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Reproduced with the permission of Prof. Krüger

From "Rättsvetenskapliga studier till minnet av Tore Almén" pp 239-273
Iustus Förlag, Stockholm 1999
© Kai Krüger 1999

«Financial force majeure»

The extent of efforts which the seller must take to overcome impediments for performance in contracts for the sale of goods under Scandinavian law - remarks on the impact of CISG Art 79

By professor Kai Krüger, University of Bergen

1. Point of departure: «pacta sunt servanda» under the doctrine of «rigor commercialis» - Scandinavian SGA 1905-1907 § 24

2. The concept «economical force majeure» in Scandinavian pre-CISG 1980 jurisprudence

3. One or two layers? The Norwegian versus the rest-Scandinavian legislative handling of CISG 1980

4. CISG 1980 Art 79 - bridging restrictive common law and equally restrictive continental (basically German) law - but nothing else?

5. Possible approaches under debate

5.1. Traditional interpretation - words, semantic context, preparatory material, principles of interrpetation under 1969 Vienna Convention on Treaties

5.2. CISG 1980 Art 79 read in conjunction with the Art 7 interpretation references - which impulses and sources are relevant?

5.3. Scandinavian «soft» law relief under Formation of Contract Sect 36 («generalklausul»)?

5.4. Public policy - social economical considerations?

5.5. CISG Art 79 as a protective measure in globalised commerce?

6. Suggestive conclusions on Scandinavian law on financial impediments in sales transactions

Abbreviations:

1. Point of departure: «pacta sunt servanda» under the doctrine of «rigor commercialis» - Scandinavian SGA 1905-1907 § 24

A commercial goods/service contract serves different purposes. It «forecasts», defines and clarifies the intended and anticipated performance for which the principal pays the agreed price. It adapts procedural issues on communication between the parties to the contract. It arranges for interactive functions and allocates risks and liabilities for unforeseen contingencies which may affect the performance on either side.

The contract may have the ambition to rule the legal relationship between the parties more or less exhaustively, or it may function in a more fragmentary way, allowing for supplementary rules and principles such as legislature or jurisprudence. A national legislator's approach may vary with legal tradition and method under each legal regime, but also as time passes.

The common law historical approach seems to be based on the fundamental idea that disputes under a contract should find their solutions under an intensive - real or pro forma - search for express of implied intention of parties, be it the parties to the actual dispute or a standardised concept of a «normal» prudent contractor or principal.

The continental position seems to be a different one. Extensive codification of private law puts the contract under «law of obligations» and purports to regulate both in principle and in detail the legal relationship between the actors of a contract scenario under a Roman-inspired philosophy based on the concept that «substantial law» on sales of goods, transportation, rendering of services exists before the actual contract, thus establishing a need for dualistic balancing the actual contract commitment with the law on the matter in which the contract «intervenes». The Roman/German-law inspired «Obligationsrecht» seems to demonstrate this very clearly: The BGB and HGB codifications contain many rules and principles applicable to the «object» defined as a sales relationship (§§ 433 et seq on «Kauf/Tausch», §§ 535 et seq on «Miete», §§ 581 et seq on «Pacht», §§ 598 et seq on «Leihe» etc).[1]

The Scandinavian approach adopted in the joint drafting of the common legislation on sales of goods at the turn of the last century seems to be a different one: Accepting parties' autonomy to arrange for their bilateral contract relationship, the legislator should only render the «service» of clarifying issues which were not already imported into the contract. And even then, the legislator should look for and by drafting provisions widely recognise trade customs and practices when legislating on matters of legal relevance. At the same time, however, the continental concept of the already developed organic «Obligationsrecht» inspired the drafters of the 1905-1907 Scandinavian Act on Sale of Goods.[2] This is particularly true within the area of contract law which is the subject of this article: The problem of contingent impediments affecting the performance of the physical obligation on part of the seller. Two legal maxims found their way into the Scandinavian acts at the turn of the century, firstly the idea that «genus non perit» explaining the risk provision in ScSGA 1905-07 § 24,[3] secondly the theory of «Unmöglichkeit», stating the rough principle of liability for unexpected costs turning the contract into a loss or even a financial disaster for the seller who has to overcome pecuniary obstacles in order to meet the contract requirements, without options to terminate or suspend the contract and without prospects of extra payment. The Roman/German «Treu und Glauben» (BGB Art 242) was later introduced, not in the SGA, but in the joint Scandinavian (Norwegian version) 1918-05-31 No 4 Act on Formation of Contracts as § 33, later to be succeeded by the far more comprehensive «generalklausul» in § 36, authorising the so-called «test of reasonableness» on any contract belonging to the very wide area of law defined as property law - «formuerett» (§ 41).

While the common law doctrine of «frustration» basically seems to rest on the idea that any contract is performed either by performance or by liability for economical damage, the Scandinavian legislative experience has always been a different one. Gradually accepting the idea of specific performance not recognised in principle in common law, the supplementary liability risk allocation in «breach» situations was never seen as an automatic or inherent function of one existing «contract». Reflecting perhaps the tort law concept of «culpa» in the form of «error» and «negligence», Scandinavian dualistic contract law has been balancing between the idea of economical liability as a starting point for breach situations on the one hand, distinct from the idea that liability for breach will only apply when there is a basis of liability such as the «genus» risk rule or the rule of «culpa» imported from tort law.

Tore Almén's first comprehensive commentary on the Swedish SGA appeared in 1906-08, with its first volume released only one year after the Swedish Act of 1905. The commentary acquired an immediate position as the standard authorised Scandinavian treatise on the joint Uniform Scandinavian Acts on sale of goods. Its subsequent editions [4] up until the posthume 4th revision in 1960 (by Rudolf Eklund) have inspired all contemporary and subsequent Nordic academic legal scholars within the area of sales of goods, myself for one. The fact that an act like ScSGA 1905-07 could function reasonably useful up until the CISG 1980 revision in the 1980'ies is impressive in itself. References to Almén's treatise, with its almost unbelievable range of details on all issues and its appreciation of commercially well-founded interpretation places that book in a position of truly high esteem and Nordic reputation.

However, even monuments must face the impact and threat of time and changes. The problem to be discussed in this article has its origins in the very issues elaborated by Tore Almén in his writings, but the contemporary setting is a legal environment now dominated by globalisation in law, unification, changed trade practises - and need for bridging different legal traditions in method and state of the art in legal academics both in a EU context and in a truly global one.

2. The concept «economical force majeure» in Scandinavian pre-CISG 1980 jurisprudence

The issue to be discussed is whether substantial increase of pecuniary burdens on part of the contractor (primarily the seller in a contract for sale of goods) will allow for the «impediment» remedy as embodied in CISG 1980 Art 79. The question will in practice be related to similar issues in connection with sudden and radical shift of equilibrium in the contract, such as where the contracts turns out to be substantially more profitable for one party where the other party will suffer a correspondingly heavy loss. In fact, in analysing the cases on the matter, there seems to be a tendency in literature to mix cases where the dominant feature is disrupted equilibrium with cases more to the point of this article: Actual physical or financial impediments not necessarily placing unexpected market windfalls in the lap of the buyer.[5] Market fluctuations may undermine the commercial intention for one of the contracting parties, such as in cancellation disputes in a shipping market which makes the actually contracted vessel in the contractor's shipyard redundant.[6] Such incidents do not put extra burdens on the performing parties - neither the contractor nor the principal - and the solutions seems therefore to be a blank reference to basic contract law implications as to the allocation of functions and risk structural patterns of the contract in question. However, the fact that market fluctuations in a commercial contract practically never will allow for mutual discretionary judiciary revision, might very well influence the corresponding more limited specific issue of a radical rise in cost level or other contingent burdens in the act of alternative performance when fulfilling the duty to overcome physical obstacles not predicted by any of the parties - even mutually undisputed «bristende forutsetning» in parties' subjective sense - in the performing stage of the contract.

While «breach» under common law doctrine implies strict liability up to the breaking point of terminating «frustration» of the contract, the problem of unforeseen contingencies under Roman-German sales of goods law seems to have been discussed as a matter of whether or not performance is possible, hence the quest for remnants - even in a global perspective! - of the «genus» dealt with in the contract obligation, theoretically available for generic seller's order.[7] The simple rational principle of allocating a risk for choosing one out of several available ways to perform (at differing prices) could be - and in fact was - pressed to its absurd ultimate consequences, such as the famous Almén'ian caricature on the «sydfruktlast» fiction case.[8]

If the question of increased preparatory costs on seller's behalf is raised in an «Unmöglichkeit» scenario, then the answer seems clear: The contract obligation released by parties' autonomous disposition will be a very severe one: Only if the changed circumstances amount to impossibility in an economical, commercial sense will afford relief to a seller who failed to take adequate measures in drafting or negotiating of the terms of the contract.

A number of pre- and post-war judgements under Da/Norw/Sw SGA 1905-1907 demonstrate the fatal distinction between the scope of the «genus» provision on liability in § 24 on the one side and different contract «force majeure» approaches on the other.[9] The 1950'ies and 1960'ies generation of Norwegian law students were brought up to familiarise themselves with the idea that only truly «exorbitant» changes in the contract setting could justify relief in terms of non-liability under § 24.[10] However, courts' equitable remedy for mitigating «rigor commercialis» in sales of goods law was found in structural interpretative classification of the contract: The identifying of a «joint venture» impact on an otherwise formal sale commitment, such as a seller acting as an intermediary or agent for a seller who was truly a principal, might under the circumstances afford the necessary basis for softening the legal principle of «pacta sunt servanda».[11] Another avenue towards more flexibility emerged in the area of contracts for production and subsequent delivery of technical equipment («tilvirkningskjøp» - «Werkslieferungsvertrag»), a borderline type of contract - containing both elements of «genus» and «specie» - which seemed to be treated partly with a higher degree of discretion and flexibility in the interpretation and application of law.[12]

Law functions over time appears to be a continuous dialogue between legislator, legal theory and jurisprudence. It should be emphasised that the standard Scandinavian post-war treaties on «obligasjonsrett» recognised and elaborated a theory of commercial impossibility as decisive for the threshold of financial sacrifices. Some writers would extract the principles on theories of «bristende forutsetninger»;[13] others would make references to general principles of risk allocation under a concept of «irregulær utvikling».[14] References to presumed relevant theories of The Roman/German doctrine of «Unmöglichkeit» was also resorted to.[15] The discussion over mitigating legal remedies in frustration situations centered around the Da/Norw/Sw SGA 1905-1907 § 24. There can be no doubt that the provision on generic sales obligations was in joint Scandinavian focus for legal theory for decades up until the abolishment of the Act in the late 1980'ies, when the «genus» rule was replaced by the Nordic regional «impediment» principle for liability introduced by CISG Art 79.

