1. COMPARATIVE PRIVATE LAW NON-PERFORMANCE - REMEDIES University of Oslo Prof. Giuditta Cordero Moss

2. 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?

3. Destruction of subject-matter (1) All: Seller is excused. Buyer may terminate contract/contract ceases to exist

4. 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?

5. 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

6. 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?

7. Act of god (1) All: Seller is excused. Buyer may terminate contract/effects cease

8. 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IV – Act of god (factum principis) (2) Sale of car components built on specifications The sellers export licence is withdrawn because of the sellers non-compliance with governmental requiremenets Consequences as above.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?

9. 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

10. 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 extraordinary wheather conditions it cannot ship on time Consequences as above. What can the buyer do?

11. 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.

12. 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?

13. 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

14. 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?

15. 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

16. 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?

17. 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

18. 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?

19. 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. (?)

20. 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

21. 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

22. 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

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

24. 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

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

26. 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

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

28. 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

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

30. 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 (as long as impediment lasts)

31. UNIDROIT Damages –Assumption: strict liability –Foresseable as likely

32. 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 (as long as impediment lasts)

33. PECL Damages –Assumption: strict liability –Foresseable as likely

34. Common features

35. Main differences – specific performance Main remedy –Norway –Germany –Italy –CISG Restricted use –England –PECL UNIDROIT

36. Main differences – assumption for damages Negligence –Norway (?) –Germany –Italy (?) Strict liability –England –CISG –PECL –UNIDROIT

37. Main differences - Causation Adequate causation –Germany –Norway Foreseeability –Italy –England –CISG –PECL UNIDROIT

38. 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)

39. Main differences - Hardship Renegotiation or termination –All but England and CISG Treated as breach –England –CISG