|
|
The Principles Of European Contract
Law 2002
(Parts I, II, and III)
copy @ lexmercatoria.org
Generated by SiSU www.jus.uio.no/sisu
www.sisudoc.org
Generated by SiSU [ SiSU 0.69.0-beta of 2008w34/4 ] www.jus.uio.no/sisu
Copyright © 1997, current 2008 Ralph Amissah, All Rights Reserved.
SiSU is software for document structuring, publishing and search (with object citation numbering),
www.sisudoc.org
SiSU is released under GPL 3 or later, <http://www.fsf.org/licenses/gpl.html>.
Document information:
sourcefile eu.contract.principles.parts.1.to.3.2002.sst
Generated by SiSU www.jus.uio.no/sisu
version information: SiSU 0.69.0-beta of 2008w34/4
For alternative output formats of this document check:
<http://www.jus.uio.no/lm//eu.con ... /sisu_manifest.html>
SiSU lexmercatoria.org ii
Contents
Contents
THE PRINCIPLES OF EUROPEAN CONTRACT LAW - Parts I and II revised
1998
(Parts I and II revised 1998, Part III 2002) 1
CHAPTER 1 - GENERAL PROVISIONS 1
Section 1 - Scope of the Principles 1
Article 1:101 (ex art. 1.101) - Application of the Principles . . . . . . . . . . . . 1
Article 1:102 - Freedom of contract . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1:103 - Mandatory Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1:104 - Application to questions of consent . . . . . . . . . . . . . . . . . 1
Article 1:105 (ex art. 1.103) - Usages and Practices . . . . . . . . . . . . . . . . 2
Article 1:106 (ex art. 1.104) - Interpretation and Supplementation . . . . . . . . 2
Article 1:107 (ex Art. 1.113) - Application of the Principles by Way of Analogy 2
Section 2 - General Obligations 2
Article 1:201 (ex art. 1.106) - Good Faith and Fair Dealing . . . . . . . . . . . . 2
Article 1:202 (ex art. 1.107) - Duty to Co-operate . . . . . . . . . . . . . . . . . 2
Section 3 - Terminology and Other Provisions 3
Article 1:301 (ex art. 1.105) - Meaning of Terms . . . . . . . . . . . . . . . . . . 3
Article 1:302 (ex art. 1.108) - Reasonableness . . . . . . . . . . . . . . . . . . . 3
Article 1:303 (ex art. 1.110) - Notice . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 1:304 (ex art. 1.111) - Computation of Time . . . . . . . . . . . . . . . . 4
Article 1:305 (ex art. 1.109) - Imputed Knowledge and Intention . . . . . . . . . 4
CHAPTER 2 - FORMATION 4
Section 1 - General Provisions 4
Article 2:101 (ex art. 5.101) - Conditions for the Conclusion of a Contract . . . 4
Article 2:102 (ex art. 5.102) - Intention . . . . . . . . . . . . . . . . . . . . . . . 5
Article 2:103 (ex art. 5.103) - Sufficient Agreement . . . . . . . . . . . . . . . . 5
Article 2:104 (ex art. 5.103 A) - Terms not individually negotiated . . . . . . . 5
Article 2:105 (ex art. 5.106 A) - Merger Clause . . . . . . . . . . . . . . . . . . 5
Article 2:106 (ex art. 5.106 B) - Written Modification only . . . . . . . . . . . . 6
Article 2:107 (ex art. 5.108) - Promises binding without acceptance . . . . . . . 6
Section 2 - Offer and Acceptance 6
Article 2:201 (ex art. 5.201) - Offer . . . . . . . . . . . . . . . . . . . . . . . . . 6
Article 2:202 (ex art. 5.202) - Revocation of an Offer . . . . . . . . . . . . . . . 6
Article 2:203 (ex art. 5.203) - Lapse of an Offer . . . . . . . . . . . . . . . . . . 6
Article 2:204 (ex art. 5.204) - Acceptance . . . . . . . . . . . . . . . . . . . . . 7
Article 2:205 (ex art. 5.205) - Time of Conclusion of the Contract . . . . . . . . 7
SiSU lexmercatoria.org iii
Contents
Article 2:206 (ex art. 5.206) - Time Limit for Acceptance . . . . . . . . . . . . . 7
Article 2:207 (ex art. 5.208) - Late Acceptance . . . . . . . . . . . . . . . . . . . 7
Article 2:208 (ex art. 5.209) - Modified Acceptance . . . . . . . . . . . . . . . . 7
Article 2:209 (ex art. 5.210) - Conflicting General conditions . . . . . . . . . . . 8
Article 2:210 (ex art. 5.211) - Professional's written confirmation . . . . . . . . 8
Article 2:211 (ex art. 5.212) - Contracts not Concluded through Offer and
Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3 - Liability for negotiations 9
Article 2:301 (ex art. 5.301) - Negotiations Contrary to Good Faith . . . . . . . 9
Article 2:302 (ex art. 5.302) - Breach of Confidentiality . . . . . . . . . . . . . . 9
CHAPTER 3 - AUTHORITY OF AGENTS 9
Section 1 - General Provisions 9
Article 3:101 - Scope of the Chapter . . . . . . . . . . . . . . . . . . . . . . . . 9
Article 3:102 - Categories of Representation . . . . . . . . . . . . . . . . . . . . 9
Section 2 - Direct Representation 10
Article 3:201 - Express, implied and apparent authority . . . . . . . . . . . . . . 10
Article 3:202 - Agent acting in exercise of his authority . . . . . . . . . . . . . . 10
Article 3:203 - Unidentified Principal . . . . . . . . . . . . . . . . . . . . . . . . 10
Article 3:204 - Agent acting without or outside his authority . . . . . . . . . . . 10
Article 3:205 - Conflict of Interests . . . . . . . . . . . . . . . . . . . . . . . . . 10
Article 3:206 - Subagency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Article 3:207 - Ratification by Principal . . . . . . . . . . . . . . . . . . . . . . 11
Article 3:208 - Third Party's Right with Respect to Confirmation of Authority . 11
Article 3:209 - Duration of Authority . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3 - Indirect Representation 12
Article 3:301 - Intermediaries not acting in the name of a Principal . . . . . . . 12
Article 3:302 - Intermediary's Insolvency or Fundamental Non-performance to
Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Article 3:303 - Intermediary's Insolvency or Fundamental Non-performance to
Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Article 3:304 - Requirement of Notice . . . . . . . . . . . . . . . . . . . . . . . . 13
CHAPTER 4 - VALIDITY 13
Article 4:101 (ex art. 6.101) - Matters not Covered . . . . . . . . . . . . . . . . 13
Article 4:102 (ex art. 6.102) - Initial Impossibility . . . . . . . . . . . . . . . . . 13
Article 4:103 (ex art. 6.103) - Mistake as to facts or law . . . . . . . . . . . . . 13
Article 4:104 (ex art. 6.104) - Inaccuracy in communication . . . . . . . . . . . 13
Article 4:105 (ex art. 6.105) - Adaptation of contract . . . . . . . . . . . . . . . 14
Article 4:106 (ex art. 6.106) - Incorrect information . . . . . . . . . . . . . . . . 14
Article 4:107 (ex art. 6.107) - Fraud . . . . . . . . . . . . . . . . . . . . . . . . 14
SiSU lexmercatoria.org iv
Contents
Article 4:108 (ex art. 6.108) - Threats . . . . . . . . . . . . . . . . . . . . . . . 14
Article 4:109 (ex art. 6.109) - Excessive benefit or unfair advantage . . . . . . . 15
Article 4:110 (ex art. 6.110) -Unfair terms which have not been individually
negotiated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Article 4:111 (ex art. 6.111) - Third persons . . . . . . . . . . . . . . . . . . . . 15
Article 4:112 (ex art. 6.112) - Notice of Avoidance . . . . . . . . . . . . . . . . . 16
Article 4:113 (ex art. 4.113) - Time limits . . . . . . . . . . . . . . . . . . . . . 16
Article 4:114 (ex art. 6.114) - Confirmation . . . . . . . . . . . . . . . . . . . . 16
Article 4:115 (ex art. 6.116) - Effect of avoidance . . . . . . . . . . . . . . . . . 17
Article 4:116 (ex art. 6.115) - Partial avoidance . . . . . . . . . . . . . . . . . . 17
Article 4:117 (ex art. 6.117) - Damages . . . . . . . . . . . . . . . . . . . . . . . 17
Article 4:118 (ex. art. 6.118) - Exclusion or restriction of remedies . . . . . . . . 17
Article 4:119 (ex art. 6.119) - Remedies for non-performance . . . . . . . . . . . 17
CHAPTER 5 - INTERPRETATION 18
Article 5:101 (Ex art. 7.101/ 101A) - General Rules of Interpretation . . . . . . 18
Article 5:102 (ex art. 7.102) - Relevant Circumstances . . . . . . . . . . . . . . 18
Article 5:103 (ex art. 7.103) - Contra Proferentem Rule . . . . . . . . . . . . . . 18
Article 5:104 (ex art. 7.104) - Preference to Negotiated Terms . . . . . . . . . . 18
Article 5:105 (ex art. 7.105) - Reference to Contract as a Whole . . . . . . . . . 18
Article 5:106 (ex art. 7.106) - Terms to Be Given (Full) Effect . . . . . . . . . . 19
Article 5:107 (ex art. 7.107) - Linguistic Discrepancies . . . . . . . . . . . . . . 19
CHAPTER 6 - CONTENTS AND EFFECTS 19
Article 6:101 (ex art. 8.101) - Statements giving rise to contractual obligation . 19
Article 6:102 (replaces 5.108) - Implied obligations . . . . . . . . . . . . . . . . 19
Article 6:103 - Simulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Article 6:104 (ex art. 2.101) - Determination of Price . . . . . . . . . . . . . . . 20
Article 6:105 (ex art. 2.102) - Unilateral Determination by a Party . . . . . . . 20
Article 6:106 (ex art. 2.103) - Determination by a Third Person . . . . . . . . . 20
Article 6:107 (ex art. 2.104) - Reference to a Non Existent Factor . . . . . . . . 20
Article 6:108 (ex art. 2.105) - Quality of Performance . . . . . . . . . . . . . . . 20
Article 6:109 (ex art. 2.109) - Contract for an Indefinite Period . . . . . . . . . 20
Article 6:110 (ex art. 2.115) - Stipulation in Favour of a Third Party . . . . . . 20
Article 6:111 (ex art. 2.117) - Change of Circumstances . . . . . . . . . . . . . . 21
CHAPTER 7 - PERFORMANCE 21
Article 7:101 (ex art. 2.106) - Place of Performance . . . . . . . . . . . . . . . . 21
Article 7:102 (ex art. 2.107) - Time of Performance . . . . . . . . . . . . . . . . 22
Article 7:103 (ex art. 2.108) - Early Performance . . . . . . . . . . . . . . . . . 22
Article 7:104 - Order of performance . . . . . . . . . . . . . . . . . . . . . . . . 22
Article 7:105 - Alternative performance . . . . . . . . . . . . . . . . . . . . . . . 22
Article 7:106 (ex art. 2.116) - Performance by a Third Person . . . . . . . . . . 23
Article 7:107 (ex art. 2.110) - Form of Payment . . . . . . . . . . . . . . . . . . 23
Article 7:108 (ex art. 2.111) - Currency of Payment . . . . . . . . . . . . . . . . 23
SiSU lexmercatoria.org v
Contents
Article 7:109 (ex art. 2.112) - Appropriation of Performance . . . . . . . . . . . 23
Article 7:110 (ex art. 2.113) - Property Not Accepted . . . . . . . . . . . . . . . 24
Article 7:111 (ex art. 2.114) - Money not Accepted . . . . . . . . . . . . . . . . 24
Article 7:112 - Costs of performance . . . . . . . . . . . . . . . . . . . . . . . . 25
CHAPTER 8 - NON-PERFORMANCE AND REMEDIES IN GENERAL 25
Article 8:101 (ex art. 3.101) - Remedies Available . . . . . . . . . . . . . . . . . 25
Article 8:102 (ex art. 3.102) - Cumulation of Remedies . . . . . . . . . . . . . . 25
Article 8:103 (ex art. 3.103) - Fundamental Non-Performance . . . . . . . . . . 25
Article 8:104 (ex art. 3.104) - Cure by Non-Performing Party . . . . . . . . . . 25
Article 8:105 (ex art. 3.105) - Assurance of Performance . . . . . . . . . . . . . 26
Article 8:106 (ex art. 3.106) - Notice Fixing Additional Period for Performance . 26
Article 8:107 (ex art. 3.107) - Performance Entrusted to Another . . . . . . . . 26
Article 8:108 (ex art 3.108) - Excuse Due to an Impediment . . . . . . . . . . . 26
Article 8:109 (ex 3.109) - Clause Limiting or Excluding Remedies . . . . . . . . 27
CHAPTER 9 - PARTICULAR REMEDIES FOR NON-PERFORMANCE 27
Section 1 - Right to Performance 27
Article 9:101 (ex art. 4.101) - Monetary Obligations . . . . . . . . . . . . . . . . 27
Article 9:102 (ex art. 4.102) - Non-monetary Obligations . . . . . . . . . . . . . 27
Article 9:103 (ex art 4.103) - Damages Not Precluded . . . . . . . . . . . . . . . 28
Section 2 - Right To Withhold Performance 28
Article 9:201 (ex art 4.201) - Right to Withhold Performance . . . . . . . . . . . 28
Section 3 - Termination Of The Contract 28
Article 9:301 (ex art. 4.301) - Right to Terminate the Contract . . . . . . . . . 28
Article 9:302 (ex art 4.302) - Contract to be Performed in Parts . . . . . . . . . 28
Article 9:303 (ex art. 4.303) - Notice of Termination . . . . . . . . . . . . . . . 28
Article 9:304 (ex art. 4.304) - Anticipatory Non-Performance . . . . . . . . . . . 29
Article 9:305 (ex art. 4.305) - Effects of Termination in General . . . . . . . . . 29
Article 9:306 (ex art. 4.306) - Property Reduced in Value . . . . . . . . . . . . . 29
Article 9:307 (ex art. 4.307) - Recovery of Money Paid . . . . . . . . . . . . . . 29
Article 9:308 (ex art 4.308) - Recovery of Property . . . . . . . . . . . . . . . . 29
Article 9:309 (ex art. 4.309) - Recovery for Performance that Cannot be Returned 30
Section 4 - Price Reduction 30
Article 9:401 (ex art 4.401) - Right to Reduce Price . . . . . . . . . . . . . . . . 30
Section 5 - Damages and Interest 30
Article 9:501 (ex art. 4.501) - Right to Damages . . . . . . . . . . . . . . . . . . 30
Article 9:502 (ex art 4.502) - General Measure of Damages . . . . . . . . . . . . 30
Article 9:503 (ex art. 4.503) - Foreseeability . . . . . . . . . . . . . . . . . . . . 30
Article 9:504 - Loss Attributable to Aggrieved Party (new; previously part of
4.504) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SiSU lexmercatoria.org vi
Contents
Article 9:505 - Reduction of loss (previously part of 4.504) . . . . . . . . . . . . 31
Article 9:506 (ex art. 4.505) - Substitute Transaction . . . . . . . . . . . . . . . 31
Article 9:507 (ex art. 4.506) - Current Price . . . . . . . . . . . . . . . . . . . . 31