Refusing in principle to accept anything short of physical «impossibility» on the part of the seller meant that the issue of economical impossibility had to be framed under very restrictive parameters. In fact, the only effective legal method for achieving some mitigating leniency was through somewhat forced interpretation of the contract in question, accepting that radical and comprehensive change in the performance scenario might justify a contract based solution in favour of the seller.

Rephrasing the legislative frustration of contract issue, the intended joint Nordic draft law reform in the 1970'ies advocated some increase in judicial discretionary mitigation within the area of sales contracts. The Norwegian consumer law reform dated 1974-06-14 No 36 introduced (§ 1 2nd para) a «generalklausul» for the combat of unreasonable contract terms - standard contracts or ad hoc clauses - both in commercial and consumer contracts.[16] At this occasion, however, one did not state or anticipate specific relief provisions in «frustration» cases and there were no suggestions in the preparatory documentation on the applicability of the «generalklausul» on that matter. The later committee reports (Finnish) 1973 «Köplagskommitténs betänkande», NOU 1976:34 and SOU 1976:66 were (except for Finland, which was not a party to the 1905-07 law reform) never put into effect, but there are fragmentary comments in Norwegian documents anticipating a less rigorous position for the seller in frustration cases,[17] while contemporary legal contract law theory suggested different avenues for the opening up of more efficient judicial discretion in these matters.[18]

The 1970'ies faced the commercial environment - both national and international - with crises in the merchant shipping, radical rise in oil prices as a result of Middle East host states' over-night nationalisation of resident oil production, international currency turbulence and others. The imperative need for contract revision in lack of specific authority in the contract itself possibly refused in court rooms had to be achieved through the re-negotiation of contracts which would otherwise have lead to bankruptcy or equivalent socially harmful termination of the contract relationship.[19] This would cause harm not only to the parties' expectations under a main contract, but to conjunctive subcontracts, undesirable unemployment and other social policies affected by the possible collapsing of major commercial contracts with insufficient legal machinery to cope with the new situation created beyond the control of the parties involved. The question was asked: If the contracts will never be performed under changed conditions anyway, would it not still be better to have courts administer some commercial reasonableness and «good faith» than leave the parties to extra-judicial arbitrary commercial passage of arms?[20]

Some courts and arbitrators of the 1970'ies may be seen more or less reluctantly to have supported the idea of alternative more open «soft» discretion replacing the rigid rule of «Unmöglichkeit».[21] A shift to discretion in this context does not necessarily imply «soft law» leniency, but means that the courts may apply some more legal policy «de sententia ferenda» considerations as compared to the classical Roman-German «rule», which admittedly leaves very narrow options for the judiciary.

The next stage in modern contract legal history on «frustration» in Scandinavian law seems to be the introduction of the approximated Formation of Contract Act provision § 36 «generalklausul» on «reasonableness» in contracts irrespective of category and both in consumer and commercial contracts.[22] The provision was introduced in Danish law by law reform 1975-06-12 No 250, Finnish law 1981, in Swedish law in 1976 - and in Norwegian law somewhat later - in 1983 (1983-03-04 No 4).

Opening for apparent considerable discretion, the formal wording of the «generalklausul» provision directed towards the substance of a given legal effect caused by the contract in question is formally wide enough to cover the problem of contingent impediments affecting the subsequent performance and execution of the contract.

Norwegian 1918 (1983) Formation of Contract § 36 contents in substance (freely expressed) states:

An impediment may under the circumstances seem to cause such «unreasonable» effects of the contract that the judge may prescribe termination, suspension - or even price revision. In this respect, the provision departs from the otherwise binary character of the provisions in the 1918 Act Chap III on void or voidable contracts, which all leave as the only available legal alternatives either to maintain the contract in its contexts or to set the contract aside as null and void.[23]

Two Norwegian Supreme Court plenary judgements from 1988 in disputes over fixed price provisions in everlasting land lease contracts accepted a § 36 revision of obsolete price stipulations in contract.[24] However, the majority of the Norwegian Supreme Court emphasises that one is not considering the market value but the nominal effect of a payment arrangement which is deteriorating as time virtually undermines the purchasing power of fixed amounts set in the national currency to be paid by the land lessee to the lessor.[25]

This somewhat unexpected development in the «generalklausul» concept had feeble support in the Norwegian preparatory documents, but some support was found in the contemporary Swedish Supreme Court judgements NJA 1979.731 and NJA 1983.385.[26] Other cases on § 36 within the commercial area demonstrate that expectations on soberness in the application of the test of «reasonableness» within the commercial - particularly the international - area - are in place.

The provision was applied for a maritime contract currency collapse in the «Mascot» case ND 1985.234 (arbitration), but was rejected by Supreme Court in a houselord tenant commercial contract Rt. 1995.500 («Periscopus»).

Cut off-clauses in commercial triangular hire purchase arrangements have been subject to a «generalklausul» revision in RG 1989.710 E (leasing), comp adversely RG 1990. 824 Moss.

On other § 36 commercial contract Sup Ct cases (where the provision has been applied), see for Danish law UfR 1981. 300 DaHR, UfR 1987. 526 DaHR, UfR 1987. 531 DaHR, UfR 1988.1042 DaHR, UfR 1989. 915 (discretionary review, but not § 36), UfR 1994. 841 DaHR, UfR 1994. 898 DaHR (compare adversely UfR 1982. 176 DaHR, UfR 1987. 639 DaHR, UfR 1987. 767 DaHR, UfR 1988. 449 DaHR, UfR 1989. 47 DaHR ), for Finnish law NDs 1985.444 FiHD (adversely NDs 1994.541), for Swedish law NJA 1983. 332 SvHD, NJA 1987. 639 (adversely NJA 1984.115, NJA 1988.230).

The present situation on the § 36 issue seems to be somewhat un-clarified. Ramberg [27] seems to advocate the survival of the Da/Norw/Sw SGA 1905-1907 § 24 «genus» doctrine, while Krüger [28] defending a restrictive policy still is of the opinion that the legal basis for the present considerations should be the § 36 «generalklausul» («virke urimelig...») and no longer the old doctrine of impossibility. Gomard [29] does not exclude relief, but expresses narrow conditions for non-liability both in sales and other commercial contracts.[30]

3. One or two layers? The Norwegian versus the rest-Scandinavian legislative handling of CISG 1980

While CISG 1980 in its entirity (except for Part II) was made effective by legislative acts in Denmark, Finland and Sweden, the Norwegian position was a different one. Although Norway is a member of the Convention, there is no truly authentic CISG 1980 text applicable in Norwegian law. The position taken in 1988 is in accordance with a policy statement from 1972 on how to adapt to international obligations (NOU 1972:16 on the «transformation» of public international commitments into domestic law): To transpose international obligations under conventions and treaties into the framework and structure of statutory law. Thus, the method advocated by the Norwegian delegates in NU 1984:5, opposed by the other Scandinavian countries, was applied also in the subseqent ministerial preparation of the 1988-05-13 No 27 Act on Sale of Goods («lov om kjøp» - litterally «purchase of goods» - «Norw SGA 1988»). The present status is a regretful one: The contents of the Articles of the Convention are spread over a number of provisions meant to be partly applicable to both national and international sales contracts, partly applicable only to national contracts, partly applicable only to international sales.[31]

The Norwegian position on the transposition of CISG 1980 means that the Norwegian version of the «impediment» rule in Art 79 is expressed in one provision purporting to state the legal position both in national and international sales - Norw SGA 1988 § 27 (1).[32] This raises a question on method: Is the provision to be interpreted in the same way when applied in national and international sales? Should the interpretation take place in due regard of CISG 1980 Art 7 and thus importing international legal guidance also within the national scope? Is the fact that the § 27 corresponds to Finnish and Swedish parallel provisions an argument for maintaining Scandinavian unity in the interpretation - and if so, is that unity restricted to national sales or does it extend to international sales?

There can in this author's opinion be no doubt that the apparent advantage of operating with a unified general Norwegian legislation on sales of goods, covering both national, international, commercial and consumer sales, creates problems which, in the negative, may by far outweigh the simplicity one has tried to achieve in legal technique.[33] The following discussion will expand on this issue, focusing on the «frustration» and economical «impediment» problem.

The complex situation created by the legislature in 1980-1990 necessitates some systematic distinctions;

(1) The genuine CISG 1980 Art 79 issue in Finland, Denmark and Sweden is the extent to which the courts in these countries will apply the «incorporated» Art 79 with due consideration of the Art 7 reference, or whether there will be a spill-over effect induced by Scandinavian concepts and theories of otherwise applicable and recognised Scandinavian contract law - and vice versa, such as the theories of «bristende forutsetninger» or the «generalklausul» reasonableness test under the ScFCA 1915-1918 § 36. The issue seems open as there are not yet any reported cases on the issue (NDs, NJA, UfR).

