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COMPARATIVE PRIVATE LAW NON-PERFORMANCE - REMEDIES. University of Oslo Prof. Giuditta Cordero Moss. Case I – Destruction of subject-matter (1). Sale of car components built on specifications An earthquake destroys the facilities and the stored components

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comparative private law non performance remedies

COMPARATIVE PRIVATE LAWNON-PERFORMANCE -REMEDIES

University of Oslo

Prof. Giuditta Cordero Moss

case i destruction of subject matter 1
Case I – Destruction of subject-matter (1)
  • Sale of car components built on specifications
  • An earthquake destroys the facilities and the stored components
  • Non-delivery causes stop of car production:
    • buyer looses increase of sales because important car event is missed;
    • buyer looses extraordinary profit due to extremely profitable contract;
    • buyer incurred expenses to charter ships that were not used due to non-delivery
  • Supply contract is in force for 5 more years
  • What can the buyer do?
case ii destruction of subject matter 2
Case II – Destruction of subject-matter (2)
  • Sale of car components built on specifications
  • A fire destroys the facilities and the stored components
  • The fire alarm had not been installed due to illness of the person in charge of security in the seller’s company
  • Consequences as above.
  • What can the buyer do?
destruction of subject matter 2
Norwegian, German law: Seller has to reimburse loss of increased profit, loss of extraordinary (?) profit, incurred expenses. Buyer may terminate contract

Italian, English law, UNIDROIT, PECL, CISG : Seller has to reimburse loss of increased profit, incurred expenses. Buyer may terminate contract

Destruction of subject-matter (2)
case iii act of god factum principis 1
Case III – Act of god (factum principis) (1)
  • Sale of car components built on specifications
  • New governmental regulations forbid export of various technical equipment, i.a. car components
  • Consequences as above.
  • What can the buyer do?
case iv act of god factum principis 2
Case IV – Act of god (factum principis) (2)
  • Sale of car components built on specifications
  • The seller’s export licence is withdrawn because of the seller’s non-compliance with governmental requiremenets
  • Consequences as above.
  • What can the buyer do?
act of god 2
Norwegian, German law: Seller has to reimburse loss of increased profit, loss of extraordinary (?) profit, incurred expenses. Buyer may terminate contract

Italian, English law, UNIDROIT, PECL, CISG: Seller has to reimburse loss of increased profit, incurred expenses. Buyer may terminate contract

Act of god (2)
case v supplier s failure
Case V – Supplier’s failure
  • Sale of car components built on specifications
  • The aluminium supplier fails to deliver aluminium on time for the production of the components
  • The aluminium supplier is a recognised supplier on the market, but due to extraordinary wheather conditions it cannot ship on time
  • Consequences as above.
  • What can the buyer do?
supplier s failure
Norwegian, Italian, German law:

Seller is excused. Buyer may terminate contract

English law: Seller has to reimburse loss of increased profit, incurred expenses . Buyer may terminate contract

UNIDROIT, PECL, CISG: Buyer may request specific performance or terminate contract. Seller has to reimburse loss of increased profit, incurred expenses .

Supplier’s failure
case vi unaffordability 1
Case VI – Unaffordability (1)
  • Sale of car components built on specifications
  • Due to unexpected weather conditions the ship cannot leave the harbour unless an ice-breaker is especially ordered from abroad
  • Consequences as above.
  • What can the buyer do?
unaffordability 1
Norwegian, German, Italian law, UNIDROIT, PECL: Contract renegotiated or terminated

English law, CISG: Seller has to reimburse loss of increased profit, incurred expenses. Buyer may terminate contract

Unaffordability (1)
case vii unaffordability 2
Case VII – Unaffordability (2)
  • Sale of car components built on specifications
  • The price of aluminium increases significantly, and sale of the components at the agreed price would result in considerable losses for the seller
  • Consequences as above.
  • What can the buyer do?
unaffordability 2
Norwegian, German law: Buyer may request specific performance or terminate contract. Seller has to reimburse loss of increased profit, loss of extraordinary (?) profit, incurred expenses

Italian law, CISG: Buyer may request specific performance or request termination. Seller has to reimburse loss of increased profit, incurred expenses.

English law, UNIDROIT, PECL: Seller has to reimburse loss of increased profit, incurred expenses. Buyer may terminate contract

Unaffordability (2)
case viii unaffordability 3
Case VIII – Unaffordability (3)
  • Sale of car components built on specifications
  • The price of aluminium increases significantly, and due to its numerous obligations the seller cannot pay for its raw materials
  • Consequences as above.
  • What can the buyer do?
unaffordability 3
Norwegian, German law: Buyer may request specific performance or request termination. Seller has to reimburse loss of increased profit, loss of extraordinary (?) profit, incurred expenses.

Italian law, CISG: Buyer may request specific performance or request termination. Seller has to reimburse loss of increased profit, incurred expenses.

