COMPARATIVE PRIVATE LAW

NON-PERFORMANCE REMEDIES
University of Oslo
Prof. Giuditta Cordero Moss

Case I Destruction of
subject-matter (1)
Sale of car components built on specifications
An earthquake destroys the facilities and the
stored components
Non-delivery causes stop of car production:
buyer looses increase of sales because important car
event is missed;
buyer looses extraordinary profit due to extremely
profitable contract;
buyer incurred expenses to charter ships that were not
used due to non-delivery

Supply contract is in force for 5 more years

What can the buyer do?

Destruction of subject-matter (1)

All: Seller is excused.
Buyer may terminate
contract/contract
ceases to exist

Case II Destruction of
subject-matter (2)
Sale of car components built on
specifications
A fire destroys the facilities and the stored
components
The fire alarm had not been installed due
to illness of the person in charge of
security in the sellers company
Consequences as above.
What can the buyer do?

Destruction of subject-matter (2)

Norwegian, German
law: Seller has to
reimburse loss of
increased profit, loss
of extraordinary (?)
profit, incurred
expenses. Buyer may
terminate contract

Italian, English law,

UNIDROIT, PECL,
CISG : Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract

Case III Act of god

(factum principis) (1)
Sale of car components built on
specifications
New governmental regulations forbid
export of various technical equipment, i.a.
car components
Consequences as above.
What can the buyer do?

Act of god (1)

All: Seller is excused.
Buyer may terminate
contract/effects cease

Case IV Act of god

(factum principis) (2)
Sale of car components built on
specifications
The sellers export licence is withdrawn
because of the sellers non-compliance
with governmental requiremenets
Consequences as above.
What can the buyer do?

Act of god (2)

Norwegian, German
law: Seller has to
reimburse loss of
increased profit, loss
of extraordinary (?)
profit, incurred
expenses. Buyer may
terminate contract

Italian, English law,

UNIDROIT, PECL,
CISG: Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract

Case V Suppliers failure

Sale of car components built on specifications
The aluminium supplier fails to deliver aluminium
on time for the production of the components
The aluminium supplier is a recognised supplier
on the market, but due to internal reorganisation
it is experiencing inefficiency
Consequences as above.
What can the buyer do?

Suppliers failure
Norwegian, Italian,
German law:
Seller is excused. Buyer
may terminate contract

English law: Seller has to

reimburse loss of
increased profit, incurred
expenses . Buyer may
terminate contract
UNIDROIT, PECL, CISG:
Buyer may request
specific performance or
terminate contract. Seller
has to reimburse loss of
increased profit, incurred
expenses .

Case VI Unaffordability (1)

Sale of car components built on
specifications
Due to unexpected weather conditions the
ship cannot leave the harbour unless an
ice-breaker is especially ordered from
abroad
Consequences as above.
What can the buyer do?

Unaffordability (1)
Norwegian, German,
Italian law,
UNIDROIT, PECL:
Contract renegotiated
or terminated

English law, CISG:

Seller has to
reimburse loss of
increased profit,
incurred expenses.
Buyer may terminate
contract

Case VII Unaffordability (2)

Sale of car components built on
specifications
The price of aluminium increases
significantly, and sale of the components
at the agreed price would result in
considerable losses for the seller
Consequences as above.
What can the buyer do?

Unaffordability (2)

Norwegian, German law:

Buyer may request specific
performance or terminate
contract. Seller has to
reimburse loss of increased
profit, loss of extraordinary (?)
profit, incurred expenses
Italian law, CISG: Buyer may
request specific performance
or request termination. Seller
has to reimburse loss of
increased profit, incurred
expenses.

English law, UNIDROIT,

PECL: Seller has to
reimburse loss of
increased profit, incurred
expenses. Buyer may
terminate contract

Case VIII Unaffordability (3)

Sale of car components built on
specifications
The price of aluminium increases
significantly, and due to its numerous
obligations the seller cannot pay for its raw
materials
Consequences as above.
What can the buyer do?

Unaffordability (3)

Norwegian, German law:

Buyer may request specific
performance or request
termination. Seller has to
reimburse loss of increased
profit, loss of extraordinary (?)
profit, incurred expenses.
Italian law, CISG: Buyer may
request specific performance
or request termination. Seller
has to reimburse loss of
increased profit, incurred
expenses.

