As terms incorporated into the single contract, the individual provisions of the UNIDROIT Principles will, of course, bind the parties only to the extent that they do not affect the rules of the domestic law governing the contract from which parties may not derogate by agreement (so-called “mandatory rules”).^[5] Scholars have argued that where the UNIDROIT Principles are unilaterally referred to by one of the parties, and the other party merely accepts them with no further negotiations, the UNIDROIT Principles have to be considered as standard terms and, consequently, be subject to the special limitations provided in some domestic laws for standard terms.^[6]

This view is hardly convincing. To consider the UNIDROIT Principles on par with standard terms fails to take account, above all, of the fact that they were created not for specific types of transactions, but for contracts in general. As a result, they do not address single professional groups (e.g., sellers, lessors, carriers, banks, etc.), but just the two abstract categories of “obligors” and “obligees.”^[7] Moreover, the UNIDROIT Principles, far from laying down one-sided rules, provide means for "policing" the individual contract terms against unfairness, including those specifically aimed at protecting the adhering party, in case of standard terms, against possible abuses.^[8]

Obviously, it is impossible to provide precise data as to the frequency with which in actual practice parties use the UNIDROIT Principles in whole or in part when drafting their contracts, especially since they often do so without openly stating it.^[9] An interesting example of an undeclared incorporation of individual provisions is the settlement agreement contained in a recent award of the International Centre for Settlement of Investment Disputes (“ICSID”).^[10] In that agreement, the parties-a U.S. investor and the Government of Ukraine-in addition to the terms of settlement, set out fourteen “Principles of interpretation and implementation of the Agreement,” all of which had been taken literally, with only a few minor deviations, from the UNIDROIT Principles.^[11]

By contrast, in the accompanying Notes to the ICC Force Majeure Clause/ICC Hardship Clause (2003),^[12] it is expressly stated that the general definition of force majeure, set out in paragraph 1, and the entire hardship clause as proposed have been inspired primarily by the article 7.1.7^[13] and articles 6.2.1, 6.2.2, and 6.2.3 of the UNIDROIT Principles, respectively.^[14]

II. The unidroit principles as the law governing the contract

Paragraph 2 of the Preamble to the UNIDROIT Principles provides that [these Principles] shall be applied when the parties have agreed that their contract be governed by them.[15] The reasons why parties may be induced to choose the UNIDROIT Principles rather than a particular domestic law as the law governing their contract are manifold. First, in a situation involving parties of unequal bargaining power, the stronger party will normally insist on the choice of its own domestic law.

There are cases where a party, although having sufficient bargaining power to impose its own domestic law on the other party, actually prefers not to use that power based on the unpredictability of its own law and, instead, opts for the UNIDROIT Principles.[16] Yet, there are at least two other scenarios where the UNIDROIT Principles may be an alternative to the choice of a particular domestic law as the law governing an international contract. As pointed out by an experienced German attorney,

The Principles are particularly appealing ... to small and medium sized businesses operating at an international level, which are too small to impose their own domestic law and/or are too cost conscious to invest in a comparative analysis of a neutral law as a possible alternative solution. For this market segment the Principles provide an attractive, neutral and readily available set of rules.[17]

Moreover, “the Principles provide a solution ... in cases in which the parties to the contract either are of equal bargaining power or-for instance where they choose the applicable law after arbitral proceedings have begun-for tactical or strategic reasons decide to proceed on an equal footing.”[18]

Yet, there are also obviously intrinsic merits that render the UNIDROIT Principles particularly apt to provide the normative framework for international commercial contracts. As stated in an ICC arbitral award rendered soon after the publication of the first edition of the Principles:

[T]he UNIDROIT Principles are a restatement of international legal principles.., made by a distinguished group of international experts coming from all prevailing legal systems of the world, without the intervention of states or governments, both circumstances redounding to the high quality and neutrality of the product and its ability to reflect the present stage of consensus on international legal rules and principles governing international contractual obligations in the world, primarily on the basis of their fairness and appropriateness for international commercial transactions falling within their purview .... [19]

A. The application of the unidroit principles by domestic courts

The role that the UNIDROIT Principles may play as the governing law chosen by parties differs considerably depending upon whether their application is invoked before a domestic court or an arbitral tribunal. Domestic courts are bound to apply their own national law, including the relevant conflict-of-laws rules. According to the traditional and still prevailing view, the choice of the law applicable to international contracts is limited to a particular domestic law, which is to the exclusion of any international normative system.