(2) The CISG 1980 Art 79 in Norwegian law on international sales is even more difficult. Since the Art 79 has been transposed, edited and rearranged within a national system including - in principle - all sales of goods contracts, both international, national commercial and consumer purchases, the question is whether the conceivable interpretation of the joint SGA 1988 § 27 (1) will take place with due regard to CISG 1980 Art 7. There are as yet no reported printed cases on the matter (Rt., RG).

(3) Within the area of national (including inter-Nordic under Fi/Norw/Sw SGA 1987-1990 § 5) sales, the situation in Denmark is different than in the other Scandinavian countries. The original joint Da/Norw/Sw SGA 1905-1907 is still in force in Denmark, and problems on frustrating impediments of a financial nature must therefore be discussed under the scope of the Danish SGA 1905 § 24.

(4) In Finland and Sweden, having separated the CISG 1980 from the SGA 1987-1990, the similar issues as under (3) are whether courts will continue to operate the «exorbitance» principle of financial impossibility from the SGA 1905-1990 acts, or whether the interpretation will indicate mitigating leniency, such as the possible applying of the «generalklausul» § 36 even in commercial contracts. There is finally also partly a question as to which extent social economical factors will be recognised as relevant for solving the issue - as well as the development of modern trade practices in the clausing and «lex mercatoria» possibly inherent in general law theory.

(5) The issues mentioned under (4) will also apply to the situation under Norwegian law on national sales, but in addition to the uncertainty mentioned above, there is also the intriguing question as to whether Norwegian courts will accept the novel idea apparently launched by the ministerial «fathers» of the Act that one and the same provision, namely SGA § 27 (1), may have a different meaning when interpretated in an international as distinguished from a national sales contract.

4. CISG 1980 Art 79 - bridging restrictive common law and equally restrictive continental (basically German) law - but nothing else?

The «impediment» rule of the convention extends to situations where the seller's obligation is affected by pre-delivery frustrating contingencies such as traditional «force majeure» incidents: Labour conflicts, climatic hardship, accidents, communication breakdowns, currency crises etc. CISG 1980 Art 7 assumes that the interpretation of the provision should be a truly non-national one and take the flauvour from the international character of the Convention, its objective to promote uniformity as well as the observance of good faith in international trade.[34] It is often maintained that the Art 79, even though it may to some degree consume principles of national law, must be treated independently from national contract law, in particular in areas where national jurisprudence has developed solutions synthesised by academic writers under comprehensive concepts or theories like (Scand:) «bristende forutsetninger», «irregulær utvikling», (Fr) «imprévision», (Germ) «Wegfall der Geschäftgrundlage» etc.[35]

The US approach under UCC Sect 2-615 is not quite as restrictive as its continental parallels. A seller may be excused for delay when performance as agreed

«...has been made impracticable by the occurence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.»

There are also provisions which afford relief in case of casualty to «specific» goods and on failure of agreed means of transportation if there are no «commercially reasonable» or «substantially equivalent» substitutes to the anticipated available (UCC 2.613).[36]

The «impediment» as such and its location within the seller's «sphere of control» is not the issue of this article.[37] Neither is the requirement that a relieving contingency «could not reasonably have been expected...at the time of the conclusion of the contract».[38]

Focus is on the final prerequsite that a relieving impediment must not have been such as could have been [39] «avoided or overcome» in substance or consequences. This last alternative must be the point of departure for a discussion of the «threshold» of pecuniary sacrifices required on part of the seller before Art 79 will afford relief to the seller.[40] Or put in other words: The level of financial burdens assumed to be a seller's risk under the Convention is really not a question of strict liability, but a classical «extent of duty» concept such as dealt with in the Roman-German doctrine of «Unmöglichkeit» and in the corresponding common law doctrine of «frustration». But unlike any geographical or regional tradition, the Convention's idea is that these matter should now be dealt with in the light of Art 7 and not with reference to any particular legal contract law tradition. The matter is in other words meant to be a truly international issue with no link to domestic national legal tradition, neither in continental law nor in the common law context. In this respect, the provision has a striking resemblance with the EU Treaty provisions meant to specify visions and objectives for inner market framework, not the present situation.

Unlike the EU Treaty (ECJ in Luxembourg) and the European Human Right legal regime (H R Court Tribunal in Strasbourg), the CISG 1980 has no institutional framework for the accumulation of jurisprudence on unsolved interpretation issues. What really is meant by the CISG 1980 Art 7 threefold reference to the international character of the regime, the need to promote uniformity and principles of good faith in international trade in this context is therefore somewhat unclear and the possible implications are manifold: Does the provision refer to recognised international fora such as the ICC Arbitration regime?[41] Is the truly developing «lex mercatoria» concepts such as UNIDROIT 1994 Principles [42] and Lando-Beale 1995 Commission [43] of relevance when applying Art 7? Is the reference a «common denominator» authorising solutions in accordance with some presumed «main stream» or trends in international jurisprudence? Is customary practice on «force majeure» or «hardship» contracting practice [44] or even conciliation practice relevant?

To ascertain the actual scope of Art 79 in «financial force majeure»-situations from analytical statements in preparatory works or even literature on the issue is not easy.[45] The semi-official UNCITRAL Secretariat comment reads

(7.) «Even if the non-performing party can prove that he could not reasonably have been expected to take the impediment into account at the time of the conclusion of the contract, he must also prove that he could neither have avoided the impediment nor overcome it nor avoided or overcome the consequences of the impediment. This rule reflects the policy that a party who is under an obligation to act must do all in his power to carry out his obligation and may not await events which might later justify his non-performance. This rule also indicates that a party may be required to perform by providing what is in all the circumstances of the transaction a commercially reasonable substitute for the performance which was required under the contract» (emphasis added).

and does not afford much clarification, except for the fact that the word «reasonable» occurs in the identification of a substitute performance on part of the seller.

The prevailing non-Scandinavian authorities on CISG 1980 as separate from domestic, national concepts may seem to advocate restrictions somewhat similar to the historical Roman-German «Unmöglichkeit» principle, but there are shades in wordings from one author to another which prevents a reliable classification as to the degree of which unforeseeable, heavy impact of market conditions negatively affecting the balance of the contract will come under the impediment rule. A cumulative reference to impossibility and reasonableness in the stating of seller's liability may be read as problematic.The standard bottom line seems, however, to be that the seller is said not to benefit from Art 79 in a situation where the impediment is not of a physical nature.[46] The issue is sometimes compared to the «force majeure» situation under contract practice or to the common law principle of «impracticability». Possibly, authors applying the word «reasonable» in the actual context may have a more liberal view than authors who only speak of the situations of virtual impossibility where the sellers is not excused.[47] But since the word «reasonable» appears already in the text of Art 79, this may not afford very much guidance in distinguishing between a strict and restrictive interpretation and a more flexible and lenient one.

Some Scandinavian writers seem to take the position that the financial burden element in Art 79 is in line with previous solutions found under the ScSGA 1905-07 § 24 genus doctrine.[48]

Also, the position that the Da/Norw/Sw SGA 1905-1907 regime is still the same under the 1987-90 law reform on national sales is advocated by Swedish writers.[49] There seems to be a tendency to interpret Art 79 in the same way as the ScSGA 1987-90 § 27 (1).[50] O Lando,[51] on the other side, may be seen to have taken a somewhat more flexible position, summing the relationship between CISG 1980 and national laws thus:

«Således som art. 79 (1) er formuleret, vil den ligesom i nordisk ret omfatte både de tilfælde, hvor opfyldelse er blevet objektivt umulig, og de tilfælde, hvor den er blevet så byrdefuld for skyldneren, at man ikke med rimelighed kan fordre, at han skal opfylde aftalen.»

<<As in Nordic law, the way art. 79(1) is worded it would cover cases where performance has turned objectively impossible as well as cases in which the performance has become so burdensome for the debtor that one could not reasonably expect him to perform the contract obligation.>> (author's translation)

In Norwegian theory, where the position in the 1970'ies for some writers seem to forecast the kind of considerations under the «generalklausul» § 36, the matter seems to be unsettled.[52] A few cases from the 1970'ies support a trend towards more leniency.[53] In Danish law, the 1906 Act (§ 24) is still being interpreted as being very restrictive, and it is expected that Danish law will not be less rigorous in international transactions than in national contract scenarios.[54]

5. Possible approaches under debate

5.1. Traditional interpretation - words, semantic context, preparatory material, principles of interpretation under 1969 Vienna Convention on Treaties

The ban on national legal tradition on impediment matters in international sales contracts must obviously be recognised.[55] That means a refinement of the issue: What is the contents of Art 79 when totally disregarding both national law and - possibly? - comparative approaches to the issue?

The actual words used in the Art 79 impediment rule itself do not indicate that seller has to take upon himself extraordinary burdens to perform the delivery. There is no trace of concepts such as impossibility or commercial impracticability in the actual text of the Convention. On the contrary, if the term «reasonable» in the relevant passage of paragraph (1) qualifies not only the foreseeability prerequisite, but also the duty to avoid or overcome the impediment, the provision expresses in plain words that the seller must make a reasonable effort to effectuate the contract. Even more: If Art 79 is read in conjunction with the interpretation guiding principle in Art 7, the question on what is reasonable must be rephrased as a reference to principles of good faith in international trade. To put it bluntly, the contents of Art 79 - read apart from preparatory origin, excluding the UNCITRAL official comments and abundant literature on the matter - is fairly similar to the words used in the «soft» Scandinavian «generalklausul» directing the performance under changed circumstances to a reasonableness test, open enough to allow for «tailor-made» justifiable remedies in severe contingent frustration situations, but also wide enough to adversely advocate a restrictive approach in litigation turning over alleged impediments affecting the contract strongly and negatively.

Recognising the principles of the interpretation of Treaties expressed in Art 31 of the 1969 Vienna Convention on the law of treaties, the CISG 1980 Art 79 should furthermore be read

«...in good faith in accordance with the ordinary meaning to be given to the terms of the treaty with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.»

