In May 1994, after almost fifteen years of preparation, the International Institute for the Unification of Private Law (UNIDROIT), seated in Rome, produced the official text of the "Principles of International Commercial Contracts" (Principles).(1) Initially published in English and French, the Principles have also been translated into German, Italian, Spanish, and other languages.(2)
As stated in the introduction of their Preamble, the Principles aim to establish "general rules" of international commercial contracts.(3) The official commentary clarifies that the Principles "represent a SYSTEM of rules of contract law which are common to existing national legal systems or best adapted to the special requirements of international commercial transactions."(4) This statement reflects the dual approach taken by the drafters. The Principles are intended to convey to international contract drafters and arbitrators the notion of legal neutrality(5) through their comparative persuasiveness(6) while at the same time accommodating the particular needs and practices of international traders. Also, they provide the users with a set of rules flexible enough to be adapted to the circumstances of each individual case and to the underlying interests of the parties involved. This flexibility also leaves enough leeway to adapt the Principles to the rapid and continuous technical and economic changes in international trade.(7)
The efforts to draft a set of rules of international contract law date back to the late 1960s, when the then-General Secretary of UNIDROIT, Mario Matteucci, proposed for the first time the drafting of a "Restatement" of the international law of contract.(8) The proposal triggered UNIDROIT's initiative for the "Progressive Codification of the Law of International Trade" of 1971,(9) which may be regarded as the nucleus of the modern efforts towards the drafting of the Principles. However, it was not until 1980 that UNIDROIT established a Working Party to draft the Principles.(10) The Working Party presented the final version of the Principles at its 18th session held in Tulane from January 31 to February 3, 1994.(11) The text was finally adopted at the 73rd session of UNIDROIT's Governing Council.(12) At the same time, UNIDROIT recommended the widest possible proliferation of the final text.(13)
Being a "totally new product of international trade law,"(14) the Principles raise numerous questions concerning their legal character, their practical application, and their possible influence on the decision-making of international arbitrators.(15) The following arguments strive to provide the missing link between the Principles and the doctrine of an emerging transnational commercial law, a new law merchant or lex mercatoria. In addition, this Article will investigate the legal character of the Principles and several of the resulting consequences on the practice of transnational commercial law.
II. THE PRINCIPLES
The Principles consist of 119 articles that are divided into 7 chapters. They contain basic rules dealing with such fundamental notions as freedom of contract,(16) freedom of form and proof,(17) pacta sunt servanda,(18) good faith and fair dealing,(19) and the primacy of usages and practices in international trade.(20) In addition, the Principles include provisions relating to the conclusion, effect, interpretation, and content of international commercial contracts, as well as their performance and the legal consequences of nonperformance.(21)
The structure of the Principles follows the American Restatement of the Law of Contracts:(22) a basic rule or a general legal principle formulated as black letter law is followed by a short commentary-like explanation and explanatory examples. In contrast to the Restatement (Second) of the Law of Contracts, however, there are no notes specifying the legal comparisons on which the wording of the relevant rule or principle is based. …