DAMAGES IN INTERNATIONAL SALES LAW: CISG, PECL, AND UPICC

Contract law, whether national or international, is – almost universally and entirely – at the disposition of the parties when they are modeling their individual contractual situation; very few of its provisions are usually considered mandatory. Mandatory rules are confined to questions of validity because of a party's immorality, illegality, or incapacity, as well as the rudimentary protection of the balance of the duties owed between the parties. Even in situations where the contract partners actively negotiate the terms of their contract, and especially in the manifold situations in which they do not discuss the conditions, the commercial parties of cross-border transactions often do not consider the substantive law applicable to their contract. This holds true not only for the contract drafting stage but also for the fulfillment stage of performing the duties owed under the contract. Somewhat prematurely, the parties (and their legal counsel) might even believe that their elaborate contract deals with all the issues of fulfillment and no reference to the underlying law must be made. Whatever the scenario, this view dramatically changes when the relationship deteriorates and one or both of the parties deliberate about damages. In practice virtually all less extensively negotiated, elaborated, and documented contracts – and thus the vast majority of them – do not provide any rules of either accounting or awarding damages. The pursuit of compensation almost invariably leads the parties to turn to the applicable law.