Breach and Adaptation of International Contracts

Transcription

1 Breach and Adaptation of International Contracts An Introduction to Lex Mercatoria Ugo Draetta Ralph B. Lake Ved P. Nanda Butterworth Legal Publishers

2 INTRODUCTION CONTENTS I. The Notion of International Business Contracts Chapter 1. International Contracts and the Lex Mercatoria International Contracts The Concept of the Lex Mercatoria Early Origins of the Lex Mercatoria Contents of the Current Lex Mercatoria The Lex Mercatoria and Codifications: Relationships to the Vienna Convention and the United States Uniform Commercial Code Further Evidence of the Use of the Law Merchant 19 A. Arbitral Decisions 19 B. State Practice Conclusion 26 II. Breach of Contract and Remedies in International Trade Practice Chapter 2. Breach of Contract and Entitlement to Damages General The Common Law Concepts Regarding Entitlement to Damages The Civil Law Concepts Regarding Entitlement to Damages The Practice of International Business Contracts 45 Chapter 3. The Quantification of Damages General Common Law Principles 61 A. General English Law United States Law Civil Law Principles 70 IX

3 3.4 The Practice of International Business Contracts 73 A. "Consequential Damages" 73 B. Interest and Currency Fluctuations 80 C. Mitigation 82 Chapter 4. Contractual Exclusions and Limitations of Liability General Force Majeure Clauses in International Trade Practice 85 A. The Practice of International Business Contracts Concerning Force Majeure 92 B. International Contract Models and Forms 97 C. Article 79 of the Vienna Convention on the International Sales of Goods 99 D. International Chamber of Commerce Arbitration Practice with Respect to Force Majeure Other Limitations of Liability Based on the Degree of Fault Clauses Limiting Damages Amounts Liquidated Damages and Penalty Clauses 110 A. The Concept of Liquidated Damages 110 B. Liquidated Damages Clauses in Municipal Law Ill C. Liquidated Damages Clauses in International Trade Practice 114 D. Late Delivery Penalties 119 E. Ceilings for Late Delivery Penalties 120 Appendix 1. Force Majeure Clause Contained in an Economic Development Contract (A) 124 Appendix 2. Force Majeure Clause Contained in an Economic Development Contract (B) 125 Appendix 3. ICC Document No Appendix 4. Limitation of Liability Clause Contained Supply of a Nuclear Power Plant 129

4 Appendix 5. Limitation of Liability Clause Contained Supply of a Diesel Locomotive 131 Appendix 6. Limitation of Liability Clause Contained Supply of a Gas Power Plant 132 Appendix 7. Limitation of Liability Clause Contained Supply of Maintenance Services 134 Appendix 8. Limitation of Liability Clause Contained in an Offer Responding to an International Tender 135 Chapter 5. Contractual Self-Protections Against Breach General Bank Guarantees and Guarantee Bonds Guarantee Bonds in Municipal Law The Proper Law of Guarantee Bonds Emerging Principles Governing the Guarantee Bonds in the International Trade Practice Attempts to Codify the Transnational Rules Governing Guarantee Bonds Other Types of Self-Protection Remedies Against Contract Breaches 158 A. Exceptio Inadimpleti Contractus 158 B. Documentary Credit and Vesting of Plant and Contractor's Equipment 165 III. The Adaptation of International Business Contracts Chapter 6. Changed Circumstances and Contract Adaptation General Adaptation Clauses in International Business Contracts 170 A. Clauses Aimed at Maintaining the Original Economic Value of the Parties' Obligations Unchanged 172 XI

5 B. Clauses Aimed at Adjusting the Contract to Unforeseen Changes of Circumstances Contract Adaptation in Municipal Law Changed Circumstances in Treaty Law: The "Rebus Sic Stantibus" Clause Contract Adaptation in the Lex Mercatoria 191 A. The Events Triggering the Application of Hardship Clauses 195 B. The Impact the Events Must Have on the Parties' Obligations 196 C. The Effect of Hardship Clauses The International Arbitration Case Law Conclusion 202 Chapter 7. Unilateral Contract Modifications Change Clauses in International Construction Contracts Termination of Convenience Clauses 211 Table of Cases T-l Index 1-1 xu