grounds, because of the extreme vagueness of such concepts. In order to avoid, or at least considerably to reduce, the uncertainty accompanying the use of such vague concepts for the determination of their content, it might be advisable to have recourse to a systematic and well-defined set of rules such as the Principles.
5. The Principles as a substitute for the domestic law otherwise applicable
The Principles may however become relevant even where the contract is governed by a particular domestic law. This is the case whenever it proves extremely difficult if not impossible to establish the relevant rule of that particular domestic law with respect to a specific issue and a solution can be found in the Principles. The reasons for such a difficulty generally lie in the special character of the legal sources and/or the cost of access to them.
Recourse to the Principles as a substitute for the domestic law otherwise applicable is of course to be seen as a last resort; on the other hand it may be justified not only in the event of the absolute impossibility of establishing the relevant rule of the applicable law, but also whenever the research involved would entail disproportionate efforts and/or costs. The current practice of courts in such situations is that of applying the lex fori. Recourse to the Principles would have the advantage of avoiding the application of a law which will in most cases be more familiar to one of the parties.
6. The Principles as a means of interpreting and supplementing existing international instruments
Any legislation, whether of international or national origin, raises questions concerning the precise meaning of its individual provisions. Moreover, such legislation is by its very nature unable to anticipate all the problems to which it will be applied. When applying domestic statutes it is possible to rely on long established principles and criteria of interpretation to be found within each legal system. The situation is far more uncertain with respect to instruments which, although formally incorporated into the various national legal systems, have been prepared and agreed upon at international level.
According to the traditional view recourse should, even in such cases, be had to the principles and criteria provided in domestic law, be it the law of the forum or that which would, according to the relevant rules of private international law, be applicable in the absence of the uniform law.
At present, both courts and arbitral tribunals tend more and more to abandon such a "conflictual" method and seek instead to interpret and supplement international instruments by reference to autonomous and internationally uniform principles. This approach, which has indeed been expressly sanctioned in the most recent conventions (see, e.g., Art. 7 of the 1980 UN Convention on Contracts for the International Sale of Goods (CISG)), is based on the assumption that uniform law, even after its incorporation into the various national legal systems, only formally becomes an integrated part of the latter, whereas from a substantive point of view it does not lose its original character of a special body of law autonomously developed at international level and intended to be applied in a uniform manner throughout the world.
Until now, such autonomous principles and criteria for the interpretation and supplementing of international instruments have had to be found in each single case by the judges and arbitrators themselves on the basis of a comparative survey of the solutions adopted in the different national legal systems. The Principles could considerably facilitate their task in this respect.
7. The Principles as a model for national and international legislators
In view of their intrinsic merits the Principles may in addition serve as a model to national and international law-makers for the drafting of legislation in the field of general contract law or with respect to special types of transactions. At a national level, the Principles may be particularly useful to those countries which lack a developed body of legal rules relating to contracts and which intend to update their law, at least with respect to foreign economic relationships, to current international standards. Not too different is the situation of those countries with a well-defined legal system, but which after the recent dramatic changes in their socio-political structure have an urgent need to rewrite their laws, in particular those relating to economic and business activities
At an international level the Principles could become an important term of reference for the drafting of conventions and model laws.
So far the terminology used to express the same concept differs considerably from one instrument to another, with the obvious risk of misunderstandings and misinterpretations. Such inconsistencies could be avoided if the terminology of the Principles were to be adopted as an international uniform glossary.
CHAPTER 1 - GENERAL PROVISIONS
ARTICLE 1.1 (Freedom of contract)
The parties are free to enter into a contract and to determine its content.
ARTICLE 1.2 (No form required)
Nothing in these Principles requires a contract to be concluded in or evidenced by writing. It may be proved by any means, including witnesses.
ARTICLE 1.3 (Binding character of contract)
A contract validly entered into is binding upon the parties. It can only be modified or terminated in accordance with its terms or by agreement or as otherwise provided in these Principles.
ARTICLE 1.4(Mandatory rules)
Nothing in these Principles shall restrict the application of mandatory rules, whether of national, international or supranational origin, which are applicable in accordance with the relevant rules of private international law.
ARTICLE 1.5(Exclusion or modification by the parties)
The parties may exclude the application of these Principles or derogate from or vary the effect of any of their provisions, except as otherwise provided in the Principles.
