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Published in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 5, pages 5-1 to 5-24. Reproduction authorized by Juris Publishing.

Impracticability and Impossibility in the U.N. Convention
on Contracts for the International Sale of Goods

by Barry Nicholas

§ 5.01 Criticism of Article 79
§ 5.02 The Definition in Paragraph (1)
            [1] The Elements
            [2] The Special Problems of Defects
            [3] Conclusion
§ 5.03 The Incompleteness of the Provision
            [1] Omission of Frustration
            [2] Inadequacy of the System of Remedies
§ 5.04 The Innovation in Paragraph (2)
§ 5.05 Conclusion

§ 5.01 Criticism of Article 79

If a critic were drawing up a list of the unsatisfactory provisions in the Convention, he would, I fear, include article 79.[1] My purpose in this paper is to consider how far [page 5-1] the critic (and I am assuming that he is a common laywer) would be justified in doing so.

He would have to concede, to begin with, that a great deal of time and effort was put into the article. A substantial part of two two-week sessions of the Working Group, supported by written submissions, was devoted to the subject,[2] followed by a long discussion by UNCITRAL itself [3] and finally by a debate at Vienna spread intermittently over four sessions of the First Committee.[4] The critic would also have to concede that there are, by comparison with the Uniform Law on International Sales of 1964 (ULIS), improvements in detail and a greater internal consistency.[5] Neither of these concessions, however, would do much to mitigate his main criticism, which would, I think, fall under two heads: (I) [infra § 5.02] He would say that the attempt in paragraph (1) to define the circumstances in which the exemption will apply has yielded a formula which is so vague that there are bound to be differences of interpretation in different jurisdictions and the prime purpose of any uniform law will in consequence be defeated. (II) [infra § 5.03] His second criticism would be that the provision is incomplete, a criticism which would itself fall into two related parts: (1) The provision is lopsided in that it deals with impossibility or impracticability, but not with frustration of purpose; (2) Its system of remedies is inadequate.

A consideration of these two (or three) criticisms will enable us to examine the merits and demerits of paragraphs (1), (3) and (5) of the article. I shall then have a little to say [page 5-2] on (III) [infra § 5.04] paragraph (2), which breaks new ground by comparison with ULIS. Paragraph (4) needs, I think, no comment. [page 5-3]

§ 5.02 The Definition in Paragraph (1)

       [1] The Elements

There are three things which the party claiming exemption has to prove. (i) The non-performance must be "due to an impediment"; (ii) the impediment must have been "beyond his control"; (iii) it must be one which he could not reasonably have been expected to take into account when the contract was made and which (or the consequences of which) he could not reasonably have been expected to avoid or overcome. This is obviously not the language of the common law; it echoes in fact that of French law [6] and the systems derived from it, which speak in terms of force majeure or the like as a justification or excuse for non-performance; and force majeure is characterized as unforeseeable, insurmountable, irresistible. But the common lawyer should have no difficulty in working with this concept. By comparison with ULIS,[7] which adopts the same approach, the article does indeed dispense with the criterion of the intention of the parties and replaces the question whether the impediment was foreseeable by the question whether it was one which the non-performing party should have taken into account, but this is all in keeping with current thinking in the common law.[8] The critic should have nothing therefore to complain about here. He is more likely to say that the weak element of the three is the first: the requirement that the non-performance be "due to an impediment." Both "due to" and "impediment" are elastic words, which may embrace much or little. They provide, it can be [page 5-4] said, no guidance to the courts which will have to interpret the provision.

Elastic words are obviously more undesirable in an international enactment than in a national one. A national enactment is drafted against a background of one system of law and the draftsman can fairly confidently predict how his text will be understood by the courts, particularly if he uses words which have already acquired a patina of legal meaning. An international enactment, on the other hand, has no such background or context. Or rather it has as many backgrounds as there are legal systems within which it may be applied. The objection to elastic words like "due to an impediment" is therefore that they will be read in the context of each system's view of the limits within which an excuse of this kind should be admitted.

