Chapter 5 - Content

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Chapter 5 - Content

Article 5.1 - Express and Implied Obligations

The contractual obligations of the parties may be express or implied.

Article 5.2 - Implied Obligations

Implied obligations stem from

(a) the nature and purpose of the contract;

(b) practices established between the parties and usages;

(c) good faith and fair dealing;

(d) reasonableness.

Article 5.3 - Co-operation between the Parties

Each party shall co-operate with the other party when such co-operation may reasonably be expected for the performance of that party?s obligations.

Article 5.4 - Duty to Achieve a Specific Result. Duty of Best Efforts

(1) To the extent that an obligation of a party involves a duty to achieve a specific result, that party is bound to achieve that result.

(2) To the extent that an obligation of a party involves a duty of best efforts in the performance of an activity, that party is bound to make such efforts as would be made by a reasonable person of the same kind in the same circumstances.

Article 5.5 - Determination of Kind of Duty Involved

In determining the extent to which an obligation of a party involves a duty of best efforts in the performance of an activity or duty to achieve a specific result, regard shall be had, among other factors, to

(a) the way in which the obligation is expressed in the contract;

(b) the contractual price and other terms of the contract;

(c) the degree of risk normally involved in achieving the expected result;

(d) the ability of the other party to influence the performance of the obligation.

Article 5.6 - Determination of Quality of Performance

Where the quality of performance is neither fixed by, nor determinable from, the contract a party is bound to render a performance of a quality that is reasonable and not less than average in the circumstances.

Article 5.7 - Price Determination

(1) Where a contract does not fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have made reference to the price generally charged at the time of the conclusion of the contract for such performance in comparable circumstances in the trade concerned or, if no such price is available, to a reasonable price.

(2) Where the price is to be determined by one party and that determination is manifestly unreasonable, a reasonable price shall be substituted notwithstanding any contract term to the contrary.

(3) Where the price is to be fixed by a third person, and that person cannot or will not do so, the price shall be a reasonable price.

(4) Where the price is to be fixed by reference to factors which do not exist or have ceased to exist or to be accessible, the nearest equivalent factor shall be treated as a substitute.

Article 5.8 - Contract for an Indefinite Period

A contract for an indefinite period may be ended by either party by giving notice a reasonable time in advance.

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Preamble - Purpose of the Principles 

Chapter 1 - General Provisions

Chapter 2 - Formation

Chapter 3 - Validity 

Chapter 4 - Interpretation

Chapter 5 - Content

Chapter 6 - Performance 

Chapter 7 - Non-Performance 

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Principles of International Commercial Contracts