Cite as Lando, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 232-239. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision
If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention.
1. History of the provision
1.1. - In the civil law systems the right to obtain specific performance of goods sold is the natural remedy in case of non-performance by a party; this right can be denied the aggrieved party only in exceptional cases. In the common law systems the claim for damages is the primary remedy available to the aggrieved party. Specific performance is granted only exceptionally at the court's discretion as an equitable relief.
This is a profound difference in the system and structure of the law of contract of the two families of law. The authors of the 1939 and 1956 Drafts took account of it. They provided in Article 26 of the 1939 Draft and in Article 27 of the 1956 Draft that a decree for specific performance could be rendered only if permissible under the national law of the court. Article VII (1) of the 1964 Convention relating to ULIS made a similar reservation. Although the right to require specific performance was granted in Article 24 of ULIS Article VII (1) of the Convention provided that:
Article VII (2) provided that the provisions of Article VII (1) «shall not affect the obligations of a Contracting State resulting [page 232] from any Convention, concluded or to be concluded, concerning the recognition and enforcement of judgements, awards, and other formal instruments which have like force».
In accordance with Article VII of the 1964 Convention, Article 16 of ULIS laid down that:
Article 25 of ULIS made an important exception to the rule on specific performance in Article 24. It provided that the buyer is not entitled to require specific performance of the contract by the seller, if it would be in conformity with usage and reasonably possible for the buyer to purchase goods to replace those to which the contract related.
1.2. - Article 26 of the UNCITRAL Draft Convention dropped Article 25 of ULIS and added a rule similar to the present Article 28, however, with a significant difference. It provided that a court would not be bound to enter a judgment for specific performance unless the court could do so under its own law. This was criticized by some common law writers on the ground that the law relating to equitable relief in common law systems is sufficiently discretionary that, given the appropriate facts, a court could render a judgment of specific performance in respect of many types of contracts although it would render such a judgment in respect of very few (see FARNSWORTH, Damages, 250). Accordingly «could» was changed to «would» as in ULIS.
1.3. - Since 1939 all attempts to establish a uniform provision on specific performance have failed. Still, was it really not possible for the Convention to go further than the Article 28 formulation, with its reference to what «the court would do ... under its own national law»?
1.3.1. - Several authors have pointed out that the difference between the two systems is small in practice. In civil law systems a claim for specific performance is rarely made. The difficulties [page 233] and delays in obtaining the very goods contracted for will in most cases discourage the aggrieved party from suing for specific performance. The situations in civil law courts in which an action for specific performance is brought are those in which a common law court would generally enter a judgment for specific performance.
1.3.2. - There are several situations in which it is impracticable or unjust to enforce a contract specifically. Nowhere can a party obtain a performance which has become impossible, legally or factually. If a party's failure to perform is due to an impediment beyond his control which he could not be expected to have taken into account at the time of conclusion of the contract or to have overcome or avoided it or its consequences, that party is not liable in damages for non-performance. It would then be inconsistent to force him to perform.
If specific performance can be obtained only through measures which are disproportionate to the benefit which the aggrieved party would derive from it, it will often be unreasonable to order specific performance. An example is a gold ring which before delivery is lost in a lake and which can be retrieved only by draining the lake. Furthermore, there are cases in which it will be much easier for the aggrieved party than for the defaulting party to obtain goods of the kind contracted for. For example, a fishmonger located in an isolated region becomes unable to deliver the agreed quantity of fish to the cannery. It would be very difficult for the fishmonger to acquire the stipulated quantity from other sources, whereas this would be easy for the cannery which transacts business with a large number of other fishmongers. To accomodate such situations it has been proposed in the 1984 Draft of a Nordic Sale of Goods Act that the buyer cannot require specific performance in cases of «force majeure» and where this would impose sacrifices upon the seller which would be manifestly disproportionate to the buyer's interest in obtaining performance (see Nordiska koplagar. Nordiska utredningar 1984:5, 246).
