Document-Id: 946000, Please cite as: "http://www.trans-lex.org/946000"

Principle

No. VII.1 - Damages in case of non-performance

The aggrieved party is entitled to damages for loss caused by the other party's non-performance of its contractual obligations. It is entitled, subject to the provisions of Principle VII.2 and Principle VII.3.1 , to receive such a sum of money by way of damages as will, so far as possible, put him in the same position as if the contract had been performed.

CommentaryReferencesContract ClausesDiscussion

Commentary

1 The Principle, together with the Principle VII.3.1 establishes the principle of full compensation as the corner stone of the law on damages. The party suffering the damage is entitled to full compensation for the harm it has sustained as a consequence of the other party's non-performance. At the same time, the damages claimed and received must not enrich the party suffering the damage. This limitation is relevant for the recovery of future harm, including lost profits.

2 By refering to the recovery of damages "caused" by the other party's non-performance, the Principle refers to the need for a causal nexus between the non-performance and the damages. establishing siuch nexus may be problematic in cases in which a party claims compensation for future damages.

Please cite as: "Commentary to Trans-Lex Principle , http://www.trans-lex.org/946000"
 

References

 

Jump to: Please select a type!

Arbitral AwardsCourt DecisionsDoctrineInternational LegislationMiscellaneousModel LawsModel TermsNational LegislationPrinciples / Restatements

Arbitral Awards

CRCICA Award no. 14/1989, in: Mohie Eldin I. Alam Eldin, Arbitral Awards of the Cairo Regional Centre of International Commercial Arbitration, The Hague 2000, p. 17CRCICA Award no.6/1985, in: Mohie Eldin I. Alam Eldin, Arbitral Awards of the Cairo Regional Centre of International Commercial Arbitration, The Hague 2000, p. 189ICC Award No. 1526, Clunet 1974, at 915 et seq.ICC Award No. 2520, Clunet 1976, at 992 et seq.ICC Award No. 2583, Clunet 1977, at 950 et seq.ICC Award No. 3131, Rev. d. Arb. 1983, at 525 et seq.ICC Award No. 5835, 10 ICC Bull. No. 2, 1999, at 33 et seq.ICC Award No. 5910, Clunet 1988, at 1216 et seq.ICC Award No. 8502, 10 ICC Bull. No. 2, 1999, at 72 et seq.ICC Award No. 9392/9426, YCA 2001, 13 et seq.ICC Award No. 9771, YCA 2004, at 46 et seq.Karaha Bodas Company L.L.C. v. Pertamina and PT. PLN (Persero), Int'l Arb. Rep. March 2001, at C-2 et seq.Lena Goldfields v. Soviet Government, Award of 2nd Sept 1930, German original text previously unpublished; English translation: 36 Cornell Law Quarterly (1950/1951), at 42 et seq.Saphire Award, ILR 1963, at 136 et seq. 

Court Decisions

PCIJ Judgement No. 13, Case Concerning The Factory At Chorzów, at http://www.icj-cij.org/pcij/serie_A/A_17/54_Usine_de_Chorzow_Fond_Arret.pdf, also published in PCIJ, Series A, No. 17, Sept. 13th, 1928.Taylor v. Caldwell, 122 E.R. 309. 

Doctrine

Bishop, R. Doak, International Arbitration of Petroleum Disputes: The Development of a Lex Petrolea, YCA 1998, at 1131 et seq.Derains, Yves, note to ICC Award No. 1526, Clunet 1974, at 918 et seq.Domingo, Ortega, Rodriguez-Antolin, Zambrana, Principios de Derecho Global, Navarra, 2006Fouchard Gaillard Goldman on International Commercial Arbitration (edited by Emmanuel Gaillard and John Savage) The Hague 1999Gotanda, John Yukio, Damages in Private International Law, 326 (2007) Recueil des cours 83Jenks, Edward et al., A Digest of English Civil Law, London, Sydney, Calcutta, Winnipeg, Wellington 1921.Langen, Eugen, Transnationales Recht, Heidelberg 1981.Magnus, Ulrich, Die allgemeinen Grundsätze im UN-Kaufrecht, 59 RabelsZ 1995, at 469 et seq.Ortscheidt, Jérôme, La réparation du dommage dans l'arbitrage commercial international, Paris 2001.Osman, Filali, Les Principes Généraux de la Lex Mercatoria, Paris 1992Ripert, Georges, Les Règles du Droit Civil Applicables aux Rapports Internationaux (Contribution à l'Etude des Principes Généraux du Droit Visés au Statut de la Cour Permanente de Justice Internationale), 44 Rec.Cours 1933-II, at 569 et seq. 