And it is certain that there are differences of attitude and emphasis between different systems.[9] French law is very strict in the matter of frustration or imprévision, whereas German and Swiss law probably stand at the other extreme, with the common law systems in the middle. But even within a single system there are differences between the formulation of the law and its application. Thus an English lawyer coming uninstructed to § 2-615 of the Uniform Commercial Code or to chapter 11 of the Restatement (Second) of [page 5-5] Contracts with their use of unfamiliar, and to him alarmingly elastic, words like "impracticable" or "occurrence of contingency" or "performance [which] would be materially more burdensome," is surprised to find how little the actual decisions diverge from what he would have expected at home. Again, French law is in its verbal formulation very strict in the matter of force majeure. The Cour de cassation insists that performance must be impossible, but individual decisions are sometimes more lenient than this would suggest [10] -- certainly more lenient than would be countenanced in England.

The truth is that every system acquires its familiar phrases, which serve to identify the kinds of situation in which the courts will act. What predictability of meaning these phrases have derives from their past application or discussion in the literature, rather than from any intrinsic meaning of their own. I have already referred to the terms used by the Uniform Commercial Code and the Restatement (Second). English law has of course nothing to correspond to these, but English judges (thinking in terms of frustration rather than of impossibility or impracticability) often use formulae declaring that the difference between the performance originally promised and the performance now expected must be one of kind as opposed to simply of degree, or must be a radical difference,[11] just as Comment 4 to UCC § 2-615 [page 5-6] speaks of an alteration in "the essential nature of the performance." For practical purposes; however, such terms are no more helpful than those in article 79. German law, as befits a system with great powers of abstraction, has been particularly fertile in the creation of general theories in this area, but one is inclined to agree with Zweigert and Kötz [12] that the only use of such general theories is "to give the courts phrases in which to dress up the really material considerations."

But should one not attempt to indicate to some extent what those material considerations are? We should probably all agree that what a court is doing when it applies a provision such as article 79 is to determine which party ought to bear the risk of the occurrence which has given rise to the dispute.[13] And indeed it was suggested at an early stage in the drafting of the Convention [14] that the article should be expressed in terms of risk allocation, but the general view was [15] that this was an analysis of the result to be achieved rather than a tool with which the courts could achieve that result. In the context of a single system, in which the courts share a common set of pre-suppositions about policy, it might perhaps be sufficient to say that a court should decide in whose sphere of risk the occurrence lay, without indicating what matters the court should take into account in making that decision, but in an international [page 5-7] context such a formula merely shifts the uncertainty. This becomes obvious if one considers the economic approach to risk allocation, which finds, I think, a good deal of current favor in this country.[16] I am no economist, but I cannot imagine that the economic doctrines of a free enterprise, capitalist economy would find an exact echo within a state-trading, socialist system.

The purpose of the law, in a situation in which ex hypothesi the parties have expressed no intention, should be (as a very useful paper by the Ontario Law Reform [page 5-8] Commission [17] puts it) to give effect to reasonable expectations. And in doing so it must necessarily take account of the terms of the contract, the whole context in which it was made and current trade practices in the areas concerned. This, I take it, is what an American court is doing when, in applying § 2-615 of the UCC (or § 281 of Restatement (Second)) it asks itself whether the non-occurrence of the contingency or event with which it is concerned "was a basic assumption on which the contract was made." And this, one hopes, is what a court applying article 79 of the Convention will do when it asks whether the "impediment beyond his control" was one which the party "could not reasonably be expected to have taken ... into account ... or to have avoided or overcome ... ." Here the need to decide what is a "reasonable expectation" is indeed expressly stated. And in arriving at its decision a court is required by the Convention to have regard "to the need to promote uniformity" in the application of the Convention (article 7) and to give effect to the usages of the particular trade concerned, within the limits laid down in article 9. As Professor Honnold [18] says in his commentary on article 79, it would be reasonable to have regard to established contractual patterns and to other evidence such as the General Conditions worked out by the U.N. Economic Commission for Europe.

If you have followed me so far, you will see that the conclusion to which I am coming is that the important elements in paragraph (1) are the test of reasonable expectation and the requirement that the impediment be beyond the party's contro1. The words "due to an impediment" are indeed vague, but this degree of vagueness is unavoidably present in any such formula. In a very recent article in the [page 5-9] American Journal of Comparative Law [19] Professor Eörsi makes some wise and witty observations on the futility of attempting to define broad concepts. He is referring to the definition of fundamental breach in article 25 of the Convention, but what he says is equally applicable to our paragraph (1). He observes, if I may crudely paraphrase his argument, that there are always some who hope that by multiplying words they may succeed in defining the indefinable and others, like himself, who know that this is futile. The ebb and flow of the battle is charted by the number of words used in the definition and it is a matter of chance where the battleline stands when final agreement is reached. If one applies what I may call the Eörsi test to our paragraph (1), one finds that it is at least better than its predecessors. It used 62 words, against 72 in the 1978 text and 89 in ULIS.