This is confirmed by the 1980 Rome Convention on the Law Applicable to Contractual Obligations (“Rome Convention”), which unifies the conflict-of-laws rules with respect to contracts within the Member States of the European Union. By using expressions such as the “law of a Contracting State” (article 2), or the “law of the country with which [the contract] is most closely connected” (article 4(1)), and the like, the Convention clearly makes it understood that the law that is applicable in the respective cases must necessarily be the law of a particular nation.[20]

As a result, even where the parties expressly refer to the UNIDROIT Principles as the law governing their contract, domestic courts are likely to consider such a reference as a mere agreement to incorporate the Principles into the contract. In other words, the proper law of the contract in such cases must still be determined separately on the basis of the conflict-of-laws UNIDROIT Principles for Judges and Arbitrators in Disputes Arising out of International rules of the forum, and the UNIDROIT Principles will bind the parties only to the extent that they do not affect the rules of law from which the parties may not derogate.[21]

Things may change, however, in the near future, and it is fair to say that the appearance of the UNIDROIT Principles has considerably contributed to such new perspectives. First, the 1994 Inter-American Convention on the Law Applicable to International Contracts, while confirming that the law governing international contracts will normally be the law of a particular State,^[22] refers on two occasions to legal sources of an international character.^[23] As pointed out by an eminent American scholar,^[24] the innovative approach taken by the new Inter-American Convention has great merit because it “allows decision makers to dispense with a tedious investigation into subtleties of conflicting laws and to rely instead on the rules laid down in the UNIDROIT Principles.”^[25]

Furthermore, an express reference to the possibility for parties to agree on the applicability of the UNIDROIT Principles can now be found even in the Uniform Commercial Code. More precisely, comment 2 to section 1-302, as revised in 2001, states:

[P]arties may vary the effect of [the Uniform Commercial Cod’s provisions by stating that their relationship will be governed by recognized bodies of rules or principles applicable to commercial transactions. Such bodies of rules or principles may include for example those that are promulgated by intergovernmental authorities such as UNCITRAL or Unidroit (see, for example, Unidroit Principles of International Commercial Contracts).

It is true that such reference is made in the context of section 1-302, which lays down the principle of freedom of contract,^[26] and not in the context of section 1-301, which deals with the parties’ right to choose the applicable law.^[27] Yet, the fact that the UNIDROIT Principles are expressly referred to as an alternative set of rules applicable to the kind of transactions falling within the scope of the Code is significant. If parties actually choose the UNIDROIT Principles as the rules of law governing their contract, the probability that individual provisions of the Principles will be struck out because of their incompatibility with the Code is rather remote.^[28]

This theory is bolstered by the fact that most of the mandatory provisions of the Code are restricted to consumer transactions.^[29] Finally, within the European Union there may soon be even more significant changes. First, there is growing support for the view that the present version of the Rome Convention, if properly interpreted, would permit the parties to choose private codifications or “restatements” of general contract law, such as the UNIDROIT Principles, as the law governing their contract.^[30]

Moreover, and more importantly, in its Green Paper on the Conversion of the 1980 Rome Convention on the Law Applicable to Contractual Obligations into a Community Instrument and its Modernisation of 14 January 2003,^[31] the Commission of the European Union raises the question whether article 3(1) of the Rome Convention on party autonomy should be amended so as to permit parties the ability to choose international rules as the law governing their contract.^[32] In this connection, the Commission expressly stated:

It is common practice in international trade for the parties to refer not to the law of one or other state but directly to the rules or an international convention such as the Vienna Convention of 11 April 1980 on Contracts for the International Sale of Goods, to the customs of international trade, to the general principles of law, to the lex mercatoria or to recent private codifications such as the Unidroit Principles of International Commercial Contracts.^[33] Not surprisingly, in its reply, UNIDROIT expressed its strong support for such an amendment.^[34]

First, by allowing parties to an international commercial contract to agree on the application of international principles and rules as the law governing their contract, instead of the law of a particular country, they would be in a position to adopt a truly “neutral” solution, which would be more acceptable to both of them. This is especially true since there is a legitimate expectation that such international principles and rules are better suited to the special needs of international transactions than national laws which, by their very nature, focus on domestic transactions.

