THE CHARACTERISTICS OF FORCE MAJEURE UNDER ENGLISH COMMON LAW, EUROPEAN CIVIL LAW AND IN US/CANADA LEGAL SYSTEM IN COMPARISON

THE CHARACTERISTICS OF FORCE MAJEURE UNDER ENGLISH COMMON LAW, EUROPEAN CIVIL LAW AND IN US/CANADA LEGAL SYSTEM IN COMPARISON. WHICH MODEL OFFERS A BETTER SOLUTION AND IS MORE EFFECTIVE FOR INTERNATIONAL CONTRACTS?

by

Gurban BAGHIROV

A Dissertation Presented in Partial Fulfillment

of the Requirements for the Degree

in Master

in International European And Comparative Law

Track International Law

Major: International Business Law

TOULOUSE CAPITOLE UNIVERSITY

August 2015, Toulouse

Table of contents

1. Introduction...............................................................................................................        1
2. The concept of force majeure        ...................................................................................        2

1.  What is force majeure?......................................................................................        2

The terms force majeure and act of God............................................................        3

1.  How modern concept of force majeure developed............................................        5
2.  Characteristics of force majeure events.............................................................        8

1. Externality...............................................................................................        8
2. Unpredictability.......................................................................................        9
3. Irresistibility............................................................................................        11

1. Force majeure in common law..................................................................................        13

1.  The conflict between two basic rules of contract law, pacta sunt servanda and rebus sic stantibus.........................................................................................................        13
2.  Absolute liability in common law......................................................................        15
3.  Establishment of doctrine of frustration on common law..................................        18
4.  Force majeure in the United States....................................................................        21
5.  Force majeure in Canada...................................................................................        23

1. Force majeure in civil law........................................................................................        25

1.  Force majeure in French law.............................................................................        25
2.  Force majeure in German law...........................................................................        27
3.  Force majeure in Italian law..............................................................................        29

1. Force majeure in International law...........................................................................        30

1.  Going through the history of Article 79 CISG and its conceptual evolution.....        30
2.  International aspects of force majeure and the United Nations Convention on Contracts for the International Sales of Goods...................................................        34
3.  The UNIDROIT principles of international commercial contracts...................        37
4.  The relationship between Article 79 CISG and Articles 6.2.1-6.2.3. of the UNIDROIT principles........................................................................................        40
5.  The force majeure concept according to community law..................................        41
6.  Recent community legislation............................................................................        43
7.  Practice of the ICC Court of Arbitration. Cases related to force majeure.........        44
8.  Case law of European Court of Justice..............................................................        47

1. Legal Consequences of force majeure......................................................................        49
2. Conclusion................................................................................................................        50

List of primary sources...................................................................................................        52

1. Introduction

If we had one word to describe our world, we could easily pick the word "international". It does not only encompass universal matters like politics, business and trade, but also small matters in local communities which were formerly known as domestic issues. By going further, one can claim that every single spot on the Earth is more international rather than domestic now. Due to globalization process the relations between countries and nations are at its highest point in the modern time. So are business relations and trade.

This is partially due to the fact that in the past century and especially in last few decades, mankind has witnessed an enormous development in the fields of global business and communication technologies, shrinking the distances in just one click. Truthfully, since the business environment has become such global, the law had to follow. Attempts to harmonize and even fully unify the international commercial law have been taken very seriously, resulting in the adoption of various legal documents and treaties.

This trend also triggers development of international contract law. As modern contracts cover huge amount of business transactions, companies need a more careful and delicate approach while having an agreement. In mutual relations, it is important to find out what will happen if performance of duties becomes impossible for a party. Is that party still responsible for its promises or is it excused for non-performances? If so, what are the condition which excuse a party for its non-performances? What remedies are sought in this case? Are there any restrictions? How does the theory differ from the practice and what are differences in various legal systems? What kind of force majeure clauses is preferable for contracting parties?

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