       [2] The Special Problem of Defects

I have just said that the word "impediment" is unavoidably vague, and yet paradoxically its choice was the result of much discussion in the Working Group, arising out of a widely shared desire to ensure that article 79 could not be used by a seller to escape his liability for defective performance, and in particular defects of quality, by pleading that they were beyond his control and that he could not have been expected to take them into account. This possibility might arise if, for example, in the state of technical knowledge as it was when the contract was made, the defect could not have been detected.

The question whether the exemption should apply in such a case was a subject of controversy at the Hague Conference in 1964,[20] some civil law states, and in particular the Federal [page 5-10] Republic of Germany, being concerned that it should do so. The issue turned eventually on the choice between the word "obstacle" and the word "circumstances." Those who wished to ensure that the paragraph could not apply to the delivery of non-conforming goods argued for "obstacle"; for that word, it was thought, suggested an event which was both subsequent to the conclusion of the contract and external to the seller and the goods, whereas a defect must be internal and must (if the seller is to be responsible for it) have existed when the contract was made (or at least when the risk passed). "Circumstances," on the other hand, could more easily be understood as embracing the existence of defects. The verdict in 1964 went in favor of "circumstances," but the question was revived in the discussions of the UNCITRAL Working Group [21] and the word "impediment" was adopted as denoting, like "obstacle," an external barrier to performance, rather than an aspect of that performance; and no attempt was made at subsequent stages of the drafting of the article to go back on this choice. The intention of the draftsmen is therefore clear enough, but it has been said that there is disagreement among commentators. Thus Professor Huber [22] in his examination of the 1978 text (which, as far as this question is concerned, is identical with the final text) found that the changes from "circumstances" in the ULIS text to "impediment," though the difference between the two had been the subject of so much argument, was without significance. A defect present in the goods at the time of the contract could, in Professor Huber's view, be an impediment to the performance of the seller's obligation to deliver conforming goods (article 35). Professor Schlechtriem does not expressly deal with the question in his valuable commentary on the Convention, but I have the [page 5-11] impression that he would agree with Professor Huber.[23]

Of course it comes. as something of a surprise to the common lawyer that anyone should think that impracticability could ever be an excuse for breach of what he would call the implied warranty of merchantability. It is worth inquiring briefly why this is so, since we shall find once again that the interpretations adopted by Professor Huber on the one hand and on the other hand by a common lawyer reflect the pre-suppositions with which each approaches the text. The fundamental reason for the difference of approach is that the common lawyer starts from strict liability whereas the civil lawyer, and especially the German lawyer, starts from fault liability.[24] The result of this is that although an attempt to express article 79 in terms of fault was fairly early abandoned,[25] a German lawyer may still, I think, see it as an expression of strict liability only to the extent that the burden of proof of fault is reversed,[26] the party in breach [page 5-12] being required to prove the absence of fault, as with the French obligation de résultat, whereas the common lawyer sees it as a statement of objective exonerating circumstances. In most cases this difference of approach is of no great consequence, but in the case of liability for defects its practical importance becomes apparent. The common lawyer does not, I think, see a warranty in the traditional sense as a promise of performance which is capable of becoming impossible or impracticable or of being frustrated. It is not a promise of a performance, but a guarantee of a fact and it is of the essence of a guarantee that impossibility is irrelevant to it.[27] This is equally true, of course, of the obligation de garantie of French law [28] or the Gewährleistung of German law.[29] But in German law if the sale is of generic goods -- as many international sales are -- the presence of a defect can be seen in the alternative either as giving rise to a claim on the guarantee, or as a defective performance of the contract and therefore governed by the principle of fault.[30] If one looks at the Convention from this point of view one finds that the provision on defects in the goods (article 35) is indeed expressed as an aspect of the obligation to perform: "The seller must deliver goods which are of the quantity, quality and description required by the contract ... ." There is no talk of warranties or guarantees.

