Selected Cases by Article & Issues
(1) Where a contract infringes a mandatory rule, whether of national, international or supranational origin, applicable under Article 1.4 of these Principles, the effects of that infringement upon the contract are the effects, if any, expressly prescribed by that mandatory rule.
(2) Where the mandatory rule does not expressly prescribe the effects of an infringement upon a contract, the parties have the right to exercise such remedies under the contract as in the circumstances are reasonable.
(3) In determining what is reasonable regard is to be had in particular to:
(a)the purpose of the rule which has been infringed;
(b)the category of persons for whose protection the rule exists;
(c)any sanction that may be imposed under the rule infringed;
(d)the seriousness of the infringement;
(e)whether one or both parties knew or ought to have known of the infringement;
(f)whether the performance of the contract necessitates the infringement; and
(g)the parties’ reasonable expectations.
| Number | Issue | # Cases |
|---|---|---|
| 1 | Contract infringing mandatory rules | |
| 1.1 | Only mandatory rules applicable under Article 1.4 relevant | |
| 1.1.1 | Infringement of statutory provisions | |
| 1.1.2 | Infringement of general principles of public policy | |
| 1.2 | Ways in which contract may infringe mandatory rules | |
| 1.2.1 | By its terms | |
| 1.2.1.1 | Corruption agreements | |
| 1.2.2 | By its performance | |
| 1.2.3 | By way in which it is formed | |
| 1.2.3.1 | Contract concluded as result of corruption | |
| 1.2.4 | By its purpose | |
| 2 | Effects of infringement | |
| 2.1 | Expressly prescribed by mandatory rule infringed | |
| 2.2 | Available contractual remedies, if any, to be determined according to what is reasonable in the circumstances | |
| 2.2.1 | Purpose of rule infringed | |
| 2.2.2 | Category of persons protected by rule infringed | |
| 2.2.3 | Any sanction imposed under rule infringed | |
| 2.2.4 | Seriousness of infringement | |
| 2.2.5 | Parties’ knowledge of infringement | |
| 2.2.6 | Whether performance of contract necessitates infringement | |
| 2.2.7 | Parties’ reasonable expectations | |
| 2.2.8 | Other criteria |