SUMMARY

COMMENTARY AND ANALYSIS REGARDING TO

“NO FORM REQUIRED” PRINCIPLE OF UNIDROIT 2004

GROUP 141

INTERNATIONAL BUSINESS TRANSACTION CLASS

The UNIDROIT Principles of International Commercial Contracts

(UNIDROIT Principles) contain an abolition of statute of frauds requirements in
Article 1.2 (no form required) which states :

“Nothing in these Principles requires a contract to be concluded in or

evidenced by writing. It may be proved by any means, including witnesses.”

Since form requirements are the most substantial obstacles for electronic commerce,
this provision has an important role in electronic commerce. The working group may
wish to consider whether we need a provision about the validity of a contract
concluded by way of electronic means and a provision that declares the admissibility
and evidential weight of electronic data.

Commentary2:

1. Contracts as a rule not subject to formal requirements

This article states the principle that as a rule the conclusion of a contract is not subject
to any requirement as to form. Although the article mentions only the requirement of
writing, it may be extended to other requirements as to form. The rule also covers the
subsequent modification or termination of a contract by agreement of the parties.

The principle, which is to be found in many, although not in all, legal systems, seems
particularly appropriate in the context of international trade relationships where,
thanks to modern means of communication, many transactions are concluded at great
speed 106 and are not paper-based.

                                                                                                               

and Friends. 1  Lidzikri

2
Principles of International Commercial Contracts, 1994 – UNIDROIT.
@lexmercatoria.  
The first sentence of the article takes into account the fact that some legal systems
regard formal requirements as matters relating to substance, while others impose them
for evidentiary purposes only. The second sentence is intended to make it clear that to
the extent that the principle of freedom of form applies, it implies the admissibility of
oral evidence in judicial proceedings.

2. Possible exceptions under the applicable law

The principle of freedom of form may of course be overridden by the applicable law.
See Art. 1.4. National laws as well as international instruments may impose special
requirements as to form with respect either to the contract as a whole or to individual
terms (e.g. arbitration agreements; jurisdiction clauses).

3. Form requirements agreed by the parties

Moreover, the parties may themselves agree on a specific form for the conclusion,
modification or termination of their contract. In this context see Arts. 2.13, 2.17 and
2.18.

There is a similarity between such regulation that describe about the form of
the contract:

1. Article 1.2 of the Unidroit Principles, ‘no form required’, states that the
Principles do not require the contract to be concluded or evidenced by writing,
and that it can be proved by any means, including witnesses.
2. The principle of consensualism is equally demonstrated by the Proposals for
Reform of the Law of Obligations and the Law of Prescription. Its Article
1127 holds that ‘as a general rule, contracts are completely formed by the
mere consent of the parties regardless of the form in which this may be
expressed.
3. Only the European Code of Contract Preliminary Draft does not expressly
state the principle of consensualism. Nevertheless, no other article requires
that a particular form be used for a contract to be valid. Only contracts that are
specially designated require writing for their validity3.

                                                                                                               
3  See in particular Article 35for contracts relating to real goods (§1, 2 and 3) or gifts (§4).  
 Unidroit principles dealing with international commercial contracts, like the
French Law, recognize the consensual nature of the contract, concluded by the simple
meeting of agreeing wills, as the articles 1.2 and 3.2 of this text let us understand.
Therefore, the oral formation of the contract doesn’t raise any problem, apart from
proof problems.