The contract execution in case of a change of circumstances (hardship) a comparison between the civil code 2015 and the principles of international commercial contracts

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC LUẬT TP HỒ CHÍ MINH -*** -BAN ĐIỀU HÀNH CÁC CHƯƠNG TRÌNH ĐÀO TẠO ĐẶC BIỆT NGUYỄN HOÀNG NAM THE CONTRACT EXECUTION IN CASE OF A CHANGE OF CIRCUMSTANCES (HARDSHIP) – A COMPARISON BETWEEN THE CIVIL CODE 2015 AND THE PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS KHÓA LUẬN TỐT NGHIỆP CỬ NHÂN LUẬT Khoa: Các chương trình đào tạo đặc biệt Niên khóa: 2012 – 2016 THÀNH PHỐ HỒ CHÍ MINH NĂM 2016 BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC LUẬT TP HỒ CHÍ MINH -*** -BAN ĐIỀU HÀNH CÁC CHƯƠNG TRÌNH ĐÀO TẠO ĐẶC BIỆT NGUYỄN HOÀNG NAM THE CONTRACT EXECUTION IN CASE OF A CHANGE OF CIRCUMSTANCES (HARDSHIP) – A COMPARISON BETWEEN THE CIVIL CODE 2015 AND THE PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS KHÓA LUẬN TỐT NGHIỆP CỬ NHÂN LUẬT Khoa: Các chương trình đào tạo đặc biệt Niên khóa: 2012 – 2016 Người hướng dẫn khoa học: Th.S Lương Văn Lắm Người thực hiện: Nguyễn Hoàng Nam MSSV: 1253801011685 Lớp: CLC37A THÀNH PHỐ HỒ CHÍ MINH NĂM 2016 STATEMENT OF GUARANTEE I hereinafter guarantee that this bachelor thesis is definitely attributed to my own research and are implemented under the instruction of LL.M Luong Van Lam I reassure that the citation and reference used in this thesis is authentic and appropriate I am faithfully and completely responsible for this guarantee ABBREVIATION TABLE ABBREVIATION FULL TEXT CC 1995 Civil Code (Law No 44-L/CTN) passed by the National Assembly on 28/10/1995 CC 2005 Civil Code (Law No 33/2005/QH11) passed by National Assembly on 14/6/2005 CC 2015 Civil Code (Law No 91/2015/QH13) passed by the National Assembly on 24/11/2015 CPC 2004 Civil Procedural Code (Law No 24/2004) passed by the National Assembly on 15/6/2004, amended by Law on the amendment and supplement of certain regulations of Civil Procedural Code (Law No 65/2011/QH12) passed by the National Assembly on 29/3/2011 CPC 2015 Civil Procedural Code (Law No 92/2015/QH13) passed by the National Assembly on 25/11/2015 Commercial Law 2005 Commercial Law (Law No 36/2015/QH11) passed by National Assembly on 31/12/2015 UNIDROIT International Institute for the Unification of Private Law PICC UNIDROIT Principles of International Commercial Contract PECL The Principles of European Contract Law DCFR Draft Common Frame of Reference CISG Convention on International Sales of Goods Decree 99/2007 Decree No 99/2007/ND-CP passed by the Government on management of expenditure on work investment and construction on 13/6/2007 Decree 37/2015 Decree No 37/2015/ND-CP passed by the Government providing detailed regulations on construction contract on 22/4/2015 ICC International Chamber of Commerce TABLE OF CONTENTS INTRODUCTION CHAPTER 1: OVERVIEW OF HARDSHIP AND CONTRACT EXECUTION IN CASE OF HARDSHIP 1.1 The origin of doctrine of hardship 1.1.1 The doctrine pacta sunt servanda 1.1.2 The doctrine clausula rebus sic stantibus 10 1.1.3 The doctrine of frustration of purpose 12 1.2 The definition and legal characteristics of hardship 14 1.3 Overview of hardship institution in the Principles of International Commercial Contracts and Vietnamese law 16 1.3.1 Overview of hardship institution in the Principles of International Commercial Contracts 16 1.3.2 Overview of performance of contract in case of a change of circumstances in Vietnamese law .18 SUB-CONCLUSION OF CHAPTER 24 CHAPTER 2: THE COMPARISON OF THE CONTRACT EXECUTION IN CASE OF HARDSHIP BETWEEN THE CIVIL CODE 2015 AND THE PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS – EXPERIENCES FOR VIET NAM 25 2.1 The requirements of hardship .25 2.1.1 The time that hardship occurs .25 2.1.2 The awareness of the parties towards hardship 29 2.1.3 The uncontrollability of hardship 34 2.1.4 The excessively onerous consequence of hardship 37 2.2 The legal effects of hardship 40 2.2.1 The right to request renegotiation in case of hardship 40 2.2.2 The interference of judicial body with the contract in case of hardship .44 SUB-CONCLUSION OF CHAPTER 49 CONCLUSION 50 INTRODUCTION The reasons for conducting the thesis The economy of Viet Nam has been enhanced dramatically since the 6th National Congress of the Communist Party This remarkable milestone contributed to the birth and the promotion of the socialist-oriented market economy of Viet Nam In addition, due to the participation of Viet Nam in World Trade Organisation as well as various free trade areas, the flow of international trades into Viet Nam and the economic integration of Viet Nam have become more and more expansive These have both positive and negative impacts on natural persons, legal entities as well as certain superstructures of Viet Nam Contracts and the contract institution are not exempted from this trend In particular situations, changes of the market materially