Article 25 of ULIS went even further and provided that a buyer would not be entitled to specific performance of the contract by the seller if it were in conformity with usage and reasonably possible for the buyer to purchase goods to replace those [page 234] to which the contract related. This took care of the many cases in which it would have been more economical for the parties and for society to award damages than to require the seller to perform. To perform specifically will often be unnecessarily hard on the seller who has closed his enterprise or reorganized his production. When the goods can be easily obtained elsewhere, damages will, as a rule, give the buyer adequate relief. It is also worthy of note here that in many cases the sanction in civil law systems against a recalcitrant party who does not abide by a decree for specific performance is to convert the aggrieved party's interest in having the decree enforced into a sum of money. In these cases the outcome will, as in common law systems, be damages.
Specific performance is a practical and adequate remedy where the goods contracted for are unique, such as heirlooms and precious objects of art. It is a useful remedy in output contracts under which goods have been made specially for the buyer, and in requirements contracts of long duration. It is appropriate in situations of scarcity and where the seller has a monopoly in the goods contracted for.
1.3.3. - It appears from the discussion at the 1964 Hague Conference concerning ULIS that it was tradition more than practical needs which made the delegations from civil law systems stick to specific performance as the main rule. Noteworthy are the remarks by the French delegate, Professor Tunc:
In French legal tradition, the right to specific performance was strongly adhered to, since it was felt that the contract was not truly performed unless it was specifically performed. This right was perhaps not frequently made use of, but it was wished that it should be retained (1964 Hague Conference Records, I, 53).
The same doctrinaire approach seems to have animated other civil law delegations and it appeared again at the Vienna Conference.
1.3.4. - Section 52(1) of the 1979 United Kingdom Sale of Goods Act provides that:
In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the plaintiff's application, by its [page 235] judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages.
Ascertained goods are goods which in accordance with the agreement between the parties are identified after the contract is made.
Section § 2-716 of the United States Uniform Commercial Code provides that «specific performance may be decreed if the goods are unique or in other proper circumstances». This provision lays emphasis on the commercial feasibility of replacement and does not limit specific performance to goods which are specific or ascertained. The official comment to § 2-716 states that:
Output and requirement contracts involving a particular or peculiarly available source or market present today the typical commercial specific performance situation, as contrasted with contracts for the sale of heirlooms or priceless works of art which were usually involved in the older cases.
One author mentions that the breach of a requirement contract may cut off a vital supply of raw materials of inestimable worth. If the breach occurs when the contract still has many years to run it may not be possible at the time of the trial to forecast the loss that will result. In such situations equitable relief has often been granted in the United States (FARNSWORTH, Damages, 253). In spite of Section 52 of the United Kingdom Sale of Goods Act, English courts have recently also granted specific performance in requirement contracts (see § 2.1., infra).
The common law confers a wide discretion upon the courts. Even in the typical specific performance situation a court may refuse to give judgment for the plaintiff if, for instance, it finds that his claim is not morally justified. Common law writers have criticized the wide discretion of the courts. It creates unforeseeability for the parties as to whether a court will direct specific performance, and as to which and how severe a sanction the court will impose upon the defaulting party.
1.3.5. - Given this background it seems as if a compromise could have been reached at the 1964 Hague Conference and at [page 236] the Vienna Conference. The civil law countries could have admitted that specific performance should be restricted to the situations for which this remedy is needed in practice. The common law countries might have conceded that in these situations specific performance should be a right which the court would have to grant the aggrieved party.
2. Meaning and purpose of the provision
2.1. - Article 28 gives the court the power to refuse a decree for specific performance if under its own law it would not render such a decree in respect of similar contracts of sale. However, the court is not bound to do so. Nothing prevents it from entering a judgment for specific performance in cases in which formerly it refused to do so. Recent case law in England supports the view that specific performance may be granted in domestic requirement contracts although the goods are neither specific nor ascertained (see Sky Petroleum Ltd. v. V.S.P. Petroleum Ltd. (1974) 1 Weekly Law Reports, 576). The common law courts would not be prevented from going even further in international contract cases than they have gone in domestic contract cases.
