Answer to Question #233082 in Management for Bob

Question

Briefly describe the differences and similarities between the CISG and the UNIDROIT PICC ?

Answer not less than 700 words

Answer 1

COMPARISON AND CONTRADICTIONSBETWEEN CISG AND THE UNIDROIT PRINCIPLES

Freedom of and the binding force of the contract.

Articles 1.3, 1.4 and 1.6 enunciate some basic policies underlying the Principles. They relate to freedom of contract and the binding forte of contract. The parties are free to enter into a contract and to determine its content; a contract validly entered into is binding upon the parties and can only be modified or terminated in accordance with its terms or by agreement (or as otherwise provided under the Principles ): the parties may exclude the application of the Principles or derogate from, or vary the effect of, any of its provisions (except as otherwise provided in the Principles).Only the last of these rules may be found explicitly in

CISG in article 6 but the other rules can also be reckoned to be among ' the general principles on which it is based'.

Good faith

Each party must act in accordance with good faith and fair dealing in international trade.The parties may not exclude or limit this duty in Article 1.8.The draft comments enumerate a number of application through the principles and note that good faith and fair dealing may be considered 'to be one of the fundamental ideas underlying in the principles'.At first glance ,CISG attributes a more restricted rote to good faith .Article 7 paragraph 1 confines it to the interpretation of the convention .This rule reflects a solution which is a compromise between those who were opposed to any explicit refference in the Convention to good faith and those who preffered a provision imposing the duty to act in good faith directly upon parties to a contract of sale.

The UNIDROIT Principles set forth general rules for international contracts. Their goal “is to establish a balanced set of rules designed for use throughout the world irrespective of the legal traditions and the economic and political conditions of the countries in which they are to be applied.”9

The drafters of the UNIDROIT Principles intended them to apply in a wide variety of circumstances. The preamble states that: They shall be applied when the parties have agreed that their contract be governed by them. They may be applied when the parties have agreed that their contract be governed by general principles of law, the lex mercatoria or the like. They may be applied when the parties have not chosen any law to govern their contract. They may be used to interpret or supplement international uniform law instruments. They may be used to interpret or supplement domestic law. They may be used as a model for national and international legislators.10 While the UNIDROIT Principles reflect concepts found in many legal systems,they also “embody what are perceived to be the best solutions, even if still not yet generally adopted.”11 Thus, they do not simply restate existing rules found in most legal systems; they are aspirational.12

 In a number of circumstances, however, the rules founds in the UNIDROIT Principles are based upon or track language from articles of the CISG.13 For example, UNIDROIT Principles Article 1.9(1), stating that “[t]he parties are bound by any usage to which they have agreed and by any practices which they have established between themselves[,]” is identical to CISG Article 9(1).14 In addition, UNIDROIT Principles Article 5.1.7(1),which sets forth the general rule for determining the contract price whenthe agreement does not fix or make provision for determining the price, is based upon CISG Article 55.15 And in some instances, the UNIDROIT Principles follow a basic approach found in the CISG, but adapt the rule “to reflect the particular nature and scope of the Principles.”16 For example, UNIDROIT Principles Article 7.2.2, dealing with the right to require performance of non-monetary obligations, follows the general approach of CISG Article 46, but adds “certain qualifications

 In many ways, the damages provisions of the UNIDROIT Principles are comparable to those found in the CISG. CISG Article 74 sets forth a basic framework for the recovery of damages. It provides: Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.18 CISG Article 74 thus provides for the recovery of both actual loss suffered and net gains prevented.19 However, it does not provide specific guidelines for calculating damages.20 Instead, CISG Article 74 allows a tribunal to determine the aggrieved party’s