affect contracts which parties concludes without cognition of such changes, leading to the unfair alteration of the equilibrium of the contract Research on this situation, so-called “hardship” or “fundamental change of circumstances”, thus appears to be an urgent demand in Viet Nam This demand is also confirmed by the fact that regulation on changed circumstances is an inclusion in Annex III namely “Fundamental issues of the Proposal for the Civil Code (amendment) in need of public consultation” promulgated along with Decision No 01/QD-TTg of the Prime Minister on promulgation of the plan of organisation of public consultation regarding the Proposal for the Civil Code (amendment) dated 02/01/2015 However, Vietnamese law regulates this situation in an incomplete manner In fact, only some specialised legal documents provide the changed circumstances of specific types of contract This undeniably creates not only the incoherence and shortcomings in contract law but also the imbalance treatment as to specific types of contract relationships In that context, the adoption of the Civil Code 2015 (hereinafter “CC 2015”)1 plays a crucial role because, through this legislation, the institution of “performance of contract in the event of substantial change of circumstances” has been formally and generally recognised in Vietnamese Civil Law This movement of Vietnamese law requires extensive and comprehensive academic research Another reason for the urgency of this thesis lies in the legal policy of the Vietnamese Communist Party Resolution 48-NQ/TW of Political Bureau on 24/5/2005 determines that enhancing contract law is one of the central strategies to improve the socialist-oriented market economy of Viet Nam Regarding this sense, researching and improving hardship institution support the political and economic policy in Viet Nam Civil Code (Law No 91/2015/QH13) passed by the National Assembly on 24/11/2015 Among many legal systems and general principles, the Principles of International Commercial Contracts (hereafter “PICC”) of the Unification of Private Law (hereafter “UNIDROIT”) is an appropriate model with which CC 2015 should be compared PICC, the Principles of European Contract Law (hereafter “PECL”) and Draft Common Frame of Reference (hereafter “DCFR”)2 are classical instruments which recognise and provide hardship Among them, whilst PECL and DCFR are principles drafted by European entities in response to the need of harmonisation contract laws at European level3, PICC is a worldwide international instrument prepared by professional drafters in all regions of the world, including all five continents.4 Thus, PICC could offer the innovation and the harmonisation of a variety of legal traditions in the world at a more expansive decree than PECL and DCFR Furthermore, although Convention on International Sales of Goods (hereafter “CISG”)5 is an indispensable legislation on international trades, the basic question whether hardship is covered by CISG has not been solved.6 The process of promoting Vietnamese Civil Law should Full text of PICC 2010 is available at International Institute for the Unification of Private Law (UNIDROIT), Principles of International Commercial Contracts 2010 (“PICC 2010”), UNIDROIT, Rome Full text of PECL is available at Lando, Beale (2002), The Principles of European Contract Law, The Hague: Kluwer Full text of DCFR is available at Christian von Bar, Eric Clive, Principles, Definitions, Model Rules of European Private Law: Draft Common Frame of Reference (DCFR), Sellier European Law Publishers, M nchen Christian von Bar, Eric Clive, supra note 2, pp 6-9; Lando, Beale, supra note 2, pp 3-9 See the exhaustive list of drafters and observers from Europe, Africa, Asia, The Americas and Australia in International Institute for the Unification of Private Law (UNIDROIT), Principles of International Commercial Contracts 2010, UNIDROIT, Rome, pp ix-xiii United Convention on Contracts for the International Sales of Goods (“CISG”), opened for signature on 11/4/1980 (entered into force on 01/01/1988) This question amounts to a prolonged drastic polemic on the relationship between hardship and force majeure For instances, see Kieu Thi Thuy Linh (2015), “Nghia vu tien hop dong va dieu chinh hop dong hoan canh thay doi boi canh sua doi Bo luat dan su” [Pre-contractual obligation and regulating contracts in the event of change of circumstance in the context of amending the Civil Code], Tap chi Luat hoc [Jurisprudence Journal], Special No., pp 118-120 (hardship covers force majeure and certain events could possibly be both concepts); Amin Dawwas (2010), “Alteration of the Contractual Equilibrium under the UNIDROIT Principles”, Pace International Law Review Online Companion, Volume 2(5), p 6; Alexei G Doudko (2000), “Hardship in Contract: The Approach of the UNIDROIT Principles and Legal Developments in Russia”, Unification of Law Review, Volume 5, p 490-491; Nguyen Ngoc