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Title: Fundamental breach in international commercial contracts in the CISG, English and Egyptian law
Author: Al-Janabi , Mohammed Qasim Kareem
ISNI:       0000 0004 5923 6616
Awarding Body: Glasgow Caledonian University
Current Institution: Glasgow Caledonian University
Date of Award: 2014
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The main purpose of the research is to investigate and analyze the concept of fundamental breach of contract in international commercial contracts, and how its inclusion in Iraqi civil law can promote a more effective approach to contractual disputes between Iraqi companies and international partners. Additionally, it aims to raise awareness of the practical value of the application of the concept of fundamental breach in managing contractual disputes involving common and civil law, and ultimately provide a valid contribution to academic knowledge that promotes enhanced understanding of this concept within the different legal systems at a global level. The research method adopted is theoretically comparative in nature and compares the concept of fundamental breach of contract from the perspectives of the United Nations Convention's guidelines on Contracts for the International Sale of Goods 1980 (referred to hereafter as the CISG), English (Common) law and Egyptian (Civil) law. The study is based on the following research questions: i) reasons for the numerous cases of avoidance of international commercial contracts in Iraq due to a fundamental breach of terms; ii) The elements that constitute a 'fundamental breach' of contract; iii) Which legal systems could provide a comprehensive framework of reference to compare the different processes applied in breach of contract in selected case studies, to determine which, if any, is more effective in keeping contracts 'active'. iv) If the outcome of the comparisons could be applied more universally, in cases of arbitration in international commercial contracts, to bridge the differences in individual laws of the countries involved. The concept of fundamental breach is examined in-depth, including its origins, development, application and effectiveness in maintaining the active life of international commercial contracts. A comparison of its application is made within three different legal systems and the study concludes with a commentary on the outcomes of the comparative research, including any limitations and implications for international sales contracts involving different legal systems. Finally, recommendations are made, both for the Iraqi legislature and for future research. The key outcomes are that the CISG rules regarding fundamental breach appear to be more successful in upholding the validity of international commercial contracts than Common or Civil law. This can be attributed to the way in which the CISG tailored the concept of fundamental breach. To date, it has been ratified by 83 countries. Not only are its principles rooted in the two primary law systems (Common and Civil), but they are also significantly influenced by the doctrinal concepts that vary considerably across different national law systems. This suggests the CISG offers a greater degree of flexibility and harmony across the legal systems, and does not require any court order or ruling in instances of contract avoidance. Indeed, its greatest success lies in the flexibility of its principles due to the additional terms it provides in promoting the life of the contract; namely: additional period of time, partial avoidance, anticipatory breach and instalments contracts. There are limitations, however, despite the CISG rules providing a degree of flexibility. The definition of fundamental breach given in Art.25 is vague due to the generality of the terminology used by the CISG drafters. Unlike the trend of the 1998 Principles of European Contract Law and the 1994 UNIDROlT Principles of International Commercial Contracts, no examples are given to provide guidance on the exact meaning of the term. It is also noticeable that the CISG's notion of fundamental breach is more common law oriented. As a result, this may be a source of possible conflict in countries where civil law is adopted such as: Egypt, Iraq, Kuwait, Jordan, Libya, amongst others. The implications of adopting the CISG approach to determining fundamental breach in international commercial contracts are that contractual parties could incur delays and subsequent financial losses while disputes involving interpretation of its rules are resolved. Nevertheless, CISG principles governing fundamental breach are increasingly popular as the applicable law for international contracts, since they fulfill a primary goal of contract law to act in accordance with developmental requirements and changes. Contract law has to correspond to a growing economic need and be flexible in addressing emerging difficulties and shifting conditions. For this reason the CISG's principles are likely to continue to be adopted by contractual parties within the arena of International Trade. A necessary recommendation, however, concerns the terminology of the CISG rules on fundamental breach, which could benefit from being more specific in order to satisfy the demands of international commercial contracts that involve countries governed by common and civi11aw. In short, greater specificity is required in ascertaining the degree of seriousness, detriment, foreseeability and time of foreseeability in cases of contractual breach.Establishing an international body for resolving disputes stemming from the CISG is highly recommended. The given body could contribute greatly to reducing both the time and the cost resulting from such disputes. Reviewing the provisions of the CISG periodically is, therefore, highly advisable for making changes or establishing new rules applicable to the new developments in trade. The avoidance of contract in electronic trade contracts could represent an example where this would be necessary. However, more discussion is needed to elaborate on the development of the wording of the CISG principles in this respect. Finally, with regard to Iraq, its legislation would do well to make provision to include the concept of fundamental breach in accordance with the principles of the CISG. This reform is necessary since Iraq's existing law is no longer capable of properly addressing the special demands of international trade to ensure disputes are dealt with in a manner that is reliable, consistent, valid and fair to the contractual parties concerned.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Contracts for International Sale of Goods