Second, there is no valid reason why parties to an international contract should enjoy a different degree of autonomy in choosing the applicable law, depending on whether they decide to have their dispute settled by arbitration or a court decision. As to the wording of the envisaged modification of article 3(1) of the Rome Convention, UNIDROIT suggested restricting the parties' freedom of choice to “internationally recognized principles and rules of contract law,” thereby ensuring that only those international principles and rules, which can count on wide recognition within the international business and legal community, may be chosen as an alternative to a particular domestic law.

B. The application of the unidroit principles by arbitral tribunals

The situation is different if the parties agree to submit disputes arising from their contract to arbitration.^[35] This is why the comments to the preamble of the UNIDROIT Principles expressly recommend that parties wishing to adopt the UNIDROIT Principles as the law governing their contract combine such a choice-of-law clause with an arbitration agreement.^[36]

Arbitrators are not necessarily bound to apply a particular domestic law, but may well base their decision on international principles and rules, especially if the parties expressly request them to do so. With reference to the parties’ right to choose the law applicable to the substance of the dispute, the first arbitration laws to deliberately employ the term “rules of law” instead of “law,” in order to make it clear that the parties’ freedom of choice was no longer restricted to domestic laws, but also included rules of law of an supranational or transnational character, were those of France,^[37] the Netherlands,^[38] and Switzerland.^[39]

After the adoption of the 1985 UNCITRAL Model Law, article 28(1) states that [t]he arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute.^[40] This approach has been increasingly accepted and, at present, can be found not only in the forty or so new domestic arbitration laws enacted worldwide on the basis of the UNCITRAL Model Law,^[41] but also in other countries, including England-a country once famous for its rigidly legalistic arbitration regime.^[42]

Significantly, even article 10 of the 1998 Agreements on International Commercial Arbitration of MERCOSUR[43] provides that “the parties may choose the law that shall be applied to resolve the dispute based on private international law rules and principles, as well as on international trade law.[44] Similar provisions are also contained in the arbitration rules recently adopted by the most important arbitration institutions and other international organizations.

For example, article 17(1) of the 1998 Rules of Arbitration of the International Chamber of Commerce, entered into force in 1998, provides that “[t]he parties shall be free to agree upon the rules of law to be applied by the Arbitral Tribunal to the merits of the dispute.”^[45] Therefore, there can be no doubts that parties are free to choose the UNIDROIT Principles as the “rules of law” according to which the arbitrators shall decide possible disputes arising from their contract,^[46] not only with respect to contract interpretation and performance/non-performance, but also to contract formation including questions of so-called precontractual liability.^[47]

C. Choice-of-law clauses in favor of the unidroit principles

Parties wishing to choose the UNIDROIT Principles as the law governing their contract may use one of the two alternative Model Clauses set out in a footnote to the Preamble: “This contract shall be governed by the UNIDROIT Principles (2004), [except as to Articles...],” or “This contract shall be governed by the UNIDROIT Principles (2004), [except as to Articles ...], supplemented when necessary by the law of [jurisdiction X].”

The two clauses differ insofar as the first refers to the UNIDROIT Principles as the sole law governing the contract with the consequence that in case of gaps in the UNIDROIT Principles, the solution should, whenever possible, be found within the system of the UNIDROIT Principles itself.^[48] Whereas, in the second clause, the parties choose a particular domestic law to govern all questions not expressly settled by the UNIDROIT Principles.^[49]

An example of a choice-of-law clause of the first kind can be found in the membership agreement of COVISINT, an electronic marketplace recently set up among DaimlerChrysler, Ford, General Motors, Nissan, Peugeot, and Renault, for their suppliers, which under the heading “Governing Law; Arbitration” provides: “The Product Agreement shall be construed in accordance with the UNIDROIT Principles of International Commercial Contracts, with the exception of Section 4.6 [“Contra proferentem rule”] which is excluded due to the difficulty of providing explicit language to cover each possible interpretation that may arise in a multi-national legal structure.”[50]

An example of a choice-of-law clause of the second kind is article 14 of the Model Contract for the International Commercial Sale of Perishable Goods, adopted in 1999 by the International Trade Centre UNCTAD/WTO, stating:

In so far as any matters are not covered by the foregoing provisions, this Contract is governed by the following, in descending order of precedence: the United Nations Convention on Contracts for the International sale of Goods; the UNIDROIT Principles of International Commercial Contracts, and for matters not dealt with in the above-mentioned texts, the law applicable at ... or, in the absence of a choice of law, the law applicable at the Seller's place of business through which this Contract is to be performed.[51]