International Legislation

United Nations Convention on Contracts for the International Sale of Goods (CISG) 

Miscellaneous

CISG Advisory Council Opinion No. 6: Calculation of Damages under CISG Article 74Decision taken by the Governing Council of the United Nations Compensation Commission, S/AC.26/1992/9, 06 March 1992 

Model Laws

A Contract Code: Drawn up on Behalf of the English Law CommissionDraft Common Frame of Reference (EU) - DCFR (2008) 

Model Terms

Standard Contracts for the UK Offshore Oil & Gas Industry, General Conditions of Contract (including Guidance Notes) for Marine Construction, 2nd Ed., Aberdeen 2004, at 1 et seq. (available at: http://www.logic-oil.com/contracts.cfm)North American Export Grain Association, Inc. - Free on Board Export Contract U.S.A./Canada (No. 2) 

National Legislation

Civil Code QuébecContract Law of the People's Republic of ChinaCzechoslovak International Trade CodeEthiopian Civil CodeNieuw Burgerlijk Wetboek - New Netherlands Civil Code ( Dutch Civil Code )Russian Civil CodeUK Sale Of Goods Act 1979, Chapter 54 

Principles / Restatements

Principles of European Contract Law - PECL 

Contract Clauses

 

Jump to: Please select a type!

1. Full CompensationSales & Purchase ContractServices ContractJoint Venture2. Aggrieving Party to Support Additional CostsSales & Purchase ContractLoan ContractMerger Agreement3. Determination of Cases where Allocation of Damages may be AwardedSales & Purchase ContractServices ContractConstruction & O&M Contract4. Repartition of LiabilitiesSales & Purchase ContractServices Contract
1. Full CompensationSales & Purchase ContractSpecific Performance
The parties recognize that irreparable injury will result from a breach of any provision of this Agreement and that money damages will be inadequate to fully remedy the injury. Accordingly, in the event of a breach or threatened breach of one or more of the provisions of this Agreement, any party who may be injured (in addition to any other remedies which may be available to that party) will be entitled to one or more preliminary or permanent orders (i) restraining and enjoining any act which would constitute a breach or (ii) compelling the performance of any obligation which, if not performed, would constitute a breach.
1997
Trigger Price Transactions
(...) Calculation of any damages pursuant to this Section X shall be incorporated as necessary in the calculation of damages set forth in Section Y to assure that the non-failing Party will be fully compensated for its actual loss incurred because of the other Party's failure.
2000
Claims vis-à-vis the Sellers
If a Guarantee made by the Sellers (...) is incorrect, the Sellers shall, at the Seller's option, in their sole discretion and subject to the limitations (...) put either the Purchaser and the Companies of the Group into the position they would have been in had the Guarantee been correct or shall pay damages within the meaning of Sections 249 et seq. German Civil Code
2004

Each Party agrees to indemnify and hold harmless the other against any and all liability, loss and costs, expenses or damages, including but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever or howsoever caused by reason of any injury (whether to body, property, personal or business character or reputation) sustained by any person or to any person or property, arising out of any act, failure to act, neglect, any untrue or alleged untrue statement of a material fact or failure to state a material fact which thereby makes a statement false or misleading, or any breach of any material representation, warranty or covenant by either Party or any of its agents, employees, or other representatives. Nothing herein is intended to nor shall it relieve either party from liability for its own willful act, omission or negligence. All remedies provided by law, or in equity shall be cumulative and not in the alternative.
2011
Indemnity of Seller
Purchaser agrees to indemnify, defend and hold Seller harmless from and against any and all Losses (as hereinafter defined) arising out of or resulting from the breach by Purchaser of any representation, warranty, covenant or agreement contained in this Agreement or the schedules and exhibits hereto. For purposes of Section X, the term Losses​ shall mean all damages, costs and expenses (including reasonable attorneys' fees) of every kind, nature or description, it being the intent of the Parties that the amount of any such Loss shall be the amount necessary to restore the indemnified party to the position it would have been in (economically or otherwise), including any costs or expenses incident to such restoration, had the breach, event, occurrence or condition occasioning such Loss never occurred (...)
2011
Remedies
The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed by any party in accordance with their specific terms or were otherwise breached by such party. The parties accordingly agree that, in addition to any other remedy to which the parties are entitled at law or in equity, each party is entitled to injunctive relief to prevent breaches of this Agreement by the other party and otherwise to enforce specifically the provisions of this Agreement against the other party. Each party expressly waives any requirement that the other party obtain any bond or provide any indemnity in connection with any action seeking injunctive relief or specific enforcement of the provisions of this Agreement.
2014
 Services ContractMoney Damages Insufficient
Distributor agrees that money damages would not be a sufficient remedy for any breach by Distributor of the confidentiality provisions of this Agreement and that in addition to all other remedies, the Company shall be entitled to specific performance and injunctive or other equitable relief as remedy for such breach. Distributor further agrees to waive any requirement for the Company to secure a bond or post other security in connection with such remedy - (International Contracting: Law and Practice – Larry A. DiMatteo – §9.02 – S. 326)

