Subjective Reasons of Gross Disparity and the Presumption of Professional Competence: A Contradiction in the Lex Mercatoria?

Murdoch University eLaw Journal, Vol. 15, No. 1, p. 94, 2008

21 Pages Posted: 2 Nov 2011  

Cemil Ahmet Yildirim

affiliation not provided to SSRN

Date Written: August 7, 2008

Abstract

The article 3.10 of the UNIDROIT Principles flamed a traditional debate among legal writers which reflects to a contradiction between two general principles of international commercial law: On the one hand, the presumption of professional competence of international businessmen is a well established principle of the new lex mercatoria. On the other hand, the article 3.10 of the UNIDROIT Principles, which was drafted by eminent professors of international commercial law recognizes a remedy to the parties which sign a disadvantageous contract because of their 'improvidence, ignorance, inexperience or lack of bargaining skill.'

What was the aim of the drafters of this article? Does the Art.3.10 really provide that, after conclusion of an international commercial contract, one of the parties to whom the concluded price does not please may rescind the contract with the pretext of his 'improvidence, ignorance, inexperience or lack of bargaining skill'? Is the purpose of the presumption of professional competence of international businessmen to enforce an unfair contract in all circumstances, even if the unfairness is caused by the fact that the more powerful party has benefited from the weakness of the other?

I briefly argue in this article that these two principles do not necessarily have to be read in a contradiction, because they are based on different traditions and they are still useful for different purposes. We need, then, to propose an interpretation to read both Art.3.10 and the presumption of professional competence of businessmen so that they do not contradict each other.

In this article I aim to propose a complete and useful reading of these concepts. To do that, I study first the evolution of the concept of contractual equilibrium, with a short look at comparative law, and then I examine the arbitral case law on the application of the presumption of professional competence with particular attention to its relations with the rigidity of the pacta sund servanda rule and gross disparity.

Keywords: Lex mercatoria, UNIDROIT principles, international commercial contracts, gross disparity, presumption for professional competence, international commercial arbitration

JEL Classification: K00, K12, K39

Suggested Citation

Yildirim, Cemil Ahmet, Subjective Reasons of Gross Disparity and the Presumption of Professional Competence: A Contradiction in the Lex Mercatoria? (August 7, 2008). Murdoch University eLaw Journal, Vol. 15, No. 1, p. 94, 2008 . Available at SSRN: https://ssrn.com/abstract=1953173

Cemil Ahmet Yildirim (Contact Author)

affiliation not provided to SSRN ( email )

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