History & Modern Evolution of Transnational Commercial Law

Document-Id: 104510, Please cite as: "https://www.trans-lex.org/104510"

Title

Pédamon, Catherine/Chuah, Jason, Hardship in Transnational Commercial Contract - A Critique of Legal, Judicial and Contractual Remedies (2013), Chapter 4, p. 63

Table of Contents

Chapter 4 The International/Transnotional Dimension

Content

Chapter 4
The International/Transnotional Dimension

Much has already been written about international commercial instruments and
their perspective on hardship and its impact on contracts1 and the right/duty to
renegotiate and adapt the contract2. It is not the intention of this work to revisit
this well-worn ground. The purpose here is to show how the international rules
tend to take a similar approach to regulating hardship cases and the question as
to whether they represent a sufficiently autonomous solution to the lack of cer-
tainty. The methodology taken by these regimes is similar - most begin with a
similar conception of hardship usually qualified by unforseeability, absence of
fault or control over the intervening event and a significant change in circum-
stances. This is then followed by a reiteration of the principale of sanctity of the
agreement3; and finally, in most regimes, provisions for a duty to renegociate the
terms of the agreement and/or an enforced adaptation of the contract. Avoidance
of the contract is frequently not envisaged to be a satisfactory remedy.

1 A useful work on the UNIDROIT Principles and hardship as a concept might be had in Maskow, D., Hardship and Force Majeure [1992] 40 Am. J. Comp. L 657 (Mr Maskow, from Germany, was a member of the Working Group of UNIDROIT).
2See e.g. Berger, K.P., Renegotiation and Adaptation of International Investment Contracts: The Role of Contract Drafters and Arbitrators, 36 Vand. J. Transnat'l L 1347 (Oct. 2003); Gotanda, J., Renegociation and Adaptation Clauses in Investment Contracts, Revisited, ibid., at 1461; Nagla, N., Sanctity Of Contracts Revisited: A Study In Theory And Practice Of Long-Term International Commercial Transaction (Martinis Nijhoff 1995); Wolfgan, P., Arbitration and Renegociation of International Investment Agreements (Kluwer); Hillman, R.A., 'Court Adjustment of Long-Term Contracts: An Analysis under Modern Contract Law', 1987 Duke Law Journal 1; Clayton Gillette, 'Commercial Rationality and the Duty to Adjust Long-Term Contracts', 69 Minnesota Law Review 521 (Feb. 1985).
3Some perhaps seen to be stronger than others: Article 89(1) of the draft Common European Sales Law Regulation for example stresses that 'a party must perform its obligations even if performance has become more onerous, whether because the cost of performance has increased or because the value of what is to be received in return has diminished' whilst Article 6.2.1 of the UPICC might be seen as less exacting in its terms: 'Where the performance of a contract becomes more onerous for one of the parties, that party is nevertheless bound to perform its obligations subject to the following provisions on hardship.'

Referring Principles

Trans-Lex Principle: VIII.1 - Hardship: Requirements

Trans-Lex Principle: VIII.2 - Hardship: Legal consequences

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