The Principles of European Contract Law, PECL, Landoprinciples

1
The Principles of European Contract Law, PECL,
(Lando-principles)

• UNIDROIT PRINCIPLES ON INTERNATIONAL COMMERCIAL
  CONTRACTS (UPICC), the latest version is from
  2004.

2
CISG 1980

PECL 2000, 2003
UPICC 2 ed.2004
DCFR 2008
?
3

• PECL, Principles of European Contract Law
• UPICC, UNIDROIT Principles on International
  Commercial Contracts
• CISG, United Nations Convention on Contracts for
  the International Sales of Goods
• DCFR, Draft Common Frame of Reference

4

• PECL -------- Contract Law
• PRINCIPLES
• CISG -------- Sales of Goods
• CONVENTION

5

• Principles -------- actively opt in
• Convention ------ actively opt out

6

• PECL also covers consumer contracts
• compare CISG, UPICC

7
The first question is of course why do we need
common European Principles of Contract Law?

• The Facilitation of Cross-Border Trade within
  Europe
• The Strengthening of the Single European Market
• To create an Infrastructure for Community Law
• To create common terminology and judicial
  language
• To create a balanced set of rules to supplement
  the contract

8
Article 1101

• These principles are intended to be applied as
  general rules of contract law in the European
  Union.
• (2) These Principles will apply when the parties
  have agreed to incorporate them into their
  contract or that their contract is to be governed
  by them.
• (3)These principles may be applied when the
  parties
• have agreed that their contract is to be governed
  by general principles of law or
• have not chosen any system or rules of law to
  govern their contract.
• (4) These rules may provide a solution to the
  issue raised where the system or rules of law
  applicable do not do so.

9
The purpose for which the Principles are designed

• The future a Foundation of European
  Legislation
• Today Adoption by the Parties
• The nature MODEL RULES

10
Model rules

• This contract is subject to the Principles of
  European Contract Law
• This contract incorporates the Principles of
  European Contract Law
• This contract is subject to the Principles of
  European Contract Law, except as to Articles

11
ICC Model

• Liability for delay
• Liquidated damages for delay in delivery shall
  be
• ____ of the price of the delayed goods
  (service) per week,
• with a maximum of______ of the price of the
  delayed goods (service)
• or
• ___________

12
What kind of Principles?

• General law of contractual obligations
• The Structure Articles, Comments, Notes
• The Contents

13

• Chapter 1 General Provisions
• Chapter 2 Formation
• Chapter 3 Authority of Agents
• Chapter 4 Validity
• Chapter 5 Interpretation
• Chapter 6 Contents and Effects
• Chapter 7 Performance
• Chapter 8 Non-performance and Remedies in
  general
• Chapter 9 Particular Remedies for
  non-performance
• Chapter 10 Plurality of Parties
• Chapter 11 Assignment of Claims
• Chapter 12 Substitution of New Debtor
  Transfer of Contract
• Chapter 13 Set-off
• Chapter 14 Prescription
• Chapter 15 Illegality
• Chapter 16 Conditions
• Chapter 17 Capitalisation of interest

14
Illustrations some important articles

• Article 1201 ( DCFR)
• (1) Each party must act in accordance with good
  faith and fair dealing.
• (2) The parties may not exclude or limit this
  duty.
• Comments, including e.g. examples 3 p
• Comparative notes, 3 p.

15
Good faith and fair dealing is required in e.g.

• The formation, e.g. duty of the party not to
  negotiate a contract with no real intention of
  reaching an agreement with the other party (Art.
  2301) just to get more information of the other
  parties business,
• - or not to disclose confidential
  information given by the other party in the
  course of negotiations (Art. 2302)
• - and do not take unfair advantage of the
  other partys dependence, economic distress or
  other weakness (Art. 4109)
• The performance
• The enforcement of the parties duties under a
  contract to find out about the implied terms of
  the contract,(Art. 6102) the reasonability of
  the usage between the parties (Art. 1105)
• The exercise of a partys right under the contract

16
In 1945 A, a car manufacturer in country Z,
appoints B its sole distribution of automobiles
for country X. The contract takes effect on
January 1, 1946, and runs for one year. It
provides that A, through not obliged to do so,
may give B a one month notice if A does not wish
to renew the contract. On this condition one year
contracts are issued by A and signed by B during
the following years. A does not wish to renew the
contract for 2007 and so informs B on 30.11.
2006. Considering that a contractual relationship
between the parties has lasted for 60 years, B,
despite the provision on notice in the contract,
is entitled to damages because in the
circumstances the notice is too short.
17
Article 1 202 ( DCRF III. - 104)

• Each party owes to the other a duty to
• co-operate in order to give full effect to the
  contract.

18
Article 9 501 Right to Damages (DCFR.-3702)

• The aggrieved party is entitled to damages for
  loss caused by the other partys non-performance
  which is not excused under Article 8108.
• The loss for which damage is recoverable
  includes
• non-pecuniary loss and
• future loss which is reasonably likely to occur.

19
Article 9502 General Measure of Damages (DCFR
III. 3702)

• The general measure of damages is such sum as
  will put the aggrieved party as nearly as
  possible into the position in which it would have
  been if the contract had been duly performed.
  Such damages cover the loss which the aggrieved
  party has suffered and the gain of which he has
  been deprived.

20
Article 9503 Foreseeability (DCFR III.-3703)

• The non-performing party is liable only for
  loss which it foresaw or could reasonably have
  foreseen at the time of conclusion of the
  contract as a likely result of its
  non-performance, unless the non-performance was
  intentional or grossly negligent.

21
Article 9505 Reduction of Loss (DCFR III.-707)

• The non-performing party is not liable for loss
  suffered by the aggrieved party to the extent
  that the aggrieved party could have reduced the
  loss by taking reasonable steps.
• The aggrieved party is entitled to recover any
  expenses reasonably incurred in attempting to
  reduce the loss.

22

• PECL is
• inserted in DCFR Book I, II, III
• But the future of DCFR is ???

23
Draft Common Frame of Reference A European Civil
Code

• PECL CISG
• Lease of goods
• Services General rules, Construction,
  Processing, Storage, Design, Information and
  advice, Treatment
• Mandate
• Commercial Agency, francise and distributionship

24

• Loans
• Personal security
• Benevolent intervention in anothers affairs
  (negotiorum gestio)
• Non-contractual liability arising out of damage
  caused to another (Tort law)
• Unjustified enrichment