European Contract Protocols - Chapter 6

CHAPTER 6 - CONTENTS AND EFFECTS

Article 6.101 (ex art. 8.101) - Statements giving rise to contractual obligation

(1) A statement made by one party before or when the contract is concluded is to be treated as giving rise to a contractual obligation if that is how the other party reasonably understood it in the circumstances, taking into account:
(a) the apparent importance of the statement to the other party;
(b) whether the party was making the statement in the course of business; and
(c) the relative expertise of the parties.
(2) If one of the parties is a professional supplier who gives information about the quality or use of services or goods or other property when marketing or advertising them or otherwise before the contract for them is concluded, the statement is to be treated as giving rise to a contractual obligation unless it is shown that the other party knew or could not have been unaware that the statement was incorrect.
(3) Such information and other undertakings given by a person advertising or marketing services, goods or other property for the professional supplier, or by a person in earlier links of the business chain, are to be treated as giving rise to a contractual obligation on the part of the professional supplier unless it did not know and had no reason to know of the information or undertaking.

Article 6.102 (replaces 5.108) - Implied obligations

In addition to the express terms, a contract may contain implied terms which stem from
(a) the intention of the parties,
(b) the nature and purpose of the contract, and
(c) good faith and fair dealing.

Article 6.103 - Simulation

When the parties have concluded an apparent contract which was not intended to reflect their true agreement, as between the parties the true agreement prevails

Article 6.104 (ex art. 2.101) - Determination of Price

Where the contract does not fix the price or the method of determining it, the parties are to be treated as having agreed on a reasonable price.

Article 6.105 (ex art. 2.102) - Unilateral Determination by a Party

Where the price or any other contractual term is to be determined by one party whose determination is grossly unreasonable, then notwithstanding any provision to the contrary, a reasonable price or other term shall be substituted.

Article 6.106 (ex art. 2.103) - Determination by a Third Person

(1) Where the price or any other contractual term is to be determined by a third person, and it cannot or will not do so, the parties are presumed to have empowered the court to appoint another person to determine it.
(2) If a price or other term fixed by a third person is grossly unreasonable, a reasonable price or term shall be substituted.

Article 6.107 (ex art. 2.104) - Reference to a Non Existent Factor

Where the price or any other contractual term is to be determined by reference to a factor which does not exist or has ceased to exist or to be accessible, the nearest equivalent factor shall be substituted.

Article 6.108 (ex art. 2.105) - Quality of Performance

If the contract does not specify the quality, a party must tender performance of at least average quality.

Article 6.109 (ex art. 2.109) - Contract for an Indefinite Period

A contract for an indefinite period may be ended by either party by giving notice of reasonable length.

Article 6.110 (ex art. 2.115) - Stipulation in Favour of a Third Party
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(1) A third party may require performance of a contractual obligation when its right to do so has been expressly agreed upon between the promisor and the promisee, or when such agreement is to be inferred from the purpose of the contract or the circumstances of the case. The third party need not be identified at the time the agreement is concluded.
(2) If the third party renounces the right to performance the right is treated as never having accrued to it.
(3) The promisee may by notice to the promisor deprive the third party of the right to performance unless:
(a) the third party has received notice from the promisee that the right has been made irrevocable, or
(b) the promisor or the promisee has received notice from the third party that the latter accepts the right.

Article 6.111 (ex art. 2.117) - Change of Circumstances

(1) A party is bound to fulfil its obligations even if performance has become more onerous, whether because the cost of performance has increased or because the value of the performance it receives has diminished.
(2) If, however, performance of the contract becomes excessively onerous because of a change of circumstances, the parties are bound to enter into negotiations with a view to adapting the contract or terminating it, provided that:
(a) the change of circumstances occurred after the time of conclusion of the contract,
(b) the possibility of a change of circumstances was not one which could reasonably have been taken into account at the time of conclusion of the contract, and
(c) the risk of the change of circumstances is not one which, according to the contract, the party affected should be required to bear.
(3) If the parties fail to reach agreement within a reasonable period, the court may:
(a) terminate the contract at a date and on terms to be determined by the court; or
(b) adapt the contract in order to distribute between the parties in a just and equitable manner the losses and gains resulting from the change of circumstances.
In either case, the court may award damages for the loss suffered through a party refusing to negotiate or breaking off negotiations contrary to good faith and fair dealing.