The Agent shall be entitled to compensation for damages which may arise out of the Principal's inability to meet his commitments, according to the contract or to business customs (...) Should this contract be improperly terminated or revoked, as a result of which either party sustains damages, the party improperly terminating the contract shall be obliged to compensate the other party for the damages such party sustained, taking into account the extent of efforts made and material and non-material capabilities provided to serve the Agency prior to such improper termination
1983
Validity Period and Breach of Agreement
(...) urther, if the other party has been subject to other losses, the party that unilaterally discontinues this agreement is liable for a full amount payment of compensation.
2006
 Joint VentureCooperation
(…) Each Member acknowledges that monetary damages alone would not be adequate compensation for a breach of this Section X and the Members agree that a non breaching Member shall be entitled to seek a decree or order from a court of competent jurisdiction for specific performance to restrain a breach or threatened breach of this Section X or to require compliance by a Member with this Section X (…)
2007
Remedies Cumulative
Each right, power and remedy provided for in this Agreement or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement or now or hereafter existing at law, in equity, by statute or otherwise, and the exercise by any Party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such Party of any or all of such other rights, powers or remedies.
2007
Specific Performance
The Parties agree that irreparable damage will result if this Agreement is not performed in accordance with its terms, and the parties agree that any damages available at law for a breach of this Agreement would not be an adequate remedy. Therefore, the provisions hereof and the obligations of the Parties hereunder shall be enforceable in a court of equity, or other tribunal with jurisdiction, by a decree of specific performance, and appropriate preliminary or permanent injunctive relief may be applied for and granted in connection therewith. Except as otherwise limited by this Agreement, such remedies and all other remedies provided for in this Agreement shall, however, be cumulative and not exclusive and shall be in addition to any other remedies that a party may have under this Agreement (…)
2007
 2. Aggrieving Party to Support Additional CostsSales & Purchase ContractShipment
Failure of Buyer to provide such shopping space or to give such instruction shall be a breach of the contract and Buyer shall bear any additional costs incurred therefrom and all risks of the goods
Packing
If the packaging does not fulfil any of the criteria mentioned above, the goods are considered as not being in due form. Without further consultations 5% of the order value may directly be deducted for increased logistic and handling costs
Costs of Collection
Purchaser shall pay all costs, charges, and expenses including attorney's fees, reasonably incurred or paid by the Company (including attorney's fees for any appeals taken) because of the failure of the Purchaser to perform and comply with the terms and conditions of this agreement including payment of monies due and every such payment shall bear interest from the date at the highest rate permitted by law – (International Contracting: Law and Practice – Larry A. DiMatteo – §7.12 – S. 252)