Art 32 of the same Treaty addresses subsidiary supplementary means of interpretation such as

«..the preparatory work of the treaty and the circumstances of its conclusion...»

but only

«...when the interpretation according article 31 [cited]
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable»

Could one say that the CISG 1980 Art 79 satisfies the conditions in this provision? There seems to be room for differing opinions on that. However, even if the answer is in the affirmative, then the official UNCITRAL Comments together with the abundant material from the legislative process of reaching the Art 79 compromise acquires attention. However, even the UNCITRAL statements made at the time of conclusion of the Convention use words which include elements of reasonableness and no reference to actual impossibility is recorded;

«This rule also indicates that a party may be required to perform by providing what is in all the circumstances of the transaction a commercially reasonable substitute for the performance which was required under the contract.»

Subsequent practice in the application of a treaty is recognised as relevant under Art 31 para 3 (b). However, to establish a relevant practice based on only very few reported CISG Art 79 cases (below) seems to be a rather modest contribution. Under Scandinavian law, there are so far no cases at all, so the issue under a dispute raised in a Scandinavian litigation would depend on the judges' or arbitrators' willingness to appreciate the handful of haphazard UNCITRAL Art 79 cases - ranging from ICC expert panel arbitrations to local ad hoc arbitration awards and subordinate city and district court cases - as guidelines, furthermore the impact of literature, supplementary comments etc, pinpointed in a situation where a court or arbitration panel is asked to issue a judgement different than that which would have been reached under national law (on international transactions). The problem seems to be that even 18 years after the conclusion of the Convention, there is no genuine firm customary precedence on the Art 79 matters which is suited to replace such established national or regional customs and practice which were really meant to be ruled out through CISG 1980 Art 7.

One is left with a somewhat more vaguely expressed idea in international academic communication through literature - as shown above not always consistent and generally often only repeating and citing what other writers have expressed previously - that reasonableness has limited relevance in the matter, since the real and true understanding of the financial impediment is that only contingencies comparable to levels of physical impossibility will do. It is of interest to note that the analysis of literature more often deals with facets and nuances in each writers choice of words than the occurrence of actual declared disagreement on the exact level for escape from liability.

5.2. CISG 1980 Art 79 read in conjunction with the Art 7 interpretation references - which impulses and sources are relevant?

a. Contract law regulation in modern Scandinavian legislature lets statutory law retreat for both contract regulations as well as established practice between the parties and established trade customs (when not unreasonable and therefore subject to review under «generalklausul» § 36 on the same basis as unreasonable contracts). Examples of this are found in both Norwegian, Swedish and Finnish national provisions of SGA 1987-90 (§ 3).[56] There is no requirement that the custom in question must be impliedly incorporated by the parties (Norw SGA § 3: «...som må anses bindende»).

CISG 1980 is manifestly secondary to explicit contracting by parties (Art 6), but the Scandinavian model for accepting that also general practices and customs in the trade as such prevail over the statutory texts is not as broadly recognised under the Convention as under Scandinavian law. CISG 1980 Art 7 refers to the international setting for the correct interpretation of the Convention. Art 9 recognises trade customs, but only to the extent that such customs are either agreed upon (1) with the following qualification on implication (2):

«The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.»

Thus, the Convention may accept customary contract practises, maybe even de facto to the same extent than under the cited Norwegian provision, but the setting is different: The assumption is that a custom must find its way to the contract relationships within and through the actual parties' presumed or implied autonomy. While the Scandinavian approach seems to be a triangular method with parties, statute and custom in each «corner», the CISG method appears as a two-layer concept, meaning that relevant law is either made by parties' contract or through the secondary provisions of the Convention. Either may be filled in with custom and practice, but only in the international context and never with reference to any domestic legal tradition. Even the comparative approach, such as advocated by Honnold:[57]

«However, no such difficulty arises from a comparative law approach that seeks guidance from the prevailing patterns and trends of modern domestic law»

seems to be rightfully opposed by Bianca Bonell [58] since this may lead to - and therefore should be ruled out - de facto applying some distilled version of several legal systems domestic law.

With respect to Scandinavian legal method in contract law, this raises a fundamental problem. The «generalklausul» approach based on the ScFCA 1915-1918 § 36 read in conjunction with either CISG Art 79 itself or (in Norwegian law) with the Norw SGA § 27 (1) means an undisputed recourse to national law, presumably ruled out by the CISG 1980 international concept. So would any recourse to non-statutory Scandinavian «deklaratorisk» law on sale of goods as long as such law is not genuinely of an international flavour. Adversely, contract parties' intention expressed in contract or impliedly accepted would prevail over the text of the Convention (Art 6). The incorporation of «lex mercatoria» by way of express or implied agreement will similarly replace the CISG provisions. In this context, it seems as if any legal principle classified as expressly or impliedly incorporated by both parties - or alternatively silently accepted (Scand «vedtagelse») by the passive party to a standard form applied in casu - will prevail over the Convention. Thus, the doctrine of «changed conditions» («bristende forutsetninger»), such as advocated by Lehrberg,[59] might prove a more legitimate and a more convincing way to let Scandinavian developing doctrine on frustration and impediments in contract law survive even in CISG transactions. Policy-wise one could argue that this is not in line with the spirit of the Convention. However, any Scandinavian judge or court would probably exercise considerable ad hoc discretionary quality censorship on the selection of law applicable to the case and would only reluctantly adopt scarce and fragmented legal elements such as those which are available under the present Art 79 scope of jurisprudence.

b. Jurisprudence and arbitration awards [60] on the CISG Art 79 are meant to be relevant in the interpretation of the provision. Scandinavian explicit CISG-practise is so far non-existent,[61] at least on reported Supreme Court level.[62] This raises a few methodological problems, such as indicated by key words: Should UNCITRAL register as accessible cases thoroughly prepared for readiness on easily accessible Internet web-pages? Should one put the same relevance of arbitration awards as regular courts?[63] Does age in combination with undisputed position for one or more judgements improve the argumentative authority of the case in question?

One might expect to find a great number of reported cases on Art 79. In fact, the list seems to be short. The PACE/UNCITRAL web-system reports 24 cases on Art 79 (pr October 1998). Six of them are reported to be unavailable.[64] some deal with buyer's risk of payment arrangements, others deal with subcontractors' failures. Only 4 of the reported cases may be said to be directly relevant to the issues discussed in this article.[65] None of these actually award the impediment relief. In fact, none out of a total of 24 cases seem to accept claims for relief under CISG 1980 Art 79.

(1) 1989-09-26 (ICC Arbitration NO 6281)

The parties, of Egyptian and Yugoslav nationality, concluded a contract for the FOB sale of a certain quantity of steel. In conformity with the contract, the buyer announced that it wished to exercise its right to buy an additional quantity of steel at the price and on the conditions stipulated in the contract. The dispute arose from the seller's refusal to deliver the additional quantity of steel at the contract price, since the market price had gone up, as a result of which the buyer was forced to obtain the goods from another source at a higher price. The tribunal found that, pursuant to Article 100(2) CISG, the Convention was not applicable, since the contract was concluded before the Convention entered into force in the countries involved (including France, the place of arbitration), even though those countries were parties to the Convention at the time of issuance of the arbitral award. Applying the private international law rules of the countries concerned and Article 3.1 of the Hague Convention of 15 June 1955 on the law applicable to international sales of goods, to which France is a party, the tribunal concluded that the applicable law was the law of Yugoslavia, as the law of the place where the seller had its principal place of business and where the contract was performed. The tribunal compared the Yugoslav law with Article 74.1 of the Uniform Law on the International Sale of Goods (ULIS) and with Article 79(1) CISG and found that by refusing to deliver the additional goods at the contract price the seller had committed a breach of contract. The tribunal held that the seller could be relieved of the obligation to deliver the goods at the contract price only if the contract contained a price adjustment clause, or in case of frustration of the contract, which was not the case here, since the increase in the market price was, in fact, neither sudden nor substantial nor unforeseeable. In order to determine the amount of compensation due to the buyer, the tribunal compared Yugoslav domestic law with Articles 75 CISG and 85 ULIS and held that the buyer was entitled to the difference between the contract price and the price actually paid in order to obtain the goods from another source.

(2) 1993-03-29 Tribunale Civile di Monza

The plaintiff, an Italian seller who failed to deliver the goods to the defendant, a Swedish buyer, claimed avoidance of the sales contract on the ground of hardship ("eccessica on erositasopravvenuta") since the price of the goods had increased after conclusion of the contract and before delivery by almost 30%. The court held that CISG was not applicable since at the time of the conclusion of the contract CISG was in force in Italy but not in Sweden (Article 1(1)(a) CISG). The court also excluded the application of the Convention on the ground that the parties had chosen Italian law as the law governing their contract holding that Article 1(1)(b) CISG operates only in the absence of a choice of law by the parties. In the court's opinion, even if CISG applied, the seller could not rely on hardship as a ground for avoidance, since CISG did not contemplate such a remedy in Article 79 or elsewhere. A domestic court could not integrate into CISG provisions of domestic law recognizing a right of avoidance of the contract in case of hardship since hardship is not a matter expressly excluded in Article 4 CISG from the scope of the Convention.