Article 9:508 (ex art. 4.507) - Delay in Payment of Money . . . . . . . . . . . . 31
Article 9:509 (ex art. 4.508) - Agreed Payment for Non-performance . . . . . . . 32
Article 9:510 (ex art. 4.509) - Currency by which Damages to be Measured . . . 32
THE PRINCIPLES OF EUROPEAN CONTRACT LAW - Part III, 2002
(Parts I and II revised 1998, Part III 2002) 32
CHAPTER 10: Plurality of parties* 32
Section 1 - Plurality of debtors* 32
Article 10:101 Solidary, Separate and Communal Obligations . . . . . . . . . . . 32
Article 10:102 When Solidary Obligations Arise . . . . . . . . . . . . . . . . . . 32
Article 10:103 Liability Under Separate Obligations . . . . . . . . . . . . . . . . 33
Article 10:104 Communal Obligations: Special Rule when Money Claimed for
Non-Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article 10:105 Appointment Between Solidary Debtors . . . . . . . . . . . . . . 33
Article 10:106 Recourse Between Solidary Debtors . . . . . . . . . . . . . . . . . 33
Article 10:107 Performance, Set-Off and Merger in Solidary Obligations . . . . . 33
Article 10:108 Release or Settlement in Solidary Obligations . . . . . . . . . . . 33
Article 10:109 Effect of Judgment in Solidary Obligations . . . . . . . . . . . . . 34
Article 10:110 Prescription in Solidary Obligations . . . . . . . . . . . . . . . . 34
Article 10:111 Opposability of other Defences in Solidary Obligations . . . . . . 34
Section 2 - Plurality of creditors* 34
Article 10:201 Solidary, Separate and Communal Claims . . . . . . . . . . . . . 34
Article 10:202 Apportionment of Separate Claims . . . . . . . . . . . . . . . . . 34
Article 10:203 Difficulties of Executing a Communal Claim . . . . . . . . . . . . 35
Article 10:204 Apportionment of Solidary Claims . . . . . . . . . . . . . . . . . 35
Article 10:205 Regime of Solidary Claims . . . . . . . . . . . . . . . . . . . . . . 35
CHAPTER 11. Assignment of Claims* 35
Section 1 - General Principles* 35
Article 11:101 Scope of Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Article 11:102 Contractual Claims Generally Assignable . . . . . . . . . . . . . . 36
Article 11:103 Partial Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Article 11:104 Form of Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2 - Effects of Assignment As Between Assignor and Assignee* 36
Article 11:201 Rights Transferred to Assignee . . . . . . . . . . . . . . . . . . . 36
Article 11:202 When Assignment Takes Effect . . . . . . . . . . . . . . . . . . . 36
Article 11:203 Preservation of Assignee's Rights Against Assignor . . . . . . . . 36
Article 11:204 Undertakings by Assignor . . . . . . . . . . . . . . . . . . . . . . 37
SiSU lexmercatoria.org vii
Contents
Section 3 - Effects of Assignment As Between Assignee and Debtor* 37
Article 11:301 Contractual Prohibition of Assignment . . . . . . . . . . . . . . . 37
Article 11:302 Other Ineffective Assignments . . . . . . . . . . . . . . . . . . . . 37
Article 11:303 Effect on Debtor's Obligation . . . . . . . . . . . . . . . . . . . . 37
Article 11:305 Competing Demands . . . . . . . . . . . . . . . . . . . . . . . . . 38
Article 11:306 Place of Performance . . . . . . . . . . . . . . . . . . . . . . . . . 38
Article 11:307 Defences and Rights of Set-Off . . . . . . . . . . . . . . . . . . . 38
Article 11:308 Unauthorised Modification Not Binding on Assignee . . . . . . . 38
Section 4 - Order of Priority between Assignee and Competing Claimants* 39
Article 11:401 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
CHAPTER 12. Substitution of New Debtor: Transfer of Contract* 39
Section 1 - Substitution of New Debtor* 39
Article 12:101 Substitution: General Rules . . . . . . . . . . . . . . . . . . . . . 39
Article 12:102 Effects of Substitutions on Defences and Securities . . . . . . . . 39
Section 2 - Transfer of Contract* 40
Article 12:201 Transfer of Contract . . . . . . . . . . . . . . . . . . . . . . . . . 40
CHAPTER 13. Set-Off* 40
Article 13:101 Requirement for Set-Off . . . . . . . . . . . . . . . . . . . . . . . 40
Article 13:102 Unascertained Claims . . . . . . . . . . . . . . . . . . . . . . . . 40
Article 13:103 Foreign Currency Set-Off . . . . . . . . . . . . . . . . . . . . . . 40
Article 13:104 Notice of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Article 13:105 Plurality of Claims and Obligations . . . . . . . . . . . . . . . . . 41
Article 13:106 Effects of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Article 13:107 Exclusion of Right of Set-Off . . . . . . . . . . . . . . . . . . . . 41
CHAPTER 14. Prescription* 41
Section 1 - General Provision* 41
Article 14:101 Claims Subject to Prescription . . . . . . . . . . . . . . . . . . . 41
Section 2 - Periods of Prescription and their Commencement* 41
Article 14:201 General Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Article 14:202 Period for a Claim Established by Legal Proceedings . . . . . . . 41
Article 14:203 Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 3 - Extension of Period* 42
Article 14:301 Suspension in Case of Ignorance . . . . . . . . . . . . . . . . . . . 42
Article 14:302 Suspension in Case of Judicial and Other Proceedings . . . . . . 42
Article 14:303 Suspension in Case of Impediment Beyond Creditor's Control . . 42
Article 14:304 Postponement of Expiry in Case of Negotiations . . . . . . . . . . 43
Article 14:305 Postponement of Expiry in Case of Incapacity . . . . . . . . . . . 43
SiSU lexmercatoria.org viii
Contents
Article 14:306 Postponement of Expiry: Deceased's Estate . . . . . . . . . . . . 43
Article 14:307 Maximum Length of Period . . . . . . . . . . . . . . . . . . . . . 43
Section 4 - Renewal of Periods* 43
Article 14:401 Renewal by Acknowledgement . . . . . . . . . . . . . . . . . . . . 43
Article 14:402 Renewal by Attempted Execution . . . . . . . . . . . . . . . . . . 43
Section 5 - Effects of Prescription* 44
Article 14:501 General Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Article 14:502 Effect on Ancillary Claims . . . . . . . . . . . . . . . . . . . . . . 44
Article 14:503 Effect on Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6 - Modification by Agreement* 44
Article 14:601 Agreements Concerning Prescription . . . . . . . . . . . . . . . . 44
CHAPTER 15. Illegality* 44
Article 15:101 Contracts Contrary to Fundamental Principles . . . . . . . . . . . 44
Article 15:102 Contracts Infringing Mandatory Rules . . . . . . . . . . . . . . . 44
Article 15:103 Partial Ineffectiveness . . . . . . . . . . . . . . . . . . . . . . . . 45
Article 15:104 Restitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Article 15:105 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
CHAPTER 16. Conditions* 46
Article 16:101 Types of Condition . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Article 16:102 Interference with Conditions . . . . . . . . . . . . . . . . . . . . . 46
Article 16:103 Effect of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 46
CHAPTER 17. Capitalisation of Interest* 46
Article 17:101 When Interest to be Added to Capital . . . . . . . . . . . . . . . 46
[Note] 46
Disclaimers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Document Information (metadata) 48
Metadata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Information on this document copy and an unofficial List of Some web related
information and sources 49
Information on this document copy . . . . . . . . . . . . . . . . . . . . . . . . . 49
Links that may be of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SiSU lexmercatoria.org ix
The Principles Of European Contract Law 2002 (Parts I, II, and III)
THE PRINCIPLES OF EUROPEAN CONTRACT LAW - Parts 1
I and II revised 1998
(Parts I and II revised 1998, Part III 2002)
CHAPTER 1 - GENERAL PROVISIONS 2
Section 1 - Scope of the Principles 3
Article 1:101 (ex art. 1.101) - Application of the Principles 4
(1) These Principles are intended to be applied as general rules of contract law in the 5
European Communities.
(2) These Principles will apply when the parties have agreed to incorporate them into 6
their contract or that their contract is to be governed by them.
(3) These Principles may be applied when the parties: 7
(a) have agreed that their contract is to be governed by “general principles of law”, the 8
“lex mercatoria” or the like; or
(b) have not chosen any system or rules of law to govern their contract. 9
(4) These Principles may provide a solution to the issue raised where the system or rules 10
of law applicable do not do so.
Article 1:102 - Freedom of contract 11
(1) Parties are free to enter into a contract and to determine its contents, subject to the 12
requirements of good faith and fair dealing, and the mandatory rules established by these
Principles.
(2) The parties may exclude the application of any of the Principles or derogate from or 13
vary their effects, except as otherwise provided by these Principles.
Article 1:103 - Mandatory Law 14
(1) Where the otherwise applicable law so allows, the parties may choose to have their 15
contract governed by the Principles, with the effect that national mandatory rules are not
applicable.
(2) Effect should nevertheless be given to those mandatory rules of national, supranational 16
and international law which, according to the relevant rules of private international law,
are applicable irrespective of the law governing the contract.
Article 1:104 - Application to questions of consent 17
(1) The existence and validity of the agreement of the parties to adopt or incorporate 18
SiSU lexmercatoria.org 1
The Principles Of European Contract Law 2002 (Parts I, II, and III)
these Principles shall be determined by these Principles.
(2) Nevertheless, a party may rely upon the law of the country in which it has its habitual 19
residence to establish that it did not consent if it appears from the circumstances that it
would not be reasonable to determine the effect of its conduct in accordance with these
Principles.
Article 1:105 (ex art. 1.103) - Usages and Practices 20
(1) The parties are bound by any usage to which they have agreed and by any practice 21
they have established between themselves.
(2) The parties are bound by a usage which would be considered generally applicable by 22
persons in the same situation as the parties, except where the application of such usage
would be unreasonable.
Article 1:106 (ex art. 1.104) - Interpretation and Supplementation 23
(1) These Principles should be interpreted and developed in accordance with their pur- 24
poses. In particular, regard should be had to the need to promote good faith and fair
dealing, certainty in contractual relationships and uniformity of application.
(2) Issues within the scope of these Principles but not expressly settled by them are so far 25
as possible to be settled in accordance with the ideas underlying the Principles. Failing
this, the legal system applicable by virtue of the rules of private international law is to
be applied.
Article 1:107 (ex Art. 1.113) - Application of the Principles by Way of 26
Analogy
These Principles apply with appropriate modifications to agreements to modify or end 27
a contract, to unilateral promises and other statements and conduct indicating inten tion.
Section 2 - General Obligations 28
Article 1:201 (ex art. 1.106) - Good Faith and Fair Dealing 29
(1) Each party must act in accordance with good faith and fair dealing. 30
(2) The parties may not exclude or limit this duty. 31
Article 1:202 (ex art. 1.107) - Duty to Co-operate 32
Each party owes to the other a duty to co-operate in order to give full effect to the 33
contract.
SiSU lexmercatoria.org 2
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Section 3 - Terminology and Other Provisions 34
Article 1:301 (ex art. 1.105) - Meaning of Terms 35
In these Principles, except where the context otherwise requires: 36
(1) `act' includes omission; 37
(2) `court' includes arbitral tribunal; 38
(3) an `intentional' act includes an act done recklessly; 39
(4) `non-performance' denotes any failure to perform an obligation under the contract, 40
whether or not excused, and includes delayed performance, defective performance and
failure to co-operate in order to give full effect to the contract.
(5) A matter is `material' if it is one which a reasonable person in the same situation as 41
one party ought to have known would influence the other party in its decision whether to
contract on the proposed terms or to contract at all..
(6) `Written' statements include communications made by telegram, telex, telefax and 42
electronic mail and other means of communication capable of providing a readable record
of the statement on both sides
Article 1:302 (ex art. 1.108) - Reasonableness 43
Under these Principles reasonableness is to be judged by what persons acting in good faith 44
and in the same situation as the parties would consider to be reasonable. In particular,
in assessing what is reasonable the nature and purpose of the contract, the circumstances
of the case, and the usages and practices of the trades or professions involved should be
taken into account.
Article 1:303 (ex art. 1.110) - Notice 45
(1) Any notice may be given by any means, whether in writing or otherwise, appropriate 46
to the circumstances.