There is therefore no ground for the common lawyer's initial surprise at the idea of applying article 79 to the matter of defects. The only question is whether the requirement of an "impediment" excludes it. Even leaving aside the legislative history, I find it less easy than Professor Huber does to answer this question in the negative. To take the case of a defect which in the state of technical knowledge existing at the time of the contract was not discoverable, the seller has [page 5-13] presumably to say that his failure to perform his obligation of delivering goods of the quality required is due to an impediment consisting in his ignorance of the defect (an ignorance which was beyond his control, etc. because of the state of technical knowledge). But if the seller's state of mind can constitute an impediment, article 79 is simply a statement of fault liability with the burden of proof reversed. Professor Huber indeed treats the defect itself as the impediment. This involves saying that the seller cannot deliver conforming goods because of an impediment consisting in their not being conforming. In other words the seller is not liable for defects in the goods if he can show that the defects were beyond his control, etc.

       [3] Conclusion

In sum, my answer to our hypothetical critic is a confession and avoidance.

Yes, the wording of the paragraph is vague or imprecise, but it is in the nature of definitions of this kind to be imprecise. The important thing is that national courts should see the article in the context of the Convention as a whole and of the practices of international trade. As far as "impediment" is concerned, if the paragraph is read in the context of the strict liability approach of the Convention as a whole and in the light of the legislative history, I submit that the word must indicate a barrier to performance which is external to the party and the thing concerned. Beyond this the main burden of the paragraph must be borne by the requirement that the impediment be beyond his control and especially by what I have called the test of reasonable expectation. The more sophisticated and widespread international commerce becomes, the more difficult it is to say that a party could not reasonably have been expected to take an impediment into account.[31] This is reflected in the [page 5-14] paucity of successful cases under § 2-615 of the Uniform Commercial Code.[32] [page 5-15]

§ 5.03 The Incompleteness of the Provision

The second objection of our hypothetical critic is that article 79 is incomplete. It does not deal with all the questions which arise out of the situation with which it purports to deal. This criticism itself falls into two parts.

       [1] Omission of Frustration

The American common law has the merit, by comparison with the common law of England and the Commonwealth, of keeping a clear distinction between impossibility or impracticability of performance [33] and frustration of purpose.[34] Article 79 provides for the former, but not for the latter.[35] This can be illustrated by a hypothetical case which I borrow from Professor Honnold's unpublished teaching materials on this subject. In January 1981 Seller agrees to manufacture and supply equipment to Buyer's specification at a price specified, delivery to be made by June 1, 1981. Both parties understand that the equipment can only be produced at Seller's factory at X. On February 1, 1981 this factory is destroyed by fire. In response to Buyer's inquiry, Seller says that the factory will be rebuilt by December 1982. If one assumes that the fire was beyond Seller's control and that it passes the test of reasonable expectation, Seller is exempted by paragraph (1) from liability in damages for the delay in performance. Paragraph (5) preserves Buyer's right to avoid the contract if the prospective delay constitutes a fundamental breach; and it will constitute such a breach if, in the words of article 25, it substantially deprives Buyer of what he is entitled to expect. But the article provides Seller with no complementary protection. He has no right to avoid the contract if, owing to changed circumstances (for example, [page 5-16] enormous cost increases) performance in December 1982 would be radically different from performance in June 1981. Seller can, of course, argue that the increase in costs is an impediment which exempts him from liability for non-performance in December 1982, but this is unlikely to help him. In the first place, it is very improbable that a court will allow an increase in costs by itself to be an impediment [36] (as opposed to an increase in costs resulting from another impediment, in this case the fire). And in the second place, as we shall see,[37] Buyer may in any case be able to claim specific performance.

A proposal was indeed made at Vienna [38] to add to paragraph (3) a provision that the non-performing party (Seller in our example) should be permanently exempted if at the end of the period of temporary exemption circumstances had "so radically changed that it would be manifestly unreasonable to hold him liable." The proposal was, however, rejected (as similar proposals had been rejected at earlier stages in the drafting of the Convention), apparently out of a reluctance to embark on the problems of frustration or imprévision.

As a palliative, however, it was agreed [39] to delete the word "only," which until then had stood in the text after "has effect." The intention behind this amendment was to leave open the possibility that the exemption might continue even after the period during which the exemption existed. [page 5-17]

The paragraph therefore might be read as if it said something like the following: "The exemption has effect for the period during which the impediment exists and may have permanent effect if after the impediment has ceased to exist the circumstances have so radically changed that it would be manifestly unreasonable to hold the non-performing party liable." You may well think that this was the most pregnant deletion of a single word that was ever made. I certainly cannot imagine that any court would arrive at this interpretation without the assistance of the legislative history. It has to be said, however, that even if the non-performing party persuades the court to adopt this interpretation, he may find that, though he is indeed exempt from liability in damages, he may still be compelled to perform. This is our next problem.

