TEXT OF ARTICLE 25
A breach of contract committed by one of the parties is fundamental if it results in
such detriment to the other party as substantially to deprive him of what he is entitled
to expect under the contract, unless the party in breach did not foresee and a
reasonable person of the same kind in the same circumstances would not have
foreseen such a result.
For other Articles of the Convention that specifically refer to "fundamental breach", go to
Most of these provisions pertain to avoidance. A fundamental breach can also give rise
the right to require delivery of substitute goods.
OUTLINE OF ISSUES
Reproduced with permission of UNCITRAL
25A Effect of a fundamental breach
25A1 Avoidance of contract (see arts. 49(1)(a) and 64(1)(a))
25B Definition: Substantial deprivation of expectation, etc.
25B1 Exception: Foreseeability test (see art. 25)
25C Other issues concerning definition
DESCRIPTORS
Fundamental breach ; Avoidance
CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES
Presented below is a composite list of Art. 25 cases reporting UNCITRAL Digest cases and other Art. 25 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 13 December 2001 citation reported below. Cases are coded to the UNCITRAL Thesaurus. English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars to the extent available. For a case annotated analysis of issues associated with The Buyer's Right to Avoid the Contract in Case of Non-Conforming Goods or Documents, go to CISG-AC Opinion No. 5, dated 7 May 2005. Rapporteur: Professor Dr. Ingeborg Schwenzer, University of Basel. Analysis endorsed by Jan Ramberg, Chair; Eric E. Bergsten, Michael Joachim Bonell, Alejandro M. Garro, Roy M. Goode, Sergei N. Lebedev, Pilar Perales Viscasillas, Peter Schlechtriem, Ingeborg Schwenzer, Hiroo Sono, Claude Witz, Members; Loukas A. Mistelis, Secretary. There are scholars who believe that there are circumstances in which the UNIDROIT Principles of International Commercial Contracts may be used to interpret or supplement this Article of the CISG. See match-up of this Article with counterpart provisions of the Principles and commentary on this subject. To the extent this reasoning fits, cases on the counterpart provisions of the UNIDROIT Principles may be relevant. To the extent available, such cases may be found on the Unilex website. United States 16 April 2008 U.S. District Court [New York] (Macromex Srl. v. Globex International, Inc.) 25B
Germany 27 November 2007 Bundesgerichtshof [Federal Supreme Court] (Glass bottles case) 25B [translation available]
Switzerland 13 November 2007 Bundesgericht [Supreme Court]
American Arbitration Association 23 October 2007 [Interim Award] (Macromex Srl. v. Globex International Inc.) 25B
Austria 4 July 2007 Oberster Gerichtshof [Supreme Court] (Auto case) [translation available]
Stockholm Chamber of Commerce 5 April 2007 (Pressure sensors case) 25B [English text]
Spain 22 March 2007 Audiencia Provincial [Appellate Court] Madrid
Germany 12 January 2007 Oberlandesgericht [Appellate Court] Köln [translation available]
Spain 21 December 2006 Appellate Court Islas Huesca
Spain 9 November 2006 Appellate Court Islas Baleares
Spain 31 October 2006 Supreme Court
Germany 19 October 2006 Oberlandesgericht [Appellate Court] München (Auto case) 25B [translation available]
Germany 31 August 2006 Oberlandesgericht [Appellate Court] Köln (Chlorine tablets case) 25B [translation available]
Spain 20 July 2006 Supreme Court
Netherlands 28 June 2006 Rechtbank [District Court] Arnhem (Silicon Biomedical Instruments B.V. v. Erich Jaeger GmbH) 25B [translation available]
Germany 21 June 2006 Amtsgericht [Lower Court] Landsberg (Dust ventilator case) 25B [translation available]
Belgium 24 April 2006 Hof van Beroep [Appellate Court] Antwerpen (GmbH Lothringer Gunther Grosshandelsgesellschaft für Bauelemente und Holzwerkstoffe v. NV Fepco International) 25A1 [translation available]
Belgium 19 April 2006 Rechtbank van Koophandel [Commercial Court] Hasselt (Bruggen Deuren BVBA v. Top Deuren VOF) [translation available]
Spain 5 April 2006 Supreme Court
United States 4 April 2006 Federal District Court [New Jersey] (Valero Marketing v. Green Oy) 25B
Austria 23 January 2006 Oberlandesgericht [Appellate Court] Linz (Auto case) 25B [translation available]
Russia 30 November 2005 Arbitration Award 76/2005
Germany 29 November 2005 Landgericht [District Court] München (Frozen vegetables case) 25B [translation available]