Lam (2014), Giai quyet tranh chap hop dong thuong mai quoc te [Settlement of disputes on international commercial contracts], Hong Duc Publishing House, Ha Noi, pp 195196; Le Minh Hung (2010), Hieu luc cua hop dong theo qui dinh cua phap luat Viet Nam [The validity of contract in accordance with the regulations of Vietnamese law], PhD Dissertation, University of Law of Ho Chi Minh City, p 158; Nguyen Anh Thu (2014), “De xuat sua doi, bo sung qui dinh lien quan den nguyen tac thien chi Bo luat dan su Viet Nam nam 2005” [Proposal for amending and supplementing regulations related to the principle of good faith in the Vietnamese Civil Code 2005], Tap chi Khoa Dai hoc Quoc gia Ha Noi: Luat hoc [Journal of Science of Viet Nam National University in Ha Noi: Legal Studies], Volume 3, pp 64-65; Joern Rimke (2000), “Force majeure and Hardship: Application in International Trade Practice with Specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts”, Pace Review of the Convention on Contracts for the International Sales of Goods, Kluwer, p 200-201 (concluding that force majeure differs from hardship); Do Van Dai (2015), “Ban them ve dieu chinh hop dong hoan canh thay doi” [More comments on regulating contracts regading the incidence of change of circumstance], Tap chi Nghien cuu lap phap [Journal of Legislative Research], Volume 13(293)/2015, p 32; Harry M Flechner (2011), “The Exemption Provision of the Sales Convention, including comments on “Hardship” Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court”, Belgrade Law Review, Year LIX, No 3, pp 90-101 (reject the inclusion of hardship in CISG); Christoph Brunner (2009), Force Majeure and Hardship under General not be affected by such dispute as well as uncertainty and indirect provisions of CISG Therefore, to the extent of international instruments and to the decree of a bachelor thesis, PICC appears to be an ideal and reliable option for this research Moreover, the regulations on hardship in PICC are believed to be a good model for national law-makers due to its advance and several times of application Issued in 1994, up to 2011, PICC has been applied or referred to in 265 cases 7, a nontrivial number as regards to the non-binding nature of PICC Another crucial reason is the explicit intention of the drafters of CC 2015 to absorb experiences from PICC in the drafting process Specifically, in Section C.4 of the Presentation on the Proposal for the Civil Code (amendment) of Ministry of Justice, Section 6.2.1 and 6.2.2 PICC are fully cited Accordingly, as a benchmark for drafting CC 2015, PICC is the most ultimate research object upon fostering Vietnamese Civil Law Consequently, the author chooses “The contract execution in case of a change of circumstances (hardship) – A comparison between the Civil Code 2015 and Principles of International Commercial Contracts” as the bachelor thesis Overview of the research literature Vietnamese material The doctoral dissertation “Hieu luc cua hop dong theo qui dinh phap luat Viet Nam” [The validity of contracts in accordance with Vietnamese law] of Le Minh Hung does not only provide an thorough and in-depth research on elements of the validity of contracts but also specifies the hardship clause in many legal systems for the purpose of improving Vietnamese law Regarding this sense, the article “Dieu khoan dieu chinh hop dong hoan canh thay doi phap luat nuoc va kinh nghiem cho Viet Nam” [Hardship clause in foreign law and experiences for Viet Nam] in Tap chi nghien cuu lap phap [Journal of Legislative Research] 2009 also contains various information on hardship clause in several domestic laws, international principles and the practical application of Vietnamese law Three articles including “Dieu chinh hop dong hoan canh thay doi va van de sua doi Bo luat Dan su nam 2005” [Regulating contracts in the event of change of circumstances and the amendment of Civil Code 2005] of Ngo Quoc Chien in Tap chi Contracts Principles – Exemption for Non-performance in International Arbitration, Kluwer Law International, Netherlands, pp 397-400 (with a view to discrepancy between two concepts only regarding the legal effect); Hannes Rösler (2008), “Changed and Unforeseen Circumstances in German and International Contract Law”, Slovenian Law Review, Volume 5(1), pp 52; Rodrigo Momberg Uribe (2011), “Change of Circumstances in International Instrument of Contract Law The Approach of the CISG, PICC, PECL and DCRF”, Vidobona Journal of International Commercial Law and Arbitration, Volume 15(2), pp 235-266 Lauro Gama Jr (2011), “Prospects for the UNIDROIT Principles in Brazil”, Uniform Law Review, Volume 16(3), p 620 nghien cuu lap phap [Journal of Legislative Research] 2015, “Ban them ve dieu chinh hop dong hoan canh thay doi” [More comments on regulating contracts regarding the incidence of change of circumstances] of Do Van Dai in Tap chi nghien cuu lap phap [Journal of Legislative Research] and “Nghia vu