2.2. - Article 28 is provided for the benefit of common law courts but may also be applied by the courts of civil law countries. They may invoke Article 28 to remedy one of the flaws of Article 79. It provides that certain impediments (force majeure) will excuse a party from liability in damages for non-performance. It also provides in paragraph (5) that «nothing in this article prevents either party from exercising any right other than to claim damages ...». However, in cases of exemption from liability because of a lasting impediment it would be inconsistent to require a party to perform specifically when he is free from paying damages for non-performance. Courts in countries which in these cases would not enter a judgment for specific performance may take advantage of the freedom not to do so provided in Article 28 (for a similar view see SCHLECHTRIEM, UN-Kaufrecht, 51; Uniform Sales Law, 63).
2.3. - The provisions of the Convention, apart from Article 28, are based on the premise that a defaulting party may be forced [page 237] to perform (see Article 45(1)). There are, however, some exceptions to these rules (see Article 46(2) on the right to require substitute goods, and Article 46(3) on the right to have the goods repaired).
Restrictions of the buyer's duty to pay the price may, in cases in which the seller has sold goods of which the buyer has failed to take delivery, and which are subject to rapid deterioration, or the presentation of which involves unreasonable expense, be deduced from Article 88 (see Article 85 and 86). A similar restriction may be inferred from the seller's or buyer's duty to mitigate the loss resulting from a breach of contract (see Article 77). Thus, a buyer who in good time before delivery informs the seller that he cannot receive the goods should not be forced to bear the seller's subsequent unwarranted manufacturing and shipping costs, and may therefore, if is submitted, demand a reduction of the purchase price he is obliged to pay in damages.
2.4. - Neither Article 28 nor Article 46(1) and 62 provide how a judgment for specific performance is to be enforced. This is left to the procedural law of the country where enforcement is sought. On this issue there are remarkable differences between the laws of the various countries (see ZWEIGERT-KÖTZ, Einführung in die Rechtsvergleichung auf dem Gebiete des Privatrechts, Tübingen (Mohr), 2nd ed. 1984, II, 178-201).
2.5. - Article 16 of ULIS and Article VII (1) of the Convention relating to ULIS gave the court the freedom not to enforce a (foreign) judgment for specific performance. This freedom was curtailed by Article VII (2) of that Convention which provided that Article VII (1) should not affect the obligations of a Contracting State resulting from any convention concerning the recognition and enforcement of judgments. Article 28 of the present Convention does not raise the issue of enforcement of foreign judgments. It only concerns the freedom of the courts not to enter a judgment for specific performance. Therefore there has been no need for a provision like Article VII (2) of the ULIS Convention.
Conventions on the enforcement of foreign judgments are not affected by Article 28. The European Community Convention of September 27, 1968 on jurisdiction and the recognition [page 238] and enforcement of judgments in civil and commercial matters will soon be now in force also in the United Kingdom (see 1982 United Kingdom Civil Jurisdiction and Judgments Act (Ch. 27)). Under this Convention judgments of the Member States are enforceable in the United Kingdom also when they are judgments for specific performance entered in cases in which an English court would not have granted specific performance.
3. Problems concerning the provision
3.1. - Even if the parties have expressly agreed that the contract must be performed specifically a court may refuse to order specific performance of the contract. In this respect Article 28 is inconsistent with Article 6 which permits the parties to derogate from or vary the effect of any of the provisions of the Convention. The same contradiction was found in ULIS. Article 16 of ULIS was, however, sustained by the argument that it does not concern the rights and the duties of the parties, but is directed to the courts whose powers it regulates (REINHART, in DÖLLE, Einheitliches Kaufrecht, 113). This argument is not convincing. Article 28 of the Convention and Article 16 of ULIS may be read as directives to the courts -- you do not have to grant specific performance -- and as directives to the parties -- in certain jurisdictions you have no right to require specific performance. Besides, there are other provisions of the Convention which are directed to the courts, such as Article 45(3) and 61(3) (no court may grant a period of grace), and these provisions may be derogated from by the parties. [page 239]