ElectronicjournalofcomparativELaw,vol.8.1(march2004),http://www.ejclorg expenses in order to ensure performance of the contract Finally, although this is not stated in the article, it seems right to demand -like under the CISG-that the imped iment is caused solely by an event that was neither foreseeable nor insurmountable 29 Taking the facts from the English landmark decision of Taylor v. caldwell plaintiffs and the defendants entered into a contract for the use of the defend s music hall for four concerts in the summer months of June to August. The day before the first concert was to take place the hall burned down. Provided that the supervening event was beyond the debtor's sphere of control, this case would also lead to excuse(at least for the first concert) under article 8: 108 BII Result Whereas Article 79 of the CiSG only provides a defence against an action for damages, I Article 8: 108s result is a wider excuse. Article 8: 101(2) provides that the 'aggrieved party may resort to any of the remedies set out in Chapter 9 except claiming performance and damages,.32 Another difference occurs in the case of delay amounting to fundamental non- performance: while under the PeCl an imped iment terminates the contract automatically Article 9: 303(4), under the CiSg the creditor may choose. 33 The practical d ifferences, however, will be minimal for fundamental non-performance in the case of delay will hardly be claimed by the debtor but by the creditor. The latter will not have any interest in performance. If, e.g., A employs B's big band at a fixed date and time for his anniversary garden party and the big band does not show up, then it is likely that a wants to terminate the contract, whereas B is likely to be able and willing to perform on another day. 34 B III English law: Frustration After the courts in the 17th century upheld contracts as being absolute, 3> the English doctrine of frustration has been developed and may discharge the debtor from liability. Unlike in th PECL and in German law, there are no two distinct concepts for that The classic definit 29 For Art 79 CISG, Bianca/Bonell/Tallon, n 16, Art 79, para 2.6.6; Schlechtriem/Stoll, n 16, Art 79 para 31; of a contrary opinion are Enderlein/Maskow/Strohbach, n 24, Art 79, para 3.4 Taylor v Caldwell(1863)3B& s826; cf the detailed discussion by Treitel, n 6, paras 2-024ff Cf Art 79(5)CISG For the relationship between the right to demand specific performance and Art 79 CISG, cf Schlechtriem/Stoll, n 16, Art. 79 paras 55ff Cf also Flam bouras n 4. 284 situaton. This is of course no Sale of Goods example; it only serves to illustrate the parties'interests in such Paradine v Jane(1647) Aleyn 26:... when a party by his own contract creates a duty and charge upon himself he is bound to make it good, if he may, not withstand ing any accident by inev ita ble necessity because he might have provided aga inst it by his contract. The history is well narrated in Treitel, n 6, ch 2 6
Electronic Journal of Comparative Law, vol. 8.1 (March 2004), <http://www.ejcl.org/> 6 expenses in order to ensure performance of the contract. Finally, although this is not stated in the Article, it seems right to demand - like under the CISG - that the impediment is caused solely by an event that was neither foreseeable nor insurmountable.29 Taking the facts from the English landmark decision of Taylor v. Caldwell, 30 the plaintiffs and the defendants entered into a contract for the use of the defendant’s music hall for four concerts in the summer months of June to August. The day before the first concert was to take place the hall burned down. Provided that the supervening event was beyond the debtor’s sphere of control, this case would also lead to excuse (at least for the first concert) under Article 8:108. B.II Results Whereas Article 79 of the CISG only provides a defence against an action for damages,31 Article 8:108’s result is a wider excuse. Article 8:101(2) provides that the ‘aggrieved party may resort to any of the remedies set out in Chapter 9 except claiming performance and damages’.32 Another difference occurs in the case of delay amounting to fundamental nonperformance: while under the PECL an impediment terminates the contract automatically (Article 9:303(4), under the CISG the creditor may choose.33 The practical differences, however, will be minimal for fundamental non-performance in the case of delay will hardly be claimed by the debtor but by the creditor. The latter will not have any interest in performance. If, e.g., A employs B’s big band at a fixed date and time for his anniversary garden party and the big band does not show up, then it is likely that A wants to terminate the contract, whereas B is likely to be able and willing to perform on another day.34 B.III English law: Frustration After the courts in the 17th century upheld contracts as being absolute,35 the English doctrine of frustration has been developed and may discharge the debtor from liability. Unlike in the PECL and in German law, there are no two distinct concepts for that. The classic definition 29 For Art 79 CISG, Bianca/Bonell/Tallon, n 16, Art 79, para 2.6.6; Schlechtriem/Stoll, n 16, Art 79 para 31; of a contrary opinion are Enderlein/Maskow/Strohbach, n 24, Art 79, para 3.4. 