tien hop dong va dieu chinh hop dong hoan canh thay doi boi canh sua doi Bo luat Dan su” [Pre-contractutal obligations and regulating contracts in the event of change of circumstance in the context of amending the Civil Code] of Kieu Thi Thuy Linh in Tap chi Luat hoc [Jurisprudence Journal] 2015 provide the necessity of legalising the issue and a variety of shortcomings of relevant provisions in the Proposal for the Civil Code Material in foreign language The book Force Majeure and Hardship under General Contracts Principles – Exemption for Non-performance in International Arbitration chiefly edited by Christoph Brunner is an indispensable and comprehensive source of material regarding hardship, covering historic and doctrinal aspects, comments and analysis on this institution in typical legal instruments to both international and domestic extents The article “Contractual Excuse under the CISG: Impediment, Hardship, and the Excuse Doctrine” of Larry A DiMatteo on Pace International Law Review 2015 provides a comprehensive analysis on the Article 79 “Exemptions” of Convention on International Sales of Goods as the institution of hardship in the Principle of International Commercial Contract and Principles of European Contract Law The article “Force majeure and Hardship in International Sales Contracts” of Ingeborg Schwenzer in Victoria University Wellington Law Review illustrates the relationship between force majeure and hardship as regulated by certain domestic laws and some international conventions and principles The article “From Clausula Rebus Sic Stantibus to Hardship: Aspect of the Evolution of the Judge’s Role” of Pascal Pichonnaz in Fundamina 2011 describes the legal-historical aspect of hardship from its origin in the Middle Ages to modern legislations The article “Hardship and Force majeure” of Dietrich Maskow in American Journal of Comparative Law 1992 introduces two concepts which are hardship and force majeure, regarding their reasoning and legal regulations, in PICC, CISG and changes in German Law The aforementioned research indicates that there has not been extensive legal literature on “fundamental changes of circumstances relating to contract” in CC 2015 BIBLIOGRAPHY A LEGAL DOCUMENT United Convention on Contracts for the International Sales of Goods (“CISG”), opened for signature on 11/4/1980 (entered into force on 01/01/1988) Vienna Convention on the Law of Treaties (Convention 1969), opened for signature on 23/9/1969 (entered into force on 27/01/1980) Civil Code of the Russian Federation, last amendment in 2011, available at http://www.wipo.int laws/en/ru/ru083en.pdf (last visited on 09/7/2016) Civil Code (Law No 44-L/CTN) of by the National Assembly on 28/10/1995 Civil Code (Law No 33/2005/QH11) of by the National Assembly on 14/6/2005 Civil Code (Law No 91/2015/QH13) of by the National Assembly on 24/11/2015 Civil Procedural Code (Law No 24/2004) of by the National Assembly on 15/6/2004, amended by Law on the amendment and supplement of certain regulations of Civil Procedural Code (Law No 65/2011/QH12) of by the National Assembly on 29/3/2011 Civil Procedural Code (Law No 92/2015/QH13) of by the National Assembly on 25/11/2015 Law on Bidding (No 43/2013/QH13) of by the National Assembly on 26/11/2013 10 Law on Bidding (No 61/2005/QH11) of by the National Assembly on 29/11/2005 11 Law on Construction (Law No 16/2003/QH11) of by the National Assembly on 26/11/2003 12 Law on Construction (Law No 50/2014/QH13) of by the National Assembly on 18/6/2014 13 Law on Commerce (Law No 36/2015/QH11) of by the National Assembly on 31/12/2015 14 Law on Commercial Arbitration (Law No 54/2010/QH12) of the National Assembly on 17/6/2010 15 Law on Independent Audit (Law No 67/2011/QH12) of by the National Assembly on 29/3/2011as amended by Law on Fee and Charge (Law No 97/2015/QH13) of by the National Assembly on 25/11/2015 16 Law on Insurance Business (Law No 24/2000/QH10) of by the National Assembly on 09/12/2000 as amended by Law on amending and supplementing a number of articles of the Law on Insurance Business (Law No 61/2010/QH12) of by the National Assembly on 24/11/2010 17 Law on Organisation of People’s Courts (Law No 62/2014/QH13) of by the National Assembly on 24/11/2014 18 Decree No 99/2007/ND-CP of by the Government on management of expenditure on work investment and construction on 13/6/2007 19 Decree No 37/2015/ND-CP of the Government providing detailed regulations on construction contract on 22/4/2015 20 Decision No 01/QD-TTg of the Prime Minister on promulgation of the plan of organisation of public consultation regarding the Proposal for the Civil Code (amendment) dated 02/01/2015 21 Circular No 139-TTg of the Prime Minister of Democratic of Republic of Viet Nam promulgating temporary rules on contracts for performance of basic construction works on 27/11/1962 22 Circular No 214/2012/TT-BTC of by the Government on the promulgation of the Vietnam