Extract

Between the time when the contract is concluded and the time when performance by one or both parties is due, there is a risk that some event will intervene and disrupt initial expectations. War or natural disaster may create obstacles to performance. Scarcity in materials may increase costs beyond what either party anticipated. When such unexpected events occur, a party who has yet to perform may claim that it faces impediments that were not allocated or priced and therefore seek to avoid performance. It is more difficult to allocate losses to the party best positioned to avoid them in these situations, because the unanticipated nature of the risk that has materialized implies that neither party was well positioned to take measures against it. Different legal systems have very different rules that govern such events. Some legal systems are somewhat sympathetic to parties that claim that the promises they made should be excused when circumstances have changed sufficiently to alter substantially the initial benefits of the contract. These legal systems assume that promises are made against background circumstances and that the obligations generated by those promises can change when circumstances change. Other legal systems refuse to recognize conditions that fall short of making performance impossible. They hold more closely to the proposition that promises should be kept regardless of intervening events.

The CISG addresses the issue of unanticipated events in Article 79. That provision exempts a party from liability for its failure to perform if it proves that the...