(...) if direct losses of Party A resulting from the breach of Party B are in excess of the foregoing compensation or penalties, Party A shall be entitled to claim against Party B.
2010
 Loan ContractExpenses; Indemnification for Litigation
(...) The Borrower shall be obligated to pay (...) if any Event of Default occurs, all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including fees and disbursements of counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
2011
 Merger AgreementIndemnification
The Escrow Participants agree to indemnify, compensate, reimburse, and hold Parent and its officers, directors, and affiliates, including the Surviving Corporation (the Indemnified Parties​), harmless against all claims, losses, liabilities, damages, Taxes, costs and expenses, including reasonable attorneys' fees and expenses of defense, interest, fines and penalties (hereinafter individually a Loss and collectively Losses​) paid, incurred or sustained by the Indemnified Parties, or any of them (including the Surviving Corporation), as a result of (…) any inaccuracy in or breach of any representation or warranty of the Company set forth in this Agreement as of the date of this Agreement (…) any failure by the Company to perform, fulfill or comply with any covenant or obligation applicable to it contained in this Agreement (…)
2014
 3. Determination of Cases where Allocation of Damages may be AwardedSales & Purchase ContractIndemnity
Subject to Section X, each Party assumes full responsibility and liability for and shall indemnify and save harmless the other Party from all liability and expense on account of any and all damages, claims or actions, including injury to and death of persons, arising from any act or accident occurring when title to the Gas is vested in the indemnifying Party unless the act or accident was the result of the willful misconduct or gross negligence of the indemnified Party, its agents or assigns.
2000
 Services ContractDirect Damages
Each of the Parties shall be liable to the other for any direct damages arising out of or relating to its performance or failure to perform under this Agreement; provided, however, that the liability of X and Y, whether based on an action or claim in contract, equity, negligence, tort or otherwise, for all events, acts or omissions shall not exceed, in the aggregate, an amount equal to the amounts paid under this Agreement during the {X} months preceding the claim
2005
 Construction & O&M ContractPresenting Claims
In no event shall the Company be liable for any act or omission or default unless the claim is presented to it at its office within {X} days from the date of exportation of the goods in a written statement to which sworn proof of claim shall be attached – (International Contracting: Law and Practice – Larry A. DiMatteo – §7.12 – S. 252)
No Responsibility for Governmental Requirements
It is the responsibility of the Purchaser to know and inform the Company of the marking requirements of the country of importation, and all other safety and health regulations, and all other requirements of law or official regulations. The Company shall not be responsible for action taken or fines or penalties assessed by any governmental agency against the shipment – (International Contracting: Law and Practice – Larry A. DiMatteo – §7.12 – S. 252)
Damage to the Works Before & After Taking Over
The Contractor shall be liable for and shall make good any damage to the Works, which occurs before taking over. The Purchaser shall, however, be liable for any such damage if the damage is caused by the Purchaser's negligence. The Contractor shall only be liable for damage to the Works after taking over to the extent that the damage is caused by a defect (...) or negligence by the Contractor when remedying a defect (...)
2001
Damage to Property
The Contractor/Purchaser shall be liable for damage to the Purchaser's/Contractor's other property than the Works when such damage is caused by the Contractor's/Purchaser's negligence
2001
 4. Repartition of LiabilitiesSales & Purchase ContractFailure to Perform
If either Party fails on any Day to Schedule and receive or deliver the Contract Quantity, as provided in Section X, that Party shall be liable for, and shall pay the other party, the following damages: (a) Buyer's Failure. If the quantity Buyer receives and purchases on any Day is less than the applicable Contract Quantity and the Sales Price is less than the Contract Price, then Buyer shall be liable for and shall pay to Seller a dollar amount equal to the product of (i) the difference between the Contract Price and the Sales Price, and: (ii) Buyer's Deficiency Quantity. In addition, Buyer shall pay Seller an amount equal to ten percent (10%) of the amount calculated pursuant to the first sentence of this subsection (a) to cover Seller's administrative and operational costs and expenses. (b) Seller's Failure. If the quantity Seller sells and delivers on any Day is less than the applicable Contract Quantity and the Replacement Price is greater than the Contract Price, then Seller shall be liable for and shall pay to Buyer a dollar amount equal to the product of (i) the difference between the Replacement Price and the Contract Price and; (ii) Seller's Deficiency Quantity. In addition, Seller shall pay Buyer an amount equal to ten percent (10%) of the amount calculated pursuant to the first sentence of this subsection (b) to cover Buyer's administrative and operational costs and expenses.
2000
Indemnification
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in paragraph (x) of this Section is due in accordance with its terms but is for any reason held by a court to be unavailable from the Parent Company on grounds of policy or otherwise, the Parent Company and the Underwriter shall contribute to the total losses, claims, damages and liabilities (including legal or other expenses of investigation or defense) to which they may be subject in such proportion so that the Underwriter is responsible for the percentage that the underwriting fee is of the sum of such fee and the purchase price of the Bonds specified in Section X and the Parent Company is responsible for the balance (...)
2003
 Services ContractValidity Period and Breach of Agreement
If, because of Party A's wrong broadcasting or omission in broadcasting of advertisements, damages have been caused to clients or consumers, Party A shall bear the liabilities. In the case where damages have been caused to clients or consumers, and resulting in legal disputes because of the truthfulness of the content in the advertisement Party B provides to Party A and because of problems in the procedures, Party B shall bear the liabilities.
2006
 

Discussion

There are currently no discussions.
Contact - Team - Trustees - Disclaimer / Legal information / Privacy - Twitter - Facebook
A project of CENTRAL, University of Cologne. Co-sponsored by Klemens Pleyer Foundation