(2) Subject to paragraphs (4) and (5), any notice becomes effective when it reaches the 47
addressee.
(3) A notice reaches the addressee when it is delivered to it or to its place of business 48
or mailing address, or, if it does not have a place of business or mailing address, to its
habitual residence
(4) If one party gives notice to the other because of the other's non-performance or 49
because such non-performance is reasonably anticipated by the first party, and the notice
is properly dispatched or given, a delay or inaccuracy in the transmission of the notice
or its failure to arrive does not prevent it from having effect. The notice shall have effect
from the time at which it would have arrived in normal circumstances.
(5) A notice has no effect if a withdrawal of it reaches the addressee before or at the same 50
SiSU lexmercatoria.org 3
The Principles Of European Contract Law 2002 (Parts I, II, and III)
time as the notice.
(6) In this Article, `notice' includes the communication of a promise, statement, offer, 51
acceptance, demand, request or other declaration.
Article 1:304 (ex art. 1.111) - Computation of Time 52
(1) A period of time set by a party in a written document for the addressee to reply or 53
take other action begins to run from the date stated as the date of the document. If
no date is shown, the period begins to run from the moment the document reaches the
addressee.
(2) Official holidays and official non-working days occurring during the period are included 54
in calculating the period. However, if the last day of the period is an official holiday or
official non-working day at the address of the addressee, or at the place where a prescribed
act is to be performed, the period is extended until the first following working day in that
place.
(3) Periods of time expressed in days, weeks, months or years shall begin at 00:00 on the 55
next day and shall end at 24:00 on the last day of the period; but any reply that has to
reach the party who set the period must arrive, or other act which is to be done must
be completed, by the normal close of business in the relevant place on the last day of the
period.
Article 1:305 (ex art. 1.109) - Imputed Knowledge and Intention 56
If any person who with a party's assent was involved in making a contract, or who was 57
entrusted with performance by a party or performed with its assent:
(a) knew or foresaw a fact, or ought to have known or foreseen it; or 58
(b) acted intentionally or with gross negligence, or not in accordance with good faith and 59
fair dealing,
this knowledge, foresight or behaviour is imputed to the party itself. 60
CHAPTER 2 - FORMATION 61
Section 1 - General Provisions 62
Article 2:101 (ex art. 5.101) - Conditions for the Conclusion of a 63
Contract
(1) A contract is concluded if: 64
(a) the parties intend to be legally bound, and 65
(b) they reach a sufficient agreement 66
without any further requirement. 67
SiSU lexmercatoria.org 4
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(2) A contract need not be concluded or evidenced in writing nor is it subject to any 68
other requirement as to form. The contract may be proved by any means, including
witnesses.
Article 2:102 (ex art. 5.102) - Intention 69
The intention of a party to be legally bound by contract is to be determined from 70
the party's statements or conduct as they were reasonably understood by the other
party.
Article 2:103 (ex art. 5.103) - Sufficient Agreement 71
(1) There is sufficient agreement if the terms: 72
(a) have been sufficiently defined by the parties so that the contract can be enforced, 73
or
(b) can be determined under these Principles. 74
(2) However, if one of the parties refuses to conclude a contract unless the parties have 75
agreed on some specific matter, there is no contract unless agreement on that matter has
been reached.
Article 2:104 (ex art. 5.103 A) - Terms not individually negotiated 76
(1) Contract terms which have not been individually negotiated may be invoked against a 77
party who did not know of them only if the party invoking them took reasonable steps to
bring them to the other party's attention before or when the contract was concluded.
(2) Terms are not brought appropriately to a party's attention by a mere reference to 78
them in a contract document, even if that party signs the document.
Article 2:105 (ex art. 5.106 A) - Merger Clause 79
(1) If a written contract contains an individually negotiated clause stating that the writing 80
embodies all the terms of the contract (a merger clause), any prior statements, under takings or agreements which are not embodied in the writing do not form part of the
contract.
(2) If the merger clause is not individually negotiated it will only establish a presumption 81
that the parties intended that their prior statements, undertakings or agreements were
not to form part of the contract. This rule may not be excluded or restricted.
(3) The parties' prior statements may be used to interpret the contract. This rule may 82
not be excluded or restricted except by an individually negotiated clause.
(4) A party may by its statements or conduct be precluded from asserting a merger clause 83
to the extent that the other party has reasonably relied on them.
SiSU lexmercatoria.org 5
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 2:106 (ex art. 5.106 B) - Written Modification only 84
(1) A clause in a written contract requiring any modification or ending by agreement to 85
be made in writing establishes only a presumption that an agreement to modify or end
the contract is not intended to be legally binding unless it is in writing.
(2) A party may by its statements or conduct be precluded from asserting such a clause 86
to the extent that the other party has reasonably relied on them.
Article 2:107 (ex art. 5.108) - Promises binding without acceptance 87
A promise which is intended to be legally binding without acceptance is binding. 88
Section 2 - Offer and Acceptance 89
Article 2:201 (ex art. 5.201) - Offer 90
(1) A proposal amounts to an offer if: 91
(a) it is intended to result in a contract if the other party accepts it, and 92
(b) it contains sufficiently definite terms to form a contract. 93
(2) An offer may be made to one or more specific persons or to the public. 94
(3) A proposal to supply goods or services at stated prices made by a professional supplier 95
in a public advertisement or a catalogue, or by a display of goods, is presumed to be an
offer to sell or supply at that price until the stock of goods, or the supplier's capacity to
supply the service, is exhausted.
Article 2:202 (ex art. 5.202) - Revocation of an Offer 96
(1) An offer may be revoked if the revocation reaches the offeree before it has dispatched its 97
acceptance or, in cases of acceptance by conduct, before the contract has been concluded
under Article 2:205(2) or (3).
(2) An offer made to the public can be revoked by the same means as were used to make 98
the offer.
(3) However, a revocation of an offer is ineffective if: 99
(a) the offer indicates that it is irrevocable; or 100
(b) it states a fixed time for its acceptance; or 101
(c) it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree 102
has acted in reliance on the offer.
Article 2:203 (ex art. 5.203) - Lapse of an Offer 103
When a rejection of an offer reaches the offeror, the offer lapses. 104
SiSU lexmercatoria.org 6
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 2:204 (ex art. 5.204) - Acceptance 105
(1) Any form of statement or conduct by the offeree is an acceptance if it indicates assent 106
to the offer.
(2) Silence or inactivity does not in itself amount to acceptance. 107
Article 2:205 (ex art. 5.205) - Time of Conclusion of the Contract 108
(1) If an acceptance has been dispatched by the offeree the contract is concluded when 109
the acceptance reaches the offeror.
(2) In case of acceptance by conduct, the contract is concluded when notice of the conduct 110
reaches the offeror.
(3) If by virtue of the offer, of practices which the parties have established between them- 111
selves, or of a usage, the offeree may accept the offer by performing an act without notice
to the offeror, the contract is concluded when the performance of the act begins.
Article 2:206 (ex art. 5.206) - Time Limit for Acceptance 112
(1) In order to be effective, acceptance of an offer must reach the offeror within the time 113
fixed by it.
(2) If no time has been fixed by the offeror acceptance must reach it within a reasonable 114
time.
(3) In the case of an acceptance by an act of performance under art. 2:205 (3), that act 115
must be performed within the time for acceptance fixed by the offeror or, if no such time
is fixed, within a reasonable time.
Article 2:207 (ex art. 5.208) - Late Acceptance 116
(1) A late acceptance is nonetheless effective as an acceptance if without delay the offeror 117
informs the offeree that he treats it as such.
(2) If a letter or other writing containing a late acceptance shows that it has been sent 118
in such circumstances that if its transmission had been normal it would have reached the
offeror in due time, the late acceptance is effective as an acceptance unless, without delay,
the offeror informs the offeree that it considers its offer as having lapsed.
Article 2:208 (ex art. 5.209) - Modified Acceptance 119
(1) A reply by the offeree which states or implies additional or different terms which would 120
materially alter the terms of the offer is a rejection and a new offer.
(2) A reply which gives a definite assent to an offer operates as an acceptance even 121
if it states or implies additional or different terms, provided these do not materially
SiSU lexmercatoria.org 7
The Principles Of European Contract Law 2002 (Parts I, II, and III)
alter the terms of the offer. The additional or different terms then become part of the
contract.
(3) However, such a reply will be treated as a rejection of the offer if: 122
(a) the offer expressly limits acceptance to the terms of the offer; or 123
(b) the offeror objects to the additional or different terms without delay; or 124
(c) the offeree makes its acceptance conditional upon the offeror's assent to the additional 125
or different terms, and the assent does not reach the offeree within a reasonable time.
Article 2:209 (ex art. 5.210) - Conflicting General conditions 126
(1) If the parties have reached agreement except that the offer and acceptance refer to con- 127
flicting general conditions of contract, a contract is nonetheless formed. The general con ditions form part of the contract to the extent that they are common in substance.
(2) However, no contract is formed if one party: 128
(a) has indicated in advance, explicitly, and not by way of general conditions, that it does 129
not intend to be bound by a contract on the basis of paragraph (1); or
(b) without delay, informs the other party that it does not intend to be bound by such 130
contract.
(3) General conditions of contract are terms which have been formulated in advance for an 131
indefinite number of contracts of a certain nature, and which have not been individually
negotiated between the parties.
Article 2:210 (ex art. 5.211) - Professional's written confirmation 132
If professionals have concluded a contract but have not embodied it in a final document, 133
and one without delay sends the other a writing which purports to be a confirmation of
the contract but which contains additional or different terms, such terms will become part
of the contract unless:
(a) the terms materially alter the terms of the contract, or 134
(b) the addressee objects to them without delay. 135
Article 2:211 (ex art. 5.212) - Contracts not Concluded through Offer and 136
Acceptance
The rules in this section apply with appropriate adaptations even though the process of 137
conclusion of a contract cannot be analysed into offer and acceptance.
SiSU lexmercatoria.org 8
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Section 3 - Liability for negotiations 138
Article 2:301 (ex art. 5.301) - Negotiations Contrary to Good Faith 139
(1) A party is free to negotiate and is not liable for failure to reach an agreement. 140
(2) However, a party who has negotiated or broken off negotiations contrary to good faith 141
and fair dealing is liable for the losses caused to the other party.
(3) It is contrary to good faith and fair dealing, in particular, for a party to enter into 142
or continue negotiations with no real intention of reaching an agreement with the other
party.
Article 2:302 (ex art. 5.302) - Breach of Confidentiality 143
If confidential information is given by one party in the course of negotiations, the other 144
party is under a duty not to disclose that information or use it for its own purposes
whether or not a contract is subsequently concluded. The remedy for breach of this duty
may include compensation for loss suffered and restitution of the benefit received by the
other party.
CHAPTER 3 - AUTHORITY OF AGENTS 145
Section 1 - General Provisions 146
Article 3:101 - Scope of the Chapter 147
(1) This Chapter governs the authority of an agent or other intermediary to bind its 148
principal in relation to a contract with a third party.
(2) This Chapter does not govern an agent's authority bestowed by law or the authority 149
of an agent appointed by a public or judicial authority.
(3) This Chapter does not govern the internal relationship between the agent or interme- 150
diary and its principal.
Article 3:102 - Categories of Representation 151
(1) Where an agent acts in the name of a principal, the rules on direct representation 152
apply (Section 2). It is irrelevant whether the principal's identity is revealed at the time
the agent acts or is to be revealed later.
(2) Where an intermediary acts on instructions and on behalf of, but not in the name 153
of, a principal, or where the third party neither knows nor has reason to know that the
intermediary acts as an agent, the rules on indirect representation apply (Section 3).
SiSU lexmercatoria.org 9
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Section 2 - Direct Representation 154
Article 3:201 - Express, implied and apparent authority 155
(1) The principal's grant of authority to an agent to act in its name may be express or 156
may be implied from the circumstances.
(2) The agent has authority to perform all acts necessary in the circumstances to achieve 157
the purposes for which the authority was granted.
(3) A person is to be treated as having granted authority to an apparent agent if the 158
person'sstatements or conduct induce the third party reasonably and in good faith to
believe that the apparent agent has been granted authority for the act performed by
it.
Article 3:202 - Agent acting in exercise of his authority 159
Where an agent is acting within its authority as defined by article 3:201, its acts bind the 160
principal and the third party directly to each other. The agent itself is not bound to the
third party.
Article 3:203 - Unidentified Principal 161
If an agent enters into a contract in the name of a principal whose identity is to be revealed 162
later, but fails to reveal that identity within a reasonable time after a request by the third
party, the agent itself is bound by the contract.
Article 3:204 - Agent acting without or outside his authority 163
(1) Where a person acting as an agent acts without authority or outside the scope of its 164
authority, its acts are not binding upon the principal and the third party.
(2) Failing ratification by the principal according to article 3:207, the agent is liable to 165
pay the third party such damages as will place the third party in the same position as if
the agent had acted with authority. This does not apply if the third party knew or could
not have been unaware of the agent's lack of authority.
Article 3:205 - Conflict of Interests 166
(1) If a contract concluded by an agent involves the agent in a conflict of interest of 167
which the third party knew or could not have been unaware, the principal may avoid the
contract according to the provisions of articles 4:112 to 4:116.
(2) There is presumed to be a conflict of interest where: 168
(a) the agent also acted as agent for the third party; or 169
(b) the contract was with itself in its personal capacity. 170
SiSU lexmercatoria.org 10
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(3) However, the principal may not avoid the contract: 171
(a) if it had consented to, or could not have been unaware of, the agent's so acting; 172
or
(b) if the agent had disclosed the conflict of interest to it and it had not objected within 173
a reasonable time.
Article 3:206 - Subagency 174
An agent has implied authority to appoint a subagent to carry out tasks which are not 175
of a personal character and which it is not reasonable to expect the agent to carry out
itself. The rules of this Section apply to the subagency; acts of the subagent which are
within its and the agent's authority bind the principal and the third party directly to
each other.