ARTICLE 1.6(Interpretation and supplementation of the Principles)
(1) In the interpretation of these Principles, regard is to be had to their international character and to their purposes including the need to promote uniformity in their application.
(2) Issues within the scope of these Principles but not expressly settled by them are as far as possible to be settled in accordance with their underlying general principles.
ARTICLE 1.7(Good faith and fair dealing)
(1) Each party must act in accordance with good faith and fair dealing in international trade.
(2) The parties may not exclude or limit this duty.
ARTICLE 1.8(Usages and practices)
(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.
(2) The parties are bound by a usage that is widely known to and regularly observed in international trade by parties in the particular trade concerned except where the application of such a usage would be unreasonable.
ARTICLE 1.9(Notice)
(1) Where notice is required it may be given by any means appropriate to the circumstances.
(2) A notice is effective when it reaches the person to whom it is given.
(3) For the purpose of paragraph (2) a notice "reaches" a person when given to that person orally or delivered at that person's place of business or mailing address.
(4) For the purpose of this article "notice" includes a declaration, demand, request or any other communication of intention.
ARTICLE 1.10(Definitions)
In these Principles
- "court" includes an arbitral tribunal;
- where a party has more than one place of business the relevant "place of business" is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract;
- "obligor" refers to the party who is to perform an obligation and "obligee" refers to the party who is entitled to performance of that obligation.
- "writing" means any mode of communication that preserves a record of the information contained therein and is capable of being reproduced in tangible form.
CHAPTER 2 – FORMATION
ARTICLE 2.1(Manner of formation)
A contract may be concluded either by the acceptance of an offer or by conduct of the parties that is sufficient to show agreement.
ARTICLE 2.2(Definition of offer)
A proposal for concluding a contract constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance.
ARTICLE 2.3(Withdrawal of offer)
(1) An offer becomes effective when it reaches the offeree.
(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.
ARTICLE 2.4(Revocation of offer)
(1) Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before it has dispatched an acceptance.
(2) However, an offer cannot be revoked
(a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or
(b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.
ARTICLE 2.5(Rejection of offer)
An offer is terminated when a rejection reaches the offeror.
ARTICLE 2.6(Mode of acceptance)
(1) A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance.
(2) An acceptance of an offer becomes effective when the indication of assent reaches the offeror.
(3) However, if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act without notice to the offeror, the acceptance is effective when the act is performed.
ARTICLE 2.7(Time of acceptance)
An offer must be accepted within the time the offeror has fixed or, if no time is fixed, within a reasonable time having regard to the circumstances, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.
ARTICLE 2.8(Acceptance within a fixed period of time)
(1) A period of time for acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for dispatch or from the date shown on the letter or, if no such date is shown, from the date shown on the envelope. A period of time for acceptance fixed by the offeror by means of instantaneous communication begins to run from the moment that the offer reaches the offeree.
(2) Official holidays or non-business days occurring during the period for acceptance are included in calculating the period. However, if a notice of acceptance cannot be delivered at the address of the offeror on the last day of the period because that day falls on an official holiday or a non-business day at the place of business of the offeror, the period is extended until the first business day which follows.
ARTICLE 2.9(Late acceptance. Delay in transmission)
(1) A late acceptance is nevertheless effective as an acceptance if without undue delay the offeror so informs the offeree or gives notice to that effect.
(2) If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without undue delay, the offeror informs the offeree that it considers the offer as having lapsed.
ARTICLE 2.10(Withdrawal of acceptance)
An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective.
ARTICLE 2.11(Modified acceptance)
(1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.
(2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects to the discrepancy. If the offeror does not object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.
ARTICLE 2.12(Writings in confirmation)
If a writing which is sent within a reasonable time after the conclusion of the contract and which purports to be a confirmation of the contract contains additional or different terms, such terms become part of the contract, unless they materially alter the contract or the recipient, without undue delay, objects to the discrepancy.
ARTICLE 2.13(Conclusion of contract dependent on agreement on specific matters or in a specific form)
Where in the course of negotiations one of the parties insists that the contract is not concluded until there is agreement on specific matters or in a specific form, no contract is concluded before agreement is reached on those matters or in that form.
ARTICLE 2.14(Contract with terms deliberately left open)
(1) If the parties intend to conclude a contract, the fact that they intentionally leave a term to be agreed upon in further negotiations or to be determined by a third person does not prevent a contract from coming into existence.
