Cite as Will, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 342-346. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
1. History of the provision
2. Meaning and purpose of the provision
(1) The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations.
(2) Unless the buyer has received notice from the seller that he will not perform within the period so fixed, the buyer may not, during that period, resort to any remedy for breach of contract. However, the buyer is not deprived thereby of any right he may have to claim damages for delay in performance.
1. History of the provision
1.1. - Article 47 complements Article 46. It permits the setting of a limit for late performance (paragraph (1)). Once an additional period of time of reasonable length is fixed, the buyer may not exercise any other remedy during that period except to claim damages for delay (paragraph (2)).
1.2. - This concept is commonly discussed under the term of Nachfrist, although not really identical with the German Civil Code topic of the same name (for a background discussion see TREITEL, International Encyclopedia of Comparative Law, VII, chap. 16, Remedies for Breach of Contract, 1976, 149-151). It was introduced in ULIS to enable the buyer to avoid the contract as soon as the Nachfrist (i.e., the additional period for performance) elapsed. Except where fungible goods could be replaced by the buyer (ipso facto avoidance, see Article 25 of ULIS), the remedy applied whenever the seller failed to fulfil any of his obligations. The UNCITRAL Draft Convention remodelled that system in two aspects.
First, ipso facto avoidance disappeared. What remained is the concept of a right to avoid the contract (see Secretariat's Commentary, Official Records, I, 39). The Vienna Conference did not hesitate to confirm this step forward in international sales law [page 342] codification (see Official Records, II, 211). It is progress because the increased flexibility it provides, benefits both parties. Notably, the buyer of fungible goods is relieved from rigid automatism. Whereas ULIS forced him into avoidance when in fact he would have been better served by, and ready to consent to, a second and even third additional time for performance or would have preferred to resort to other remedies such as price reduction or damages, the Convention permits him to concede additional time for performance. Similarly, the seller retains the right to deliver and need not keep or take back the goods and incur the inconvenience and cost involved.
Second, the scope of the notice-avoidance rule was narrowed. It is now available only where the seller fails to deliver (including fungible goods, previously excluded by Article 25 of ULIS), and is no longer available where the seller fails to perform any of his other obligations (see Article 49(1)). Obviously it is the seller who benefits from the Convention's restricting the use of the remedy of avoidance to non-delivery. Minor defects need no longer make him fear the worst. The buyer, on the other hand, appears sufficiently well protected by other remedies at his disposal.
1.3. - The Draft proposal, though subject to a few suggestions for amendment, was adopted without change (see Official Records, II, 211, 340-341).
2. Meaning and purpose of the provision
2.1. - While Article 47, for all practical purposes, centers on non-delivery, it still has a function in case of non-performance of other obligations.
2.1.1. - The provision is founded upon the idea that the buyer should not be able to avoid the contract merely because the goods were not delivered on time (see Secretariat's Commentary, Official Records, I, 39). Since delayed delivery is usually not considered a fundamental breach, the buyer can be expected to give the seller another chance by setting an additional period of time. Still, the buyer usually needs the goods and may not be [page 343] able to wait a long time, let alone until the end of court procedures. Even when the delay does not constitute a fundamental breach of contract, the buyer must be able to get out of it and turn to another supplier (see Secretariat's Commentary, Official Records, I, 39). When the delay does constitute a fundamental breach, the buyer may still have reasons to prefer, and is by no means prevented from fixing an additional period for performance. In neither case does avoidance fall as an automatic sanction. Additional does not necessarily mean final. The seller, it is true, must take the period accorded to him as a final one; he faces avoidance when it lapses and cannot expect an additional extension. Avoidance, however, is neither automatic nor obligatory. The buyer always remains free to set a second, third and further additional period for performance to save the contract, for him additional does not equal final.