Article 3:207 - Ratification by Principal 176
(1) Where a person acting as an agent acts without authority or outside its authority, the 177
principal may ratify the agent's acts.
(2) Upon ratification, the agent's acts are considered as having been authorised, without 178
prejudice to the rights of other persons.
Article 3:208 - Third Party's Right with Respect to Confirmation of 179
Authority
Where the statements or conduct of the principal gave the third party reason to believe 180
that an act performed by the agent was authorised, but the third party is in doubt
about the authorisation, it may send a written confirmation to the principal or request
ratification from it. If the principal does not object or answer the request without delay,
the agent's act is treated as having been authorised.
Article 3:209 - Duration of Authority 181
(1) An agent's authority continues until the third party knows or ought to know that: 182
(a) the agent's authority has been brought to an end by the principal, the agent, or both; 183
or
(b) the acts for which the authority had been granted have been completed, or the time 184
for which it had been granted has expired; or
(c) the agent has become insolvent or, where a natural person, has died or become inca- 185
pacitated; or
(d) the principal has become insolvent. 186
(2) The third party is considered to know that the agent's authority has been brought to 187
SiSU lexmercatoria.org 11
The Principles Of European Contract Law 2002 (Parts I, II, and III)
an end under paragraph(1) (a) above if this has been communicated or publicised in the
same manner in which the authority was originally communicated or publicised.
(3) However, the agent remains authorised for a reasonable time to perform those acts 188
which are necessary to protect the interests of the principal or its successors
Section 3 - Indirect Representation 189
Article 3:301 - Intermediaries not acting in the name of a Principal 190
(1) Where an intermediary acts: 191
(a) on instructions and on behalf, but not in the name, of a principal, or 192
(b) on instructions from a principal but the third party does not know and has no reason 193
to know this,
the intermediary and the third party are bound to each other. 194
(2) The principal and the third party are bound to each other only under the conditions 195
set out in Articles 3:302 to 3:304.
Article 3:302 - Intermediary's Insolvency or Fundamental Non-performance 196
to Principal
If the intermediary becomes insolvent, or if it commits a fundamental non-performance 197
towards the principal, or if prior to the time for performance it is clear that there will be
a fundamental non-performance:
(a) on the principal's demand, the intermediary shall communicate the name and address 198
of the third party to the principal; and
(b) the principal may exercise against the third party the rights acquired on the principal's 199
behalf by the intermediary, subject to any defences which the third party may set up
against the intermediary.
Article 3:303 - Intermediary's Insolvency or Fundamental Non-performance 200
to Third Party
If the intermediary becomes insolvent, or if it commits a fundamental non-performance 201
towards the third party, or if prior to the time for performance it is clear that there will
be a fundamental non-performance:
(a) on the third party's demand, the intermediary shall communicate the name and ad- 202
dress of the principal to the third party; and
(b) the third party may exercise against the principal the rights which the third party 203
has against the intermediary, subject to any defences which the intermediary may set up
against the third party and those which the principal may set up against the intermedi ary.
SiSU lexmercatoria.org 12
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 3:304 - Requirement of Notice 204
The rights under Articles 3:302 and 3:303 may be exercised only if notice of intention to 205
exercise them is given to the intermediary and to the third party or principal, respectively.
Upon receipt of the notice, the third party or the principal is no longer entitled to render
performance to the intermediary.
CHAPTER 4 - VALIDITY 206
Article 4:101 (ex art. 6.101) - Matters not Covered 207
This Chapter does not deal with invalidity arising from illegality, immorality or lack of 208
capacity.
Article 4:102 (ex art. 6.102) - Initial Impossibility 209
A contract is not invalid merely because at the time it was concluded performance of the 210
obligation assumed was impossible, or because a party was not entitled to dispose of the
assets to which the contract relates.
Article 4:103 (ex art. 6.103) - Mistake as to facts or law 211
(1) A party may avoid a contract for mistake of fact or law existing when the contract 212
was concluded if:
(a) (i) the mistake was caused by information given by the other party; or 213
(ii) the other party knew or ought to have known of the mistake and it was contrary to 214
good faith and fair dealing to leave the mistaken party in error; or
(iii) the other party made the same mistake, and 215
(b) the other party knew or ought to have known that the mistaken party, had it known the 216
truth, would not have entered the contract or would have done so only on fundamentally
different terms.
(2) However a party may not avoid the contract if: 217
(a) in the circumstances its mistake was inexcusable, or 218
(b) the risk of the mistake was assumed, or in the circumstances should be borne, by 219
it.
Article 4:104 (ex art. 6.104) - Inaccuracy in communication 220
An inaccuracy in the expression or transmission of a statement is to be treated as a 221
mistake of the person who made or sent the statement and Article 4:103 applies.
SiSU lexmercatoria.org 13
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 4:105 (ex art. 6.105) - Adaptation of contract 222
(1) If a party is entitled to avoid the contract for mistake but the other party indicates 223
that it is willing to perform, or actually does perform, the contract as it was understood
by the party entitled to avoid it, the contract is to be treated as if it had been concluded
as the that party understood it. The other party must indicate its willingness to perform,
or render such performance, promptly after being informed of the manner in which the
party entitled to avoid it understood the contract and before that party acts in reliance
on any notice of avoidance.
(2) After such indication or performance the right to avoid is lost and any earlier notice 224
of avoidance is ineffective.
(3) Where both parties have made the same mistake, the court may at the request of 225
either party bring the contract into accordance with what might reasonably have been
agreed had the mistake not occurred.
Article 4:106 (ex art. 6.106) - Incorrect information 226
A party who has concluded a contract relying on incorrect information given it by the 227
other party may recover damages in accordance with Article 4:117(2) and (3) even if the
information does not give rise to a right to avoid the contract on the ground of mistake
under Article 4:103, unless the party who gave the information had reason to believe that
the information was correct.
Article 4:107 (ex art. 6.107) - Fraud 228
(1) A party may avoid a contract when it has been led to conclude it by the other party's 229
fraudulent representation, whether by words or conduct, or fraudulent non-disclosure of
any information which in accordance with good faith and fair dealing it should have
disclosed.
(2) A party's representation or non-disclosure is fraudulent if it was intended to de- 230
ceive.
(3) In determining whether good faith and fair dealing required that a party disclose 231
particular information, regard should be had to all the circumstances, including:
(a) whether the party had special expertise; 232
(b) the cost to it of acquiring the relevant information; 233
(c) whether the other party could reasonably acquire the information for itself; and 234
(d) the apparent importance of the information to the other party. 235
Article 4:108 (ex art. 6.108) - Threats 236
A party may avoid a contract when it has been led to conclude it by the other party's 237
SiSU lexmercatoria.org 14
The Principles Of European Contract Law 2002 (Parts I, II, and III)
imminent and serious threat of an act:
(a) which is wrongful in itself, or 238
(b) which it is wrongful to use as a means to obtain the conclusion of the contract, 239
unless in the circumstances the first party had a reasonable alternative. 240
Article 4:109 (ex art. 6.109) - Excessive benefit or unfair advantage 241
(1) A party may avoid a contract if, at the time of the conclusion of the contract: 242
(a) it was dependent on or had a relationship of trust with the other party, was in eco- 243
nomic distress or had urgent needs, was improvident, ignorant, inexperienced or lacking
in bargaining skill, and
(b) the other party knew or ought to have known of this and, given the circumstances 244
and purpose of the contract, took advantage of the first party's situation in a way which
was grossly unfair or took an excessive benefit.
(2) Upon the request of the party entitled to avoidance, a court may if it is appropriate 245
adapt the contract in order to bring it into accordance with what might have been agreed
had the requirements of good faith and fair dealing been followed.
(3) A court may similarly adapt the contract upon the request of a party receiving notice 246
of avoidance for excessive benefit or unfair advantage, provided that this party informs
the party who gave the notice promptly after receiving it and before that party has acted
in reliance on it.
Article 4:110 (ex art. 6.110) -Unfair terms which have not been individually 247
negotiated
(1) A party may avoid a term which has not been individually negotiated if, contrary to 248
the requirements of good faith and fair dealing, it causes a significant imbalance in the
parties' rights and obligations arising under the contract to the detriment of that party,
taking into account the nature of the performance to be rendered under the contract,
all the other terms of the contract and the circumstances at the time the contract was
concluded.
(2) This Article does not apply to: 249
(a) a term which defines the main subject matter of the contract, provided the term is in 250
plain and intelligible language; or to
(b) the adequacy in value of one party's obligations compared to the value of the obliga- 251
tions of the other party.
Article 4:111 (ex art. 6.111) - Third persons 252
(1) Where a third person for whose acts a party is responsible, or who with a party's 253
SiSU lexmercatoria.org 15
The Principles Of European Contract Law 2002 (Parts I, II, and III)
assent is involved in the making of a contract:
(a) causes a mistake by giving information, or knows of or ought to have known of a 254
mistake,
(b) gives incorrect information, 255
(c) commits fraud, 256
(d) makes a threat, or 257
(e) takes excessive benefit or unfair advantage, 258
remedies under this Chapter will be available under the same conditions as if the behaviour 259
or knowledge had been that of the party itself.
(2) Where any other third person: 260
(a) gives incorrect information, 261
(b) commits fraud, 262
(c) makes a threat, or 263
(d) takes excessive benefit or unfair advantage, 264
remedies under this Chapter will be available if the party knew or ought to have known 265
of the relevant facts, or at the time of avoidance it has not acted in reliance on the
contract.
Article 4:112 (ex art. 6.112) - Notice of Avoidance 266
Avoidance must be by notice to the other party. 267
Article 4:113 (ex art. 4.113) - Time limits 268
(1) Notice of avoidance must be given within a reasonable time, with due regard to the 269
circumstances, after the avoiding party knew or ought to have known of the relevant facts
or became capable of acting freely.
(2) However, a party may avoid an individual term under Article 4:110 if it gives notice 270
of avoidance within a reasonable time after the other party has invoked the term.
Article 4:114 (ex art. 6.114) - Confirmation 271
If the party who is entitled to avoid a contract confirms it, expressly or impliedly, after it 272
knows of the ground for avoidance, or becomes capable of acting freely, avoidance of the
contract is excluded.
SiSU lexmercatoria.org 16
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 4:115 (ex art. 6.116) - Effect of avoidance 273
On avoidance either party may claim restitution of whatever he has supplied under the 274
contract or the part of it avoided, provided he makes concurrent restitution of whatever
he has received under the contract or the part of it avoided. If restitution cannot be made
in kind for any reason, a reasonable sum must be paid for what has been received.
Article 4:116 (ex art. 6.115) - Partial avoidance 275
If a ground of avoidance affects only particular terms of a contract, the effect of an avoid- 276
ance is limited to those terms unless, giving due consideration to all the circumstances of
the case, it is unreasonable to uphold the remaining contract.
Article 4:117 (ex art. 6.117) - Damages 277
(1) A party who avoids a contract under this Chapter may recover from the other party 278
damages so as to put the avoiding party as nearly as possible into the same position as
if it had not concluded the contract, provided that the other party knew or ought to
have known of the mistake, fraud, threat or taking of excessive benefit or unfair advan tage.
(2) If a party has the right to avoid a contract under this Chapter, but does not exercise 279
its right or has lost its right under the provisions of Articles 4:113 or 4:114, it may recover,
subject to paragraph (1), damages limited to the loss caused to it by the mistake, fraud,
threat or taking of excessive benefit or unfair advantage. The same measure of damages
shall apply when the party was misled by incorrect information in the sense of Article
4:106.
(3) In other respects, the damages shall be in accordance with the relevant provisions of 280
Chapter 9, Section 5, with appropriate adaptations.
Article 4:118 (ex. art. 6.118) - Exclusion or restriction of remedies 281
(1) Remedies for fraud, threats and excessive benefit or unfair advantage-taking, and 282
the right to avoid an unfair term which has not been individually negotiated, cannot be
excluded or restricted.
(2) Remedies for mistake and incorrect information may be excluded or restricted unless 283
the exclusion or restriction is contrary to good faith and fair dealing.
Article 4:119 (ex art. 6.119) - Remedies for non-performance 284
A party who is entitled to a remedy under this Chapter in circumstances which afford 285
that party a remedy for non-performance may pursue either remedy.
SiSU lexmercatoria.org 17
The Principles Of European Contract Law 2002 (Parts I, II, and III)
CHAPTER 5 - INTERPRETATION 286
Article 5:101 (Ex art. 7.101/ 101A) - General Rules of Interpretation 287
(1) A contract is to be interpreted according to the common intention of the parties even 288
if this differs from the literal meaning of the words.
(2) If it is established that one party intended the contract to have a particular meaning, 289
and at the time of the conclusion of the contract the other party could not have been
unaware of the first party's intention, the contract is to be interpreted in the way intended
by the first party.
(3) If an intention cannot be established according to (1) or (2), the contract is to be 290
interpreted according to the meaning that reasonable persons of the same kind as the
parties would give to it in the same circumstances.
Article 5:102 (ex art. 7.102) - Relevant Circumstances 291
In interpreting the contract, regard shall be had, in particular, to: 292
(a) the circumstances in which it was concluded, including the preliminary negotia- 293
tions;
(b) the conduct of the parties, even subsequent to the conclusion of the contract; 294
(c) the nature and purpose of the contract; 295
(d) the interpretation which has already been given to similar clauses by the parties and 296
the practices they have established between themselves;
(e) the meaning commonly given to terms and expressions in the branch of activity con- 297
cerned and the interpretation similar clauses may already have received;
(f) usages; and 298
(g) good faith and fair dealing 299
Article 5:103 (ex art. 7.103) - Contra Proferentem Rule 300
Where there is doubt about the meaning of a contract term not individually negotiated, 301
an interpretation of the term against the party who supplied it is to be preferred.
