Sustainability Clauses in International Business Contracts
Do you also intend to include a sustainability clause in your contract and want to make sure it must be respected? Or has a dispute arisen retrospectively about what you think is part of the agreement or at least what was clearly agreed between the parties outside the agreement? In this case, contact Law & More. Our team specializes in sustainability and contract law and will be happy to answer all your questions. If necessary, we are also happy to help you with words and deeds. In addition, article 9 CISG is also relevant because it refers to customs (of international trade). This may be the case if the parties have mutually agreed on certain uses or if they have designated a particular use as binding. In addition, parties may also be bound by international business practices if they were aware of them or were aware of them. Therefore, if there are such (international commercial) practices between the parties in the area of sustainability, this can in principle be considered as an integral part of the contract. Companies in global value chains respond to the social ambition of sustainable development by including sustainability clauses in their contracts, and it has been argued that there is a need to develop a new general contract law (standard rules of contract law) so that it can achieve this objective. This article first examines the basis of this opinion and three specific areas of interest in this regard.
In a second step, the internal tensions that will arise in the chain, on the one hand, through the pursuit of sustainable development objectives outside the interests of the parties and, on the other hand, through the consequent need to protect the supplier as a weak part of the chain, will be highlighted. With regard to remedies for compliance with sustainability clauses, the United Nations Convention on Contracts for the International Sale of Goods offers only limited possibilities. Compliance is difficult because the physical quality of the goods is usually not compromised. In addition, the requirement of foreseeable damage (§ 74 CISG) and the necessary causal relationship are difficult to satisfy in most cases of damage in breach of the sustainability clauses. This could include reputational damage or future losses. In addition, the degree of non-pecuniary damage under the United Nations Convention on Contracts for the International Sale of Goods was unclear and there must be some certainty as to future damage. Of course, it also depends on how the clauses are formulated in a concrete and binding way. * The Vienna Convention on Contracts for the International Sale of Goods is considered to be the standard regulation for international commercial contracts for the sale of (movable) property between parties whose business is established in different States, if those States: (a) are Contracting States to the Treaty or (b) a choice of law has been made for a Contracting State. The Netherlands is a State Party to this Treaty. On the basis of the above, it can be concluded that, on the basis of the United Nations Convention on Contracts for the International Sale of Goods and national law, the objectives of contractual sustainability between the economic parties can only be applied if this is in the will of the parties. It depends largely on how the clause is worded.
the conduct and practices of the parties, in part in light of international trade. The well-known phrase “Where there is a will, there is a way” clearly applies here. Companies in global value chains respond to the company`s overall sustainability agenda by including sustainability clauses in their contracts, and it has been argued that there is a need to develop a general contract law (standard rules of contract law) so that it can meet this sustainability agenda. This article first examines the basis of this view and three specific areas of interest in this regard. Secondly, it draws attention to the internal tensions that arise in the chain, on the one hand by pursuing sustainability objectives that are not in the interest of the parties and, on the other hand, the consequent need to protect the supplier as a weaker part of the chain. Kind. 8 The CISG concerns the interpretation of contracts, the clarity of which of the intention and the knowledge of which on the part of the other party is decisive. If this does not provide sufficient relief, a subjective approach is applied: would a reasonable person with the same characteristics have conceived the intention in these circumstances? All the circumstances of the case play a role, so communication between the parties on sustainability standards is particularly important. If a party invokes the sustainability standards specified in the CSR Code of the other party`s website, although this was not known during the negotiations, it is unlikely to be considered part of the contract. The situation is different if it has been regularly raised during the negotiations. A first possibility for this is the non-compliance order in the United Nations Convention on Contracts for the International Sale of Goods.
Whether the goods do not meet the parties` sustainability objectives depends on what has been contractually agreed. On the basis of Article 35(1) CISG, the Seller delivers in accordance with the agreed quality, quantity and description of the contract (supplemented by criteria in the second subparagraph if nothing has been agreed on this). Whether there is non-compliance therefore depends expressly on the agreements between the parties. For example, non-compliance may occur if a sustainable production method has been agreed upon and then deviated. Achieving the goals of the Paris Agreement requires drastic economic measures. The private sector, which is responsible for a large part of emissions, must therefore contribute to this. One development that is already emerging is that companies are making their supply chain more contractually sustainable, as it often carries the greatest emission risks. This raises the question whether Dutch contract law can enforce these sustainability obligations.
This article deals with the two most commonly used forms, namely explicit clauses and implied practices, in the context of the provisions of the Civil Code and the Vienna Convention on Contracts for the International Sale of Goods* (“CISG”). See Relations at Aarhus University ]]> Citation formats Non-compliance may also be claimed under national law (Article 7:17 BW). It is important that the correct information was requested before the conclusion of the contract, as the non-conformity should not have been known before the conclusion of the contract (paragraph 2). If it is a specific use known to the seller, the latter must inform the buyer. As with the United Nations Convention on Contracts for the International Sale of Goods, what has been agreed between the parties is very important. As regards non-compliant production methods, there is currently case law on products that have subsequently been found to be non-organic (see ECLI:NL:GHSGR:2012:1316). Terminating a contract could be easier under national law. In accordance with Article 6:265, paragraph 1, of the Dutch Civil Code, any (reasonable) breach of performance gives the power to terminate the contract in whole or in part. In other words, no fundamental violation is required. In addition, each defect results in a claim for compensation and other types of damages are compensated (such as. B damage to reputation in accordance with Article 6.106(1)(b)(BW).
Compliance remains challenging, as national legislation offers virtually the same opportunities as the United Nations Convention on Contracts for the International Sale of Goods. Search result: Book/Anthology/Dissertation/Report › Book › Research Another possibility is the termination of the contract, for which the United Nations Convention on Contracts for the International Sale of Goods requires a fundamental breach in accordance with §§ 25 and 49 para. 1. This usually happens when one of the main obligations of the contract is not fulfilled. Whether there is a fundamental breach again depends heavily on the agreements reached and how they are reflected in the contract. The actions of the parties and the degree of foreseeability of the breach are also relevant in the present case. Companies in global value chains are responding to growing sustainability requirements across society by including sustainability clauses in their procurement contracts. A common argument is that specific reforms of general contract law (devices) are needed to help enforce these sustainability concerns. This article first examines the context of this argument and three aspects that are particularly relevant to it. It then highlights the internal tensions that arise within the chain between the sustainability objectives of third parties and the protection of the supplier as a generally weaker party to the contract.
.