       [2] Inadequacy of the System of Remedies

Our critic would say that the system of remedies is inadequate in two ways: (i) paragraph (5) leaves unaffected every remedy except that of damages, and (ii) a system of remedies devised for (in common law terms) breach of contract is inadequate for situations in which there has been no breach.

Paragraph (5) restricts the effect of the exemption created by the article to the action for damages. In other words, when paragraph (1) says "A party is not liable ...," it means that he is not liable in damages.[40] All the other party's remedies are unaffected. The remedies in question [page 5-18] are, in case of non-performance by the seller,[41] to avoid the contract, to compel performance or, in case of non-conformity, to reduce the price. Reduction of the price poses no problem and the right to avoid the contract" is useful, as we have seen,[42] in enabling the buyer to bring the contract to an end where the non-performance by the seller is so extensive as to amount to fundamental breach. It is the right to compel performance that presents the difficulty. Of course insofar as the impediment makes performance actually impossible, there can be no specific enforcement; but if performance is physically possible, but impracticable within the meaning of paragraph (1), we have the curious result that the seller is not liable in damages for not performing and yet can be compelled to perform. In practical terms, as Professor Schlechtriem points out,[43] this may mean that national courts may impose penalties for non-compliance with an order for performance and that those penalties may exceed the amount of the damages in respect of which the seller is exempt. The Convention will then in effect be saying to the seller: "You are exempt from paying damages for your non-performance, but you are required to pay an even larger sum by way of penalty for the same non-performance." It might well be thought that this paradoxical position resulted from an oversight by the draftsmen. This was indeed what Professor Huber thought [44] when he read the 1978 text, but an attempt at Vienna [45] to exclude from paragraph (5) the right to compel performance was defeated. The opposition seemed to rest partly on the assumption (which comes more easily to a civil lawyer than to a common lawyer) that if an action for performance will not lie there can be no obligation [page 5-19] to perform, and therefore that to exclude the action for performance in the case of a merely temporary impediment would result in total extinction of the obligation. Another reason, also deriving, I think, from the assumption that the action for performance and the obligation to perform are inseparably linked, was the fear that accessory rights and the right to claim interest would disappear.

I have been speaking in terms of remedies for the seller's non-performance, since the exemption is more likely to affect the seller than the buyer, but in principle at least the same problem can affect the buyer, since, as Professor Honnold points out,[46] the action for the price under the Convention is, contrary to common law ideas, an action to compel performance.

In sum, in this case I have to admit that our critic's objection to the Convention is well-founded.

The system of remedies is ill-adapted to the situation dealt with in article 79. The remedies, of course, are simply the general remedies for the kind of non-performance which a common lawyer calls breach of contract, whereas in article 79 we are not dealing with breach. We are concerned with adjusting the rights of two innocent parties. The problems are those of balancing benefits received against expenses incurred, problems which are normally thought of in the context of the law of restitution,[47] but call for the exercise of a greater degree of judicial discretion than is found in normal restitutionary remedies.[48]

Should the Convention have provided special remedies? This is too complex a question to deal with here. I have [page 5-20] attempted to do so to some extent elsewhere.[49] I confine myself here to saying that we are faced with what I may call the problem of the seamless web. No piece of legislation can be entirely self-contained. The Convention attempts to cut out from the web of national law one area dealing with the sale of goods, but beyond the edges of that area there remains national law, the proper law of the contract. Where the cut should come is a question about which opinions will differ. The Working Group was invited to deal with this question, but decided not to do so.[50] One may regret this decision, but there can be no doubt that to have devised a special system of remedies would have added considerably to the period of gestation of the Convention.