English law, UNIDROIT, PECL:

Seller has to reimburse loss of
increased profit, incurred
expenses. Buyer may
terminate contract

Case IX Choice between

contracts
Sale of car components built on
specifications
Destruction of part of the sellers storage
Volumes in store sufficient to meet
obligations towards one buyer, but not all
buyers
Consequences as above.
What can the buyer do?

Choice between contracts

Norwegian, Italian,
German law:
Seller is excused. Buyer
may terminate contract

English law: Seller has to

reimburse loss of
increased profit, incurred
expenses . Buyer may
terminate contract
UNIDROIT, PECL, CISG:
Buyer may request
specific performance or
terminate contract. Seller
has to reimburse loss of
increased profit, incurred
expenses . (?)

Norwegian law
Breach of contract, main remedies:
Specific performance + damages
Termination (only if fundamental breach) + damages

Hardship: adjustment of contract terms

Force majeure:
Sale: excludes damages (as long as impediment lasts). Creditor
may terminate.
Construction: duration extended
Other contracts: contract suspended or terminated

Norwegian law
Damages:
Assumption: liability
Adequate causation (direct damages)
Irrespective of degree of negligence (but:
evaluation of what is adequate is affected)
Casus mixtus: gross negligence or wilful
misconduct: also inadequate causation

German law
Breach of contract, main remedies:
Specific performance + damages
Payment instead of performance + damages
Termination (only upon notice) + damages

Hardship: adjustment of terms or

termination
Force majeure: excludes damages (as long as
impediment lasts). Creditor may terminate

German Law
Damages:
Assumption: negligence
Adequate causation (also indirect damages, if
reasonable)
Irrespective of degree of negligence

Italian law
Breach of contract, main remedies:
Specific performance + damages
Termination (only if fundamental breach and debtors
negligence) + damages

Hardship: termination (may be avoided by adjustment

of terms)

Force majeure: contract suspended or

ceases to have effect

Italian law
Damages
Assumption: strict liability and good faith
Foreseeable damages
If wilful misconduct: also unforseeable
damages

English law
Breach of contract, main remedies:
Damages
Termination (only if fundamental breach) + damages
Specific performance (at courts discretion, only if: (i)
damages are inadequate, (ii) does not cause great hardship on
debtor)

Hardship: as in breach of contract

Frustration: kills the contract

English law
Damages
Assumption: strict liability
Foreseeable: (i) usual course of things, (ii)
reasonably contemplated

CISG
Breach of contract, main remedies:
Specific performance (but, art 28: domestic law) +
damages
Termination (only if fundamental breach or, if delay, upon
notice) + damages

Hardship: as in breach of contract

Force majeure: excludes damages (as long as
impediment lasts). Creditor may terminate

CISG
Damages
Assumption: strict liability
(i) Foreseeable as (ii) possible consequences
on basis of (iii) known circumstances

UNIDROIT
Breach of contract, main remedies:
Specific performance (not if: impossible, hardship,
alternative,personal, lapse of time) + damages
Termination (only if fundamental breach or, if delay, upon
notice) + damages

Hardship: adjustment of terms or

termination
Force majeure:excludes damages
impediment lasts)

(as long as

UNIDROIT
Damages
Assumption: strict liability
Foresseable as likely

PECL
Breach of contract, main remedies:
Specific performance (not if: impossible, hardship,
services, alternative) + damages
Termination (only if fundamental breach or, if delay, upon
notice) + damages

Hardship: adjustment of terms or

termination
Force majeure:excludes damages
impediment lasts)

(as long as

PECL
Damages
Assumption: strict liability
Foresseable as likely

Common features

Main differences specific

performance
Main remedy

Norway
Germany
Italy
CISG

Restricted use
England
PECL
UNIDROIT

Main differences assumption for

damages
Negligence
Norway (?)
Germany
Italy (?)

Strict liability

England
CISG
PECL
UNIDROIT

Main differences - Causation

Adequate causation
Germany
Norway

Foreseeability

Italy
England
CISG
PECL
UNIDROIT

Main differences effects of force

majeure
Excuse from damages
All

Use of other remedies

All but England, Italy

Temporary
All but England

Automatic termination
England
Italy (but not if
temporary)

Main differences - Hardship

Renegotiation or
termination
All but England and
CISG

Treated as breach
England
CISG