Document Type

Article

Publication Date

2015

Abstract

This article will examine the law of excuse as espoused in the Convention on Contracts for the International Sale of Goods (CISG). It will examine the relevant case law applying the doctrine of impediment found in CISG Article 79. The question posed in this analysis is whether the word “impediment” relates only to the occurrences of force majeure, impossibility and frustration of purpose events or if it also includes changed circumstances, impracticability and hardship events. For purposes of simplicity, the first set of excuse or exemption doctrines will be analyzed under the heading of “impossibility” and the second set will be discussed under the heading of “hardship”.

The key issue to be explored in this article is the distinction between excuse requiring impossibility or frustration of contractual purpose and hardship as it relates to Article 79 of the CISG. These terms and doctrines have often been conflated. This is understandable given the number of such doctrines found in various national laws and international law instruments, such as impossibility, impracticability, frustration of purpose, force majeure or Act of God, hardship, change of circumstances, and so forth. The question posed is whether the impediment doctrine provides an exemption from liability only for “absolute” excuse (impossibility, force majeure) or if it also extends to the more liberal “relative” excuse doctrines (hardship, changed circumstances, impracticability).

Given the vagueness of Article 79’s use of the word impediment, its interpretation and application has had to be constructed anew. This has to, of course, be done with all CISG provisions under the autonomous interpretation mandate. However, the interpretation of the exemption of impediment is an especially difficult task given the context of the numerous excuse doctrines in the various national legal systems, as well as the conflation of different excuse doctrines within national legal systems. French law has the most form of excuse recognizing only force majeure events that make it impossible to perform; the United Kingdom’s law is slightly more liberal, adding the doctrine of frustration of purpose to the impossibility doctrine; and German law incorporates the more common civil law bifurcation of impossibility and hardship doctrines, while also recognizing frustration of purpose, as well as recognizing both physical and economic impossibility. The United States has a tripartite excuse regime involving impossibility, frustration, and impracticability.

Part II briefly examines the law of excuse in the German and American legal systems focusing on the German concept of changed circumstances and the American doctrine of impracticability, while Part III briefly reviews the law of excuse provided in the UNIDROIT’s Principles of International Commercial Contracts (PICC) and the Principles of European Contract Law (PECL). The reviews in Parts II and III will set the context for analyzing the case law relating to CISG Article 79 that is undertaken in Part IV.

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