(2) The existence of the contract is not affected by the fact that subsequently
(a) the parties reach no agreement on the term; or
(b) the third person does not determine the term, provided that there is an alternative means of rendering the term definite that is reasonable in the circumstances, having regard to the intention of the parties.
ARTICLE 2.15(Negotiations in bad faith)
(1) A party is free to negotiate and is not liable for failure to reach an agreement.
(2) However, a party who negotiates or breaks off negotiations in bad faith is liable for the losses caused to the other party.
(3) It is bad faith, in particular, for a party to enter into or continue negotiations when intending not to reach an agreement with the other party.
ARTICLE 2.16(Duty of confidentiality)
Where information is given as confidential by one party in the course of negotiations, the other party is under a duty not a disclose that information or to use it improperly for its own purposes, whether or not a contract is subsequently concluded. Where appropriate, the remedy for breach of that duty may include compensation based on the benefit received by the other party.
ARTICLE 2.17(Merger clauses)
A contract in writing which contains a clause indicating that the writing completely embodies the terms on which the parties have agreed cannot be contradicted or supplemented by evidence of prior statements or agreements. However, such statements or agreements may be used to interpret the writing.
ARTICLE 2.18(Written modification clauses)
A contract in writing which contains a clause requiring any modification or termination by agreement to be in writing may not be otherwise modified or terminated. However, a party may be precluded by its conduct from asserting such a clause to the extent that the other party has acted in reliance on that conduct.
ARTICLE 2.19(Contracting under standard terms)
(1) Where one party or both parties use standard terms in concluding a contract, the general rules on formation apply, subject to Articles 2.20 -2.22.
(2) Standard terms are provisions which are prepared in advance for general and repeated use by one party and which are actually used without negotiation with the other party.
ARTICLE 2.20(Surprising terms)
(1) No term contained in standard terms which is of such a character that the other party could not reasonably have expected it, is effective unless it has been expressly accepted by that party.
(2) In determining whether a term is of such a character regard is to be had to its content, language and presentation.
ARTICLE 2.21(Conflict between standard terms and non-standard terms)
In case of conflict between a standard term and a term which is not a standard term the latter prevails.
ARTICLE 2.22(Battle of forms)
Where both parties use standard terms and reach agreement except on those terms, a contract is concluded on the basis of the agreed terms and of any standard terms which are common in substance unless one party clearly indicates in advance, or later and without undue delay informs the other party, that it does not intend to be bound by such a contract.
CHAPTER 3 – VALIDITY
ARTICLE 3.1(Matters not covered)
These Principles do not deal with invalidity arising from
(a) lack of capacity;
(b) lack of authority;
(c) immorality or illegality.
ARTICLE 3.2(Validity of mere agreement)
A contract is concluded, modified or terminated by the mere agreement of the parties, without any further requirement.
ARTICLE 3.3(Initial impossibility)
(1) The mere fact that at the time of the conclusion of the contract the performance of the obligation assumed was impossible does not affect the validity of the contract.
(2) The mere fact that at the time of the conclusion of the contract a party was not entitled to dispose of the assets to which the contract relates does not affect the validity of the contract.
ARTICLE 3.4(Definition of mistake)
Mistake is an erroneous assumption relating to facts or to law existing when the contract was concluded.
ARTICLE 3.5(Relevant mistake)
(1) A party may only avoid the contract for mistake if, when the contract was concluded, the mistake was of such importance that a reasonable person in the same situation as the party in error would only have concluded the contract on materially different terms or would not have concluded it at all if the true state of affairs had been known, and
(a) the other party made the same mistake, or caused the mistake, or knew or ought to have known of the mistake and it was contrary to reasonable commercial standards of fair dealing to leave the mistakenparty in error; or
(b) the other party had not at the time of avoidance acted in reliance on the contract.
(2) However, a party may not avoid the contract if
(a) it was grossly negligent in committing the mistake; or
(b) the mistake relates to a matter in regard to which the risk of mistake was assumed or, having regard to the circumstances, should be borne by the mistaken party.
ARTICLE 3.6(Error in expression or transmission)
An error occurring in the expression or transmission of a declaration is considered to be a mistake of the person from whom the declaration emanated.
ARTICLE 3.7(Remedies for non-performance)
A party is not entitled to avoid the contract on the ground of mistake if the circumstances on which that party relies afford, or could have afforded, a remedy for non-performance.
