Go to Database Directory || Go to Table of Contents to Annotated Text of the CISG

GUIDE TO ARTICLE 72

Comparison with Principles of European Contract Law (PECL)


Match-up of CISG Article 72 with PECL Article 9:304
CISG Article 72

(1) If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided.

(2) If time allows, the party intending to declare the contract avoided must give reasonable notice to the other party in order to permit him to provide adequate assurance of his performance.

PECL Article 9:304 [Anticipatory Non-Performance]
(complete and revised version 1998)

Where prior to the time for performance by a party it is clear that there will be a fundamental non-performance by it, the other party may terminate the contract. [page 416]

(3) The requirements of the preceding paragraph do not apply if the other party has declared that he will not perform his obligations.


Definitions

For information on the nature and effect of "termination" under the European Principles, go to the match-up with CISG art. 81 for PECL arts. 9:305 through 9:309 and the comments and notes that accompany these provisions. For the CISG counterpart to "termination " under the PECL, see "avoidance". For the PECL definition of "fundamental non-performance", see the match-up of CISG art. 25 with PECL art. 8:103.


Editorial remarks

[Section not yet available]


Comment and notes on PECL 9:304

Like the commentary to the UNIDROIT Principles and the U.S. Restatements, the comments to the PECL help explain the text. The PECL notes identify civil law and common law antecedents and related domestic provisions. With the permission of the Commission on European Contract Law, these comments and notes are presented below. The source of this material is Ole Lando & Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000) 416-419.


COMMENT AND NOTES: PECL Article 9:304: Anticipatory Non-Performance

Where prior to the time for performance by a party it is clear that there will be a fundamental non-performance by it, the other party may terminate the contract. [page 416]

Comment

A. Anticipatory non-performance equated with actual non-performance

This Article entitles the aggrieved party to terminate the contract for "anticipatory non-performance", by which is meant an obvious unwillingness or inability to perform where the failure in performance would be fundamental within Article 8:103. The right to terminate for anticipatory non-performance rests on the notion that a party to a contract cannot reasonably be expected to continue to be bound by it once it has become clear that the other party cannot or will not perform at the due date. The effect of this Article is that for the purpose of the remedy of termination an anticipatory fundamental non-performance is equated with a fundamental non-performance after performance has become due.

Illustration 1: In January B agrees to build a house for O and to start work on 1st May. In April B tells O that owing to labour troubles he will not be able to carry out the contract. O may immediately terminate the contract.

B. Threatened non-performance must be fundamental

Termination under this Article is permitted only where the obligation of which non-performance is threatened is of such kind that its breach would entitle the aggrieved party to terminate the contract. This applies also to a threatened delay in performance. If a party indicates that it will perform but that its performance will be late this does not constitute an anticipatory non-performance within this Article except where time of performance is of the essence of the contract or the threatened delay is so serious as to constitute a fundamental non-performance within Article 8:103.

Illustration 2: B has agreed to build a house to O's design. B informs O that the double glazing specified by O is no longer available but that it can install double glazing from a different supplier which is almost identical. The failure to provide the double glazing originally specified would not, in these circumstances, be a fundamental non-performance, and O therefore cannot treat B's statement as indicating an anticipatory non-performance within this Article.

Illustration 3: In January S contracts to sell goods to B for delivery on 1st March. In February S tells B that delivery will be a few days late. B can treat this as an anticipatory non-performance if time of delivery is of the essence, but not otherwise.

C. Inability or unwillingness to perform must be manifest

In order for this Article to apply it must be clear that a party is not willing or able to perform at the due date. If its behaviour merely engenders doubt as to its willingness or ability to perform the other party's remedy is to demand an assurance of performance under Article 8:105. See Illustration 1 of that Article. [page 417]

D. Remedies consequent on termination

It is implicit in this Article that a party which exercises a right to terminate the contract for anticipatory non-performance has the same rights as on termination for actual non-performance and is therefore entitled to exercise any of the remedies available under this Chapter, including damages, except that damages are not recoverable where the non-performance at the due date would be excused under Article 3.108. See Article 8:101(2).

E. Time for notification of termination

The party faced with an anticipatory non-performance may terminate the contract at any time while it remains clear that there will be a fundamental non-performance by the other party.

