Remedies for breach of pre-contractual duty of disclose : perspectives of avoidance of contract from international contract law

Abstract

It is common for parties to withhold certain information during the formation of a business contract that it deems detrimental in deciding the contract’s terms. In practice, this non - disclosure leads to many parties to a contract to feel aggrieved and ultimately decide to avoid the contract. As a preventive measure, principles of international contract law set a duty of disclosure to the parties. However, there is no specific explanation on what essential information that should be disclosed. The writing of this thesis focuses on two questions under the realm of international contract law, which examines (1) the circumstance that allows an aggrieved party to avoid a contract due to a breach of duty to disclose and (2) the remedies available to an aggrieved party in case of a breach of duty to disclose. This thesis takes the form of a doctrinal research that uses normative juridical legal research approach, and the research will then be dissected using a qualitative method. The findings of this research confirm that avoidance as a remedy is granted when a party breaches its duty to disclose certain information. It is the prevailing view that material information that may impact the substance of the contract, should be disclosed. Failure to do so can amount to mistake or fraud, which are grounds for avoidance. Further, the UPICC also provides remedies other than avoidance in cases of breach of duty to disclose, including but not limited to adaptation or rectification of the contract, and damages.