Contractual liability in the event of non-performance: United States and China through the eyes of the CISG

The present research provides a comparative analysis the contractual liability in cases of non-performance under Chinese and American contract laws, with peculiar emphasis on the principle of good faith and a debate on the system of liability adopted in both countries. The dissertation leads to a discussion of the Convention on Contracts for the International Sale of Goods (CISG) as a solution to provide for a uniform set of rules in order to conduct business relationship in an effective manner among Contracting Parties.Starting with Chinese contract law, it must be noted that it has been highly influenced by both Western legal traditions and the CISG. The early legal codes of China laid the foundational principles of contract law which were mainly based on Confucian principles. Through the years, the needs of the Chinese legal systems have evolved and in the late 19th and early 20th centuries, influenced by German and Soviet laws the Chinese Civil Code has started to be drafted. In the 1980s the was the introduction of the Economic Contract Law, which was the first comprehensive legislative effort to regulate contractual relationships in a market-oriented economy. This law was succeeded by the more structured Contract Law of 1999, which consolidated various pieces of legislation into a unified Code. According to this Code, it derives the willingness of the drafters to adopt strict liability system which imposes liability on the breaching party regardless of fault, thereby simplifying the adjudication process and providing clear guidance for enforcement. Moreover, this analysis focuses on the maxim of good faith and in Chinese contract law it serves as a fundamental guideline for contractual behavior. It binds the parties to act honestly and fairly throughout the contractual process, from negotiation to performance and termination. Differently from the Chinese legal system, in the United States contract law has its roots in English common law. Contrary to China where the approach towards liability is mostly shared by courts and authors, in American contract law there has been a long-standing debate over the adoption of a strict liability system versus a fault-based system. On the one hand, an approach towards a fault-based system suggests that fault or negligence must play a role in assessing liability in cases of breach of contract. On the other hand, the approach towards strict liability system provides that adopting this system would simplify legal proceedings and provides legal certainty in contractual relationships. This unsolved discussion is reflected in the Restatements and the Uniform Commercial Code (UCC). On the one hand, the Restatements of Contracts provide for a collection of common law principles, On the other hand, the Uniform Commercial Code (UCC) is a set of rules conceived to provide a common shared approach towards commercial transactions. The UCC stresses the role of the principle of good faith and fair dealing in commercial transactions as a fundamental tool to have a proper business interaction among contractual parties.After an in-depth analysis of the two legal systems, the dissertation focuses on the role of the CISG as uniform legal framework for international sales contracts representing a compromise between common law and civil law traditions. Moving the conceptualization of the principle of good faith, Article 7 of the CISG binds that parties to observe good faith in the interpretation and performance of t