audit standards on 06/12/2012 B MATERIAL Vietnamese Material 23 Ngo Quoc Chien (2015), “Dieu chinh hop dong hoan canh thay doi va van de sua doi Bo luat Dan su nam 2005” [Regulating contracts in the event of change of circumstance and amendment of Civil Code 2005], Tap chi Nghien cuu lap phap [Journal of Legislative Research], No 14(294)/2015, pp 29-33 24 Do Thanh Cong (2011), “Thuc tien xet xu ve thuc hien nghia vu tra tien hop dong chuyen giao bat dong san”, Tap chi Nghien cuu lap phap [Journal of Legislative Research], Volume 22/2011, pp 17-19 25 Do Van Dai (2011), Luat hop dong Viet Nam – Ban an va binh luan ban an (tap 2) [Vietnamese contract law – Judgments and comments], National Political Publishing House, Ha Noi 26 Do Van Dai (2012), Luat nghia vu dan su va bao dam thuc hien nghia vu dan su – Ban an va binh luan ban an [Law of civil obligation and security for performance of civil obligation - Judgments and comments], National Political Publishing House, Ha Noi 27 Do Van Dai (2015), “Ban them ve dieu chinh hop dong hoan canh thay doi” [More comments on regulating contracts regading the incidence of change of circumstance], Tap chi Nghien cuu lap phap [Journal of Legislative Research], Volume 13(293)/2015, pp 31-40 28 Nguyen Ngoc Lam (2014), Giai quyet tranh chap hop dong thuong mai quoc te [Settlement of disputes on international commercial contracts], Hong Duc Publishing House, Ha Noi 29 Kieu Thi Thuy Linh (2015), “Nghia vu tien hop dong va dieu chinh hop dong hoan canh thay doi boi canh sua doi Bo luat dan su” [Pre-contractual obligation and regulating contracts in the event of change of circumstance in the context of amending the Civil Code], Tap chi Luat hoc [Jurisprudence Journal], Special No., pp 111-122 30 Le Minh Hung (2010), Hieu luc cua hop dong theo qui dinh cua phap luat Viet Nam [The validity of contract in accordance with the regulations of Vietnamese law], PhD Dissertation, University of Law of Ho Chi Minh City 31 Nguyen Anh Thu (2014), “De xuat sua doi, bo sung qui dinh lien quan den nguyen tac thien chi Bo luat dan su Viet Nam nam 2005” [Proposal for amending and supplementing regulations related to the principle of good faith in the Vietnamese Civil Code 2005], Tap chi Khoa Dai hoc Quoc gia Ha Noi: Luat hoc [Journal of Science of Viet Nam National University in Ha Noi: Legal Studies], Volume 3, pp 61-72 32 University of Law of Ho Chi Minh City (2013), Giao trinh phap luat ve hop dong va boi thuong thiet hai ngoai hop dong [Textbook of the law on contract and non-contractual compensation], Hong Duc Publishing House, Ha Noi 33 University of Law of Ho Chi Minh City (2013), Giao trinh nhung van de chung ve luat dan su, quyen so huu va thua ke [Textbook of the general issues of civil law, ownership and inheritance rights], Hong Duc Publishing House, Ha Noi 34 Brief report of the explanation, reception and amendment of the Proposal for the Civil Code (amendment) of the Standing Committee of the National Assembly dated 22/10/2015 35 Cassation Decision No 09/HDTP-DS regarding “dispute over house, land and debt collection” of the Judge Council of the Supreme Court on 24/02/2005 36 Cassation Decision No 02/2007/KDTM-GDT regarding “dispute over the sale contract” of the Judge Council of the Supreme Court on 06/3/2007 37 Cassation Decision No 09/2007/KDTM-GĐT regarding “dispute over construction contract” of the Judge Council of the Supreme Court on 04/10/2007 38 Judgment No 411/2015/DS-ST regarding “the dispute over the implementation of the construction contract” of People’s Court of Ho Chi Minh City on 23/9/2015 39 The Proposal for the Civil Code (amendment), the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th and 8th version of Ministry of Justice 40 The Statement of the Government on the Civil Code project dated 12/10/2014 41 The Presentation on the Civil Code (amendment) of Ministry of Justice 42 Resolution 48-NQ/TW of Political Bureau on 24/5/2005 English Material 43 Arbitration Centre of Mexico, 30 November 2016, English abstract available at http://www.unilex.info/case.cfm?pid=2&do=case&id=1149&step= Abstract (last visited on 10/7/2016) 44 Christian von Bar, Eric Clive (2009), Principles, Definitions, Model Rules of European Private Law: Draft Common Frame of Reference, Sellier European Law Publishers, M nchen 45 Christoph Brunner (2009), Force Majeure and Hardship under General Contracts Principles – Exemption for Non-performance in International Arbitration, Kluwer Law International, Netherlands 46 Chamber of Conciliation and Arbitration FGV, Brazil, September 2009, Delta Comercializadora de Energia Ltda v AES Infoenergy Ltda, English abstract available at http://www.unilex.info/case.cfm?pid=2&do=case&id=1530&step= Abstract (last visited on 10/7/2016) 47 Amin Dawwas (2010), “Alteration of the Contractual Equilibrium under the UNIDROIT Principles”, Pace International Law Review Online Companion, Volume 2(5), pp 1-28 48 Alexei G Doudko (2000), “Hardship in Contract: The Approach of the UNIDROIT Principles and Legal Developments in Russia”, Unification of Law Review, Volume 5, pp 483-209 49 Harry M Flechner (2011), “The Exemption Provision of the Sales Convention, including comments on “Hardship” Doctrine and the 19 June 2009 Decision of the Belgian Cassation Court”, Belgrade Law Review, Year LIX, No 3, pp 84-101 50 Larry A DiMatteo (2015), “Contractual Excuse under the CISG: Impediment, Hardship, and the Excuse Doctrines”, Pace International Law Review, Volume 27(1), pp 258-305 51 Lauro Gama Jr (2011), “Prospects for the UNIDROIT Principles in Brazil”, Uniform Law Review, Volume 16(3), pp 613-656 52 Bryan A Garner (2009), Black’s Law Dictionary, 9th edition, St Paul, Minn,: West 53 A S Horny (2010), Oxford Advanced Learner’s Dictionary, 8th edition, Oxford University Press, London 54 Andrew Hutchison (2010), “The Doctrine of Frustration: A Solution to the Problem of Changed Circumstances in South African Contract Law”, African Law Journal, 127(1), pp 84-106 55 ICC Arbitration, March 1998, Rome, March 1998, Case No 9029, English full text available at http://www.unilex.info/case.cfm?id=660 (last visited on 16/7/2016) 56 ICC Arbitration, Case No 9479, February 1999, English full text available at http://www.unilex.info/case.cfm ?pid=2&do=case&id=680&step=FullText (last visited on 12/7/2016) 57 ICC Arbitration, Case No 10021, 2000, English full text available at http://www.unilex.info/case.cfm?pid=2&do=case&id=832&step=FullText (last visited on 16/7/2016) 58 ICC International Court of Arbitration, Zürich, September 1996, Case No 8486, English full text available at http://www.unilex.info/case.cfm?pid=2&do =case&id=630&step=FullText (last visited on 12/7/2016) 59 ICC International Court of Arbitration, Paris, Case No 7635, 05 May 1997, Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v Cubic Defense Systems, Inc, English abstract available at http://www.unilex.info/case.cfm?pid=2&do=case&id=653&step=Abstract (last visited on 10/7/2016) 60 International Chamber of Commerce (ICC) (2003), ICC Force Majeure Clause 2003 and ICC Hardship Clause 2003, ICC Publishing S.A., Paris 61 International Institute for the Unification of Private Law (UNIDROIT) (2010), Principles of International Commercial Contracts 2010, UNIDROIT, Rome 62 International Institute for the Unification of Private Law (UNIDROIT) (2004), Principles of International Commercial Contracts 2004, UNIDROIT, Rome 63 International Institute for the Unification of Private Law (UNIDROIT) (1994), Principles of International Commercial Contracts 1994, UNIDROIT, Rome 64 Nikki R Keddie, Yann Richard (2006), Modern Iran: Roots and Revolution, Yale University Press, Connecticut 65 Lando, Beale (2002), The Principles of European Contract Law, The Hague: Kluwer 66 Dietrich Maskow (1992), “Hardship and Force Majeure”, American Journal of Comparative Law, Volume 40(3), pp 657-669 67 Werner Melis (1984), “Force Majeure and Hardship Clauses in International Commercial Contracts in View of the Practices of the ICC Court of Arbitration”, Journal of International Arbitration, Volume 1, pp 213-221 68 Pascal Pichonnaz (2011), “From clausula rebus sic stantibus to Hardship: Aspects of the Evolution of the Judge’s Role”, Fundamina, Volume 17(1), pp 125143 69 Hannes Rösler (2007), “Hardship in German Codified Private Law – In Comparative Perspective to English, French and International Contract Law, European Review of Private Law, Volume 15(4), pp 483-513 70 Hannes Rösler (2008), “Changed and Unforeseen Circumstances in German and International Contract Law”, Slovenian Law Review, Volume 5(1), pp 47-57 71 Joern Rimke (2000), “Force Majeure and Hardship: Application in International Trade Practice with Specific regard to the CISG and the UNIDROIT Principles of International Commercial Contracts”, Pace Review of the Convention on Contracts for the International Sales of Goods, Kluwer, pp 197-243 72 Schiedsgericht Berlin, SG 126/90, 1990, English abstract available at http://www.unilex.info/case.cfm?pid=2&do=case&id=627&step=Abstract (last visited on 10/7/2016) 73 Ingeborg Schwenzer (2008), “Force Majeure and Hardship in International Sales Contracts”, Victoria University of Wellington Law Review, Volume 39(4), pp 709-725 74 Rodrigo Momberg Uribe (2011), “Change of Circumstances in International Instrument of Contract Law The Approach of the CISG, PICC, PECL and DCRF”, Vidobona Journal of International Commercial Law and Arbitration, Volume 15(2), pp 233-266 75 Perales Viscasillas (1996), “UNIDROIT Principles of International Commercial Contracts: Sphere of Application and General Provisions”, Arizona Journal of International and Comparative Law, Volume 13, pp 383-441 76 Krysta Wise (2011) “Islamic Revolution of 1979: The Downfall of American-Iranian Relations”, Legacy, Volume 11(1), pp 1-16 77 Elena Christine Zaccaria (2005), “The Effects of Changed Circumstances in International