Moreover, there are still other variations of possible choice-of-law clauses in favor of the UNIDROIT Principles. Thus, parties may stipulate that “[t]his Contract shall be governed by the law of country X, interpreted and supplemented, whenever necessary, by the UNIDROIT Principles,” or, alternatively, that:

(1) This Agreement is governed by the laws of .... (2) The Agreement shall be performed in a spirit of good faith and fair dealing. (3) In the interpretation of the Parties’ rights and obligations under this Agreement, due weight shall be given to applicable practices in international trade. When defining these practices, reference shall be made, inter alia, to the Unidroit Principles of International Commercial Contracts;[52]or that

Any questions relating to this Contract which are not expressly or implicitly settled by the provisions contained in this Contract shall be governed, in the following order: (a) by the principles of law generally recognized in international trade as applicable to international [agency] [distributorship] contracts, (b) by the relevant trade usages, and (c) by the UNIDROIT Principles of International Commercial Contracts, with the exclusion... of national laws.[53]

Under all of these last three provisions, the UNIDROIT Principles will apply only in a subordinate role, i.e., as a means of interpreting and supplementing other legal sources that the parties have chosen as the primary law governing their contract. There are two final points concerning the drafting of a choice-of-law clause in favor of the UNIDROIT Principles. First, after the publication of the 2004 edition, there are now two editions of the UNIDROIT Principles. While parties who still prefer to choose the 1994 edition as the law governing their contract[54] are free to do so, they should expressly state so since, in the absence of an express reference to either of the two editions of the UNIDROIT Principles, it is presumed that the latest edition will apply.[55]

Second, since a choice-of-law clause in favor of the UNIDROIT Principles is formally binding only on the parties stipulating it, it follows that the provisions of the 2004 edition dealing with tri-partite relationships, such as authority of agents, third party rights, assignment of rights, transfer of obligations, and assignment of contracts, will be fully effective only with the consent of all three parties involved.[56] Although this may occur in frequently in practice, there is nothing to prevent a principal, or an agent acting according to the principal’s instructions, from expressly stipulating with a third party that the UNIDROIT Principles 2004 in general, or their provisions on authority of agents in particular, will be applicable in an assignment of a right, transfer of an obligation, or assignment of a contract.[57]

D. Unidroit principles and mandatory law

One of the fundamental ideas underlying the UNIDROIT Principles is that of freedom of contract. Thus, article 1.1 (“Freedom of contract”) states that “[t]he parties are free to enter into a contract and to determine its content,” while article 1.5 (“Exclusion or modification by parties”) provides that “[t]he parties may exclude the application of these Principles or derogate from or vary the effect of any of their provisions ....”

In this way, it is made clear that the parties enjoy the widest possible autonomy in the sense that they may, in each individual case, not only exclude the application of the UNIDROIT Principles in whole or in part, but also modify the content so as to adapt them to the specific needs of the kind of transaction involved.[58] To be sure, given the particular nature of the UNIDROIT Principles, any statement to the effect that they are not compulsory may at first sight look rather redundant. On the other hand, party autonomy, even under the UNIDROIT Principles, is not unlimited.

First of all, the parties encounter the limit of the applicable mandatory rules, whatever their origin. This is expressly stated in article 1.4 (“Mandatory rules”), according to which “[n]othing in these Principles shall restrict the application of mandatory rules, whether of national, international or supranational origin, which are applicable in accordance with the relevant rules of private international law.”

The UNIDROIT Principles deliberately refrain from indicating which mandatory rules are applicable in each given case. In particular, nothing is said as to whether only mandatory rules that claim application irrespective of the law otherwise applicable (so-called internationally mandatory rules or lois d’application ndcessaire) or whether all the other rules from which the parties cannot derogate (so-called internal or ordinary mandatory rules) are relevant. These issues, known to be extremely controversial, have been left to the relevant conflict-of-laws rules which may vary, not only from one country to another, but also depending on whether or not they are decided by a national court or by an arbitral tribunal.

As already pointed out, domestic courts generally consider the parties’ reference to the UNIDROIT Principles as a mere agreement to incorporate them in the contract. As such, courts generally determine the law governing that contract on the basis of their own conflict-of-laws rules. It follows that the UNIDROIT Principles will encounter the limit of the mandatory rules of the proper law of the contract, i.e., they will bind the parties only to the extent that they do not affect the rules of the law from which parties may not derogate by agreement.