Article 5:104 (ex art. 7.104) - Preference to Negotiated Terms 302
Terms which have been individually negotiated take preference over those which are 303
not.
Article 5:105 (ex art. 7.105) - Reference to Contract as a Whole 304
Terms are interpreted in the light of the whole contract in which they appear. 305
SiSU lexmercatoria.org 18
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 5:106 (ex art. 7.106) - Terms to Be Given (Full) Effect 306
An interpretation which renders the terms of the contract lawful, or effective, is to be 307
preferred to one which would not.
Article 5:107 (ex art. 7.107) - Linguistic Discrepancies 308
Where a contract is drawn up in two or more language versions none of which is stated 309
to be authoritative, there is, in case of discrepancy between the versions, a preference for
the interpretation according to the version in which the contract was originally drawn
up.
CHAPTER 6 - CONTENTS AND EFFECTS 310
Article 6:101 (ex art. 8.101) - Statements giving rise to contractual 311
obligation
(1) A statement made by one party before or when the contract is concluded is to be 312
treated as giving rise to a contractual obligation if that is how the other party reasonably
understood it in the circumstances, taking into account:
(a) the apparent importance of the statement to the other party; 313
(b) whether the party was making the statement in the course of business; and 314
(c) the relative expertise of the parties. 315
(2) If one of the parties is a professional supplier who gives information about the quality 316
or use of services or goods or other property when marketing or advertising them or
otherwise before the contract for them is concluded, the statement is to be treated as
giving rise to a contractual obligation unless it is shown that the other party knew or
could not have been unaware that the statement was incorrect.
(3) Such information and other undertakings given by a person advertising or marketing 317
services, goods or other property for the professional supplier, or by a person in earlier
links of the business chain, are to be treated as giving rise to a contractual obligation on
the part of the professional supplier unless it did not know and had no reason to know of
the information or undertaking.
Article 6:102 (replaces 5.108) - Implied obligations 318
In addition to the express terms, a contract may contain implied terms which stem 319
from
(a) the intention of the parties, 320
(b) the nature and purpose of the contract, and 321
(c) good faith and fair dealing. 322
SiSU lexmercatoria.org 19
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 6:103 - Simulation 323
When the parties have concluded an apparent contract which was not intended to reflect 324
their true agreement, as between the parties the true agreement prevails
Article 6:104 (ex art. 2.101) - Determination of Price 325
Where the contract does not fix the price or the method of determining it, the parties are 326
to be treated as having agreed on a reasonable price.
Article 6:105 (ex art. 2.102) - Unilateral Determination by a Party 327
Where the price or any other contractual term is to be determined by one party whose 328
determination is grossly unreasonable, then notwithstanding any provision to the contrary,
a reasonable price or other term shall be substituted.
Article 6:106 (ex art. 2.103) - Determination by a Third Person 329
(1) Where the price or any other contractual term is to be determined by a third person, 330
and it cannot or will not do so, the parties are presumed to have empowered the court to
appoint another person to determine it.
(2) If a price or other term fixed by a third person is grossly unreasonable, a reasonable 331
price or term shall be substituted.
Article 6:107 (ex art. 2.104) - Reference to a Non Existent Factor 332
Where the price or any other contractual term is to be determined by reference to a factor 333
which does not exist or has ceased to exist or to be accessible, the nearest equivalent factor
shall be substituted.
Article 6:108 (ex art. 2.105) - Quality of Performance 334
If the contract does not specify the quality, a party must tender performance of at least 335
average quality.
Article 6:109 (ex art. 2.109) - Contract for an Indefinite Period 336
A contract for an indefinite period may be ended by either party by giving notice of 337
reasonable length.
Article 6:110 (ex art. 2.115) - Stipulation in Favour of a Third Party 338
(1) A third party may require performance of a contractual obligation when its right to do 339
SiSU lexmercatoria.org 20
The Principles Of European Contract Law 2002 (Parts I, II, and III)
so has been expressly agreed upon between the promisor and the promisee, or when such
agreement is to be inferred from the purpose of the contract or the circumstances of the
case. The third party need not be identified at the time the agreement is concluded.
(2) If the third party renounces the right to performance the right is treated as never 340
having accrued to it.
(3) The promisee may by notice to the promisor deprive the third party of the right to 341
performance unless:
(a) the third party has received notice from the promisee that the right has been made 342
irrevocable, or
(b) the promisor or the promisee has received notice from the third party that the latter 343
accepts the right.
Article 6:111 (ex art. 2.117) - Change of Circumstances 344
(1) A party is bound to fulfil its obligations even if performance has become more oner- 345
ous, whether because the cost of performance has increased or because the value of the
performance it receives has diminished.
(2) If, however, performance of the contract becomes excessively onerous because of a 346
change of circumstances, the parties are bound to enter into negotiations with a view to
adapting the contract or terminating it, provided that:
(a) the change of circumstances occurred after the time of conclusion of the contract, 347
(b) the possibility of a change of circumstances was not one which could reasonably have 348
been taken into account at the time of conclusion of the contract, and
(c) the risk of the change of circumstances is not one which, according to the contract, 349
the party affected should be required to bear.
(3) If the parties fail to reach agreement within a reasonable period, the court may: 350
(a) terminate the contract at a date and on terms to be determined by the court; or 351
(b) adapt the contract in order to distribute between the parties in a just and equitable 352
manner the losses and gains resulting from the change of circumstances.
In either case, the court may award damages for the loss suffered through a party refusing 353
to negotiate or breaking off negotiations contrary to good faith and fair dealing.
CHAPTER 7 - PERFORMANCE 354
Article 7:101 (ex art. 2.106) - Place of Performance 355
(1) If the place of performance of a contractual obligation is not fixed by or determinable 356
from the contract it shall be:
(a) in the case of an obligation to pay money, the creditor's place of business at the time 357
of the conclusion of the contract;
SiSU lexmercatoria.org 21
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(b) in the case of an obligation other than to pay money, the obligor's place of business 358
at the time of conclusion of the contract.
(2) If a party has more than one place of business, the place of business for the purpose 359
of the preceding paragraph is that which has the closest relationship to the contract,
having regard to the circumstances known to or contemplated by the parties at the time
of conclusion of the contract.
(3) If a party does not have a place of business its habitual residence is to be treated as 360
its place of business.
Article 7:102 (ex art. 2.107) - Time of Performance 361
A party has to effect its performance: 362
(1) if a time is fixed by or determinable from the contract, at that time; 363
(2) if a period of time is fixed by or determinable from the contract, at any time within 364
that period unless the circumstances of the case indicate that the other party is to choose
the time;
(3) in any other case, within a reasonable time after the conclusion of the contract. 365
Article 7:103 (ex art. 2.108) - Early Performance 366
(1) A party may decline a tender of performance made before it is due except where 367
acceptance of the tender would not unreasonably prejudice its interests.
(2) A party's acceptance of early performance does not affect the time fixed for the 368
performance of its own obligation.
Article 7:104 - Order of performance 369
To the extent that the performances of the parties can be rendered simultaneously, the 370
parties are bound to render them simultaneously unless the circumstances indicate oth erwise.
Article 7:105 - Alternative performance 371
(1) Where an obligation may be discharged by one of alternative performances, the choice 372
belongs to the party who is to perform, unless the circumstances indicate otherwise.
(2) If the party who is to make the choice fails to do so by the time required by the 373
contract, then:
(a) if the delay in choosing is fundamental, the right to choose passes to the other 374
party;
(b) if the delay is not fundamental, the other party may give a notice fixing an additional 375
period of reasonable length in which the party to choose must do so. If the latter fails to
do so, the right to choose passes to the other party.
SiSU lexmercatoria.org 22
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 7:106 (ex art. 2.116) - Performance by a Third Person 376
(1) Except where the contract requires personal performance the obligee cannot refuse 377
performance by a third person if:
(a) the third person acts with the assent of the obligor; or 378
(b) the third person has a legitimate interest in performance and the obligor has failed to 379
perform or it is clear that it will not perform at the time performance is due.
(2) Performance by the third person in accordance with paragraph (1) discharges the 380
obligor.
Article 7:107 (ex art. 2.110) - Form of Payment 381
(1) Payment of money due may be made in any form used in the ordinary course of 382
business.
(2) A creditor who, pursuant to the contract or voluntarily, accepts a cheque or other 383
order to pay or a promise to pay is presumed to do so only on condition that it will be
honoured. The creditor may not enforce the original obligation to pay unless the order or
promise is not honoured.
Article 7:108 (ex art. 2.111) - Currency of Payment 384
(1) The parties may agree that payment shall be made only in a specified currency. 385
(2) In the absence of such agreement, a sum of money expressed in a currency other 386
than that of the place where payment is due may be paid in the currency of that place
according to the rate of exchange prevailing there at the time when payment is due.
(3) If, in a case falling within the preceding paragraph, the debtor has not paid at the 387
time when payment is due, the creditor may require payment in the currency of the place
where payment is due according to the rate of exchange prevailing there either at the time
when payment is due or at the time of actual payment.
Article 7:109 (ex art. 2.112) - Appropriation of Performance 388
(1) Where a party has to perform several obligations of the same nature and the per- 389
formance tendered does not suffice to discharge all of the obligations, then subject to
paragraph 4 the party may at the time of its performance declare to which obligation the
performance is to be appropriated.
(2) If the performing party does not make such a declaration, the other party may within 390
a reasonable time appropriate the performance to such obligation as it chooses. It shall in form the performing party of the choice. However, any such appropriation to an obligation
which:
(a) is not yet due, or 391
SiSU lexmercatoria.org 23
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(b) is illegal, or 392
(c) is disputed, 393
is invalid. 394
(3) In the absence of an appropriation by either party, and subject to paragraph 4, the 395
performance is appropriated to that obligation which satisfies one of the following criteria
in the sequence indicated:
(a) the obligation which is due or is the first to fall due; 396
(b) the obligation for which the obligee has the least security; 397
(c) the obligation which is the most burdensome for the obligor, 398
(d) the obligation which has arisen first. 399
If none of the preceding criteria applies, the performance is appropriated proportionately 400
to all obligations.
(4) In the case of a monetary obligation, a payment by the debtor is to be appropriated, 401
first, to expenses, secondly, to interest, and thirdly, to principal, unless the creditor makes
a different appropriation.
Article 7:110 (ex art. 2.113) - Property Not Accepted 402
(1) A party who is left in possession of tangible property other than money because of 403
the other party's failure to accept or retake the property must take reasonable steps to
protect and preserve the property.
(2) The party left in possession may discharge its duty to deliver or return: 404
(a) by depositing the property on reasonable terms with a third person to be held to the 405
order of the other party, and notifying the other party of this; or
(b) by selling the property on reasonable terms after notice to the other party, and paying 406
the net proceeds to that party.
(3) Where, however, the property is liable to rapid deterioration or its preservation is 407
unreasonably expensive, the party must take reasonable steps to dispose of it. It may
discharge its duty to deliver or return by paying the net proceeds to the other party.
(4) The party left in possession is entitled to be reimbursed or to retain out of the proceeds 408
of sale any expenses reasonably incurred.
Article 7:111 (ex art. 2.114) - Money not Accepted 409
Where a party fails to accept money properly tendered by the other party, that party 410
may after notice to the first party discharge its obligation to pay by depositing the money
to the order of the first party in accordance with the law of the place where payment is
due
SiSU lexmercatoria.org 24
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 7:112 - Costs of performance 411
Each party shall bear the costs of performance of its obligations. 412
CHAPTER 8 - NON-PERFORMANCE AND REMEDIES IN 413
GENERAL
Article 8:101 (ex art. 3.101) - Remedies Available 414
(1) Whenever a party does not perform an obligation under the contract and the non- 415
performance is not excused under Article 8:108, the aggrieved party may resort to any of
the remedies set out in Chapter 9.
(2) Where a party's non-performance is excused under Article 8:108, the aggrieved party 416
may resort to any of the remedies set out in Chapter 9 except claiming performance and
damages.
(3) A party may not resort to any of the remedies set out in Chapter 9 to the extent that 417
its own act caused the other party's non-performance.
Article 8:102 (ex art. 3.102) - Cumulation of Remedies 418
Remedies which are not incompatible may be cumulated. In particular, a party is not 419
deprived of its right to damages by exercising its right to any other remedy.
Article 8:103 (ex art. 3.103) - Fundamental Non-Performance 420
A non-performance of an obligation is fundamental to the contract if: 421
(a) strict compliance with the obligation is of the essence of the contract; or 422
(b) the non-performance substantially deprives the aggrieved party of what it was enti- 423
tled to expect under the contract, unless the other party did not foresee and could not
reasonably have foreseen that result; or
(c) the non-performance is intentional and gives the aggrieved party reason to believe that 424
it cannot rely on the other party's future performance.
Article 8:104 (ex art. 3.104) - Cure by Non-Performing Party 425
A party whose tender of performance is not accepted by the other party because it does 426
not conform to the contract may make a new and conforming tender where the time
for performance has not yet arrived or the delay would not be such as to constitute a
fundamental non-performance.
SiSU lexmercatoria.org 25
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 8:105 (ex art. 3.105) - Assurance of Performance 427
(1) A party who reasonably believes that there will be a fundamental non-performance 428
by the other party may demand adequate assurance of due performance and meanwhile
may withhold performance of its own obligations so long as such reasonable belief contin ues.
(2) Where this assurance is not provided within a reasonable time, the party demanding it 429
may terminate the contract if it still reasonably believes that there will be a fundamental
non-performance by the other party and gives notice of termination without delay.
Article 8:106 (ex art. 3.106) - Notice Fixing Additional Period for 430
Performance
(1) In any case of non-performance the aggrieved party may by notice to the other party 431
allow an additional period of time for performance.
