Where a party who owes an obligation other than one to pay money does not perform, the other party may require performance, unless
(a) performance is impossible in law or in fact;
(b) performance or, where relevant, enforcement is unreasonably burdensome or expensive;
(c) the party entitled to performance may reasonably obtain performance from another source;
(d) performance is of an exclusively personal character; or
(e) the party entitled to performance does not require performance within a reasonable time after it has, or ought to have, become aware of the non-performance.
1. Right to require performance of non-monetary obligations
In accordance with the general principle of the binding character of the contract (see Article 1.3), each party should as a rule be entitled to require performance by the other party not only of monetary, but also of non-monetary obligations, assumed by that party. While this is not controversial in civil law countries, common law systems allow enforcement of non-monetary obligations only in special circumstances.
Following the basic approach of CISG (Article 46) this Article adopts the principle of specific performance, subject to certain qualifications.
The principle is particularly important with respect to contracts other than sales contracts. Unlike the obligation to deliver something, contractual obligations to do something or to abstain from doing something can often be performed only by the other contracting party itself. In such cases the only way of obtaining performance from a party who is unwilling to perform is by enforcement.
2. Remedy not discretionary
While CISG provides that “a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by [the] Convention” (Article 28), under the Principles specific performance is not a discretionary remedy, i.e. a court must order performance, unless one of the exceptions laid down in this Article applies.
3. Exceptions to the right to require performance
A performance which is impossible in law or in fact, cannot be required (sub-paragraph (a)). However, impossibility does not nullify a contract: other remedies may be available to the aggrieved party (see Articles 3.1.3 and 7.1.7(4)).
The refusal of a public permission which is required under the applicable domestic law and which affects the validity of the contract renders the contract void (see Article 6.1.17(1)), with the consequence that the problem of enforceability of the performance cannot arise. When, however, the refusal merely renders the performance impossible without affecting the validity of the contract (see Article 6.1.17(2)), sub-paragraph (a) of this Article applies and performance cannot be required.
b. Unreasonable burden
In exceptional cases, particularly when there has been a drastic change of circumstances after the conclusion of a contract, performance, although still possible, may have become so onerous that it would run counter to the general principle of good faith and fair dealing (see Article 1.7) to require it.
1. An oil tanker has sunk in coastal waters in a heavy storm. Although it would be possible to lift the ship from the bottom of the sea, the shipper may not require performance of the contract of carriage if this would involve the shipowner in expense vastly exceeding the value of the oil (see Article 7.2.2(b)).
The words “where relevant, enforcement” take account of the fact that in common law systems it is the courts and not the obligees who supervise the execution of orders for specific performance. As a consequence, in certain cases, especially those involving performances extended in time, courts in those countries refuse specific performance if supervision would impose undue burdens upon courts.
As to other possible consequences arising from drastic changes of circumstances amounting to a case of hardship, see Articles 6.2.1 et seq.
c. Replacement transaction
Many goods and services are of a standard kind, i.e. the same goods or services are offered by many suppliers. If a contract for such staple goods or standard services is not performed, most customers will not wish to waste time and effort extracting the contractual performance from the other party. Instead, they will go into the market, obtain substitute goods or services and claim damages for non-performance. In view of this economic reality sub-paragraph (c) excludes specific performance whenever the party entitled to performance may reasonably obtain performance from another source. That party may terminate the contract and conclude a replacement transaction (see Article 7.4.5).
The word “reasonably” indicates that the mere fact that the same performance can be obtained from another source is not in itself sufficient, since the aggrieved party could not in certain circumstances reasonably be expected to have recourse to an alternative supplier.
2. A, situated in a developing country where foreign exchange is scarce, buys a machine of a standard type from B, a manufacturer situated in country X, a developed country. In compliance with the contract, A pays the price of USD 100,000 before delivery. B does not deliver. Although A could obtain the machine from another source in country X, it would be unreasonable, in view of the scarcity and high price of foreign exchange in its home country, to require A to take this course. A is therefore entitled to require delivery of the machine from B.
d. Performance of an exclusively personal character
Where performance has an exclusively personal character, enforcement would interfere with the personal freedom of the obligor. Moreover, enforcement of performance often impairs its quality. The supervision of a very personal performance may also give rise to insuperable practical difficulties, as is shown by the experience of countries which have saddled their courts with this kind of responsibility. For all these reasons, sub-paragraph (d) excludes enforcement of performance of an exclusively personal character.
The precise scope of this exception depends essentially upon the meaning of the phrase “exclusively personal character”. The modern tendency is to confine this concept to performances of a unique character. The exception does not apply to obligations undertaken by a company. Nor are ordinary activities of a lawyer, a surgeon or an engineer covered by the phrase for they can be performed by other persons with the same training and experience. A performance is of an exclusively personal character if it is not delegable and requires individual skills of an artistic or scientific nature or if it involves a confidential and personal relationship.
3. An undertaking by a firm of architects to design a row of ten buildings can be specifically enforced as the firm can delegate the task to one of the partners or employ an outside architect to perform it.
4. By contrast, an undertaking by a world-famous architect to design a new city hall embodying the idea of a city of the 21st century cannot be enforced because it is highly unique and calls for the exercise of very special skills.
The performance of obligations to abstain from doing something does not fall under sub-paragraph (d).
e. Request within reasonable time
Performance of a contract often requires special preparation and efforts by the obligor. If the time for performance has passed but the obligee has failed to demand performance within a reasonable time, the obligor may be entitled to assume that the obligee will not insist upon performance. If the obligee were to be allowed to leave the obligor in a state of uncertainty as to whether performance will be required, the risk might arise of the obligee’s speculating unfairly, to the detriment of the obligor, upon a favourable development of the market.
For these reasons sub-paragraph (e) excludes the right to performance if it is not required within a reasonable time after the obligee has become, or ought to have become, aware of the non-performance.
For a similar rule concerning the loss of the right to terminate the contract, see Article 7.3.2(2).