(3) 1995-10-17 (Russian Arbitration)

A German seller (claimant) brought a claim against a Russian buyer (respondent) in connection with the [buyer's] failure to pay for equipment supplied under a contract concluded between the two parties. The buyer acknowledged that the goods had indeed been delivered under the contract but stated that its non-payment was due to the failure on the part of the bank responsible for the buyer's foreign currency transactions to give instructions for the amount payable for the goods under the contract to be transferred to the seller. The bank did not transfer the foreign currency amounts to the seller on the grounds that there were no funds available in the buyer's account in freely convertible currency to pay for the goods. Citing these facts, the buyer requested the tribunal to discharge it from liability since, in its view, the fact that it did not have available foreign currency resources should be regarded as force majeure discharging it from liability for the non-performance of its contractual obligations. The tribunal was not in agreement with the [buyer's] view that its lack of foreign currency should be regarded as force majeure, since the contract agreed between the two parties gave an exhaustive list of force majeure circumstances discharging them from liability for non-performance of their contractual obligations. The buyer's lack of foreign currency was not included in that list of force majeure. In addition, the tribunal stated that, under article 54 CISG, the buyer's obligation to pay the price of the goods included taking such measures and complying with such formalities as might be required to enable payment to be made. On the basis of the case materials and the clarifications offered by the buyer during the proceedings, it was established that the only action taken by the buyer was to send instructions to the bank for the amounts payable under the contract to be transferred, but that it had not taken any measures to ensure that the payment could actually be made. The tribunal found in favor of the [seller] and ordered the buyer to make the payment for the goods supplied.

(4) 1996-03-21 (Hamburg Arbitration)

The [seller], a Hong Kong company, and the [buyer], a German company, had concluded a general agreement for the exclusive delivery and distribution of Chinese goods. Under this agreement, the [seller] was responsible for the business relations with Chinese manufacturers while the [buyer] was responsible for the distribution of the goods in Europe. On this basis, the parties concluded regularly separate sale of goods contracts. Owing to financial difficulties, a Chinese manufacturer could not deliver the ordered goods to the [seller], who consequently could not fulfill its contractual obligation to the [buyer]. The [seller] demanded payment of the sum due resulting from previously delivered goods. The [buyer] set off against this claim a damage claim for lost profit owing to the termination of the business relation with the [seller] and refused to pay. The arbitral tribunal applied the CISG as the relevant German law under article 1(1)(b) CISG. The arbitral tribunal upheld the [seller's] demand for payment. It further held that the [buyer] could set off against the [seller] a claim resulting from the breach of the relevant sales contract but not from the general distribution agreement. With respect to the damages claim for the non-performance of the sales contract, the arbitral tribunal held that the contract could be declared void and damages could be claimed under article 45(2). It further held that a [seller] could be deemed to have unlawfully refused performance if it made delivery dependent on payment of arrears from previous sales contracts, even if the parties had agreed on cash payment in advance. The arbitral tribunal also held that the [buyer's] damage claim was not precluded under article 79 CISG since the financial difficulties of the [seller's] Chinese manufacturer were within the sphere of the [seller's] responsibility. With respect to the general distribution agreement, the arbitral tribunal held that the damages claim was without sufficient merit since it was not a consequence of the breach of a sales contract by the [seller] in the sense of article 74 CISG. The arbitral tribunal, in rendering its award on the costs of the proceedings, held that the [seller] could claim its attorney's fees for the arbitration proceedings as damages according to articles 61 and 74 CISG. It also held that, if the [buyer] refused to pay because it set off an alleged claim for damages, the [seller] did not have to fix an additional period of time for payment according to article 63 CISG.

The cases seem to prove that the Art 79 rule seems to be a comforting resource which «always lie beyond the facts of the actually pending case».[66] As long as there seem to be no UNCITRAL or ICC reported cases actually granting a seller the impediment remedy under CISG Art 79, the safest observation seems to be that any litigation is a truly «up hill task» for the party to a sales transaction asking for legal mercy when normal expectations for performance conditions change to the negative. The more flexible approaches seen in Norwegian practise from the 1970'ies seem to have no direct parallel in international case law.

c. Trade practices - «hardship» clauses and «lex mercatoria». For a decade, both ICC and others have developed contractual instruments to mitigate the rigour of «pacta sunt servanda» in commerce. The 1985 ICC Force Majeure clause and recommendations on contracting in Hardship mitigation (ICC Publ 421) are both attempts in this direction.[67] Another is the «lex mercatoria» trends reflected in 1994 UNIDROIT Principles such as Art 3.10. and «hardship» provisions in Section 2, reading

«(Definition of hardship)
There is hardship where the occurrence of events fundamentally alters the equilibrium of the contract either because the cost of a party's performance has increased or because the value of the performance a party receives has diminished, and a) the events occur or become known to the disadvantaged party after the conclusion of the contract;

b) the events could not reasonably have been taken into account by the disadvantaged party at the time of the conclusion of the contract;

c) the events are beyond the control of the disadvantaged party; and

d) the risk of the events was not assumed by the disadvantaged party.»

Similarly, the Lando-Beale Commission European Contract Principles Art 2.117 introduces new aspects of the contract revision problem:

«(1) A Party is bound to fulfil...

  (2) If, however, performance of the contract becomes excessively onerous because of change of circumstances,
  the parties are bound to enter into negotiations with a view to adapting the contract or terminating it, ...

(a) ------

(b) ------

(c) ------

  (3) If the parties fail to reach agreement within a reasonable period, the court may: (a) terminate the contract at a date and on terms to be determined by the court; or

(b) adapt the contract in order to distribute between the parties in a just and equitable manner the losses and gains resulting from the changed circumstances; and

(c) in either case, award damage for the loss suffered through the other part refusing to negotiate or breaking off negotiations in bad faith.»

Under Scandinavian law, elements like these may under the circumstances acquire relevance under an intelligible interpretation of Fi/Nor/Sw SGA 1987-90 § 3. The CISG approach, however, seems to be that elements like these will only acquire legal quality in the contractual relationship if there is an express or implied reference or contract incorporation (cf on international sales Norw SGA § 88). Whether or not such an reference or incorporation is found existent, is a matter of construction of the contract, cf CISG Art 8. The mere fact that the practice within international commercial transactions reflects some leniency towards a seller hit by a contingent impediment, is strangely enough not recognised under CISG, even when due regard is taken to the Art 7 qualification on «good faith».

5.3. Scandinavian «soft» law relief under Formation of Contract Sect 36 («generalklausul»)?

a. National contract law on the ScFCA 1918 (1983) § 36 «generalklausul» seems now to accept that the «reasonableness» test may under the circumstances be relevant for the allocation of risk for financial impediments. However, directing the issue to this provision, does not mean that the commercial impact on a contract - domestic or international - may be disregarded. Arbitration practice and jurisprudence - at least under Norwegian law - seem to demonstrate the awareness of the dangers of diluting «pacta sunt servanda» in a balanced, commercial contract climate. Allegedly, this may boil down to the simple observation that commercial contract law must be treated on its merits at any time, but that there may be some advantages of referring issues like the frustration and force majeure problems to one single statutory provision instead of operating with a wide range of legal «hooks», both statutory and non-statutory, both within the contract interpretation context and beyond the contract map of activities, functions and risks allocations.

b. Is the Norw FCA 1918 (1983) § 36 relevant as a supplement in the interpretation of Norw SGA 1988 § 27 (1)?

Norway is the only Scandinavian country which has adapted a legal technique of placing the Art 79 on same level as other domestic sales of goods law. The apparent obscurity inherent in this legislative method implies that the SGA § 27 (1) reflecting CISG Art 79 is just another provision on how to treat the sellers in impediment situations. There is no provision in the Act on supremacy for CISG 1980 except for the Chap XV which only indicates a «lex specialis» approach to international sales as regulated in the statute, different than genuine supremacy. Consequently, the reference in SGA § 27 (1) to impediments which the seller «...med rimelighet kunne...unngå eller overvinne følgene av...» will easily be read as a reference to the «generalklausul» «reasonableness test». This is apparently not in the true spirit of the CISG 1980, but then on the other hand: The policing of the contract with respect to impediments, frustrating events and changed conditions will subsequently afford a strong argument for a restrictive interpretation of the § 36 equally observant to the international character of the contract under review.

5.4. Public policy - social economical considerations?

An economical transactional cost-perspective has recently been strongly advocated by Scandinavian writers E M Runesson [68] and T L Wilhelmsson.[69] However, it seems doubtful whether Scandinavian courts will apply such theories in the actual settling of current disputes involved in collapse of contract equilibrium. The «generalklausul» reference to «virke urimelig» seems to exclude purely cost-transactional considerations, although it remains to be seen whether increase in the understanding of relationship between law and economics in the future will lead to a less «soft» approach when interpreting the statute. At least in the CISG 1980 scenario, there seems to be no authority expressed on a purely economical evaluation of transactional costs when applying the Art 79 principle on financial impediments.

5.5. CISG Art 79 as a protective measure in globalised commerce?

The European and common law dominance in the development of modern contract law seems to have a two-fold inconsistent impact. One is the insistence on «soft» or «social» values such as Human Rights profiles in global commerce and trade.[70] Another is the Western World - probably strongly inspired by UK common law from colonial eras - tradition of «rigor commercialis» based upon strong reliance on the positive effect of predictable «pacta sunt servanda» policies in contract dispute management. The Third World perspective, such as in the Chinese context,[71] seems to encourage pre-contractual mutual understanding and personal amicable relationship more than commercial predictability. It has been said that while the Western negotiator acts under a «transactional» concept, the Eastern negotiator is more focused on «personal» relationship. One could question whether the «rigor commercialis» in a truly increasing trans-continental commercial scenario really favours the conduct in business established among actors in law system families such as UK,[72] US and Western Europe contract transactions environment. One could furthermore question whether the «lex mercatoria» softening of commercial contract law is in better concordance with East-West commercial climate of today than the strict doctrine of impossibility as a prerequisite for excuse.

6. Suggestive conclusions on Scandinavian law on financial impediments in salestransactions

To summarise, tentative observations in short are as follows:

(1) The Norwegian mixed CISG 1980/national SGA 1988 provision is both unfortunate and in conflict of the idea of promoting unification and viable international trade law within the area of sale of goods.

(2) The CISG Art 79 solution has so far been made somewhat vague on account of scarcity of case law and the inherent mixture of terms and principles as shown in the tension between the impediment rule in Art 79 and the Art 7 [reference to] «good faith» in international trade. The risk of domestic and national law impact is present and could under Scandinavian law be reflected in revival of theories of «bristende forutsetninger» accepted as part of contract elements which prevail over CISG 1980 according to Art 6.