(2) During the additional period the aggrieved party may withhold performance of its 432
own reciprocal obligations and may claim damages, but it may not resort to any other
remedy. If it receives notice from the other party that the latter will not perform within
that period, or if upon expiry of that period due performance has not been made, the
aggrieved party may resort to any of the remedies that may be available under Chapter
9:
(3) If in a case of delay in performance which is not fundamental the aggrieved party has 433
given a notice fixing an additional period of time of reasonable length, it may terminate
the contract at the end of the period of notice. The aggrieved party may in its notice
provide that if the other party does not perform within the period fixed by the notice the
contract shall terminate automatically. If the period stated is too short, the aggrieved
party may terminate, or, as the case may be, the contract shall terminate automatically,
only after a reasonable period from the time of the notice.
Article 8:107 (ex art. 3.107) - Performance Entrusted to Another 434
A party who entrusts performance of the contract to another person remains responsible 435
for performance.
Article 8:108 (ex art 3.108) - Excuse Due to an Impediment 436
(1) A party's non-performance is excused if it proves that it is due to an impediment 437
beyond its control and that it could not reasonably have been expected to take the im pediment into account at the time of the conclusion of the contract, or to have avoided
or overcome the impediment or its consequences.
(2) Where the impediment is only temporary the excuse provided by this article has effect 438
for the period during which the impediment exists. However, if the delay amounts to a
fundamental non-performance, the obligee may treat it as such.
SiSU lexmercatoria.org 26
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(3) The non-performing party must ensure that notice of the impediment and of its effect 439
on its ability to perform is received by the other party within a reasonable time after
the non-performing party knew or ought to have known of these circumstances. The
other party is entitled to damages for any loss resulting from the non-receipt of such
notice.
Article 8:109 (ex 3.109) - Clause Limiting or Excluding Remedies 440
Remedies for non-performance may be excluded or restricted unless it would be contrary 441
to good faith and fair dealing to invoke the exclusion or restriction.
CHAPTER 9 - PARTICULAR REMEDIES FOR 442
NON-PERFORMANCE
Section 1 - Right to Performance 443
Article 9:101 (ex art. 4.101) - Monetary Obligations 444
(1) The creditor is entitled to recover money which is due. 445
(2) Where the creditor has not yet performed its obligation and it is clear that the debtor 446
will be unwilling to receive performance, the creditor may nonetheless proceed with its
performance and may recover any sum due under the contract unless:
(a) it could have made a reasonable substitute transaction without significant effort or 447
expense; or
(b) performance would be unreasonable in the circumstances. 448
Article 9:102 (ex art. 4.102) - Non-monetary Obligations 449
(1) The aggrieved party is entitled to specific performance of an obligation other than one 450
to pay money, including the remedying of a defective performance.
(2) Specific performance cannot, however, be obtained where: 451
(a) performance would be unlawful or impossible; or 452
(b) performance would cause the obligor unreasonable effort or expense; or 453
(c) the performance consists in the provision of services or work of a personal character 454
or depends upon a personal relationship, or
(d) the aggrieved party may reasonably obtain performance from another source. 455
(3) The aggrieved party will lose the right to specific performance if it fails to seek it within 456
a reasonable time after it has or ought to have become aware of the non-performance.
SiSU lexmercatoria.org 27
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 9:103 (ex art 4.103) - Damages Not Precluded 457
The fact that a right to performance is excluded under this Section does not preclude a 458
claim for damages.
Section 2 - Right To Withhold Performance 459
Article 9:201 (ex art 4.201) - Right to Withhold Performance 460
(1) A party who is to perform simultaneously with or after the other party may withhold 461
performance until the other has tendered performance or has performed. The first party
may withhold the whole of its performance or a part of it as may be reasonable in the
circumstances.
(2) A party may similarly withhold performance for as long as it is clear that there will 462
be a non-performance by the other party when the other party's performance becomes
due.
Section 3 - Termination Of The Contract 463
Article 9:301 (ex art. 4.301) - Right to Terminate the Contract 464
(1) A party may terminate the contract if the other party's non-performance is funda- 465
mental.
(2) In the case of delay the aggrieved party may also terminate the contract under Article 466
8:106 (3).
Article 9:302 (ex art 4.302) - Contract to be Performed in Parts 467
If the contract is to be performed in separate parts and in relation to a part to which 468
a counter-performance can be apportioned, there is a fundamental non-performance, the
aggrieved party may exercise its right to terminate under this Section in relation to the
part concerned. It may terminate the contract as a whole only if the non-performance is
fundamental to the contract as a whole.
Article 9:303 (ex art. 4.303) - Notice of Termination 469
(1) A party's right to terminate the contract is to be exercised by notice to the other 470
party.
(2) The aggrieved party loses its right to terminate the contract unless it gives no- 471
tice within a reasonable time after it has or ought to have become aware of the non performance.
(3) (a) When performance has not been tendered by the time it was due, the aggrieved 472
SiSU lexmercatoria.org 28
The Principles Of European Contract Law 2002 (Parts I, II, and III)
party need not give notice of termination before a tender has been made. If a tender is
later made it loses its right to terminate if it does not give such notice within a reasonable
time after it has or ought to have become aware of the tender.
(b) If, however, the aggrieved party knows or has reason to know that the other party still 473
intends to tender within a reasonable time, and the aggrieved party unreasonably fails to
notify the other party that it will not accept performance, it loses its right to terminate
if the other party in fact tenders within a reasonable time.
(4) If a party is excused under Article 8:108 through an impediment which is total and 474
permanent, the contract is terminated automatically and without notice at the time the
impediment arises.
Article 9:304 (ex art. 4.304) - Anticipatory Non-Performance 475
Where prior to the time for performance by a party it is clear that there will be a funda- 476
mental non-performance by it the other party may terminate the contract.
Article 9:305 (ex art. 4.305) - Effects of Termination in General 477
(1) Termination of the contract releases both parties from their obligation to effect and 478
to receive future performance, but, subject to Articles 9:306 to 9:308, does not affect the
rights and liabilities that have accrued up to the time of termination.
(2) Termination does not affect any provision of the contract for the settlement of disputes 479
or any other provision which is to operate even after termination.
Article 9:306 (ex art. 4.306) - Property Reduced in Value 480
A party who terminates the contract may reject property previously received from the 481
other party if its value to the first party has been fundamentally reduced as a result of
the other party's non-performance.
Article 9:307 (ex art. 4.307) - Recovery of Money Paid 482
On termination of the contract a party may recover money paid for a performance which 483
it did not receive or which it properly rejected.
Article 9:308 (ex art 4.308) - Recovery of Property 484
On termination of the contract a party who has supplied property which can be returned 485
and for which it has not received payment or other counter-performance may recover the
property.
SiSU lexmercatoria.org 29
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 9:309 (ex art. 4.309) - Recovery for Performance that Cannot be 486
Returned
On termination of the contract a party who has rendered a performance which cannot be 487
returned and for which it has not received payment or other counter-performance may
recover a reasonable amount for the value of the performance to the other party.
Section 4 - Price Reduction 488
Article 9:401 (ex art 4.401) - Right to Reduce Price 489
(1) A party who accepts a tender of performance not conforming to the contract may 490
reduce the price. This reduction shall be proportionate to the decrease in the value of
the performance at the time this was tendered compared to the value which a conforming
tender would have had at that time.
(2) A party who is entitled to reduce the price under the preceding paragraph and who 491
has already paid a sum exceeding the reduced price may recover the excess from the other
party.
(3) A party who reduces the price cannot also recover damages for reduction in the value 492
of the performance but remains entitled to damages for any further loss it has suffered so
far as these are recoverable under Section 5 of this Chapter.
Section 5 - Damages and Interest 493
Article 9:501 (ex art. 4.501) - Right to Damages 494
(1) The aggrieved party is entitled to damages for loss caused by the other party's non- 495
performance which is not excused under Article 8:108.
(2) The loss for which damages are recoverable includes: 496
(a) non-pecuniary loss; and 497
(b) future loss which is reasonably likely to occur. 498
Article 9:502 (ex art 4.502) - General Measure of Damages 499
The general measure of damages is such sum as will put the aggrieved party as nearly 500
as possible into the position in which it would have been if the contract had been duly
performed. Such damages cover the loss which the aggrieved party has suffered and the
gain of which it has been deprived.
Article 9:503 (ex art. 4.503) - Foreseeability 501
The non-performing party is liable only for loss which it foresaw or could reasonably have 502
SiSU lexmercatoria.org 30
The Principles Of European Contract Law 2002 (Parts I, II, and III)
foreseen at the time of conclusion of the contract as a likely result of its non-performance,
unless the non-performance was intentional or grossly negligent.
Article 9:504 - Loss Attributable to Aggrieved Party (new; previously part of 503
4.504)
The non-performing party is not liable for loss suffered by the aggrieved party to the 504
extent that the aggrieved party contributed to the non-performance or its effects.
Article 9:505 - Reduction of loss (previously part of 4.504) 505
(1) The non-performing party is not liable for loss suffered by the aggrieved party to 506
the extent that the aggrieved party could have reduced the loss by taking reasonable
steps.
(2) The aggrieved party is entitled to recover any expenses reasonably incurred in at- 507
tempting to reduce the loss.
Article 9:506 (ex art. 4.505) - Substitute Transaction 508
Where the aggrieved party has terminated the contract and has made a substitute trans- 509
action within a reasonable time and in a reasonable manner, it may recover the difference
between the contract price and the price of the substitute transaction as well as damages
for any further loss so far as these are recoverable under this Section.
Article 9:507 (ex art. 4.506) - Current Price 510
Where the aggrieved party has terminated the contract and has not made a substitute 511
transaction but there is a current price for the performance contracted for, it may recover
the difference between the contract price and the price current at the time the contract
is terminated as well as damages for any further loss so far as these are recoverable under
this Section.
Article 9:508 (ex art. 4.507) - Delay in Payment of Money 512
(1) If payment of a sum of money is delayed, the aggrieved party is entitled to interest 513
on that sum from the time when payment is due to the time of payment at the average
commercial bank short-term lending rate to prime borrowers prevailing for the contractual
currency of payment at the place where payment is due.
(2) The aggrieved party may in addition recover damages for any further loss so far as 514
these are recoverable under this Section.
SiSU lexmercatoria.org 31
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 9:509 (ex art. 4.508) - Agreed Payment for Non-performance 515
(1) Where the contract provides that a party who fails to perform is to pay a specified sum 516
to the aggrieved party for such non-performance, the aggrieved party shall be awarded
that sum irrespective of its actual loss.
(2) However, despite any agreement to the contrary the specified sum may be reduced to 517
a reasonable amount where it is grossly excessive in relation to the loss resulting from the
non-performance and the other circumstances.
Article 9:510 (ex art. 4.509) - Currency by which Damages to be 518
Measured
Damages are to be measured by the currency which most appropriately reflects the ag- 519
grieved party's loss.
THE PRINCIPLES OF EUROPEAN CONTRACT LAW - Part 520
III, 2002
(Parts I and II revised 1998, Part III 2002)
CHAPTER 10: Plurality of parties* 521
Section 1 - Plurality of debtors* 522
Article 10:101 Solidary, Separate and Communal Obligations 523
(1) Obligations are solidary when all the debtors are bound to render one and the same 524
performance and the creditor may require it from any one of them until full performance
has been received.
(2) Obligations are separate when each debtor is bound to render only part of the perfor- 525
mance and the creditor may require from each debtor only that debtor's part.
(3) An obligation is communal when all the debtors are bound to render the performance 526
together and the creditor may require it only from all of them.
Article 10:102 When Solidary Obligations Arise 527
(1) If several debtors are bound to render one and the same performance to a creditor 528
under the same contract, they are solidarily liable, unless the contract or the law provides
otherwise.
(2)* *Solidary obligations also arise where several persons are liable for the same dam- 529
age.
(3)* *The fact that the debtors are not liable on the same terms does not prevent their 530
obligations from being solidary.
SiSU lexmercatoria.org 32
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 10:103 Liability Under Separate Obligations 531
Debtors bound by separate obligations are liable in equal shares unless the contract or 532
the law provides otherwise.
Article 10:104 Communal Obligations: Special Rule when Money Claimed for 533
Non-Performance
Notwithstanding Article 10:101 (3), when money is claimed for non-performance of a 534
communal obligation, the debtors are solidarily liable for payment to the creditor.
Article 10:105 Appointment Between Solidary Debtors 535
(1)* *As between themselves, solidary debtors are liable in equal shares unless the contract 536
or the law provides otherwise.
(2) If two or more debtors are liable for the same damage under Article 10:102 (2), their 537
share of liability as between themselves is determined according to the law governing the
event which gave rise to the liability.
Article 10:106 Recourse Between Solidary Debtors 538
(1)* *A solidary debtor who has performed more than that debtor's share may claim the 539
excess from any of the other debtors to the extent of each debtor's unperformed share,
together with a share of any costs reasonably incurred.
(2)* A *solidary debtor to whom paragraph (1) applies may also, subject to any prior 540
right and interest of the creditor, exercise the rights and actions of the creditor, including
accessory securities, to recover the excess from any of the other debtors to the extent of
each debtor's unperformed share.
(3)* *If a solidary debtor who has performed more than that debtor's share is unable, 541
despite all reasonable efforts, to recover contribution from another solidary debtor, the
share of the others, including the one who has performed, is increased proportionally.
Article 10:107 Performance, Set-Off and Merger in Solidary Obligations 542
(1)* *Performance or set-off by a solidary debtor or set-off by the creditor against one 543
solidary debtor discharges the other debtors in relation to the creditor to the extent of
the performance or set--off.
(2)* *Merger of debts between a solidary debtor and the creditor discharges the other 544
debtors only for the share of the debtor concerned.
Article 10:108 Release or Settlement in Solidary Obligations 545
(1)* *When the creditor releases, or reaches a settlement with, one solidary debtor, the 546
SiSU lexmercatoria.org 33
The Principles Of European Contract Law 2002 (Parts I, II, and III)
other debtors are discharged of liability for the share of that debtor.