Yet, there are still other mandatory rules which may have to be taken into account. Thus, if the proper law of the contract is the law of a foreign state, courts will typically also apply the mandatory rules of the forum which claim applicability, regardless of the law otherwise governing the contract (so-called internationally mandatory rules or lois d’application ndcessaire as contrasted with so-called ordinary or domestic mandatory rules).[59] Moreover, although this is not generally an accepted practice, under certain circumstances, in addition to the mandatory rules of the lex contractus and of the lex fori, even laws of third countries may be taken into account.[60]

The situation is considerably different whenever an arbitral tribunal determines the case. Arbitrators are prepared to apply the UNIDROIT Principles even as the law governing the contract. As a result, the individual provisions of the Principles will bind the parties irrespective of their compatibility with the mandatory rules of the otherwise applicable domestic law.[61]

What remains to be seen, however, is whether, and, to what extent arbitrators have to take into account mandatory rules of other legal systems. The question is the subject of extensive[62] debate among arbitration experts, but the prevailing view is that, contrary to domestic courts, arbitrators may, but are under no duty to respect the mandatory rules of the State on whose[63] territory they happen to render their award. Accordingly, they may take into account the mandatory rules of third countries with which the case at hand has significant contacts, provided that these rules claim to be applicable regardless of the law otherwise governing the contract, and that the rules do not run contrary to the ethical values generally shared by the international community (the so-called “ordre public international” or “international public order”).[64]

To a certain extent, arbitrators may even be bound to do so, in view of their task of rendering an effective decision capable of enforcement.[65] In any case, the application of the mandatory rules in question, along with the UNIDROIT Principles, will not normally give rise to any true conflict. Only when the mandatory rules address the same issues within the UNIDROIT Principles will they prevail over the corresponding provision(s) contained in the latter. A possible example of this may be seen in cases where the arbitrators have to decide between the law of the place of payment and the different solution provided for by article 6.1.9 of the UNIDROIT Principles.[66]

Yet, a further limitation of party autonomy occurs due to the fact that the UNIDROIT Principles contain provisions from which the parties may not derogate. According to article 1.5, “[t]he parties may exclude the application of these Principles or derogate from or vary the effect of any of their provisions, except as otherwise provided in the Principles.”[67] Most of the mandatory provisions are expressly declared as such. This is the case with article 1.7 on good faith and fair dealing and with the provisions of chapter 3 on substantive validity, except in so far as they relate or apply to mistake and to initial impossibility.[68] This is also the case with article 5.1.7(2) on price determination, with article 7.4.13(2) on agreed payment for non-performance, and with article 10.3(2) on limitation periods. Exceptionally, the mandatory character of a provision is only implicit and follows from the content and purpose of the provision itself (for example, articles 1.8 and 7.1.6).[69]

The fact that some of the provisions contained in a soft law instrument, such as the UNIDROIT Principles, claim to be of a mandatory character may come as a surprise and has indeed been criticized as a contradiction in itself.[70] On the other hand,[71] by declaring some of its provisions to be mandatory, the Principles corroborate their aspiration to be a self-sufficient, autonomous legal system for international commercial contracts. Judges, arbitrators, and parties may find it useful to know that, when choosing the UNIDROIT Principles as the lex contractus, their contractual agreement is fairer if they do not derogate from basic provisions such as those on good faith, on exemption clauses, or on agreed payments for non-performance.[72]

Yet, what if the parties nevertheless disregard these restrictions and, although choosing the UNIDROIT Principles as the law governing their contract, exclude the application of one of the "mandatory" provisions contained therein? Apart from the fact that it is rather unlikely that parties would in practice ever agree, for instance, not to be bound by the duty to act in good faith or to be able to rely on an exculpatory clause even if it would be grossly unfair to do so, the answer is quite simple.

On the one hand, given the formally non-binding nature of the UNIDROIT Principles, parties are free not only to disregard them as a whole, but also expressly to stipulate that they intend to be bound by some but not all of their individual provisions. On the other hand, if parties refer to the UNIDROIT Principles as the law governing their contract but, at the same time, strike out some of their mandatory provisions, they evidently put themselves outside the system of the UNIDROIT Principles, with the consequence that the Principles will no longer apply as the law governing the contract.[73]

CONCLUSION:

In the field of contract law, party autonomy is the raison d'etre and limit of soft law. Yet, while traditional soft law instruments, such as standard terms or model clauses, INCOTERMS or the UCP, can bind the parties only if incorporated into the contract and to the extent that they do not contrast with the mandatory rules of the applicable law, recently emerged instruments, such as the UNIDROIT Principles, may even be chosen by the parties as the law governing their contract.