(3) The defensive position taken by defenders of «rigor commercialis» can be seen to create a risk for an unfortunate gap between the CISG 1980 and the evolutionary character of international contract practice, such as embodied in «lex mercatoria», ICC impacts, conciliation and dispute settlement methods for finding ways out of contract deadlocks.

(4) The Roman/German and UK-inspired transactional doctrine of inexcusable non-performance or delay in extreme «financial force majeure» scenarios seems to be based on a Western World commercial environment and disregards i a the adverse contract mutuality philosophies often present in distant parts of the world increasingly visible on the stage of international commerce. The strict CISG Art 79 doctrine favours the industrial purchaser of goods and services from other parts of the world. Its legitimacy may be questioned, particularly in legal environments where commercial courts have a true will to design intelligible solutions even in «pacta sunt servanda» scenarios.


Abbreviations:

A Agder lagmannsrett (Norw District Appeal Court)
AfS Arkiv for Sjørett
Almén-Eklund Tore Almén: Om köp och byte av lös egendom. 4 delvis omarb uppl ombesörjd av Rudolf Eklund (1960)
B Borgarting lagmannsrett (Norw District Appeal Court)
Bergem-Rognlien John Egil Bergem og Stein Rognlien: Kjøpsloven. 1988 og FN-Konvensjonen om internasjonale løsørekjøp. Commentary (2nd ed 1995)
CISG 1980 Convention On Contracts for the Internatonal Sale of Goods (Vienna 1980-04-11)
DaHR Danmarks Højesteret (Danish Supreme Court)
Da/Norw/Sw SGA 1905-1907 Approximated Sales of Goods Act, i e Danish version 1906-04-06 No 102, Norwegian version Lov om kjøp 1907-05-24, Swedish version 1905-06-20
E Eidsivating lagmannsrett (Norw District Appeal Court)
ECJ European Communities Court of Justice
FiHD Högsta Domstolen i Finland (Supreme Court of Finland)
Fi/Norw/Sw SGA 1987-1990 Approximated Sales of Goods Act, i e: Finnish version 1987-03-27 No 355, Norwegian version Lov om kjøp 13.5.1988 nr 27, Swedish version 1990:931
G Gulating lagmannsrett (Norw District Appeal Court).
Gomard 1-5 Bernhard Gomard Obligationsret 1. Del (1998), 2. Del (1995), 3. Del (1993) 4. Del (1994)
Gaarder Karsten Gaarder, Forelesninger over kjøp. 10. utg. 1992 ved Bjørn Stordrange.
H Hålogaland lagmannsrett (Norw District Appeal Court)
Hellner-Ramberg I Jan Hellner og Jan Ramberg: Speciell avtalsrätt I Köprätt (2 uppl 1991)
Håstad Torgny Håstad, Den nya köprätten. 4 uppl 1998.
ICC International Chamber of Commerce (Det Internasjonale Handelskammer)
Innst 1904 Motiver til kjøpsloven av 1907 (1904)
IsHR Islands Højesteret (Supreme Court of Iceland)
kjl 1907 (1974) (Norw) lov om kjøp 24.5.1907 nr 2 endringer i kjl 1907 ved lov 14.6.1974 nr 36 (act abolished 1988)
Krüger Kjøpsrett Kai Krüger, Norsk kjøpsrett (4th ed 1998)
Lando-Beale Principles I Ole Lando and Hugh Beale (ed): Principles of European Contract Law Part I Performance, Non-performance and Remedies (1995)
Martinussen Roald Martinussen, Kjøpsrett (2. utg 1996)
ND Nordiske Domme i Sjøfartsanliggender
NDs Nordisk Domssamling (selected Scandinavian Supreme Court decisions) (law reports)
NF 92 Norwegian Fabrication Contract 1992 (Statoil, Norsk Hydro, Saga Petroleum, Teknologibedriftenes Landsforening)
NL 92 Alminnelige leveringsbetingelser for leveranser av maskiner samt annen mekanisk, elektrisk og elektronisk utrustning i og mellom Danmark, Finland, Norge og Sverige.
NLM 94 Alminnelige betingelser for levering og montering av maskiner samt annen mekanisk, elektrisk og elektronisk utrustning i og mellom Danmark, Finland, Norge og Sverige.
NOU Norges Offentlige Utredninger (preparatory Norw public committee reports, including law reform drafts).
NS 3430 Alminnelige kontraktsbestemmelser om utførelse av for bygg- og anleggsarbeider. 2nd ed NBR 1994. (Construction works contract form (agreed))
NU 1984:5 Nordisk Utredningsserie 1984:5 Om nordiska köplager (joint Scandinavian report 1984 on SGA law reform)
Norw SGA 1988 Lov om kjøp (kjøpsloven) Norw Sale of Goods Act 1988-05-13 No 27 (cfr
Nørager-Nielsen Theilgaard Jacob Nørager-Nielsen og Søren Theilgaard: Købeloven med kommentarer (2 utg 1993)
prp Ot prp nr 80 (1986-87) om lov om kjøp
Ramberg Commercial Transactions Jan Ramberg: International Commercial Transactions (1997)
Ramberg Köplagen Jan Ramberg, Köplagen (1995)
RG Rettens Gang (Norw Law reports - cointains selected city, district and appeal court judgements)
Rt. Norsk Retstidende (Norw Supreme Court law reports)
ScFCA 1915-1918 lov om avslutning av avtaler m v (Norw version) 31.5.1918 nr 4 (amended 1983-03-04 No 4 - the «generalklausul» § 36 added and 1955-01-06 No 1 (EEA)
SGA 1988 (Norwegian) Sale of Goods Act 1988-05-13 (Lov om kjøp)
Sevón-Wilhelmsson-Koskelo Leif Sevón-Thomas Wilhelmsson-Pauliine Koskelo:, Huvudpunkter i köplagen (1987)
SOU Statens offentlige utredningar (Swedish public commitee reports)
SvHD Högsta Domstolen i Sverige (Supreme Court of Sweden)
SvJT Svensk Juristtidning
TfR Tidsskrift for Rettsvitenskap
UCC Uniform Commercial Code (USA)
UfR Ugeskrift for Retsvæsen; A: Supreme Court and other Danish Court Judgements; B: periodica
UNCITRAL United Nations Commision for International Trade Law
UNIDROIT Principles 1994 International Institute for the Unification of Private Law (Rom-instituttet) - Principles of International Commercial Contracts (1994)
von Caemmerer/Schlectriem (Stoll) Kommentar zum Einheitlichen UN-Kaufrecht (2nd ed 1995) (eng ed 1998) Hans Stoll's Commentaries on CISG 1980 Ary 79 pp 675 et seq.


FOOTNOTES

1. Cfr Code Civil Arts 1582-1701 «De la vente», Arts 1702-07 «De l'echange», Arts 1708-1831 «Du contrat de louage» etc.

2. Danish Act 1906-04-06 No 102 (later amended, still in force), Norwegian 1907-05-24 No 2 (now abolished), Swedish Act 1905-06-20 (now abolished). Finland's SGA 1987-03-27 No 355 replaced an Act on sales from 1734 since Finland was not party to the joint SGA. Iceland's SGA is dated 1911-07-11. Abbr: Da/Norw/Sw SGA 1905-1907.

3. Commented and criticised by Almen/Eklund p 284 («den förkättrade satsen»), with preference for its more refined variant «debitor generis non liberatur iberitu speciei».

4. 1917-18 and 1924.

5. Thus in Norwegian law, the «Falconbridge» Supreme Court case Rt. 1936. 122 as well as the gas pipeline arbitration «ULA» reported ND 1990. 204 both really deal with market impact on contract equilibrium and not with the «impediment» problem. In the «Christiania Kull- og Vedbolag» arbitration reported Rt. 1951. 371 and the «Esso» arbitration ND 1976.650, however, the market changes (nickel market and crude oil prices) also meant increased financial burdens on the seller who was to perform the delivery. In NDs 1995.333, The Supreme Court of Iceland accepted a price revision, applying the Icelandic version of the § 36 «generalklausul» (statute No 11 1986) on sudden change of market value of a fishing boat with accessory fishing quotas.The UNCITRAL/PACE summary reported (abstract) CISG 1980 Art 79 Belgian case 1995-05-02 Rechtbank van koophandel seems to address the equilibrium issue (quotation:) «Impediments excusing party from damages does not include significant drop in market price of goods after conclusion of contract».

6. Principles of symmetrical equilibrium may indicate that whereas a buyer may not escape from his contract through cancellation induced by market collapses (arbitrated cases reported in ND 1959.333, ND 1960.420, ND 1975.298, cfr ND 1990.392 G), the corresponding rule on seller's side should be a strict obligation to pay whatever is needed to produce and deliver according to the words of the contract.

7. Hellner Kommersiell avtalsrätt (4th ed 1993) pp 15 et seq, Runesson pp 169 et seq with references to Kaser, Tamm, Medicus and others.

8. Now T Almén i Om köp och byte av lös egendom. Kommentaren til svensk köplag 1905 (4th ed 1960 by R Eklund) p 288.

9. Cases reported by Krüger Norsk kjøpsrett (4th ed 1998) p 290, for Danish law Nørager-Nielsen Theilgaard pp 35 et seq, for Swedish law Ramberg Köplagen p 350, Hellner-Ramberg I pp 147 et seq. See also Mestad Om force majeure og risikofordeling i kontrakt (1991) pp 60 et seq.

10. The concept of «eksorbitans» was in Norwegian jurisprudence introduced by Supreme Court (judge Prydz) in Rt. 1919.167 pp 168-69, and added to the general acceptance of «pacta sunt servanda» in sales of goods law.

11. Rt. 1935.122 «Falconbridge» and Rt. 1951.371 «Christiania Kull- og Vedbolag») (reported arbitration award from 1941).