Notes [Match-ups with Continental and Common Law domestic rules, doctrine and jurisprudence]

1. Anticipatory repudiation a recognised doctrine

The root of this provision lies in COMMON LAW (cf. Hochster v. de La Tour (1853) E. & B. 678, Q.B.; Universal Cargo Carriers Corp v. Citati [1957] 2 Q.B. 401, Q.B.; Clark 414) and corresponds to SCOTTISH law. Unidroit art 7.3.3, art. 72(1) CISG and Art. 76 ULIS also adopt the notion of anticipatory repudiation. The FINNISH and SWEDISH Sale of Goods Acts, 61 and 62 adopt the CISG rule: see Ramberg, Köplagen, 583 ff.

2. Some equivalent rule recognized

The GERMAN BGB does not contain an express provision. However, there is unanimity that an unambiguous and definite refusal to perform is a non-performance, by analogy to BGB 280, 286, 325, 326; cf. Staudinger(-Otto), BGB 326 nos. 135 FF.. Similarly in AUSTRIA, see Rumell (-Reischauer) ABGB 918 no. 14.

Under DANISH Law the right of a party to terminate the contract in case of anticipatory non-performance is, in general, limited to cases where there is certainty, or probability amounting almost to certainty, that there will be a fundamental non-performance by the other party. This rule, however, is qualified: (1) when a buyer goes bankrupt or becomes insolvent and the time for delivery has come, the seller may terminate the contract unless security is provided (cf. 39 Sale of Goods Act; 57 Bankruptcy Act); (2) where the buyer of goods has been declared bankrupt and the administrator of the estate does not confirm the take-over of the contract within a reasonable time, the seller may terminate the contract (cf. 40 Sale of Goods Act); (3) in a sale where the goods are to be delivered in instalments and where the delay or defect in respect of one instalment or payment for one instalment amounts to a fundamental non-performance (cf. Sale of Goods Act 29: "unless there is no reason to expect a future delay"; see also 22 and 46).

In DUTCH law, BW art. 6:80 provides that the consequences of non-performance operate although the obligation is not yet due (a) if performance is not possible without breach; (b) if from a communication of the debtor the creditor cannot but conclude that there will be a breach of performance; (c) if the creditor has good reasons to fear a breach of performance by the debtor, and has not received adequate assurance of the debtor's willingness to perform.

Under GREEK law, genuine anticipatory breach exists where the debtor before the date for performance expressly declares (AP 339/1982, NoB 30 (1982) 1459 at 1460) or by conduct necessarily implies (Athens 2671/1957, EEN 25 (1958) 538-539), that he will not perform. In such situations, CC art. 385(1) equally relieves the creditor from setting an additional period of performance, and allows him the remedies for damages and termination even prior to the date of performance (Gasis Erm. AK II/1 Introd. remarks to arts. 335-348 no. 62 (1949); Georgiadis & Stathopoulos II Introd. remarks to arts. 335-348 no. 6 (1979); also cf. CC art. 686; in any case, the notice of termination, in terms of time and otherwise, may not result in an abuse of right (CC art. 281)).

In ITALIAN law CC art. 1219 provides an automatic mora debitoris if the debtor declares in writing his unwillingness to perform. The way is then open for termination. On insolvency of the debtor, see CC art. 1461. [page 418]

3. No equivalent doctrine

In contrast, there is no general rule as to termination for anticipatory non-performance in FRENCH law, SPANISH law and PORTUGUESE law. This problem has hardly been subject to academic discussion nor regulated in the Codes. In general, the law is reluctant to support the aggrieved party prior to the time of performance (cf. SPAIN: Lacruz-Delgado II, 1, 26, 200; Albaladejo II. 1, 20.4 K and M; but termination for anticipatory non-performance is possible if the defaulting party's behaviour makes it clear that performance will not take place: CC arts. 1129 and 1183). In Portuguese law, some of the results of anticipatory non-performance are reached in other ways: Soares-Ramos 195 ff.; STJ 15 March 1983, BMJ 325, 561; STJ 19 March 1985, BMJ 345, 400; STJ 19 February 1990, Act. jur., 1990. 2. 10. The same is true for BELGIUM: Cass. 5 June 1981, R.W. 1981-82, 245, R.C.J.B. 1983, 199; Cass. 15 May 1986, R.C.J.B. 1990, 106, Arr. Cass. no. 565; Vanwijck-Alexandre Nos.177 and 199 ff; M.E. Storme, Invloed no. 299 ff. [page 419]

Go to full texts of Parts I and II of Principles of European Contract Law


Pace Law School Institute of International Commercial Law - Last updated January 2, 2001
Go to PECL Bibliography || Go to PECL Schedule of Abbreviations
Comments/Contributions