Here too therefore there is room in reply to our critic for a confession and avoidance. But, to revert to the metaphor of the web, I could wish that the edges were less frayed. [page 5-21]

§ 5.04 The Innovation in Paragraph (2)

I come finally to paragraph (2), which has no parallel in ULIS nor, as far as I know (but I have made not very careful inquiry), in national systems. The purpose of the paragraph is to limit the extent to which the non-performing party can invoke the failure of a sub-contractor as an impediment for the purposes of paragraph (1). Suppose that Seller contracts to make and supply a machine to Buyer's specification and that he sub-contracts to X the making of one of the component parts. Suppose further that X has a high reputation in the trade, but nevertheless fails to deliver the component in time. It is not sufficient for Seller to say that X's production process is beyond his control and that he could not reasonably have been expected to anticipate X's failure to overcome it. He must also show that X's failure was beyond X's own control and that X could not have been expected to anticipate or overcome it.

This is obviously, in principle at least, a considerable tightening of the limits of the excuse. But there is an area of uncertainty. I have spoken of a sub-contractor, and this was the word used in the Working Group's draft. The present formulation, "a third person whom he has engaged to perform the whole or a part of the contract," was adopted because the term "sub-contractor" seemed likely to cause difficulty in some systems.[51] But the intended meaning was the same.[52] A distinction is drawn between a sub-contractor and a general supplier. If, to take a variant of the example which we have just considered, Seller buys in raw materials or ready-made parts from X, who fails to deliver, he is able to invoke X's failure, provided it is outside Seller's control and Seller could not reasonably have been expected, etc., even though it was within X's control and X could reasonably [page 5-22] have been expected, etc. It will not be easy, of course, for Seller to show that he could not have exercised more care in choosing or controlling X as his supplier and that he could not have obtained his supplies in time elsewhere, but there is undoubtedly a less strict limit on Seller's exemption. The difference between a sub-contractor and a general supplier may therefore in exceptional cases be important. [page 5-23]

§ 5.05 Conclusion

The conclusion to which I come is that there are indeed defects, under the second of our critic's headings, which seriously mar the article and of which those who draft contracts should take account as far as possible; but that in general it establishes an adequate framework, provided that the courts read it in the context not only of the particular contract itself, but also of the practices of international trade. And, I would add, provided that they resist the suggestion that the article can yield an excuse for non-conformity. [page 5-24]


FOOTNOTES

1. Section IV of the Convention contains two articles under the heading "Exemptions." See Appendix, arts. 79 and 80.

The proposition in art. 80 is self-evident and applies throughout the Convention; see J. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention § 438 (1982).

2. 5 UNCITRAL Yearbook 39-40, 66-68, 79 (1974): 6 id. 60-61, 84-87, 106 (1975).

3. 8 id. 56-57, 135, 158-160 (1977).

4. U.N. Conference on Contracts for the International Sales of Goods, Official Records 378-387, 393, 408-412.

5. See Nicholas, Force Majeure and Frustration, 27 Am. J. Comp. L. 231 (1979).

6. B. Nicholas, French Law of Contract 193-204 (1982); 2 K. Zweigert & H. Kötz, An Introduction to Comparative Law 167-174 (1977); David, Frustration of Contract in French Law, 28(3) J. Comp. Leg. (3d ser.) 11 (1946).

7. Art. 74(1).

8. E.g., E. A. Farnsworth, Contracts 686-689 (1982); J.J. White & R.S. Summers, Uniform Commercial Code 129-131 (2d ed. 1980).

9. There are many studies. See 2 Zweigert & Kötz, op. cit. supra note 6, at 159-207, with references; Smit, Frustration of Contract: A Comparative Attempt at Consolidation, 58 Column. L. Rev. 287 (1958); Some Problems of Non-Performance and Force Majeure in International Contracts of Sale (International Association of Legal Science Colloquium, Helsinki, 20-22 June 1960) (1961); Rapsomanikis, Frustration of Contract in International Trade Law and Comparative Law, 18 Duquesne L. Rev. 551 (1980). On Scandinavian law, see Rodhe, Adjustment of Contracts on Account of Changed Conditions, 3 Scandinavian Studies in Law 153 (1959); Hellner, The Influence of the German Doctrine of Impossibility on Swedish Sales Law, in 2 Ius Privatum Gentium (Festschrift für Max Rheinstein) 705 (1969). On Soviet law, see Armstrong, The Problem of Autonomy in Soviet International Contract Law, 31 Am. J. Comp. L. 63, 81-93 (1983).

10. Some Problems, etc., op. cit. supra note 9, at 254 (remarks by Tunc); Nicholas, op. cit. supra note 6, at 197, 200-20l.

