Europe

Article 1.101 (ex art. 1.101) - Application of the Principles

  • These Principles are intended to be applied as general rules of contract law in the European Communities.
  • Principles will apply when the parties have agreed to incorporate them into their contract or that their contract is to be governed by them.
  • These Principles may be applied when the parties:
    • have agreed that their contract is to be governed by "general principles of law", the "lex mercatoria" or the like; or
    • have not chosen any system or rules of law to govern their contract.
  • These Principles may provide a solution to the issue raised where the system or rules of law applicable do not do so.

Article 1.102 - Freedom of contract

  • Parties are free to enter into a contract and to determine its contents, subject to the requirements of good faith and fair dealing, and the mandatory rules established by these Principles.
  • The parties may exclude the application of any of the Principles or derogate from or vary their effects, except as otherwise provided by these Principles.

Article 1.103 - Mandatory Law 14

  • Where the otherwise applicable law so allows, the parties may choose to have their contract governed by the Principles, with the effect that national mandatory rules are not applicable.
  • Effect should nevertheless be given to those mandatory rules of national, supranational and international law which, according to the relevant rules of private international law, are applicable irrespective of the law governing the contract.

Article 1.104 - Application to questions of consent

  • The existence and validity of the agreement of the parties to adopt or incorporate these Principles shall be determined by these Principles.
  • Nevertheless, a party may rely upon the law of the country in which it has its habitual residence to establish that it did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of its conduct in accordance with these Principles.

Article 1.106 (ex art. 1.104) - Interpretation and Supplementation 23

  • These Principles should be interpreted and developed in accordance with their purposes. In particular, regard should be had to the need to promote good faith and fair dealing, certainty in contractual relationships and uniformity of application. 24
  • Issues within the scope of these Principles but not expressly settled by them are so far as possible to be settled in accordance with the ideas underlying the Principles. Failing this, the legal system applicable by virtue of the rules of private international law is to be applied. 25

Article 1.107 (ex Art. 1.113) - Application of the Principles by Way of Analogy 26

These Principles apply with appropriate modifications to agreements to modify or end a contract, to unilateral promises and other statements and conduct indicating intention. 27

Article 1.301 (ex art. 1.105) - Meaning of Terms 35

In these Principles, except where the context otherwise requires: 36

  • 'act' includes omission; 37
  • 'court' includes arbitral tribunal; 38
  • an 'intentional' act includes an act done recklessly; 39
  • 'non-performance' denotes any failure to perform an obligation under the contract, whether or not excused, and includes delayed performance, defective performance and failure to co-operate in order to give full effect to the contract. 40
  • A matter is 'material' if it is one which a reasonable person in the same situation as one party ought to have known would influence the other party in its decision whether to contract on the proposed terms or to contract at all. . 41
  • 'Written' statements include communications made by telegram, telex, telefax and electronic mail and other means of communication capable of providing a readable record of the statement on both sides 42

Article 1.302 (ex art. 1.108) - Reasonableness 43

Under these Principles reasonableness is to be judged by what persons acting in good faith and in the same situation as the parties would consider to be reasonable. In particular, in assessing what is reasonable the nature and purpose of the contract, the circumstances of the case, and the usages and practices of the trades or professions involved should be taken into account. 44