12. Hellner AfS Vol 11.246 pp 251 et seq (printed lectures from the Scandinavian Institute of Maritime Law 1970 «Hindsgavl»-seminar on shipbuilding contracts).

13. Augdahl Den norske obligasjonsretts almindelige del (4th ed 1972) pp 151 et seq (p 152: «..nogenlunde undtagelsesfri regel om at prisstigning eller prisfall ikke har relevans»).

14. Arnholm Privatrett I. Almindelig privatrett (1964) pp 267 et seq.

15. Rodhe Obligationsrätt (1956) pp 349 et seq and pp 362 et seq, Ussing Obligasjonsretten. Almindelig del (4th ed A Vinding Kruse) pp 66 et seq.

16. «Kjøpslovkomiteens innstilling» dated 1972-12-15 attached as «Vedlegg 1» to Ot prp nr 25 (1973-74), cfr ministerial draft § 1 second para, commented in «Vedlegg 1» p 59 and p 20.

17. In particular NOU 1976:34 p 28: «...kan man i senere praksis spore en bestemt tendens til mindre strenghet mot selgeren».

18. In Norwegian literature K Andersen Kjøpsrett (1962) pp 140 et seq (referred to in NOU 1976:34 p 28), but also Gaarder Forelesninger over kjøp (8th ed 1978 B Gaarder) pp 67-68 (the later 10th edition 1992 by B Stordrange) deal with the 1988 SGA § 24 issue.

19. Cfr O Lund AfS Vol 14.339 (1977), Palmgren AfS Vol 14.431 (1977) (printed lectures from the Scandinavian Institute of Maritime Law 1976 «Nynäshamn»-seminar on contract revision under rising prices and market changes).

20. A side view to the contemporary Norwegian 1984-06-08 No 58 and 1984-06-08 No 59 law reform on insolvency proceedings shows legislator's - i e the legal system's - sense of social responsibility for the monitoring of multilateral negotiations with creditors to combat economical problems in order to avoid the opening of bankruptcy («gjeldsforhandling»), comp similarly the 1992-07-17 law reform on similar issues in private sector («gjeldsordning»).

21. RG 1976.595 E and RG 1976. 650 (arbitration - dissenting opinion), compare adversely RG 1982. 196 (arbitration), UfR 1978.482 DaHR.

22. The «generalklausul» resembles elements both of German 1976 «AGB», the UK Unfair Contract Terms Act 1977, the UCC Sec 2-302 on «unconscionability» contract terms» and the EC 93/13 EC Directive on unfair contract terms (consumer contracts). However, the scope of the Scandinavian «generalklausul» § 36 is much wider, and the judicial authority to intervene in a contract scenario goes much further than in any of the already mentioned legal instruments. The provision is generally the same in all Scandinavian countries, but there are certain differences which will not be dealt with in our context. The present discussion deals with the Norwegian 1983 version of the provision.

23. The Act has no provisions on the interpretative approach to mitigate contracts in view of its actual context. The lack of statutory rules on the interpretation of sales contracts like SGA 1988 §§ 89-90 (CISG Arts 8-9) means that such issues have to be solved basically in line with jurisprudence and customary law in the vague intersection area between the two legal method elements contract and contract law.

24. Rt. 1988. 276 and Rt. 1988. 295. Cfr also later cases reported: Rt. 1992.1387, Rt. 1992.1297, Rt. 1995. 674. In Finnish Sup Ct practice, reference could be made to FiHD 1981 II 167 FiHD and FiHD 1982-09-13 (1982 II 141) NDs 1982.443. In the first case, the 1973 sudden rice in oil prices affecting contractor's costs did not justify a revision of a construction contract. In the second case on consequences of substantial rice in price for milk powder, the buyer's compensatory purchase after seller's refusal to deliver at contract set price was mitigated. On both cases, see comments by T Wilhelmsson in Standardavtal (1984) pp 85-86. The Icelandic Sup Ct decision NDs 1995.333 concerned a dispute over a purchase of a fishing boat with catch quota. Due to a 1990 law reform releasing catch quotas for private transfers, the value of the contract object increased substantially. The Supreme Court of Iceland accepted a price revision, applying the Icelandic version of the § 36 «generalklausul» (statute No 11 1986).

25. See particularly opinion in Rt. 1988.195 at p 301, emphasising that «...[j]eg finner grunn til å understreke at påstanden bare går ut på regulering på grunnlag av konsumprisindeksen: en påstand om oppregulering på grunnlag av dagens tomteverdi ville etter min mening vanskelig ha kunnet føre frem» (judge Aasland).

26. Relevant comments on the issue could also have been found in the Danish Betænkning III (Forbrugerkommisjonen) p 29 and in J Hellner's «generalklausulsutredning» SOU 1974:83 pp 156-57, referring to restrictive NJA 1946. 679; and stating that «...det ligger i linje med generalklausulens funktion i övrigt vid långvariga avtal och ändrade förhållanden att lämna ett formellt stöd för upphörande eller förändring». Hellner advocates a general replacement of the doctrine of frustration («förutsättningsläran») with the «generalklausul» concept for judiciary discretion, but this position is not supported by all writers, see adversely B Lehrberg, Förutsättningsläran: allmänna betingelser för möjligheten att frånträda rättshandlingar på grund av okända eller oförutsedda omständigheter (1989). On the CISG 1980 relevance of the distinction between the two possible approaches, se infra.

27. Köplagen (1995) (under medverkan av J Herre) p 353.

28. Norsk kjøpsrett (4th ed 1998) p 293 and pp 692 et seq, cfr critical comments by Hellner JT 1991/92.756 at p 757.

29. Gomard Obligationsret 2. del pp 48-49, with reference to i a UfR 1975. 588 DaHR (oil cricis 1973), see also pp 170 et seq.

30. On the issue, see similarly also Krokeide TfR 1977.599 and O Lund op cit.

31. I fully agree with the strong criticism voiced by V Hagstrøm TfR 1995.561, see Krüger Norsk kjøpsrett (4th ed) p 700.

32. The Norwegian method goes further than the Convention itself. Instead of translating the CISG 1980 Art 79 on relief of obligations in conjunction with the presumed authority for strict liability in Art 45 (1), the «impediment» rule has been split in two fragments on liability reflected in the Act: One provision (§ 27 (1)) placing an approximately strict liability for delay on the seller (explanatory specific Norwegian comments in Ot prp nr 80 (1987-88) pp 33 et seq, pp 72 et seq), subject to the exceptions contained in CISG 1980 Art 79 - and another provision (§ 40 (1)) on non-conformity (defects) of the goods, duplicating the liability provision from the delay rule in § 27 (1).

33. Ot prp nr 80 (1986-87) pp 16-19 and Innst O nr 51 (1987-88), comp NU 1984:6 pp 150-53, 157-58, 165-66, 388 et seq. A recent Norwegian Supreme Court decision, the «Lyd & Bilde» Judgement reported in Rt. 1998. 774, illustrates the problem in a consumer purchase claims dispute: Norwegian Supreme Court awarded the consumer costs for repairing a VHR video unit almost 4 years after purchase, somewhat surprisingly applying the principle set in Norw SGA 1988 § 32 (3) (time limit for claims based on lack of conformance) as standard for reasonable expectations for durability of the product. The assumption was that the statutory provisions on what constitutes a «defect» (lack of conformance - Norw «mangel»), is not exhaustively regulated in the Act §§ 17 et seq. This position creates serious problems if meant to be applied also in international otherwise CISG regulated sales transactions under the same provision for commercial transactions (CISG Arts 35 et seq). On critical comments on the «Lyd & Bilde» case, se Krüger Juristkontakt 1998 No 6 pp 25 et seq.

34. The reference to good faith apparently represents an attempt to somehow compromise the otherwise strict commercial risk allocation inherent in Art 79 (1). However, it does not justify interpretable references to considerations of a domestic national character.

35. The literature on this is abundant, see for instance Honnold Item 425 footnote 6 (p 533) with references. The PACE web site «http://www.cisg.law.pace.edu/cisg/text/mono79.html» contains references to «selected monographs and anthologies» in the English language, arranged according to each CISG Article. A statement of the matter is found in Bianca Bonell pp 591-92.

36. Honnold item 425 (p 534), but also Gomard op cit p 49, referring to Farnsworth Contracts (2nd ed 1990) pp 675 et seq.

37. For Norwegian ministerial preparatory considerations, Ot prp Nr 80 (1986-87) p 73.

38. UNCITRAL/PACE Art 79 reported case: Russian arbitration award 1995-03-16; non-relevant impediment because seller quotation: «... should bear liability for failure to fulfil its obligations on the additional grounds that it was unable to establish that it could not reasonably be expected to take account, in concluding the contract, of the obstacle preventing its compliance with the contract or to avoid or surmount that obstacle or its consequences».

39. The wording of the paragraph itself is ambiguous. The word «reasonable» connected to the first subjective requisite, the foreseeability test, might either be understood to cover only that specific alternative or could be read to cover also the last passage in the Art 79 (1) provision. Few of the writers on the CISG, however, seem to comment specifically on the fact that the term «reasonably» might be substantially relevant both to the first and second element in the sentence. If so, the rigid solutions advocated on the interpretation of the second alternative would seem even more obscure since the term «reasonable» indicate more discretionary flexibility than (financial) «impossibility» or «impracticability», cfr Bianca Bonell p 592. The ICC Model International Sale Contract (ICC Publ No 556) expressly repeats the «reasonable» condition for duty to overcome impediment in Art 13.1.(c) and is therefore not necessary very different from the wording of the CISG Art 79.

40. The Scandinavian term «offergrense» for indication of limit for pecuniary sacrifices seems to originate in a work by P Heck from 1929, see Nørager-Nielsen Theilgaard Købeloven (2nd ed 1993) p 350.