Commercial Trade”, International Trade and Business Law Review, Volume 9, pp 135-182 ANNEXES ANNEX SUMMARY AND FULL TEXT OF VIETNAMESE PEOPLE COURTS’ JUDGEMENTS REFERRED TO IN THIS THESIS ANNEX 1A Cassation Decision No 09/HDTP-DS regarding “dispute over house, land and debt collection” of the Judge Council of the Supreme Court on 24/02/2005 Summary of the Decision In 1994, Bui Thi Lai lent Pham Thanh Xuan the amount of VND 128.954.000 On 08/8/1996, both of them agreed in writing that Pham Thanh Xuan owed to Bui Thi Lai VND 188.600.000 (including the interests) and Pham Thanh Xuan would sell the house at No 19 Chu Van An Street, Quang Ninh Province to Bui Thi Lai at the price of VND 188.600.000 From then, Pham Thanh Xuan had not fulfilled his obligation to pay the debt and the interests Moreover, Pham Thanh Xuan still remained his family’s use of the house and did not transfer it to Bui Thi Lai On 05/8/1997, Pham Thanh Xuan and Bui Thi Lai and their spouses re-agreed and increased the amount of the dept to VND 250.000.000, which was also the new price of the contract for the sale of the house The Judge Council concluded that in the event that the transaction on the assignment of the house and the land use rights is lawful and if Bui Thi Lai had not paid fully, she must have paid Pham Thanh Xuan the unpaid amount (calculated on the basis of the % rate of the value of house and land) in accordance with the local market price at the time of first-instance retrial ANNEX 1B Cassation Decision No 02/2007/KDTM-GDT regarding “dispute over the sale contract” of the Judge Council of the Supreme Court on 06/3/2007 Summary of the Decision On 05/7/2003, Minh Sang Joint Stock Company and Thanh Phat Limited Liability Company entered into an economic contract in which Minh Sang Company would sell to Thanh Phat Company certain types of stone Article of the Contract stipulated that “if there is rain which affects streets, Party B (Minh Sang Company) has the right to suspend the distribution of construction material within no more than days” Due to the rain, the time of suspension of distribution was 88 days Thanh Phat Company requested the compensation for 41 days of delay whereas Minh Sang Company approved only 32 days of compensation The Judge Council stated that the first-instance court and the second-instance court had not determined the days affecting streets and the days not affecting the distribution of stones, so their approval of 41 days of compensation had been groundless ANNEX 1C Cassation Decision No 09/2007/KDTM-GĐT regarding “dispute over construction contract” of the Judge Council of the Supreme Court on 04/10/2007 Summary of the Decision On 28/12/2004, Dai Viet Hung Limited Liability Company and Song Hui Limited Liability Company concluded a lump-sum construction contract in which Song Hui Company would provide the design, construction and certificates, permits of several buildings for Dai Viet Hung Company The price of the contract was VND 15.900.000 Article of the contract stated that if there occurred changes of the constructions or the items, the time of construction would be prolonged in accordance with the reality After the performance of the contract, both of the parties signed preacceptance test minutes and minutes of liquidation of the contract The former stated that the total concluded price of the contract had been VND 21.011.499.565 The Judge Council of the Supreme Court recognised the increase of the contract by VND 5.111.499.565, accounting for 32% of the contract price ANNEX 1D Judgment No 411/2015/DS-ST regarding “the dispute over the implementation of the construction contract” of People’s Court of Ho Chi Minh City on 23/9/2015 Summary of the Judgment On 24/5/2005, the Organising Board of new urban areas and fundamental constructions of Dong Nai Province (the Organising Board) and Van Thanh Joint Stock Company entered into a construction contract in which Van Thanh Joint Stock Company would construct a work office and a storage office The price of the contract was VND 19.315.000.000 Due to the fluctuation of the price of raw material, fuel and construction material of the amount of work implemented from 2007, both of the parties signed several annexes to the contract to agree the amendment of the price of the contract The final and official annex No 05/PLHĐ-XD-2009 stipulated that the increase of the price was VND 2.029.626.734 The court determined that the contract and the involved annexes were in accordance with the law and enforceable ANNEX Proposal for the amendment of hardship provisions Principles of International Commercial Contracts 2010 Proposal for the The Civil Code 2015 6.2.1 Contracts to be Article 420 observed Performance of contracts Where the performance when circumstances of a contract becomes more change substantially onerous for one of the Circumstances shall parties, that party is nevertheless bound to change substantially when perform