UNIDROIT Principles of International Commercial Contracts with Official Commentary [1994]

CHAPTER 7 - NON-PERFORMANCE

SECTION 4: DAMAGES

1779

ARTICLE 7.4.1 - (Right to damages)

COMMENT

1. Right to damages in general

2. Damages may be combined with other remedies

3. Damages and pre-contractual liability

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Article 7.4.1 - (Right to damages)

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Any non-performance gives the aggrieved party a right to damages either exclusively or in conjunction with any other remedies except where the non-performance is excused under these Principles.

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COMMENT

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1. Right to damages in general

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This article establishes the principle of a general right to damages in the event of non-performance, except where the non-performance is excused under the Principles, as in the case of force majeure (Art. 7.1.7) or of an exemption clause (Art. 7.1.6). Hardship (Art. 6.2.1 et seq.) does not in principle give rise to a right to damages. The article recalls that the right to damages, like other remedies, arises from the sole fact of non-performance. It is enough for the aggrieved party simply to prove the non-performance, i.e. that it has not received what it was promised. It is in particular not necessary to prove in addition that the non-performance was due to the fault of the non-performing party. The degree of difficulty in proving the non-performance will depend upon the content of the obligation and in particular on whether the obligation is one of best efforts or one to achieve a specific result. See Art. 5.4.

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The right to damages exists in the event of failure to perform any of the obligations which arise from the contract. Thus it is not necessary to draw a distinction between principal and accessory obligations.

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2. Damages may be combined with other remedies

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This article also states that the aggrieved party may request damages either as an exclusive remedy (for example damages for delay in the case of late performance or for defective performance accepted by the aggrieved party; damages in the event of impossibility of performance for which the non-performing party is liable), or in conjunction with other remedies. Thus, in the case of termination of the contract, damages may be requested to compensate the loss arising from such termination, or again, in the case of specific performance, to compensate for the delay with which the aggrieved party receives performance and for any expenses which might have been incurred. Damages may also be accompanied by other remedies (cure, publication in newspapers of, for example, an admission of error, etc.).

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3. Damages and pre-contractual liability

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The right to damages may arise not only in the context of non-performance of the contract, but also during the pre-contractual period. See, for instance, Art. 2.15 in case of negotiations in bad faith, Art. 2.16 in the event of breach of the duty of confidentiality, or Art. 3.18 in the case of mistake, fraud, threat or gross disparity. The rules governing damages for non-performance as laid down in this Section may be applied by analogy to those situations.

UNIDROIT Principles of International Commercial Contracts with Official Commentary [1994]

PREAMBLE

CHAPTER 1 - GENERAL PROVISIONS

CHAPTER 2 - FORMATION