41. Accessible at ICC via «http://www.iccwbo.org/».

42. UNIDROIT 1994 Principles of International Commercial Contracts Chap 6 Sect 2 «Hardship» (Arts 6.2.1., 6.2.2. and 6.2.3.).

43. The Principles of European Contract Law Part 1 (1995) Art 3.108 (in substance identical with CISG 1980 Art 79, except for the reference to «excuse» from performance where CISG 1980 Art 79 deals with «liability for a failure to perform».

44. ICC Publ No 421 «Force Majeure and Hardship».

45. The historical diplomatic context of the provision can be studied both in the UNCITRAL Yearbooks, in the Official Records and in literature such as Honnold Documentary History on the Uniform Law for International Sales (1989).

46. Von Caemmerer/Schlechtriem (Stoll) p 694-95, Honnold pp (1998:442.43), comparative comments O Lando 4.416 pp 272-73.

47. Bianca Bonell (Tallon) p 592: «The borderline between impracticability and a reasonably insurmountable impediment is, of course, uncertain. But if the Convention appears to refer to a more flexible standard than that of traditional force majeure, it is undoubtedly stricter than frustration or impracticability...», comp Honnold Item 432.2. (pp 543-44). (1st ed pp 442-43: commenting on delegates' suggestions in the preparatory stage to legislate on economic hardship): «The legislative history does not show that an extreme and unpredictable change in economic circumstances cannot constitute an «impediment» leading to exemption under paragraph (1). What this development does show is that Article 79 of the Convention addresses the general question of exemption...and therefore bars recourse to domestic law in this field»).

48. J Lookofsky Internationale køb (1989) p 84, comp more vague on the issue Bergem Rognlien p 615.

49. Ramberg Köplagen p 353, Hellner-Ramberg I pp 147-150, Martinussen Kj&oslas;psrett (1996) pp 77-78. Even stronger in seller's disfavour is E M Runesson p 222, stating that «Efter införandet av 19890 års köplag torde möjligheten att jänka köpeavtal på grund av ökade prestationskostnader få anses vara utesluten.»

50. J Lookofsky Køb. Dansk indenlandsk købsret (1996) p 124, possibly also Gomard op cit p 173.

51. O Lando, Udenrigshandelens kontrakter. Udenrigshandelsret I (4th ed 1991) p 274.

52. See Bergem Rognlien p 144, apparently (comp p 144) suggesting that the § 27 (1) should be interpreted more restrictively in national (including inter-Nordic) sales? The suggestion to direct the legal issue to ScFCA 1918 (1983) § 36, cfr Krüger Norsk kjøpsrett (3rd ed 1991) pp 175 et seq, is criticised by J Hellner JT 1991/92 pp 576 at p 757, cfr now 4th ed of the book (1998) pp 290 et seq. The § 36 approach, however, does not necessarily mean «soft» dilution of otherwise well protected commercial contract expectations since the discretion vested with the courts under the «generalklausul» may be exercised in a prudent way, balancing commercial policies against the need for practical solutions when contract is hit by an undisputed unforeseeable contingencies clearly out of proportion with the risk structure otherwise inherent in a normal contract situation. See as an example the sober reasoning of the «ULA» arbitration award reported in ND 1990. 204 (gas pipeline contract payment maintained in spite of undisputed radical and unexpected shift in distribution of costs and profits).

53. RG 1976. 650; arbitration panel majority accepting a price increase in a long term nafta contract hit by the 1973/73 rise in crude oil market - dissenting opinion based on construction of the contract, similarly RG 1976. 595 E (long term electricity supply contract). Compare a restrictive Danish case on the similar issue UfR 1975.588 DaHR.

54. Nørager-Nielsen Theilgaard Købeloven (2nd ed 1993) p 350 et seq.

55. That is: Provided one accepts that the matter of financial burdens to perform under seller's liability is recognised as being «expressly settled» under CISG Art 7 (2) (Norw SGA § 88 (2)). The Convention directs issues which are not expressly settled to the law applicable by virtue of the rules of private international law (cfr Convention on the law applicable to International Sales of Goods (Hague) Convention 1955-05-15 - Norw Act 1964-04-03 No 1).

56. But also the Da/Norw/Sw SGA 1905-1907 had (in Denmark still has) provisions to this effect, see now Danish SGA 1905 § 1.

57. Honnold Item 429 (p 537-38).

58. p 595.

59. Förutsätningsläran (1989).

60. Summaries cited with permission by UNCITRAL (web http://www.un.or.at/uncitral/en-index.htm), see also PACE (http://www.cisg.law.pace.edu/). These sites have references to 24 reported CISG Art 79 cases (UNCITRAL, ICC and others), but not all of them pertain to the issues discussed in this article. Some of the cases are unavailable for different reasons (translation etc): (1) Russia 17 October 1995 Arbitration proceeding 123/1992; (2): Russia 15 May 1995 Arbitration proceeding 321/1994; (3): Italy 29 March 1993 Tribunale Civile di Monza (Nuova Fucinati S.p.A. v. Fondmetall International A.B; (4) Germany 2 August 1994 Landgericht München; (5) Russia 16 March 1995 Arbitration proceeding 155/1994; (6): Israel 22 August 1993 Supreme Court (Eximin S.A. v. Textile and Footwear Italstyle Ferarri Inc.); (7) Russia 1 December 1995 Arbitration proceeding 369/1994; (8) Germany 2 October 1995 Landgericht Hamburg; (9) Hungary 10 December 1996 Budapest Arbitration proceeding Vb 96074; (10) Germany 16 November 1995 Landgericht Köln; (11) Germany 8 March 1995 Oberlandesgericht München; (12) Russia 17 November 1994 Arbitration proceeding 493/1993; (13) ICC Arbitration Case No. 6281 of 1989; (14) ICC Arbitration Case No. 6653 of 1993; (15) Germany 28 February 1997 Oberlandesgericht Hamburg; (16) Belgium 2 May 1995 Rechtbank van koophandel Hasselt (Vital Berry Marketing v. Dira-Frost); (17) Switzerland 26 April 1995 Handelsgericht Zürich; (18) ICC Arbitration Case No. 8128 of 1995; (19) Germany 14 May 1993 Landgericht Aachen; (20) Germany 12 May 1995 Amtsgericht Alsfeld; (21) ICC Arbitration Case No. 7197 of 1992; (22) Germany 21 March 1996 Hamburg Arbitration proceeding; (23) Germany 21 August 1995 Landgericht Ellwangen; (24) Austria 6 February 1996 Oberster Gerichtshof.

61. RG 1995. 81 H.

62. International sales' transaction cases (with possible CISG 1980 aspects) in Danish jurisprudence-cases reported are: UfR 1986. 104 DaHR, UfR 1988. 322 DaHR, UfR 1988. 449 DaHR, UfR 1990. 912 DaHR, cfr UfR 1992. 920 SøHa.

63. Brækhus Festskrift Bratholm 1990 p 447, A Meidell, Utenlandsk retts og voldgiftspraksis som tolkingsfaktor for internasjonale standardvilkår (1995).

64. Some Russian arbitrations are identified, but are inaccessible for lack of translation or other similar reasons.

65. In addition the PACE/UNCITRAL web-system the University of Freiburg on website address: «http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/279.htm» reports a few German decisions).

66. A free quotation from the then university assistant professor Ole Lund's lectures for the Oslo faculty law students in the 1960'ies on the Da/Norw/Sw SGA 1905-1907 § 24 generic liability issue.

67. Ramberg International Commercial Transactions (1997) pp 50 et seq. In the 1997-02-28 (Oberlandesgericht Hamburg), involving a dispute over a purchase of iron molybden from China for shipment to Rotterdam, affected by failing sub-delivery by subcontractor, the contract contained a Force Majeure clause reading: "The Sellers shall not be held responsibility if their owing to Force Majeur cause or cause fail to make delivery within the time stipulated in this Sales contract or can not deliver the goods. However, the Sellers shall inform immediately the Buyers by Telex or fax message». The court assumed that this clause did not decrease the risk scope of Art 79: «Die Haftung der Beklagten ist auch nicht gemäß Nr. 2 der Vertragsbedingungen ("Force majeur") bzw. gemäß Artikel 79 CISG ausgeschlossen. Ohne auf den Wortlaut von Nr. 2 der "Conditions" im einzelnen eingehen zu müssen, läßt sich nicht feststellen, daß diese von der Beklagten aufgestellte Klausel eine über die Regelung des Artikel 79 CISG hinausgehende Haftungsfreizeichnungsklausel für den Verkäufer enthält. Unter "Force majeur" im Sinne dieser Bestimmung sind solche Hinderungsgründe zu verstehen, die nicht in den vertraglich übernommenen Risikobereich einer Vertragspartei fallen und für den Verkäufer nicht beherrschbar sind. Damit stimmt diese vertragliche Regelung zur Haftungsbefreiung mit der Regelung in Artikel 79 CISG überein, wonach eine Vertragspartei für eine Nichterfüllung nicht einstehen muß, wenn diese auf außerhalb ihres Einflußbereiches liegenden Hinderungsgründen beruht, die nicht vermeidbar oder überwindbar sind, wobei für die Beurteilung der Vermeidbarkeit und Überwindbarkeit wiederum die vertraglich vorausgesetzte Risikoverteilung wesentlich ist (vgl. Schlechtriem-Stoll a.a.O. Art. 79 CISG Rdn. 16 ff).»

68. E M Runesson Rekonstruktion av ofullständiga avtal (1996) p 222.

69. TfR 1995. 1 at pp 140 et seq.

70. Such as apparent in global public contracting, see Kunzlik and McCrudden contributions in anthology Public Procurement: Global Revolution (ed S Arrowsmith and A Davies) (1998) pp 199 and 219, cfr also Krüger-Nielsen-Bruun European Public Contracts in a Labour Law Perspective (1998).

71. Peoples Republic of China is a member to the CISG 1980. So are Singapore (but not Japan).

72. Which is not a CISG Member.


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