(2) The debtors are totally discharged by the release or settlement if it so provides. 547
(3) As between solidary debtors, the debtor who is discharged from that debtor's share is 548
discharged only to the extent of the share at the time of the discharge and not from any
supplementary share for which that debtor may subsequently become liable under Article
10:106 (3).
Article 10:109 Effect of Judgment in Solidary Obligations 549
A decision by a court as to the liability to the creditor of one solidary debtor does not 550
affect: (a) the liability to the creditor of the other solidary debtors; or (b) the rights of
recourse between the solidary debtors under Article 10:106.
Article 10:110 Prescription in Solidary Obligations 551
Prescription of the creditor's right to performance (“claim”) against one solidary debtor 552
does not affect: (a) the liability to the creditor of the other solidary debtors; or (b) the
rights of recourse between the solidary debtors under Article 10:106.
Article 10:111 Opposability of other Defences in Solidary Obligations 553
(1) A solidary debtor may invoke against the creditor any defence which another solidary 554
debtor can invoke, other than a defence personal to that other debtor. Invoking the
defence has no effect with regard to the other solidary debtors.
(2) A debtor from whom contribution is claimed may invoke against the claimant any 555
personal defence that that debtor could have invoked against the creditor.
Section 2 - Plurality of creditors* 556
Article 10:201 Solidary, Separate and Communal Claims 557
(1) Claims are solidary when any of the creditors may require full performance from the 558
debtor and when the debtor may render performance to any of the creditors.
(2) Claims are separate when the debtor owes each creditor only that creditor's share of 559
the claim and each creditor may require performance only of that creditor's share.
(3) A claim is communal when the debtor must perform to all the creditors and any 560
creditor may require performance only for the benefit of all.
Article 10:202 Apportionment of Separate Claims 561
Separate creditors are entitled to equal shares unless the contract or the law provides 562
otherwise.
SiSU lexmercatoria.org 34
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 10:203 Difficulties of Executing a Communal Claim 563
If one of the creditors in a communal claim refuses, or is unable to receive, the performance, 564
the debtor may discharge the obligation to perform by depositing the property or money
with a third party according to Articles 7:110 or 7:111 of the Principles.
Article 10:204 Apportionment of Solidary Claims 565
(1)* *Solidary creditors are entitled to equal shares unless the contract or the law provides 566
otherwise.
(2)* *A creditor who has received more than that creditor's share must transfer the excess 567
to the other creditors to the extent of their respective shares.
Article 10:205 Regime of Solidary Claims 568
(1)* A *release granted to the debtor by one of the solidary creditors has no effect on 569
the other solidary creditors
(2) The rules of Articles 10:107, 10:109, 10:110 and 10:111 (1) apply, with appropriate 570
adaptations, to solidary claims.
CHAPTER 11. Assignment of Claims* 571
Section 1 - General Principles* 572
Article 11:101 Scope of Chapter 573
(1) This Chapter applies to the assignment by agreement of a right to performance 574
(“claim”) under an existing or future contract.
(2) Except where otherwise stated or the context otherwise requires, this Chapter also 575
applies to the assignment by agreement of other transferable claims.
(3) This Chapter does not apply: (a) to the transfer of a financial instrument or investment 576
security where, under the law otherwise applicable, such transfer must be* *by entry in
a register maintained by or for the issuer; or (b) to the transfer of a bill of exchange or
other negotiable instrument or of a negotiable security or a document of title to goods
where, under the law otherwise applicable, such transfer must be by delivery (with any
necessary indorsement).
(4) In this Chapter “assignment” includes an assignment by way of security. 577
(5) This Chapter also applies, with appropriate adaptations, to the granting by agreement 578
of a right in security over a claim otherwise than by assignment.
SiSU lexmercatoria.org 35
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 11:102 Contractual Claims Generally Assignable 579
(1) Subject to Articles 11:301 and 11:302, a party to a contract may assign a claim under 580
it.
(2) A future claim arising under an existing or future contract may be assigned if at the 581
time when it comes into existence, or at such other time as the parties agree, it can be
identified as the claim to which the assignment relates.
Article 11:103 Partial Assignment 582
A claim which is divisible may be assigned in part, but the assignor is liable to the debtor 583
for any increased costs which the debtor thereby incurs.
Article 11:104 Form of Assignment 584
An assignment need not be in writing and is not subject to any other requirement as to 585
form. It may be proved by any means, including witnesses.
Section 2 - Effects of Assignment As Between Assignor and 586
Assignee*
Article 11:201 Rights Transferred to Assignee 587
(1) The assignment of a claim transfers to the assignee: (a) all the assignor's rights to 588
performance in respect of the claim assigned; and (b) all accessory rights securing such
performance.
(2) Where the assignment of a claim under a contract is associated with the substitution 589
of the assignee as debtor in respect of any obligation owed by the assignor under the same
contract, this Article takes effect subject to Article 12:201.
Article 11:202 When Assignment Takes Effect 590
(1) An assignment of an existing claim takes effect at the time of the agreement to assign 591
or such later time as the assignor and assignee agree.
(2) An assignment of a future claim is dependent upon the assigned claim coming into 592
existence but thereupon takes effect from the time of the agreement to assign or such
later time as the assignor and assignee agree.
Article 11:203 Preservation of Assignee's Rights Against Assignor 593
An assignment is effective as between the assignor and assignee, and entitles the assignee 594
to whatever the assignor receives from the debtor, even if it is ineffective against the
debtor under Article 11:301 or 11:302.
SiSU lexmercatoria.org 36
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 11:204 Undertakings by Assignor 595
By assigning or purporting to assign a claim the assignor undertakes to the assignee that: 596
(a) at the time when the assignment is to take effect the following conditions will be
satisfied except as otherwise disclosed to the assignee: (i) the assignor has the right to
assign the claim; (ii) the claim exists and the assignee's rights are not affected by any
defences or rights (including any right of set-off) which the debtor might have against the
assignor; and (iii) the claim is not subject to any prior assignment or right in security in
favour of any other party or to any other incumbrance; (b) the claim and any contract
under which it arises will not be modified without the consent of the assignee unless the
modification is provided for in the assignment agreement or is one which is made in good
faith and is of a nature to which the assignee could not reasonably object; and (c) the
assignor will transfer to the assignee all transferable rights intended to secure performance
which are not accessory rights.
Section 3 - Effects of Assignment As Between Assignee and 597
Debtor*
Article 11:301 Contractual Prohibition of Assignment 598
(1) An assignment which is prohibited by or is otherwise not in conformity with the 599
contract under which the assigned claim arises is not effective against the debtor unless:
(a) the debtor has consented to it; or (b) the assignee neither knew nor ought to have
known of the non-conformity; or (c) the assignment is made under a contract for the
assignment of future rights to payment of money.
(2) Nothing in the preceding paragraph affects the assignor's liability for the non-conformity. 600
Article 11:302 Other Ineffective Assignments 601
An assignment to which the debtor has not consented is ineffective against the debtor 602
so far as it relates to a performance which the debtor, by reason of the nature of the
performance or the relationship of the debtor and the assignor, could not reasonably be
required to render to anyone except the assignor.
Article 11:303 Effect on Debtor's Obligation 603
(1) Subject to Articles 11:301, 11:302, 11:307 and 11:308, the debtor is bound to perform 604
in favour of the assignee if and only if the debtor has received a notice in writing from
the assignor or the assignee which reasonably identifies the claim which has been assigned
and requires the debtor to give performance to the assignee.
(2) However, if such notice is given by the assignee, the debtor may within a reasonable 605
time request the assignee to provide reliable evidence of the assignment, pending which
the debtor may withhold performance.
SiSU lexmercatoria.org 37
The Principles Of European Contract Law 2002 (Parts I, II, and III)
(3) Where the debtor has acquired knowledge of the assignment otherwise than by a notice 606
conforming to paragraph (1), the debtor may either withhold performance from or give
performance to the assignee.
(4) Where the debtor gives performance to the assignor, the debtor is discharged if and 607
only if the performance is given without knowledge of the assignment.
/ /Article 11:304 PROTECTION OF DEBTOR 608
A debtor who performs in favour of a person identified as assignee in a notice of assignment 609
under Article 11:303 is discharged unless the debtor could not have been unaware that
such person was not the person entitled to performance.
Article 11:305 Competing Demands 610
A debtor who has received notice of two or more competing demands for performance 611
may discharge liability by conforming to the law of the due place of performance, or, if
the performances are due in different places, the law applicable to the claim/./
Article 11:306 Place of Performance 612
(1) Where the assigned claim relates to an obligation to pay money at a particular place, 613
the assignee may require payment at any place within the same country or, if that country
is a Member State of the European Union, at any place within the European Union, but
the assignor is liable to the debtor for any increased costs which the debtor incurs by
reason of any change in the place of performance.
(2) Where the assigned claim relates to a non-monetary obligation to be performed at a 614
particular place, the assignee may not require performance at any other place.
Article 11:307 Defences and Rights of Set-Off 615
(1) The debtor may set up against the assignee all substantive and procedural defences 616
to the assigned claim which the debtor could have used against the assignor.
(2) The debtor may also assert against the assignee all rights of set-off which would have 617
been available against the assignor under Chapter 13 in respect of any claim against the
assignor: (a) existing at the time when a notice of assignment, whether or not conforming
to Article 11:303 (1), reaches the debtor; or (b) closely connected with the assigned
claim.
Article 11:308 Unauthorised Modification Not Binding on Assignee 618
A modification of the claim made by agreement between the assignor and the debtor, 619
without the consent of the assignee, after a notice of assignment, whether or not con forming to Article 11:303 (1), reaches the debtor does not affect the rights of the assignee
against the debtor unless the modification is provided for in the assignment agreement
SiSU lexmercatoria.org 38
The Principles Of European Contract Law 2002 (Parts I, II, and III)
or is one which is made in good faith and is of a nature to which the assignee could not
reasonably object.
Section 4 - Order of Priority between Assignee and Competing 620
Claimants*
Article 11:401 Priorities 621
(1) Where there are successive assignments of the same claim, the assignee whose assign- 622
ment is first notified to the debtor has priority over any earlier assignee if at the time of
the later assignment the assignee under that assignment neither knew nor ought to have
known of the earlier assignment.
(2) Subject to paragraph (1), the priority of successive assignments, whether of existing 623
or future claims, is determined by the order in which they are made.
(3) The assignee's interest in the assigned claim has priority over the interest of a creditor 624
of the assignor who attaches that claim, whether by judicial process or otherwise, after
the time the assignment has taken effect under Article 11:202.
(4) In the event of the assignor's bankruptcy, the assignee's interest in the assigned claim 625
has priority over the interest of the assignor's insolvency administrator and creditors,
subject to any rules of the law applicable to the bankruptcy relating to: (a) publicity
required as a condition of such priority; (b) the ranking of claims; or (c) the avoidance or
ineffectiveness of transactions in the bankruptcy proceedings.
CHAPTER 12. Substitution of New Debtor: Transfer of 626
Contract*
Section 1 - Substitution of New Debtor* 627
Article 12:101 Substitution: General Rules 628
(1) A third person may undertake with the agreement of the debtor and the creditor to 629
be sub-sti-tuted as debtor, with the effect that the original debtor is discharged.
(2) A creditor may agree in advance to a future substitution. In such a case the substitu- 630
tion takes effect only when the creditor is given notice by the new debtor of the agreement
between the new and the original debtor.
Article 12:102 Effects of Substitutions on Defences and Securities 631
(1) The new debtor cannot invoke against the creditor any rights or defences arising from 632
the relationship between the new debtor and the original debtor.
(2) The discharge of the original debtor also extends to any security of the original debtor 633
given to the creditor for the performance of the obli-ga-tion, unless the security is over an
SiSU lexmercatoria.org 39
The Principles Of European Contract Law 2002 (Parts I, II, and III)
asset which is transferred to the new debtor as part of a transaction between the original
and the new debtor.
(3) Upon discharge of the original debtor, a security granted by any person other than the 634
new debtor for the per-formance of the obli-ga-tion is released, unless that other person
agrees that it should continue to be available to the creditor.
(4) The new debtor may invoke against the creditor all de--fences which the original debtor 635
could have invoked against the creditor.
Section 2 - Transfer of Contract* 636
Article 12:201 Transfer of Contract 637
(1) A party to a contract may agree with a third person that that person is to be sub-sti- 638
tu-ted as the contracting party. In such a case the substitution takes effect only where,
as a result of the other party's assent, the first party is discharged.
(2) To the extent that the substitution of the third person as a contracting party involves 639
a transfer of rights to performance (“claims”), the provisions of Chapter 11 apply; to
the extent that obligations are transferred, the provisions of Section 1 of this Chapter
apply.
CHAPTER 13. Set-Off* 640
Article 13:101 Requirement for Set-Off 641
If two parties owe each other obligations of the same kind, either party may set off that 642
party's right to performance (“claim”) against the other party's claim, if and to the extent
that, at the time of set-off, the first party: (a) is entitled to effect performance; and (b)
may demand the other party's performance.
Article 13:102 Unascertained Claims 643
(1) A debtor may not set off a claim which is unascertained as to its existence or value 644
unless the set-off will not prejudice the interests of the other party.
(2) Where the claims of both parties arise from the same legal relationship it is presumed 645
that the other party's interests will not be prejudiced.
Article 13:103 Foreign Currency Set-Off 646
Where parties owe each other money in different currencies, each party may set off that 647
party's claim against the other party's claim, unless the parties have agreed that the party
declaring set-off is to pay exclusively in a specified currency.
SiSU lexmercatoria.org 40
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 13:104 Notice of Set-Off 648
The right of set-off is exercised by notice to the other party. 649
Article 13:105 Plurality of Claims and Obligations 650
(1) Where the party giving notice of set-off has two or more claims against the other 651
party, the notice is effective only if it identifies the claim to which it relates.