30 Taylor v Caldwell (1863) 3 B & S 826; cf the detailed discussion by Treitel, n 6, paras 2-024ff. 31 Cf Art 79 (5) CISG. 32 For the relationship between the right to demand specific performance and Art 79 CISG, cf Schlechtriem/Stoll, n 16, Art. 79 paras 55ff. 33 Cf also Flambouras, n 4, 284. 34 This is of course no Sale of Goods example; it only serves to illustrate the parties’ interests in such situations. 35 Paradine v Jane (1647) Aleyn 26: ‘. . . when a party by his own contract creates a duty and charge upon himself he is bound to make it good, if he may, not withstanding any accident by inevitable necessity, because he might have provided against it by his contract.’ The history is well narrated in Treitel, n 6, ch 2
ElectronicjournalofcomparatIveLaw,vol.8.1(march2004),<http://www.ejclorg/> of the modern idea of frustration was given by lord Radcliff in Davis Contractors v fareham Urban DC,36 as follows: [F]rustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing rad ically different from that which was undertaken by the contract. However, Davis was no case in which the claimant succeeded with the argument of frustration; it has generally been observed that cases of frustrat ion are rare 37 Comparing it to Article 8: 108, frustration seems to be the one with the wider application. Both are only applicable for subsequent obstacles. 38 But the obstacle does not need to amount to an impediment; 9 also delay40 or frustration of purpose+I may amount to al frustration Frustration and Article 8: 108 may accord on the second and third requirements, externality and unforeseeability of the imped iment There are some dicta that the supervening event must be something altogether outside the control of the parties'42 like under the PeCL Thus, fault on the part of the debtor averring frustration generally excludes frustration+3as well as any discharge accord ing to the PECL. This is accepted for intentional actions whereas the law is uncertain if the subsequent event is caused by negligence. 44 It is also [1956 AC 696; National Carriers Ltd v Panalpina((Northern) Ltd [ 1981]AC 675; Pioneer Shipping Ltd v BTP Tioxide Ltd( The Nema'(No 2))[1982 AC 724; for a similar reasoning prior to Davis Contractors cf FA Tamplin Steamship Company v Anglo-Mexican Petroleum Products Company [1916]2 AC 397. Davis Contractors is also cited as an authority in Scotland; HL Mac Queen, J Thomson, Contract Law in Scotland (2000), para 4.100; W WMcBryde, The Law of Contract in Scotland, 2nd edn(2001), para 21-08 E McKendrick, Force Majeure and Frustration: Their Relationship and a Comparative Assessment,in dem,n6,33,42f. Amalgamated Investment Property Co w John Walker& Sons [1977]1 WLR 164(CA); E McKendrick, Contract Law, 4th edn(2000), 301; MacQueen/Thomson, n 36, para 4.91; McBryde, n 36, 21-04 Corp Ltd (1942)AC 154, 163f; Taylor v Caldwell, n 30; cf Treitel, n 6, paras 3-001f ine v Imperial Smelting Kodros Shipping Corporation v Empresa Cubana de flees, The Evia'(No 2))[1982] 1 Lloyds Rep 334(CA), affirmed[1983]1 AC 736 Krell v Henry [1903 2 KB 740(CA), but contrast the same courts decision in Herne Steamboat v Hutton [ 1903]2 KB 740(CA), which is not easily distinguish ble from Krell v Henry, cf discussion in McKendrick, n 38, 306ff. Scots law on this point remains unclear, cf McBryde, n 36, 21-33ff with further references J Lauritsen AS v Wijsmuller Bl(The Super Servant Two)[1989]1 Lloyds Rep 148, 156, affirmed 990]1 Lloyd's Rep 1(CA), in which Bingham LJ stated: The essence of frustration is that it is caused by some unforeseen supervening event over which the parties to the contract have no control and for which they are therefore not responsible. McBryde, n 36, para 21-43 states that" beyond the control the test is describing the law more accurately than referring to externality'and foreseeability 43 McKendrick, n 6, 50f; Treitel, n 6, para 14-001 calls it the preferable view' In Joseph Constantine Steamship Line v Imperial Smelting Corporation, n 39, it was considered obiter hether negligence on the part of the party seeking relief denies the claim of frustration, contrast 166 per