Parties wishing to have their contract governed by the UNIDROIT Principles refer to them as the sole lex contractus or in conjunction with a particular domestic law, which may have the role of supplementing the Principles in case of gaps or, on the contrary, of being the law primarily governing the contract with the Principles relegated to a means of merely interpreting and supplementing it.

Contrary to domestic courts, which are traditionally reluctant to grant parties the right to choose international principles and rules as the law governing the contract in lieu of a particular domestic law, arbitrators are generally permitted, at least in the context of international disputes, to base their decision on soft law instruments such as the UNIDROIT Principles.

Even in the context of international commercial arbitration, however, party autonomy is not unlimited. First, parties encounter the limit of the internationally mandatory rules, be they of national, international, or supranational origin. Second, the UNIDROIT Principles themselves contain provisions from which parties may not derogate: if parties nevertheless do so, they evidently put themselves outside the system of the UNIDROIT Principles, with the consequence that the Principles will no longer apply as the law governing the contract, but will bind the parties only at the contractual level.

REFERENCE:

1. L. Senden, Soft Law In European Community Law 111-13 (2004); U. Drobnig, Vereinheitlichung von Zivilrecht durch soft law: neuere Erfahrungen und Einsichten, in Aufbruch Nach Europa: 75 jahre Max-Planck-Institut Fur Privatrecht 745 (2000).

2. Unidroit, Unidroit Principles of International Commercial Contracts 2004 (2004)

3. Comm'n on European Contract Law, Principles of European Contract Law (0. Lando et al. eds., 1995); 2 Comm'n on European Contract Law, Principles of European contract Law (0. Lando et al. eds., 2000); 3 Comm'n on European Contract Law, Principles of European Contract Law (0. Lando et al. eds., 2003).

4. The 1994 edition of the UNIDROIT Principles was published not only in all five official languages of UNIDROIT, i.e., English, French, German, Italian, and Spanish, but also in Arabic, Chinese, Czech, Dutch, Farsi, Hungarian, Japanese, Portuguese, Romanian, Russian, Slovak, and Vietnamese. Moreover, the black letter rules have been translated into Bulgarian, Croatian, Hebrew, Korean, and Serbian. The integral version of the UNIDROIT Principles 2004 is already available in English, French, Italian, and Chinese, while other language versions are in preparation.

5. Ulrich Drobnig, The Use of the UNIDROIT Principles by National and Supranational Courts, in UNIDROIT Principles for International Commercial Contracts: A New Lex Mercatoria? 223, 226-27 (Inst. of Int'l Business Law and Practice ed., 1995)

6. Cf. C.W. Canaris, Die Stellung der 'UNIDROIT Principles' und der 'Principles of European Contract Law' im System der Rechtsquellen, in europaische Vertragsrechtsvereinheitlichung und Deutsches recht 5, 21-26 (J. Basedow ed., 2000).

7. Cf M. Fontaine, Les Principes UNIDROIT comme guide dans la rddaction des contrats internationaux, in Unidroit Principles For International Commercial Contracts: A New Lex mercatoria?

8. Michael Joachim Bonell, Policing the International Commercial Contracts against Unfairness under the UNIDROIT Principles, 3 Tul. J. Int'l and Comp. L. 73 (1995).

9. M.J. Bonell, The UNIDROIT Principles in Practice: The Experience of the First Two Years, 2 UNIF. L.R. 34 (1997); see also, e.g., Michael Wallace Gordon, United States (Part II), in A New Approach to International Commercial Contracts-The UNIDROIT Principles of International Commercial Contracts, XVTH International Congress of Comparative Law, Bristol 26 July-1 August 1998 at 401 (M.J. Bonnell ed., 1999);

10. Cf Joseph Charles Lemire v. Ukraine (ICSID Case No. ARB(AF)/98/1), in 15 ICSID Review Foreign INv. L. J. 457, 530-39 (2000).