its obligations the following conditions are subject to the following satisfied: provisions on hardship (a) There is a change to amendment of Article 420 of the Civil Code 2015 Article 420 Performance of contracts when circumstances change substantially Circumstances shall change substantially when the following conditions are satisfied: (a) At the time when the 6.2.2 Definition of the circumstances due to contract is entered into, the hardship objective reasons, occurring party whose benefits are There is hardship where after the contract is entered affected is unable to foresee the occurrence of events into; the change of circumstances; fundamentally alters the (b) At the time when the (b) The continuation of equilibrium of the contract contract is entered into, the performance of the contract either because the cost of a changing the party's performance has parties are unable to foresee without increased or because the the change of circumstances; contents of the contract will value of the performance a (c) There is such a big cause serious loss and party receives has change in circumstances that damage to one party; diminished, and: the contract would not have (c) The party whose (a) the events occur or been entered into or would benefits are affected is become known to the have been entered into with unable to prevent or disadvantaged party after the completely different contents mitigate the level of conclusion of the contract; if the parties had foreseen affecting the benefits (b) the events could not such change; Where circumstances reasonably have been taken (d) The continuation of change substantially, the into account by the disadvantaged party at the performance of the contract party whose benefits are changing the affected has the right to time of the conclusion of the without contract; contents of the contract will request the other party to re- (c) the events are beyond cause serious loss and the control of the damage to one party; disadvantaged party; and (dd) The party whose (d) the risk of the events benefits are affected has was not assumed by the taken all necessary measures disadvantaged party to the best of its ability and 6.2.3 Effects of appropriate with the nature hardship of the contract but is unable negotiate the contract within a reasonable period of time The request must indicate its detailed grounds Where the parties are unable to reach agreement on amendment of the contract within a reasonable (1) In case of hardship to prevent or mitigate the period of time, either party the disadvantaged party is level of affecting the may request a court or an entitled to request benefits arbitration to: renegotiations The request Where circumstances (a) Terminate the contract shall be made without undue delay and shall indicate the change substantially, the at a definite time; grounds on which it is party whose benefits are (b) Amend the contract to based affected has the right to balance legitimate rights and (2) The request for request the other party to re- benefits of the parties due to renegotiation does not in negotiate the contract within substantial change in itself entitle the a reasonable period of time circumstances disadvantaged party to Where the parties are The court or the withhold performance unable to reach agreement arbitration is only (3) Upon failure to reach on amendment of the permitted to make a decision agreement within a contract within a reasonable on amendment of the reasonable time either party period of time, either party contract in a case where may resort to the court may request a court to: termination of the contract (4) If the court finds (a) Terminate the contract will cause loss and damage hardship it may, if at a definite time; of an amount higher than the reasonable, (a) terminate the contract (b) Amend the contract to costs for performance of the at a date and on terms to be balance legitimate rights and contract if the contract is benefits of the parties due to amended (b) adapt the contract substantial change in with a view to restoring its circumstances equilibrium The court is only permitted to make a decision fixed; or on amendment of the contract in a case where termination of the contract will cause loss and damage of an amount higher than the costs for performance of the contract if the contract is amended ... HARDSHIP AND CONTRACT EXECUTION IN CASE OF HARDSHIP In this Chapter, the author shall analyse the most fundamental theoretical issues of performance of contracts in the event of a change of circumstances, ... mutuality of the parties in case of cancelation and unilateral termination of the contract is not as high as the case of hardship Whereas the former results in the termination of the contract1 29... fostering Vietnamese Civil Law Consequently, the author chooses ? ?The contract execution in case of a change of circumstances (hardship) – A comparison between the Civil Code 2015 and Principles of