ARTICLE 3.8(Fraud)
A party may avoid the contract when it has been led to conclude the contract by the other party's fraudulent representation, including language or practices, or fraudulent non-disclosure of circumstances which, according to reasonable commercial standards of fair dealing, the latter party should have disclosed.
ARTICLE 3.9(Threat)
A party may avoid the contract when it has been led to conclude the contract by the other party's unjustified threat which, having regard to the circumstances, is so imminent and serious as to leave the first party no reasonable alternative. In particular, a threat is unjustified if the act or omission with which a party has been threatened is wrongful in itself, or it is wrongful to use it as a means to obtain the conclusion of the contract.
ARTICLE 3.10(Gross disparity)
(1) A party may avoid the contract or an individual term of it if, at the time of the conclusion of the contract, the contract or term unjustifiably gave the other party an excessive advantage. Regard is to be had, among other factors, to
(a) the fact that the other party has taken unfair advantage of the first party's dependence, economic distress or urgent needs, or of its improvidence, ignorance, inexperience or lack of bargaining skill; and
(b) the nature and purpose of the contract.
(2) Upon the request of the party entitled to avoidance, a court may adapt the contract or term in order to make it accord with reasonable commercial standards of fair dealing.
(3) A court may also adapt the contract or term upon the request of the party receiving notice of avoidance, provided that that party informs the other party of its request promptly after receiving such notice and before the other party has acted in reliance on it. The provisions of Article 3.13(2) apply accordingly.
ARTICLE 3.11(Third persons)
(1) Where fraud, threat, gross disparity or a party's mistake is imputable to, or is known or ought to be known by, a third person for whose acts the other party is responsible, the contract may be avoided under the same conditions as if the behaviour or knowledge had been that of the party itself.
(2) Where fraud, threat or gross disparity is imputable to a third person for whose acts the other party is not responsible, the contract may be avoided if that party knew or ought to have known of the fraud, threat or disparity, or has not at the time of avoidance acted in reliance on the contract.
ARTICLE 3.12(Confirmation)
If the party entitled to avoid the contract expressly or impliedly confirms the contract after the period of time for giving notice of avoidance has begun to run, avoidance of the contract is excluded.
ARTICLE 3.13(Loss of right to avoid)
(1) If a party is entitled to avoid the contract for mistake but the other party declares itself willing to perform or performs the contract as it was understood by the party entitled to avoidance, the contract is considered to have been concluded as the latter party understood it. The other party must make such a declaration or render such performance promptly after having been informed of the manner in which the party entitled to avoidance had understood the contract and before that party has acted in reliance on a notice of avoidance.
(2) After such a declaration or performance the right to avoidance is lost and any earlier notice of avoidance is ineffective.
ARTICLE 3.14(Notice of avoidance)
The right of a party to avoid the contract is exercised by notice to the other party
ARTICLE 3.15(Time limits)
(1) Notice of avoidance shall be given within a reasonable time, having regard to the circumstances, after the avoiding party knew or could not have been unaware of the relevant facts or became capable of acting freely.
(2) Where an individual term of the contract may be avoided by a party under Article 3.10, the period of time for giving notice of avoidance begins to run when that term is asserted by the other party.
ARTICLE 3.16(Partial avoidance)
Where a ground of avoidance affects only individual terms of the contract, the effect of avoidance is limited to those terms unless, having regard to the circumstances, it is unreasonable to uphold the remaining contract.
ARTICLE 3.17(Retroactive effect of avoidance)
(1) Avoidance takes effect retroactively.
(2) On avoidance either party may claim restitution of whatever it has supplied under the contract or the part of it avoided, provided that it concurrently makes restitution of whatever it has received under the contract or the part of it avoided or, if it cannot make restitution in kind, it makes an allowance for what it has received.
ARTICLE 3.18(Damages)
Irrespective of whether or not the contract has been avoided, the party who knew or ought to have known of the ground for avoidance is liable for damages so as to put the other party in the same position in which it would have been if it had not concluded the contract.
ARTICLE 3.19(Mandatory character of the provisions)
The provisions of this Chapter are mandatory, except insofar as they relate to the binding force of mere agreement, initial impossibility or mistake.
ARTICLE 3.20(Unilateral declarations)
The provisions of this Chapter apply with appropriate adaptations to any communication of intention addressed by one party to the other.
Continue… >>>> Chinese
【Links】
|