2.1.2. - The purpose of the provision is to remove a double uncertainty. First, it removes the uncertainty about whether and when the seller will deliver. If the buyer could not fix a time limit, his right to claim performance and the seller's right to deliver would remain open-ended indefinitely. Second, the provision removes the uncertainty about whether non-delivery amounts to a fundamental breach. Without this certainty, it would be entirely at the buyer's own risk if he, victim of non-delivery, declared the contract avoided under Article 49(1)(a). Fear that his evaluation of a difficult situation might not be shared would make a cautious buyer hesitate to avoid the contract. Article 47 offers relief from that risk, leaving the buyer with only the uncertainty of how to determine the «reasonable length» of the additional period.
2.1.3. - When the buyer chooses performance under the additional period rule of Article 47 he has to observe two conditions. He must fix an additional period of time, and that period must be of reasonable length.
18.104.22.168. - One of the longer discussions at the Vienna Conference dealt with the question of whether the term «fix» implied the necessity of notice and if so, which requirements this notice should meet. [page 344]
A proposal to require that the seller receive notice was rejected on the ground that the additional period of time was a privilege which the buyer accorded to the seller. No better fared the proposal requiring dispatch of the notice. The majority thought that the term «fix» was perfectly clear in itself and implied written or oral communication as governed by Article 27 (see Official Records, II, 338-340).
In order to serve its purpose and to constitute a valid basis for so serious a remedy as avoidance, the notice must warn the seller that a deadline has been «fixed» (HONNOLD, Uniform Law, 306). The warning will have to be as unequivocal as the deadline. Strong invitations expressing something like «hope to receive the goods soon» would certainly not suffice. The warning has to be expressed so clearly that no reasonable seller would need any further interpretation or explication in order to realize that the date indicated constitutes his final chance to deliver, and that the buyer is not prepared to go beyond this deadline.
Likewise, the deadline must be clearly determined by indicating either a period of time (four weeks from today, six weeks before Easter) or a given date (March 17, Christmas). Vague terms (soon, promptly, immediately, without delay) would not be proper «fixing» and therefore would not trigger the notice-avoidance remedy.
22.214.171.124. - In fixing an additional period of time the buyer must choose one of reasonable length. This is to eliminate any temptation for the buyer to use an insignificant delay as a means to avoid the contract under Article 49(1)(b) which he could not have done under Article 49(1)(a) (see Secretariat's Commentary, Official Records, I, 39). But what precisely is a «reasonable length»? The answer depends on the particular circumstances of each case. Among the elements to be taken into account are the nature, extent and consequences of the delay, the seller's possibilities of and time needed for delivery, and the buyer's special interest in speedy performance. It is unclear whether this decision is to be made by the buyer alone and whether it is entirely at his risk.
2.2. - Fixing an additional period of time entails two main consequences for the buyer. After the period expires he may (but [page 345] need not) avoid the contract under Article 49(1)(b); and before it expires he cannot turn to other remedies, except perhaps the right to claim for damages for delay.
2.2.1. - Once the additional period of time has lapsed and the seller still has not delivered, the buyer may. proceed to declare the contract avoided according to Article 49(1)(b). The same applies even before the deadline expires, as soon as the seller declares. that he will not perform within the additional period fixed (Article 47(2)). In either situation, any other remedy is of course available.
In all other cases of non-fulfillment of the seller's obligations, Article 49(1)(a) provides that the buyer can resort to avoidance only if the breach is a fundamental one. Without a fundamental breach there is no other way leading to avoidance. Fixing an additional period would be of no avail whatsoever. It is, however, possible that in cases of repair, for example, persistent refusal of the seller to respect additional time limits may finally open the way to avoidance under Article 49(1)(a); but never under Article 49(1)(b).
2.2.2. - Before the additional period of time has lapsed the buyer may not avail himself of any other remedy for breach of contract. By fixing an additional period he binds himself for the period fixed. All he can do in the meanwhile is claim damages suffered by the delay. The reason behind the rule is to afford temporary protection to the seller while he may be making efforts, perhaps at considerable expense, to deliver the goods as requested (see Secretariat's Commentary, Official Records, I, 39-40). [page 346]