CISG Article 79: Exemption of Performance, and Adaptation of Contract Through Interpretation of Reasonableness－Full of Sound And Fury, but Signifying Something

Abstract

Article 79 of the CISG provides that “[a] party is not liable for a failure to perform any of his obligations” if the party has encountered a certain impediment defined therein. It was once depicted as “the Convention’s least successful part of the halfcentury of work.” It has been thirty years since the CISG took effect. However, the interpretation of Article 79 is as old and unsuccessful as ever. For one thing, it has long been interpreted against our intuition, not to exempt a party from specific performance claims. For another, the controversy has long continued unsettled over whether a party could be exempted in the so-called “hardship” cases. Lastly, where an event fundamentally alters the equilibrium of the contract because of the increased cost of performance, judges’ power to adapt the contract is urgently * Professor of Law, Himeji-Dokkyo University, Japan (LL.M., Kyoto University). I am profoundly indebted to late Professor Shinichiro Michida (Rapporteur of the CISG at the Diplomatic Conference in 1980), who had cordially instructed me while I was an undergraduate and LL.M. student at Kyoto University. Thank you to the Pace International Law Review Editorial Board for publishing and editing this article in skillful manners. Special thanks to Joanna Kusio, Editor-in-Chief, for insightfully pinpointing the portions in need of clarification.