Electronic Journal of Comparative Law, vol. 8.1 (March 2004), <http://www.ejcl.org/> 7 of the modern idea of frustration was given by Lord Radcliff in Davis Contractors v Fareham Urban DC, 36 as follows: ‘[F]rustration occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.’ However, Davis was no case in which the claimant succeeded with the argument of frustration; it has generally been observed that cases of frustration are rare.37 Comparing it to Article 8:108, frustration seems to be the one with the wider application. Both are only applicable for subsequent obstacles.38 But the obstacle does not need to amount to an impediment;39 also delay40 or frustration of purpose41 may amount to legal frustration. Frustration and Article 8:108 may accord on the second and third requirements, externality and unforeseeability of the impediment. There are some dicta that the supervening event must be ‘something altogether outside the control of the parties’42 like under the PECL. Thus, fault on the part of the debtor averring frustration generally excludes frustration43 as well as any discharge according to the PECL. This is accepted for intentional actions, whereas the law is uncertain if the subsequent event is caused by negligence.44 It is also 36 [1956] AC 696; National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675; Pioneer Shipping Ltd v BTP Tioxide Ltd (‘The Nema’ (No 2)) [1982] AC 724; for a similar reasoning prior to Davis Contractors cf F A Tamplin Steamship Company v Anglo-Mexican Petroleum Products Company [1916] 2 AC 397. Davis Contractorsis also cited as an authority in Scotland; H L MacQueen, J Thomson, Contract Law in Scotland (2000), para 4.100; W W McBryde, The Law of Contract in Scotland, 2nd edn (2001), para 21-08. 37 E McKendrick, ‘Force Majeure and Frustration: Their Relationship and a Comparative Assessment’, in idem, n 6, 33, 42f. 38 Amalgamated Investment & Property Co v John Walker & Sons [1977] 1 WLR 164 (CA); E McKendrick, Contract Law, 4th edn (2000), 301; MacQueen/Thomson, n 36, para 4.91; McBryde, n 36, 21 -04. 39 But an impediment may frustrate the contract, Joseph Constantine Steamship Line v Imperial Smelting Corp Ltd [1942] AC 154, 163f; Taylor v Caldwell, n 30; cf Treitel, n 6, paras 3-001ff. 40 Kodros Shipping Corporation v Empresa Cubana de Fletes, (‘The Evia’ (No 2)) [1982] 1 Lloyd’s Rep 334 (CA), affirmed [1983] 1 AC 736. 41 Krell v Henry [1903] 2 KB 740 (CA); but contrast the same court’s decision in Herne Steamboat v Hutton [1903] 2 KB 740 (CA), which is not easily distinguishable from Krell v Henry; cf discussion in McKendrick, n 38, 306ff. Scots law on this point remains unclear; cf McBryde, n 36, 21-33ff with further references. 42 J Lauritzen AS v Wijsmuller BV (‘The Super Servant Two’) [1989] 1 Lloyd’s Rep 148, 156, affirmed [1990] 1 Lloyd’s Rep 1 (CA), in which Bingham LJ stated: ‘The essence of frustration is that it is caused by some unforeseen supervening event over which the parties to the contract have no control and for which they are therefore not responsible.’ McBryde, n 36, para 21-43 states that ‘beyond the control’ the test is describing the law more accurately than referring to ‘externality’ and ‘foreseeability’. 43 McKendrick, n 6, 50f; Treitel, n 6, para 14-001 calls it ‘the preferable view’. 44 In Joseph Constantine Steamship Line v Imperial Smelting Corporation, n 39, it was considered obiter whether negligence on the part of the party seeking relief denies the claim of frustration, contrast 166 per
ElectronicjournalofcomparativELaw,vol.8.1(march2004),http://www.ejclorg doubtful whether the frustrating event must have been unforeseeable. 4 A significant difference is that frustration does not require an insurmountable obstacle as the alternative way will often constitute something radically different, 46 The immediate result concurs again: the debtor is freed from performance and any damages for non B IV German law: Impossibility a comparison with the german concept of impossibility only is less fruitful as the effect of an impossible performance under German law is entirely different. It only excludes the general claim for specific performance+7 notwithstand ing fault and foreseeability on the part of the debtor. The question whether the debtor has to pay damages is a matter of fault. The following example may illustrate this. A sold his Volkswagen Golf to B, but the car was destroyed before it was handed over. The destruction of the car only excludes bs claim of performance in forma specifica. With regard to damages, B's claim will only succeed if he can prove that a's culpable behaviour led to the impossibility. 48 Nevertheless we should take a look at the issue when german law considers an obligation to be impossible. 