11. Unidroit Principles, Arts. 1.7, 3.3(1), 4.1-4.3, 4.5, 5.3, 5.4(1), 6.2.1-6.2.3, 7.1.1, 7.1.4, 7.1.5(1)(2)(3).

12. INT’L Chamber of Commerce, ICC Force Majeure Clause 2003 and ICC Hardship Clause 2003 (2003).

13. Note Force Majeure a.

14. Note Hardship § b-c, e

15. Unidroit Principles, Preamble, para. 2.

16. Alexander S. Komarov, The UNIDROIT Principles of International Commercial Contracts: A Russian View, 1 UNIF. L. R. 247, 250 (1996); Report on the Session 11, UNIDROIT C.D. (83) 24 (Apr. 19-21, 2004)

17. E. Br dermann, Die erweiterten UNIDROIT Principles 2004, in Recht Der Internationalen Wirtschaft 721, 730 (2004).

18. Ibid, at 730.

19. ICC Partial Award 7110 of June 1995, ICC International Court of Arbitration Bulletin (Int'l Chamber of Commerce, Paris, Fr.), Fall 1999, at 39; Luiz Olavo Baptista, The UNIDROIT Principles for International Commercial Law Project: Aspects of International Private Law, 69 Tul. L. Rev. 1209, 1219-24 (1995).

20. A. Giardina, Volontet delle parti, prestazione caratteristica e collegamento pia significativo, in Verso Una Disciplina Comunitaria Della Legge Applicabile AL Contratti 3, 7-9 (Padova 1983); Antoine Kassis, LE Nouveau Droit Europaen Des Contrats Internationaux 373 (1993).

21. With the adoption of the UNIDROIT Principles 2004 that deal with new subjects, such as limitation periods, which at the domestic level are generally governed by mandatory rules, the probability of conflicts between the UNIDROIT Principles and the applicable domestic law has obviously increased.

22. UNIDROIT Principles, Arts. 9(1), 16-17.

23. Q Harold S. Burman, International Conflict of Laws, The 1994 Inter-American Convention on the Law Applicable to International Contracts and Trends for the 1990s, 28 Vand. J. Transnat'l L. 367, 381 (1995)

24. Friedrich K. Juenger, The Inter-American Convention on the Law Applicable to International Contracts: Some Highlights and Comparisons, 42 AM. J. COMP. L. 381, 383 (1994);

25. Ibid.

26. U.C.C. § 1-302 (2004) (“Variation by Agreement”).

27. Cf. AM. Law Inst., Uniform Commercial Code Revised Article 1 General Provisions: Discussion Draft 24-25 (Feb. 28, 2000).

28. UNIDROIT Principles, Art. 1.2.

29. E. Allan Farnsworth, The Role of the UNIDROIT Principles in International Commercial Arbitration (2): A US Perspective on Their Aims and Applications, in UNIDROIT Principles of International Commercial Contracts: Reflections on Their use in International arbitration 21 (Emmanuel Jolivet ed., 2002)

30. Arthur S. Hartkamp, Modernisation and Harmonisation of Contract Law: Objectives, Methods, and Scope, 8 UNIF. L. REV. 81, 86-87 (2003).

31. Green Paper on the Conversion of the 1980 Rome Convention on the Law Applicable to Contractual Obligations into a Community Instrument and its Modernisation, COM(2002) 654 final.

32. Id at 22.

33. Green Paper, supra note 31, at 22.

34. Green Paper on the Conversion of the 1980 Rome Convention on the Law Applicable to Contractual Obligations into a Community Instrument and its Modernisation: Reply by the International Institute for the Unification of Private Law (UNIDROIT) to Question 8, Rome 25 July 2003.

35. J.F. Smith, Mediation and the Principles of UNIDROIT, in Contractacion Internacional. Commentarios A Los Principios Sobre Los contratos Comerciales Internacionales DEL UNIDROIT 237, 250-51 (Mexico 1998).

36. UNIDROIT Principles, Preamble, cmt. 4.

37. Nouveau Code de proctdure Civile N.C.P.C. art. 1496 (Fr.).

38. Wetboek VAN BuRGERLIJKE RECHTSVORDERING RV. art. 1054(2) (Neth.).

39. Recueil Systpmatique Du Droit Fidtral RS Loi Ftdtrale Surle Droit International Privt art. 182 (Switz.)

40. G. Herrmann, The Uncitral Model Law: Its Background, Salient Features and Purposes, ARB. INT'L 6, 22-23 (1985);

41. At the end of 2004, many countries had enacted legislation based on the UNCITRAL Model Law.