11. See, for example, Davis Contractors Ltd. v. Fareham Urban District Council, [1956] A.C. 696, 724, 729 (H.L.). They have also sometimes cloaked their thoughts in what is now the decent obscurity of a learned language by using the tag "non haec in foedera veni" ("it was not into this agreement that I entered"). It has been remarked that the tag is ill-chosen, since it comes from the speech in which Aeneas tries to justify his jilting and desertion of Dido (Aeneid, IV, 338-339). In fact, Aeneas pleads in the alternative, a procedure which is never very convincing outside a law court. He first denies that he ever agreed to marry her (and this is where the tag comes in) and then pleads the intervention of Jupiter, who has just sent peremptory word that Aeneas must resume his travels and fulfil his destiny. This no doubt was an impediment beyond his control, though hardly one which he could not have been expected to take into account at the time of the conclusion of the contract.

12. Op. cit. supra note 6, at 193; but see also id. at 206.

13. Patterson, The Apportionment of Business Risks Through Legal Devices, 24 Colum. L. Rev. 335 (1924); Restatement (Second) of Contracts, Introduction to Chap. 11; P.S. Atiyah, Introduction to the Law of Contract 211 (3d ed. 1981); Swan, The Allocation of Risk in the Analysis of Mistake and Frustration, in B.J. Reiter & J. Swan, eds., Studies in Contract Law 181 (1980); Zweigert & Kötz, op. cit. supra note 6, at 194.

14. 5 UNCITRAL Yearbook 79 (1974).

15. Id. at 39.

16. Birmingham, A Second look at the Suez Canal Cases: Excuse for Non-performance in the Light of Economic Theory, 20 Hastings L. J. 1393 (1969); Schlegel, Of Nuts and Ships and Sealing Wax, Suez, and Frustrating Things-The Doctrine of Impossibility of Performance, 23 Rutgers L. Rev. 419 (1969); Ashley, The Economic Implications of the Doctrine of Impossibility, 26 Hastings L.J. 1251 (1975); Posner & Rosenfield, Impossibility and Related Doctrines in Contract Law: An Economic Analysis, 6 J. Leg. Stud. 83 (1977). Even within the free enterprise context some expressions of the economic approach are as doctrinaire in their way as the expressions of the will theory of a century ago. The maximization of the free will of the individual is transposed into economic terms as the maximization of the efficiency of the exchange, but the approach is equally a priori. Thus Posner & Rosenfield, supra at 89, say: "Since the object of most voluntary exchanges is to increase value or efficiency, contracting parties may be assumed to desire a set of contract terms that will maximize the value of the exchange. It is true that each party is interested only in the value of the contract to it. However, the more efficiently the exchange is structured, the larger is the potential profit of the contract for the parties to divide between them." This seems just as artificial as the implied term. If the parties have not provided for the contingency, we must postulate a model economic man and say that the parties "should be presumed to be intending to allocate the risks as he would have done"; cf. Reiter, Comment, 56 Can. B. Rev. 98, 107-114 (1978). Again, whereas a distribution of the loss among the loss-causing agencies is easily intelligible in the law of torts, it is difficult to make a similar allocation in a contract case or to say which party occasions the loss or provides the setting for it; see McCamus, The Doctrine of Frustration in the Law of Sales 32-33 (research paper published in 3 Ontario Law Reform Commission, Report: Sale of Goods Project 201 (1979)).

17. McCamus, supra note 16.

18. Op. cit. supra note 1, at 430-432; cf. Berman, Excuse for Non-performance in the Light of Contract Practices in International Trade, 63 Colum. L. Rev. 1413 (1963); Reiter, supra note 16, at 107; P. Schlechtriem, Einheitliches UN-Kaufrecht 95 (1981).

19. A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods, 31 Am. J. Comp. L. 333 (1983).

20. Honnold, op. cit. supra note 1, at § 427; Riese, Die Haager Konferenz über die internationale Vereinheitlichung des Kaufrechts, 29 RabelsZ 1, 53-55,79-81 (1965); H. Dölle, ed., Kommentar zum Einheitlichen Kaufrecht 454 (1976).

21. 5 UNCITRAL Yearbook 39-40 (1974); 6 id. 60-61 (1975).

