A Study On Exemption Due To The Third Party’s Failing To Perform Contracts In International Trade

Nowadays, accompanied by the rapid development of International Trade, the correspondent dispute resolution mechanism in International Trade has become increasingly diversified. The system of exemption can balance the rights and obligations of the parties to CISG and distribute the loss between the said parties in a reasonable way. United Nations Convention on Contracts for the International Sale of Goods(CISG), a very important international convention regulating the international sale of goods, provides quite a generis system of exemption, which stimulates the exemption rights the said parties can exercise due to the third party’s problems on the basis of the regulations on exemption listed in the two legal systems. Facing the complexity of international specialization, the forgoing stimulation is of practical guiding significance for exemption issues, and considerable referential significance for the improvement of Chinese Contract Law.This paper, in accordance of the exemption system of CISG, clearly defines the third party, explicates the conditions of exemption from liability for the trade parties, and analyzes the legal consequences of exemption. It purposes to clarify the system of exemption, balance the rights and obligations of the said parties, and maintain the fairness of international trade. Meanwhile, it endeavors to provide reasonable recommendations with respect to the exemption system of Chinese Contract Law and make it keep up with the development of international trade..This article is divided into three parts altogether:Part one provides an overview on the system of exemption caused by the third party. First, it introduces the regulations on system of exemption stimulated in the Common Law System and Civil Law System. Then it explicates the concrete meaning and scope of the third party in order that the said parties may quote paragraph 2 of article 79 of CISG. Besides, it discusses whether the suppliers, subcontractors, and carriers can be treated as the prescribed third party. At last, it explores the theoretical and practical significance of the paragraph 2 of article 79 in the whole system of exemption.Part two is the main part of this paper. It mainly discusses the conditions for the application of the said exemption in case of impediment. It analyzes explicitly the conditions for the said exemption: the occurrence of uncontrollable, unforeseeable, unavoidable and insurmountable objective circumstances. Then it makes an explicit analysis on the effect of exemption, including the specific scope of compensation for damages and measures of remedies taken by the injured parties, which tries to safeguard the balance of rights and obligations between the said trading parties. Through introducing the conditions and effects of exemption, the said exemption can be used under a clear guidance.Part three presents the problems and the correspondent improvements with respect to the system of exemption foregoing in Chinese Contract Law. The Chinese Contract Law, to a large extent, borrowed many provisions from CISG on the exemption. Nevertheless, there is still much room for improvement. For this issue, no coincident opinions are concluded by scholars. This part explicates the exemption in light of the impact of the event of force majeure under Chinese Contract Law, especially on the definition of third party and its application in practice. Then it points out the problems and faulty provisions, hoping this would provide more practical guidance for exemption system in Chinese Contract Law.