b. Failures to Perform Caused by the Other Party

Art. 80 reads:

A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission.

Exemption under Art. 80 requires an act or omission by a party that caused a breach of the other party. Examples for acts include faulty instructions regarding manufacturing or transporting the goods. Omissions are e.g. failures of the buyer to provide the correct delivery address or take care of the necessary import procedure. This act or omission has to be the cause for the failure to perform of the other party. Fault of the first party is not required. The other party is even exempt under Art. 80 where the act or omission of the first party would fall within the ambit of Art. 79 since this provision does not change the chain of causation and furthermore its effect is restricted to damage claims (it would therefore exclude damage claims of the other party resulting from the first parties act or omission, see infra). The requirement of causation of the failure to perform also distinguishes Art. 80 from Art. 77, under which the aggrieved party did not cause the non-performance but rather contributed to the damage resulting from a failure to perform entirely caused by the breaching party.

Whether Art. 80 applies in cases where the failure to perform by the other party was merely in part but not exclusively caused by the first party’s act or omission is disputed. The prevailing view relies on the wording of the provision (‘to the extent that’) and the drafting history and comes to the conclusion that Art. 80 also applies in cases of joint responsibility. Decisive in these cases is the share of responsibility attributed to the first party.

The legal consequence of Art. 80 is that the first party cannot rely on the other party’s failure to perform. Notably, exemption under Art. 80 is not – like it is the case under Art. 79(5) – restricted to claims for damages, rather all remedies are encompassed.

In case of joint responsibility, particularly of both parties, monetary claims like claims for damages are apportioned according to the respective shares of responsibility of both parties. Non-monetary remedies like performance or avoidance of the contract on the other hand cannot be apportioned. Here, some authors only allow the first party to rely on a failure to perform where its share of responsibility is outweighed by the other party’s. Yet, this approach is criticized for its more or less arbitrary results due to the fact that shares of responsibility cannot be compared with mathematical accuracy. It is therefore suggested that the first party can only exercise non-monetary remedies where it is willing to pay the other party an amount of money corresponding to its share of responsibility.

Last modified: Friday, 23 October 2015, 6:43 PM