Article 79 of the CISG, hardship, risk and renegotiation of the contract

I met Christian Von Bar for the first time in Warsaw at a meeting of the Study Group on the European Civil Code. He asked me to join the Group and it was one of the best experiences of my life. The quality of the work, the richness of the exchanges were exceptional; all due to Christian Von Bar.

I had the honor to draft the chapter on the loan agreement, and professor Von Bar was always very constructive in the follow up of this work. We continue both to be active in the European law Institute.

I want to express at the beginning of this article my warmest thanks and my deepest admiration to professor Von Bar. The CISG is enforced in 94 countries; due to its large scope, it is interesting and useful to summarize how the notion of force majeure, recently very much invoked among others due to the Covid 19, is interpreted under CISG provisions.

According to article 79 of the Convention:

“(1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.
(2) If the party’s failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if:
(a) he is exempt under the preceding paragraph; and
(b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him.
(3) The exemption provided by this article has effect for the period during which the impediment exists.
(4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt.
(5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention”.

It is interesting to note that despite the fact that (read more here)