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Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 44
Excuse for Failure to Notify

1.  Nature of the Exception
2.  Reasonable Excuse

1. Nature of the Exception

206. Articles 39(1) and 43(1) provide that buyers who fail to notify of an alleged breach in respect of the various obligations of the seller set forth in CISG Part III (Articles 35, 41, 42) generally lose the right to rely on such breach. As a starting point, Articles 39(1) and 43(1) relate to the full range of Convention remedies otherwise available.[1] Article 44 provides an exception to these rules:

'Notwithstanding the provisions of paragraph (1) of article 39 and paragraph (1) of article 43, the buyer may reduce the price in accordance with article 50 or claim damages, except for loss of profit, if he has a reasonable excuse for his failure to give the required notice.'

A buyer who has a 'reasonable excuse' for his failure to notify does not lose all elements of the 'right to rely': such a buyer, while losing the right to require performance and the right to avoid, retains the right to a proportionate reduction in price [page 113] as well as a limited right to claim damages (i.e. except for loss of profit, which is lost by virtue of the failure to notify).[2]

It should be emphasized that the (absolute) two-year cut-off rule in Article 39(2) remains unaffected by Article 44. In this sense, the rule differs from Article 40 - a provision which has been applied to extend the buyer's protection beyond that two-year period.[3]

1. See supra Nos. 190 and 204.
2. As regards Article 50, see infra No. 231. As regards damages, hereunder lost profits, see infra No. 287 et seq.
3. See supra No. 196 citing a case where a buyer was allowed to 'rely' on a non-conformity first discovered some 3 years after delivery of the goods in question.

2. Reasonable Excuse

207. The difficult Article 44 question is what constitutes a 'reasonable' excuse. The legislative history of the Convention suggests that Article 44 was drafted to meet what representatives from developing countries saw as the drastic consequences of a failure to notify under Article 39(1), and it has been suggested that buyers in less developed regions may be among those likely to enjoy the benefits of a 'reasonable excuse.'[1] And although Article 44, by its own terms, applies to all CISG buyers, even experienced merchants, it can presumably be expected to provide 'safety valve' relief only in exceptional circumstances.[2] Then again, the developing CISG case law shows that safety-valve rules like those in Articles 40 and 44 will indeed be applied, from time to time, at least in cases where they are needed to avoid otherwise unjust results.[3]

1. See Honnold, Uniform Law (1999) at p. 283 [available at <http://www.cisg.law.pace.edu/cisg/biblio/honnold.html>].
2. The decision of Gerechtshof 's-Hertogenbosch (Netherlands), 15 December 1997, reported [at <http://cisgw3.law.pace.edu/cases/971215u1.html> and] in UNILEX, is in accord: the buyer could have appointed an expert to take and examine a sample of the goods (furs) at time of delivery, so the buyer's failure to discover the non-conformity before processing by a third party was not deemed to constitute a 'reasonable excuse'.
3. Regarding the application of the 'safety valve' in Article 40 see supra No. 196 (Chinese merchant was allowed to 'rely' on a non-conformity first discovered some 3 years after delivery of the goods in question).
[page 114]

Pace Law School Institute of International Commercial Law - Last updated April 5, 2005
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