Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 384-385. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
§350 This article gives the seller the same remedial tool that Article 47 gives the buyer—the power to "fix an additional period of time of reasonable length for performance." If the buyer fails to perform within this additional period, Article 64(1)(b), infra at §353, provides that the seller may declare the contract avoided without proving that the buyer’s breach was "fundamental."
"(1) The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations.
"(2) Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort to any remedy for breach of contract. However, the seller is not deprived thereby of any right he may have to claim damages for delay in performance."
§351 A. Notice as a Basis for Avoidance
In examining Articles 47 and 49(1)(b) we saw that the buyer’s Nachfrist notice provide a basis for avoidance only in a limited area—failure by the seller to deliver the goods. Similarly, the seller’s Nachfrist notice under Article 63 provides a basis for avoidance under Article 64(1)(b) only when the buyer fails, within the specified period, to perform his obligation to "pay the price or take delivery of the goods." Article 54 states that the buyer’s "obligation to pay the price" includes enabling steps required by the contract; thus, failure to establish a letter of credit may provide the basis for a Nachfrist notice under the present article (§323 supra). In any event, the notice-avoidance remedy applies only to the most important of the buyer’s obligations; his failure in other areas (such as specifying features of the goods, Art. 65) constitutes a breach of contract but the seller may avoid the contract only if the breach is fundamental (Arts. 25, 64(1)(a)).[page 384]
The discussion of the seller’s Nachfrist notice (Art. 47, supra at §289) concluded that the notice can serve as a basis for avoidance only if it states that the other party has an additional and final period for performance, and that the reasonableness of the period should be decided in conformity with the Convention’s general policy against the avoidance of contracts on insubstantial grounds. That discussion is equally applicable here.
§352 B. Obligation to Accept the Performance Invited in the Notice
Paragraph (1) states that the seller may fix an additional period for the buyer’s performance "of his obligations"; the notice may be given with respect to defaults that do not invoke the notice-avoidance remedy of Article 64(1)(b). In this larger area the notice has the consequences that are stated in paragraph (2)—the seller is obliged to accept the performance it has invited but is not deprived of the right to claim damages for delay, including delay during the "additional period" fixed in the notice. Knapp in B-B Commentary 459 §2.5 (See the discussion under Article 47(2), supra at §291. [page 385]
FOOTNOTES: Chapter on Article 63
1. This article is the same as Art. 59 of the 1978 Draft. Cf. ULIS 62(2), 66(2).
2. Knapp in B-B Commentary 460 §2.8 suggests that the seller’s Nachfrist notice does not become effective until it reaches the buyer. Article 27 states that "unless otherwise expressly provided" in the Convention, a communication that is dispatched by appropriate means is effective in spite of "delay or error" in transmission. Knapp suggests that the above rule should not apply because of "the purpose of this notice". However the Convention provides "express’ exceptions from Article 27 in several situations, but not here. Moreover, most of these exceptions deprive a party in breach of the benefit of the dispatch rule, while the one who sends the Nachfrist notice is a party aggrieved by the other party’s delay. See §190, supra.
3. The seller’s time for avoiding the contract does not run while he is waiting for a response to his notice. See Art. 64(2)(b)(ii), infra, and the discussion of the comparable provision in Art. 49(2)(b)(ii), §308, supra.