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Reproduced with the permission of Oceana Publications

Article 84 [Accounting for benefits in case of restitution] [1]

[TEXT OF THE UNIFORM LAW]

(1) If the seller is bound to refund the price, he must also pay [2] interest [3] on it, from the date on which the price was paid.

(2) The buyer must account to the seller for all benefits which he has derived from the goods or part of them [4]:
(a) if he must make restitution of the goods or part of them [5]; or
(b) if it is impossible for him to make restitution of all or part of the goods or to make restitution of all or part of the goods substantially in the condition in which he received them, but he has nevertheless declared the contract avoided [6] or required the seller to deliver substitute goods [7].

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [accounting for benefits irrespective of grounds that led to avoidance]

Going beyond the obligation to restitute the goods under Article 81, paragraph 2, this article stipulates that the benefits have to be accounted for which the party having to restitute the goods obtained from the performances in goods or in price, have to be returned. This obligation arises irrespective of the grounds which have led to the avoidance of the contract. But its results can in the end be considerably modified. The party who has declared the contract avoided because of a breach of contract by the other party will, as a rule, have the right to claim damages which he can set-off against payment obligations under this article. Furthermore, the parties may set-off against each other the claims they might have under this article (note 8 of Article 81).

[2] [if the seller is bound to refund the price, he must also pay interest on it …]

This rule proceeds on the assumption that the seller, within the period in which he has disposal over the price, has a benefit from it, at least in the form of interest, and, therefore, sets the date of the payment as the date from which on interest begins to run. This is the day when the payment is actually made according to the contractually or legally (Article 57 and 58) provided procedure; in our view, also in cases where the seller in individual cases had disposal of the means only later. Interest runs until the demand for the restitution of the price lapses, in particular by performance or effective setting off.

[3] [… he must pay interest on it, from the date on which the price was paid]

In regard to the amount of interest, there is the almost uniform view that the calculation of interest should be based on the interest rate used in the seller's country because it is the return of benefits drawn from use that are at issue and not claims for damages (so already O.R., 58). Tallon (BB, 612), however, expresses doubt. Actually, we do not see why we should, in this context, depart from our general opinion, that the amount of interest to be claimed is to be calculated according to "the general subsidiary statute (note 2.2. of Article 78). However, the view held in publications by a majority of colleagues is also acceptable. This does, in our view, not exclude the buyer from claiming further damages when the avoidance of the contract is based on a breach of contract by the seller and/or the latter commits another breach of contract which leads to buyer being [page 349] withdrawn means. Late repayment would also constitute such a breach, and our view corresponds with the one held by Schlechtriem (102, note 449).

[4] [the buyer must account to the seller for all benefits which he has derived from the goods or part of them …]

      [4.1] Basically, the buyer does not have to return the equivalent of the benefits which he omitted to draw. This again does not exclude that the seller may assert claims for damages because of loss in value of the goods delivered where the avoidance is based on a breach of contract by the buyer and/or the latter restitutes belatedly. These claims for damages may indeed come close to benefits not drawn.

      [4.2] The benefits do not have to be returned in kind, but according to the requirements of international trade, in money.

[5] [… if he must make restitution of the goods or part of them …]

      [5.1] In this case, possible benefits may exist in the use of the goods. In calculating them one should, in our view, proceed as a rule from how a temporary placing at the disposal of the relevant goods would have been compensated for, e.g. in the framework of a leasing contract, provided that the goods were actually used. This also meets the legal ideas as contained in Article 76. The opposite to this rule consists in that the seller has to accept normal wear and tear of the goods to be restituted. A payment of the equivalent of fruits as it is seemingly envisaged by Leser (Freiburg, 250) cannot be excluded. All the more so since it brings close to the actually drawn benefits, but will often be impractical because the expenses for the fruit bearing will have to be deducted again. In many cases, the drawing of benefits will not be possible anyway because of the reasons for the avoidance, non-conformity of the goods, or because of the category of goods, consumer goods.

      [5.2] In the event of a delivery of substitute goods, this rule will hardly be of practical relevance. The buyer generally has the right to the benefits of use which he draws from the goods because they are satisfied by the payment of the price in the context of the agreed terms of payment. It is not customary to require an additional payment in the event that the buyer twice receives new goods. As required, these did not conform to the contract in the first instance so that it would be more likely for the buyer to claim damages.

[6] [… or if it is impossible for him to make restitution of all or part of the goods or to make restitution of all or part of the goods substantially in the condition in which he received them, but he has nevertheless declared the contract avoided …]

It follows from Article 82, paragraph 2 when a contract can be avoided without restitution being made. In these events, benefits from use are to be compensated to the extent to which the goods could be used until the possibility of restitution was lost. The advantages nonetheless include claims for damages vis-à-vis third parties, the party in breach or the insurance company, in connection with a damage or a destruction of the goods as well as price demands vis à-vis third parties. It cannot be left to the discretion of the buyer, in [page 350] our view, to decide whether or not he draws the benefits, hence notifies and pursues in time a claim vis-à-vis an insurance company. He is obligated to do so, both according to the principle of good faith (Article 7, paragraph 1) and the general principles of the CISG (Article 7, paragraph 2); in the latter case, particularly because of the obligation to cooperate (note 10.1. of Article 7). But the buyer must be considered as having the right to fulfil this obligation by ceding claims against third parties to the seller. This is the obvious choice when the claims are uncertain because of those grounds which also led to the avoidance of the contract, i.e. price claims vis-à-vis third parties to which defective goods were delivered).

[7] [… or required the seller to deliver substitute goods]

The inclusion of the delivery of substitute goods in this context should be of minor practical relevance and was obviously supposed to establish a correspondence with Article 82. A case to which this rule could possibly be applied is the one where non-conforming goods, for which substitute goods are delivered, are in addition affected by an insured accident so that the buyer obtains a refund which he has to return to the seller.[page 351]

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