275(1)of the BGB applies to all types of impossibility objective, subjective and initial impossibility 50. Besides the relevance for initial Imped iments it corresponds with the notion in Article 8: 108 of an impediment; particularly excessively onerous performance is not covered.5 However, $$ 275(2)and(3)of the BGB cover changes in the equilibrium as well as cases where performance is owed in persona Viscount Simon LC and 195 per Lord Wright. However, there is Scottish authority: London Edinburgh Shipping Company, Ltd v Lords Commissioners of the Admiralty[1920]SC 309(IH) The classic approach was that unforeseeability was necessary: Walton Harvey Ltd v Walker& Homfrays Ltd [1931] 1 Ch 274(CA); see also post Davis Contractors, National Carriers Ltd v Panalpina (Northern)Ltd, n 37, 700; Paal Wilson Co A/S v Partenreederei Hannah Blumenthal( The Hannah Blumenthal)[1983]1 AC 854, 909. This was questioned in Ocean Tramp Tankers Corps v v0 Sovfracht('The Eugenia[1964 2 QB 226, 239(CA) per Lord Denning, WJ Tatem Ltd v Gamboa [1939]1 KB 132, 137f, McBryde, n 36, para 21-28: Treitel, n 6, para 13-001f 46 Treitel, n 6, para 12-017 Zimmermann, n 7, 286, W Emst, in K Rebmann(ed), Munchener Kommentar zum Buirgerlichen Gesetabuch, 4th edn(2001-),$275 para 3 48 There is some discussion on the question whether the non-performance itself can constitute a breach of contract in the case of impossibility or whether the breach can only be seen in the culpable behaviour. The prevailing view is the former approach; cf Munchener Kommentar/Ernst, n,$280 para llf Yet, subjective impossibility seems to differ from the former$ 275(2)as it demands to overcome some impediments; Munchener Kommentar/Ernst, n 47,$ 275 para 3. This, however, corresponds with Art 8: 108 Cf Zimmermann. n 7. 280f Cf Zimmermann. n. 282 8275(2)BGB; cfZimmermann, n 7, 281ff, and in German the extensive treatment by Munchen Kommentar/Ernst, n 47, $275 paras 69ff. Some remarks on$ 275(2)BGB are made below, last para of C.IV
Electronic Journal of Comparative Law, vol. 8.1 (March 2004), <http://www.ejcl.org/> 8 doubtful whether the frustrating event must have been unforeseeable.45 A significant difference is that frustration does not require an insurmountable obstacle as the alternative way will often constitute something ‘radically different’.46 The immediate result concurs again: the debtor is freed from performance and any damages for nonperformance. B.IV German law: Impossibility A comparison with the German concept of impossibility only is less fruitful as the effect of an impossible performance under German law is entirely different. It only excludes the general claim for specific performance47 notwithstanding fault and foreseeability on the part of the debtor. The question whether the debtor has to pay damages is a matter of fault. The following example may illustrate this. A sold his Volkswagen Golf to B, but the car was destroyed before it was handed over. The destruction of the car only excludes B’s claim of performance in forma specifica. With regard to damages, B’s claim will only succeed if he can prove that A’s culpable behaviour led to the impossibility.48 Nevertheless, we should take a look at the issue when German law considers an obligation to be impossible. § 275 (1) of the BGB applies to all types of impossibility: objective, subjective49 and initial impossibility50. Besides the relevance for initial impediments it corresponds with the notion in Article 8:108 of an impediment; particularly excessively onerous performance is not covered.51 However, §§ 275 (2) and (3) of the BGB cover changes in the equilibrium52 as well as cases where performance is owed in persona Viscount Simon LC and 195 per Lord Wright. However, there is Scottish authority: London & Edinburgh Shipping Company, Ltd v Lords Commissioners of the Admiralty [1920] SC 309 (IH). 45 The classic approach was that unforeseeability was necessary: Walton Harvey Ltd v Walker & Homfrays Ltd [1931] 1 Ch 274 (CA); see also post Davis Contractors, National Carriers Ltd v Panalpina (Northern) Ltd, n 37, 700; Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (‘The Hannah Blumenthal’) [1983] 1 AC 854, 909. This was questioned in Ocean Tramp Tankers Corps v V/O Sovfracht (‘The Eugenia’) [1964] 2 QB 226, 239 (CA) per Lord Denning, W J Tatem Ltd v Gamboa [1939] 1 KB 132, 137f; McBryde, n 36, para 21-28; Treitel, n 6, para 13-001f. 46 Treitel, n 6, para 12-017. 47 Zimmermann, n 7, 286; W Ernst, in K Rebmann (ed), Münchener Kommentar zum Bürgerlichen Gesetzbuch, 4th edn (2001-), § 275 para 3. 48 There is some discussion on the question whether the non-performance itself can constitute a breach of contract in the case of impossibility or whether the breach can only be seen in the culpable behaviour. The prevailing view is the former approach; cf Münchener Kommentar/Ernst, n 47, § 280 para 11f. 49 Yet, subjective impossibility seems to differ from the former § 275 (2) as it demands to overcome some impediments; Münchener Kommentar/Ernst, n 47, § 275 para 3. This, however, corresponds with Art 8:108. 50 Cf Zimmermann, n 7, 280f. 51 Cf Zimmermann, n 7, 282. 52 § 275 (2) BGB; cf Zimmermann, n 7, 281ff, and in German the extensive treatment by MünchenerKommentar/Ernst, n 47, § 275 paras 69ff. Some remarks on § 275 (2) BGB are made below, last para of C.IV