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Reproduced with the permission of Oceana Publications

excerpt from

INTERNATIONAL SALES LAW

United Nations Convention on Contracts for the International Sale of Goods

Convention on the Limitation Period in the International Sale of Goods

Commentary by
Prof. Dr. jur. Dr. sc. oec. Fritz Enderlein
Prof. Dr. jur. Dr. sc. oec. Dietrich Maskow

Oceana Publications, 1992

Article 45 [Buyer's remedies in general; claim for damages; no period of grace]

[TEXT OF THE UNIFORM LAW]

(1) If the seller fails [1] to perform any of his obligations [2] under the contract or this Convention [3], the buyer [4] may:

(a) exercise the rights provided in articles 46 to 52;
(b) claim damages [5] as provided in articles 74 to 77;

(2) The buyer is not deprived of any right he may have to claim damages by exercising his right to other remedies [6].

(3) No period of grace may be granted [7] to the seller by a court or arbitral tribunal when the buyer resorts [8] to a remedy for breach of contract.

[WORDS AND PHRASES, CONCEPTS

1. breach of contract comprises any non-fulfilment of contractual obligations
2. no distinction between main, auxiliary and participatory obligations
3. mutual agreement and practices and usages are relevant
4. overview of remedies available to buyer
5. right to claim damages
6. right to claim damages: exists as a right by itself
7. no period of time may be granted
8. applies to each and every remedy ]

[COMMENTARY]

[1] [breach of contract comprises any non-fulfilment of contractual obligations]

The notion of breach of contract under the CISG comprises any non-fulfilment of contractual obligations. Those obligations may have their origin not only in the contract between parties, but also in the Convention, established practices and usages (Article 9). This refers to non-fulfilment of obligations by the seller and to non-performance of obligations by the buyer. The rights of the other party are provided for in parallel; compare Article 45 fol with Article 61 fol. In addition the CISG contains some provisions which relate both to the seller and they buyer (Article 71 fol). There is no distinction between breaches of main or breaches of auxiliary obligations, rather, a distinction is made between fundamental and other breaches of contract (c. Article 25). The consequences which a fundamental breach of contract entails are more severe than those of ordinary breaches of contract. Some of the remedies are available only for fundamental breaches (e.g. avoidance of contract - Article 49; delivery of substitute goods - Article 46). A breach of contract constitutes an objective fact; no matter whether the party who commits the breach is at fault or not. Insofar as that party has not been able to prevent the breach is caused by the conduct of the other party, the former may be exempted from certain consequences of the failure to perform his obligations (compare Articles 79 and 80, exemption from liability).

Using the uniform term of breach of contract the CISG relinquishes such categories as initial impossibility to perform, delay, positive breach of contract, guarantee etc. (Wesler/Doralt, 116). But that concept did not fully succeed in regard to the remedies (Schlechtriem, 65; agreeing Welser/Doralt, 116). [page 174]

Under ULIS each individual type of breach was followed by the proper remedy. Performance by the seller was divided into five categories and a separate remedial system was provided for each (e.g. non-fulfilment in regard to the place of delivery, time of delivery, quality etc.). This approach was intended to make the remedial system clear, but produced ambiguity, complexity and unnecessary length (as Honnold judges it, 295). Farnsworth (Lausanne, 83 fol) believes that the change in the structure of the legal consequences, which he calls consolidation, is an important achievement of the CISG. (Other specific characteristics are in his view contractualism, i.e. priority of the contractual agreements of the parties; and stabilization, i.e. the tendency to maintain the contract.)

[2] [no distinction between main, auxiliary and participatory obligations]

The CISG does not differentiate between main, auxiliary and participatory obligations. On the other hand, not everything that is considered an obligation under the CISG in the case of breach will entail the consequences of Articles 45 fol and/or 61, fol (see the "obligation" to examine the goods, Article 38). There is a certain differentiation in the CISG insofar as specific consequences (Article 46, paras. 2 and 3, and Article 50) are defined in the case of non-conformity of the goods (Article 35).

[3] [mutual agreement and practices and usages are relevant]

The obligations under this Convention (as in Article 30 fol) also relate to obligations that are inferred from established practices and usages (c. Article 9). On the other hand, all obligations deriving from the Convention are capable of alteration subject to mutual agreement (c. Article 6).

[4] [overview of remedies available to buyer]

Here an overview is offered of all remedies available to the buyer in the event of a breach of contract by the seller (see also Articles 71 to 73). While subpara. (a) only draws attention to the remedies for breach by the seller and constitutes an introduction to the following; subpara. (b) constitutes the actual basis for claiming damages (Honnold, 296). Therefore, Article 78 should, in our view, refer to Article 45, para.1, subpara. (b) and Article 61, para. 1, subpara. (b) instead of Article 74. Articles 74 to 77 do not state that damages are to be awarded; they merely explain the damages.

The buyer has the rights described under (a) and (b) (Schlechtriem, 66) and not only (a) or (b) (as believes Welser/Doralt, 116). In the event of a delivery of defective goods the buyer always has the right to claim damages (c. Hoffmann/Freiburg, 293) (and not only in exceptional cases like under BGB 463). [page 175]

Compensation for damages because of non-performance and avoidance of a contract will be combined on a regular basis (Leser/Freiburg, 229). Before the CISG was in existence, a choice between the two always entailed difficult decisions on the part of the buyer (Honnold, 297).

According to Huber (Freiburg, 220) the remedies of the parties are now in a polished, mature and systematically closed final form.

[5] [right to claim damages]

The right to claim damages is stipulated here in principle - for Articles 74 to 77 merely contain a definition, describe the calculation of such claims for damages and state its limits and means to mitigate losses. Whereas paragraph 2 offers clarity in regard to the relationship between the right to claim damages and the other rights of the buyer.

The right of the buyer to claim damages does not presuppose a failure by the seller as it is stipulated in many domestic legal systems (Honnold, 297). There is, however, no such right in the case of force majeure under Article 79.

A breach of contract alone is not a sufficient basis for the right to claim damages. The actual damage suffered and, in the event of non-conformity with the contract or the existence of third party rights or claims, notice of such non-conformity or third party rights or claims, have to also be taken into account (c. Articles 39 and 43).

[6] [right to claim damages: exists as a right by itself]

The right to claim damages exists either as a right by itself or in addition to the right to performance of the contract, mitigating losses or avoidance of the contract. (The buyer can, however, not doubly liquidate a disadvantage, Welser/Doralt, 116). This corresponds to the legal situation in many countries, but deviates from the rule existing under German, Swiss or English law (Will/BB, 331).

[7] [no period of time may be granted]

This stipulation was considered necessary because in some countries under the influence of the French Code Civil, avoidance of a contract can only be forced with the help of a court and the court can grant the seller an additional period (delai de grace) against the interests of the buyer. The situation is completely different when the buyer himself grants the seller a reasonable additional period (s. Article 47).

[8] [applies to each and every remedy]

Here reference is not made to each and every remedy to which a buyer will resort in the event of a breach of contract by the seller, but only to the right to make a contract void (Article 49). This stipulation could be found, therefore, in ULIS in connection with the right to avoid a contract (c. Will/BB, 332). [page 176]

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Pace Law School Institute of International Commercial Law - Last updated August 14, 2002
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