English law, UNIDROIT, PECL: Seller has to reimburse loss of increased profit, incurred expenses. Buyer may terminate contract

Unaffordability (3)
case ix choice between contracts
Case IX – Choice between contracts
  • Sale of car components built on specifications
  • Destruction of part of the seller’s storage
  • Volumes in store sufficient to meet obligations towards one buyer, but not all buyers
  • Consequences as above.
  • What can the buyer do?
choice between contracts
Norwegian, Italian, German law:

Seller is excused. Buyer may terminate contract

English law: Seller has to reimburse loss of increased profit, incurred expenses . Buyer may terminate contract

UNIDROIT, PECL, CISG: Buyer may request specific performance or terminate contract. Seller has to reimburse loss of increased profit, incurred expenses . (?)

Choice between contracts
norwegian law
Norwegian law
  • Breach of contract, main remedies:
    • Specific performance + damages
    • Termination (only if fundamental breach) + damages
  • Hardship: adjustment of contract terms
  • Force majeure:
    • Sale: excludes damages (as long as impediment lasts). Creditor may terminate.
    • Construction: duration extended
    • Other contracts: contract suspended or terminated
norwegian law21
Norwegian law
  • Damages:
    • Assumption: liability
    • Adequate causation (direct damages)
    • Irrespective of degree of negligence (but: evaluation of what is adequate is affected)
    • Casus mixtus: gross negligence or wilful misconduct: also inadequate causation
german law
German law
  • Breach of contract, main remedies:
    • Specific performance + damages
    • Payment instead of performance + damages
    • Termination (only upon notice) + damages
  • Hardship: adjustment of terms or termination
  • Force majeure: excludes damages (as long as impediment lasts). Creditor may terminate
german law23
German Law
  • Damages:
    • Assumption: negligence
    • Adequate causation (also indirect damages, if reasonable)
    • Irrespective of degree of negligence
italian law
Italian law
  • Breach of contract, main remedies:
    • Specific performance + damages
    • Termination (only if fundamental breach and debtor’s negligence) + damages
  • Hardship: termination (may be avoided by adjustment of terms)
  • Force majeure: contract suspended or ceases to have effect
italian law25
Italian law
  • Damages
    • Assumption: strict liability and good faith
    • Foreseeable damages
    • If wilful misconduct: also unforseeable damages
english law
English law
  • Breach of contract, main remedies:
    • Damages
    • Termination (only if fundamental breach) + damages
    • Specific performance (at court’s discretion, only if: (i) damages are inadequate, (ii) does not cause great hardship on debtor)
  • Hardship: as in breach of contract
  • Frustration: kills the contract
english law27
English law
  • Damages
    • Assumption: strict liability
    • Foreseeable: (i) usual course of things, (ii) reasonably contemplated
slide28
CISG
  • Breach of contract, main remedies:
    • Specific performance (but, art 28: domestic law) + damages
    • Termination (only if fundamental breach or, if delay, upon notice) + damages
  • Hardship: as in breach of contract
  • Force majeure: excludes damages (as long as impediment lasts). Creditor may terminate
slide29
CISG
  • Damages
    • Assumption: strict liability
    • (i) Foreseeable as (ii) possible consequences on basis of (iii) known circumstances
unidroit
UNIDROIT
  • Breach of contract, main remedies:
    • Specific performance (not if: impossible, hardship, alternative,personal, lapse of time) + damages
    • Termination (only if fundamental breach or, if delay, upon notice) + damages
  • Hardship: adjustment of terms or termination
  • Force majeure:excludes damages (as long as impediment lasts)
unidroit31
UNIDROIT
  • Damages
    • Assumption: strict liability
    • Foresseable as likely
slide32
PECL
  • Breach of contract, main remedies:
    • Specific performance (not if: impossible, hardship, services, alternative) + damages
    • Termination (only if fundamental breach or, if delay, upon notice) + damages
  • Hardship: adjustment of terms or termination
  • Force majeure:excludes damages (as long as impediment lasts)
slide33
PECL
  • Damages
    • Assumption: strict liability
    • Foresseable as likely
main differences specific performance
Main remedy

Norway

Germany

Italy

CISG

Restricted use

England

PECLUNIDROIT

Main differences – specific performance
main differences assumption for damages
Negligence

Norway (?)

Germany

Italy (?)

Strict liability

England

CISG

PECL

UNIDROIT

Main differences – assumption for damages
main differences causation
Adequate causation

Germany

Norway

Foreseeability

Italy

England

CISG

PECLUNIDROIT

Main differences - Causation
main differences effects of force majeure
Excuse from damages

All

Use of other remedies

All but England, Italy

Temporary

All but England

Automatic termination

England

Italy (but not if temporary)

Main differences – effects of force majeure
main differences hardship
Renegotiation or termination

All but England and CISG

Treated as breach

England

CISG

Main differences - Hardship
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