(2) Where the party giving notice of set-off has to perform two or more obligations towards 652
the other party, the rules in Article 7:109 apply with appropriate adaptations.
Article 13:106 Effects of Set-Off 653
Set-off discharges the obligations, as far as they are coextensive, as from the time of 654
notice.
Article 13:107 Exclusion of Right of Set-Off 655
Set-off cannot be effected: (a) where it is excluded by agreement; (b) against a claim to 656
the extent that that claim is not capable of attachment; and (c) against a claim arising
from a deliberate wrongful act.
CHAPTER 14. Prescription* 657
Section 1 - General Provision* 658
Article 14:101 Claims Subject to Prescription 659
A right to performance of an obligation (“claim”) is subject to prescription by the expiry 660
of a period of time in accordance with these Principles.
Section 2 - Periods of Prescription and their 661
Commencement*
Article 14:201 General Period 662
The general period of prescription is three years. 663
Article 14:202 Period for a Claim Established by Legal Proceedings 664
(1) The period of prescription for a claim established by judgment is ten years. 665
(2) The same applies to a claim established by an arbitral award or other instrument 666
which is enforceable as if it were a judgment.
SiSU lexmercatoria.org 41
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 14:203 Commencement 667
(1) The general period of prescription begins to run from the time when the debtor has 668
to effect performance or, in the case of a right to damages, from the time of the act which
gives rise to the claim.
(2) Where the debtor is under a continuing obligation to do or refrain from doing some- 669
thing, the general period of prescription begins to run with each breach of the obliga tion.
(3) The period of prescription set out in Article 14:202 begins to run from the time when 670
the judgment or arbitral award obtains the effect of res judicata, or the other instrument
becomes enforceable, though not before the debtor has to effect performance.
Section 3 - Extension of Period* 671
Article 14:301 Suspension in Case of Ignorance 672
The running of the period of prescription is suspended as long as the creditor does not 673
know of, and could not reasonably know of: (a) the identity of the debtor; or (b) the
facts giving rise to the claim including, in the case of a right to damages, the type of
damage.
Article 14:302 Suspension in Case of Judicial and Other Proceedings 674
(1) The running of the period of prescription is suspended from the time when judicial 675
proceedings on the claim are begun.
(2) Suspension lasts until a decision has been made which has the effect of res judicata, 676
or until the case has been otherwise disposed of.
(3) These provisions apply, with appropriate adaptations, to arbitration proceedings and 677
to all other proceedings initiated with the aim of obtaining an instrument which is en forceable as if it were a judgment.
Article 14:303 Suspension in Case of Impediment Beyond Creditor's 678
Control
(1) The running of the period of prescription is suspended as long as the creditor is 679
prevented from pursuing the claim by an impediment which is beyond the creditor's
control and which the creditor could not reasonably have been expected to avoid or
overcome.
(2) Paragraph (1) applies only if the impediment arises, or subsists, within the last six 680
months of the prescription period.
SiSU lexmercatoria.org 42
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Article 14:304 Postponement of Expiry in Case of Negotiations 681
If the parties negotiate about the claim, or about circumstances from which a claim might 682
arise, the period of prescription does not expire before one year has passed since the last
communication made in the negotiations.
Article 14:305 Postponement of Expiry in Case of Incapacity 683
(1) If a person subject to an incapacity is without a representative, the period of prescrip- 684
tion of a claim held by or against that person does not expire before one year has passed
after either the incapacity has ended or a representative has been appointed.
(2) The period of prescription of claims between a person subject to an incapacity and 685
that person's representative does not expire before one year has passed after either the
incapacity has ended or a new representative has been appointed.
Article 14:306 Postponement of Expiry: Deceased's Estate 686
Where the creditor or debtor has died, the period of prescription of a claim held by or 687
against the deceased's estate does not expire before one year has passed after the claim
can be enforced by or against an heir, or by or against a representative of the estate.
Article 14:307 Maximum Length of Period 688
The period of prescription cannot be extended, by suspension of its running or postpone- 689
ment of its expiry under these Principles, to more than ten years or, in case of claims
for personal injuries, to more than thirty years. This does not apply to suspension under
Article 14:302.
Section 4 - Renewal of Periods* 690
Article 14:401 Renewal by Acknowledgement 691
(1) If the debtor acknowledges the claim, vis-à-vis the creditor, by part payment, payment 692
of interest, giving of security, or in any other manner, a new period of prescription begins
to run.
(2) The new period is the general period of prescription, regardless of whether the claim 693
was originally subject to the general period of prescription or the ten year period under
Article 14:202. In the latter case, however, this Article does not operate so as to shorten
the ten year period.
Article 14:402 Renewal by Attempted Execution 694
The ten year period of prescription laid down in Article 14:202 begins to run again with 695
each reasonable attempt at execution undertaken by the creditor.
SiSU lexmercatoria.org 43
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Section 5 - Effects of Prescription* 696
Article 14:501 General Effect 697
(1) After expiry of the period of prescription the debtor is entitled to refuse perfor- 698
mance.
(2) Whatever has been performed in order to discharge a claim may not be reclaimed 699
merely because the period of prescription had expired.
Article 14:502 Effect on Ancillary Claims 700
The period of prescription for a right to payment of interest, and other claims of an 701
ancillary nature, expires not later than the period for the principal claim.
Article 14:503 Effect on Set-Off 702
A claim in relation to which the period of prescription has expired may nonetheless be set 703
off, unless the debtor has invoked prescription previously or does so within two months
of notification of set-off.
Section 6 - Modification by Agreement* 704
Article 14:601 Agreements Concerning Prescription 705
(1) The requirements for prescription may be modified by agreement between the parties, 706
in particular by either shortening or lengthening the periods of prescription.
(2) The period of prescription may not, however, be reduced to less than one year or 707
extended to more than thirty years after the time of commencement set out in Article
14:203.
CHAPTER 15. Illegality* 708
Article 15:101 Contracts Contrary to Fundamental Principles 709
A contract is of no effect to the extent that it is contrary to principles recognised as 710
fundamental in the laws of the Member States of the European Union.
Article 15:102 Contracts Infringing Mandatory Rules 711
(1) Where a contract infringes a mandatory rule of law applicable under Article 1:103 of 712
these Principles, the effects of that infringement upon the contract are the effects, if any,
expressly prescribed by that mandatory rule.
(2) Where the mandatory rule does not expressly prescribe the effects of an infringement 713
SiSU lexmercatoria.org 44
The Principles Of European Contract Law 2002 (Parts I, II, and III)
upon a contract, the contract may be declared to have full effect, to have some effect, to
have no effect, or to be subject to modification.
(3) A decision reached under paragraph (2) must be an appropriate and proportional 714
response to the infringement, having regard to all relevant circumstances, including: (a)
the purpose of the rule which has been infringed; (b) the category of persons for whose
protection the rule exists; (c) any sanction that may be imposed under the rule infringed;
(d) the seriousness of the infringement; (e) whether the infringement was intentional; and
(f) the closeness of the relationship between the infringement and the contract.
Article 15:103 Partial Ineffectiveness 715
(1) If only part of a contract is rendered ineffective under Articles 15:101 or 15:102, the 716
remaining part continues in effect unless, giving due consideration to all the circumstances
of the case, it is unreasonable to uphold it.
(2) Articles 15:104 and 15:105 apply, with appropriate adaptations, to a case of partial 717
ineffectiveness.
Article 15:104 Restitution 718
(1) When a contract is rendered ineffective under Articles 15:101 or 15:102, either party 719
may claim restitution of whatever that party has supplied under the contract, pro vided that, where appropriate, concurrent restitution is made of whatever has been re ceived.
(2) When considering whether to grant restitution under paragraph (1), and what concur- 720
rent restitution, if any, would be appropriate, regard must be had to the factors referred
to in Article 15:102 (3).
(3) An award of restitution may be refused to a party who knew or ought to have known 721
of the reason for the ineffectiveness.
(4) If restitution cannot be made in kind for any reason, a reasonable sum must be paid 722
for what has been received.
Article 15:105 Damages 723
(1) A party to a contract which is rendered ineffective under Articles 15:101 or 15:102 724
may recover from the other party damages putting the first party as nearly as possible
into the same position as if the contract had not been concluded,/ /provided that the
other party knew or ought to have known of the reason for the ineffectiveness.
(2) When considering whether to award damages under paragraph (1), regard must be 725
had to the factors referred to in Article 15:102 (3).
(3) An award of damages may be refused where the first party knew or ought to have 726
known of the reason for the ineffectiveness.
SiSU lexmercatoria.org 45
The Principles Of European Contract Law 2002 (Parts I, II, and III)
CHAPTER 16. Conditions* 727
Article 16:101 Types of Condition 728
A contractual obligation may be made conditional upon the occurrence of an uncertain 729
future event, so that the obligation takes effect only if the event occurs (suspensive con dition) or comes to an end if the event occurs (resolutive condition).
Article 16:102 Interference with Conditions 730
(1) If fulfilment of a condition is prevented by a party, contrary to duties of good faith 731
and fair dealing or co-operation, and if fulfilment would have operated to that party's
disadvantage, the condition is deemed to be fulfilled.
(2) If fulfilment of a condition is brought about by a party, contrary to duties of good 732
faith and fair dealing or co-operation, and if fulfilment operates to that party's advantage,
the condition is deemed not to be fulfilled.
Article 16:103 Effect of Conditions 733
(1) Upon fulfilment of a suspensive condition, the relevant obligation takes effect unless 734
the parties otherwise agree.
(2) Upon fulfilment of a resolutive condition, the relevant obligation comes to an end 735
unless the parties otherwise agree.
CHAPTER 17. Capitalisation of Interest* 736
Article 17:101 When Interest to be Added to Capital 737
(1) Interest payable according to Article 9:508 (1) is added to the outstanding capital 738
every 12 months.
(2) Paragraph (1) of this Article does not apply if the parties have provided for interest 739
upon delay in payment.
[Note] 740
Disclaimers
The original document located at <http://www.ufsia.ac.be/~estorme/PECL.html> comes with the
following disclaimer:
“Disclaimer: Information provided here does not reflect official UFSIA viewpoints
nor gives rise to any claim against the author”
For Lex Mercatoria's disclaimer see:
SiSU lexmercatoria.org 46
The Principles Of European Contract Law 2002 (Parts I, II, and III)
<http://lexmercatoria.org/lm.information/objective.html{#}disclaimer>
SiSU lexmercatoria.org 47
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Document Information (metadata)
Metadata
Document Manifest @
<http://www.jus.uio.no/lm/eu.cont ... /sisu_manifest.html>
Dublin Core (DC)
DC tags included with this document are provided here.
DC Title: The Principles Of European Contract Law 2002
(Parts I, II, and III)
DC Date: 2002
Version Information
Sourcefile: eu.contract.principles.parts.1.to.3.2002.lm3
Filetype: SiSU text 0.38
Sourcefile Digest, MD5(eu.contract.principles.parts.1.to.3.2002.sst)= 9efa1325ebc411e443c52e4ad8c003d6
Skin_Digest: MD5(skin_lm.rb)= c89d714faa1c8cdbf677592f30bb699c
Generated
Document (metaverse) last generated: Wed Sep 03 18:46:13 -0400 2008
Generated by: SiSU 0.69.0-beta of 2008w34/4 (2008-08-28)
Ruby version: ruby 1.8.7 (2008-06-20 patchlevel 22) [i486-linux]
SiSU lexmercatoria.org 48
The Principles Of European Contract Law 2002 (Parts I, II, and III)
Information on this document copy and an unofficial List of
Some web related information and sources
"Support Open Standards and Software Libre for the Information Technology Infrastruc ture" RA
Information on this document copy lexmercatoria.org
Generated by SiSU found at www.jus.uio.no/sisu [ SiSU 0.69.0-beta 2008w34/4 ] www.sisudoc.org. SiSU is soft ware for document structuring, publishing and search (using SiSU: object citation numbering, markup,
meta-markup, and system) Copyright © 1997, current 2008 Ralph Amissah, All Rights Reserved.
SiSU is released under GPL 3 or later (www.fsf.org/licenses/gpl.html).
W3 since October 3 1993 SiSU 1997, current 2008.
Lex Mercatoria presentations at lexmercatoria.org
The Principles Of European Contract Law 2002
(Parts I, II, and III) pdf versions can be found at:
http://www.jus.uio.no/lm//eu.con ... 3.2002/portrait.pdf
http://www.jus.uio.no/lm//eu.con ... .2002/landscape.pdf
The Principles Of European Contract Law 2002
(Parts I, II, and III) html versions may be found at:
http://www.jus.uio.no/lm//eu.con ... .to.3.2002/toc.html or
http://www.jus.uio.no/lm//eu.con ... .to.3.2002/doc.html
SiSU Manifest of document output and metadata may be found at:
http://www.jus.uio.no/lm//eu.con ... /sisu_manifest.html
Lex Mercatoria found at: lexmercatoria.org
Links that may be of interest at Lex Mercatoria and elsewhere:
various language versions
http://web.cbs.dk/departments/la ... n_on_ecl/index.html
PECL
http://www.ufsia.ac.be/~estorme/PECL.html
Contract Principles
(lexmercatoria.org)
http://www.jus.uio.no/lm//privat ... act.principles.html
Sales
(lexmercatoria.org)
SiSU lexmercatoria.org 49
The Principles Of European Contract Law 2002 (Parts I, II, and III)
http://www.jus.uio.no/lm//privat ... /sale.of.goods.html
Lex Mercatoria home:
lexmercatoria.org
SiSU lexmercatoria.org 50
|
|
IP卡
狗仔卡
发表于 2024-1-10 09:33:27
提升卡
置顶卡
沉默卡
喧嚣卡
变色卡
显身卡