22. Die UNCITRAL-Entwurf eines Übereinkommens über international Warenkaufvertrage, 43 RabelsZ 413, 165 (1979).

23. Schlechtriem, op. cit. supra note 18, at 97.

24. N. Horn, H. Kötz & H. Leser, German Private and Commercial Law 112-114 (1982); Nicholas, op. cit. supra note 6, at 30-31, 48-54; 2 Zweigert & Kötz, op. cit. supra note 6, at 160-164. Another reason, at least for the common lawyer from England or the Commonwealth, who subsumes impossibility and impractibility under the wider heading of frustration, is that he thinks in terms of frustration of the whole contract and has difficulty in applying it to a single obligation or promise, whereas article 79 explicitly refers to "any of his obligations"; cf. Nicholas, supra note 5, at 235-237.

25. Early drafts paid formal homage to the fault principle by requiring that the impediment should have occurred without the fault of the party claiming the exemption, but balanced this by providing that he should be deemed to have been at fault unless he proved that he could not reasonably have been expected to have taken the impediment into account (6 UNCITRAL Yearbook 68 (1975)). This circuity was later removed (8 id. 56 (1977)). Fault plays an important practical role in the Soviet law of contract. Johnson, No Liability Without Fault - The Soviet View, 20 Current Legal Problems 165, 170-179 (1967).

26. As in effect it is in German law (BGB §§ 282, 285). Professor Huber indeed finds the German law stated better in the Convention than in the BGB. Supra note 22, at 466.

27. Nicholas, Rules and Terms -- Civil Law and Common Law, 48 Tul. L. Rev. 946, 966-969 (1974).

28. C. civ. arts. 1625-1649.

29. BGB §§ 459-493.

30. 2 Zweigert & Kötz, op. cit. supra note 6, at 167.

31. White & Summers, op. cit. supra note 8, at 133.

32. Wallach, The Excuse Defense in the Law of Contracts: Judicial Frustration of the UCC Attempt to Liberalize the Law of Commercial Impracticability, 55 Notre Dame Lawyer 203 (1979); R.S. Duesenberg & L.P. King, Sales and Bulk Transfers under the Uniform Commercial Code § 14.13[3].

33. Restatement (Second) of Contracts §§ 281-284.

34. Id. § 285.

35. Feltham, The U.N. Convention on Contracts for the International Sale of Goods, [1981] J. Bus. L. 346, 359.

36. White & Summers, op. cit. supra note 8, at 131-132, with reference; also Comment 4 on DCC § 2-615. In Brauer & Co. (Great Britain) Ltd. v. Clark (James)(Brush Materials) Ltd., [1952] 2 All. E.R. 497 (C.A.), a seller was held not to be excused by a force majeure clause when the grant of an export license was made subject to a payment by him which would exceed what he was entitled to claim from the buyer, but it was suggested that it might have been otherwise if he had had to pay a hundred times as much. Id. at 500, 50l.

37. Infra [2].

38. Official Records 381-382.

39. Id. paras. 53, 69, 70.

40. The legislative history is curious. The Working Group's draft of paragraph (1) had "is not liable in damages." When the draft was considered by UNCITRAL, a proposal was successfully made to delete "in damages" for the reasons set out here. And yet when paragraph (5) was considered, it was agreed that any remedy remained available to either party except the action for damages. 8 UNCITRAL Yearbook 56, 57 (paras. 434-437, 455-456) (1977).

41. See arts. 45-52. The question is considered here in terms of non-performance by the seller, but the same applies in principle to non performance by the buyer. See infra text at note 46.

42. Supra § 5.03[1].

43. Op. cit. supra note 18, at 97.

44. Supra note 22, at 467.

45. Official Records 383-385.

46. Op. cit. supra note 1, at § 348.

47. G.E. Palmer, The Law of Restitution §§ 7.4-7.7, 7.9.

48. E.A. Farnsworth, Contracts 704-705 (1982); Restatement (Second) of Contracts § 272; Law Reform (Frustrated Contracts) Act 1943; cf. Law Reform Commission of New South Wales, Report on Frustrated Contracts (1976).

49. Supra note 5, at 241-245; 6 UNCITRAL Yearbook 84-87 (1975).

50. 6 UNCITRAL Yearbook 60-61 (1975).

51. 8 id. 56 (para. 448) (1977).

52. There was some confusion at Vienna over the practical effect of the paragraph, some delegates interpreting it as an extension of the seller's exemption; cf. Schlechtriem, op. cit. supra note 18, at 98.


Pace Law School Institute of International Commercial Law - Last updated December 10, 2004
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