CISG & Proactive Contracting: Suspending Performance under Art. 71 CISG in Time of a Global Pandemic

Abstract

The profound economic and social impact of the global COVID-19 pandemic put to the test the resilience of commercial relationships, pushing legal academia and practice to consider questions beyond the mere impact of certain institutes of civil or common law tradition: the role of the contract law in supporting the survival of affected trading relationships. The discussion under CISG has focused mostly on the interpretation and application of its provisions – notably Art. 79 – but did not go significantly further than that. This paper aims to contribute to the existing discussion in two ways. First, is to bring to the table a discussion around a remedy embedded in Art. 71 (1) & (3) CISG: the right of suspending performance. Second, to put such remedy in the context of proactive contracting, demonstrating the potential for its use in structuring and managing the pandemic (or any other event) going forward. The discussion will, therefore, focus on the current interpretation and application of Art. 71 (1) & (3) CISG, and will then move to clarify the ideas behind proactive contracting, and ways in which participants in international sales contracts can use Art. 71 (1) & (3) CISG to address performance and adaptability risks within their relationship.

Keywords: suspending performance, CISG, proactive contracting, party autonomy, change management