Russia 18 October 2005 Arbitration Award 21/2005 (Varnish and paint machine case) 25B [translation available]
Spain 26 September 2005 Audiencia Provincial [Appellate Court] Palencia (Printing machine case) 25B
Netherlands 31 August 2005 Gerechtshof [Appellate Court] Leeuwarden (Auto-Moto Styl S.R.O. v. Pedro Boat B.V.) 25B [translation available]
Ukraine 5 July 2005 Arbitration Award (Medical equipment case) 25B [translation available]
Austria 21 June 2005 Oberster Gerichtshof [Supreme Court]
United States 15 June 2005 Federal District Court [New Jersey] (Valero Marketing v. Greeni Oy)
Russia 27 May 2005 Arbitration Award 95/2004 25B [translation available]
China 10 May 2005 CIETAC Arbitration Award No. G20010386 (Hat case) 25B [translation available]
Germany 11 April 2005 Landgericht [District Court] Frankfurt 25B [translation available]
China 7 April 2005 CIETAC Arbitration Award [CISG/2005/01] (Cotton gin motes case) 25B [translation available]
Spain 29 March 2005 Juzgado de Primera Instancia [Court of First Instance] Tudela 25B [translation available]
Switzerland 21 February 2005 Kantonsgericht [Appellate Court] Valais (CNC machine case) 25B [translation available]
Austria 1 February 2005 Oberlandesgericht [Appellate Court] Innsbruck (Powdered tantalum case) [translation available]
Spain 31 January 2005 Audiencia Provincial [Appellate Court] Cuenca (Live calves case) [translation available]
Italy 11 January 2005 Tribunale [District Court] Padova 25B
Russia 21 December 2004 Arbitration Award 39/2003 25A [translation available]
Russia 2 November 2004 Arbitration Award 188/2003 25B ; 25B1 [translation available]
Belgium 20 October 2004 Hof van Beroep [Appellate Court] Gent 25B [translation available]
Germany 15 September 2004 Oberlandesgericht [Appellate Court] Köln [detailed abstract available]
Austria 29 July 2004 Oberlandesgericht [Appellate Court] Graz (Construction equipment case) 25B [translation available]
Germany 22 July 2004 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
China 13 July 2004 CIETAC Arbitration Award [CISG 2004/03] (Liquid filling production line case)
Russia 25 June 2004 Arbitration Award 120/2003 25B [translation available]
Belgium 4 June 2004 Rechtbank van Koophandel [District Court] Kortrijk 25B [translation available]
France 4 June 2004 Cour d'appel [Appellate Court] Paris 25B [translation available]
Germany 1 June 2004 Landgericht [District Court] Saarbrücken (Pallets case) [translation available]
United States 21 May 2004 U.S. District Court [Illinois] (Chicago Prime Packers v. Norham)
Canada 4 May 2004 Court of Appeal of Manitoba (Brown & Root v. Aerotech)
Spain 28 April 2004 Audiencia Provincial [Appellate Court] Barcelona 25B [translation available]
Germany 21 April 2004 Oberlandesgericht [Appellate Court] Düsseldorf [15 U 88/03] 25B [translation available]
Italy 31 March 2004 Tribunale [District Court] Padova [translation available]
Italy 25 February 2004 Tribunale [District Court] Padova [translation available]
Switzerland 27 January 2004 Kantonsgericht [District Court] Schaffhausen 25B [translation available]
Germany 23 January 2004 Oberlandesgericht [Appellate Court] Düsseldorf 25B [translation available]
China 14 January 2004 CIETAC Arbitration Award [CISG/2004/01] (Printing machine case) 25B [translation available]
Austria 17 December 2003 Oberster Gerichtshof [Supreme Court] Netherlands 12 November 2003 Rechtbank [District Court] Maastricht Switzerland 24 October 2003 Handelsgericht [Commercial Court] Zürich
Canada 6 October 2003 Ontario Supreme Court (Diversitel v. Glacier) 25A ; 25B
Switzerland 22 August 2003 Appellationsgericht [Appellate Court] Basel 25B [translation available]
Germany 25 July 2003 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
China 26 June 2003 CIETAC Arbitration Award [CISG 2003/10] (Alumina case) 25B [translation available]
Netherlands 23 April 2003 Gerechtshof [Appellate Court] 's-Gravenhage 25B [translation available]
China 18 April 2003 CIETAC Arbitration Award [CISG 2003/05] (Desulfurization reagent case) 29A [English text]
Netherlands 29 January 2003 Rechtbank [District Court] Zwolle
Netherlands 22 January 2003 Rechtbank [District Court] Zwolle
ICC 2003 International Court of Arbitration, Case 11849 (Fashion products case) 25B [English text]
China 27 December 2002 CIETAC Arbitration Award [CISG 2002/29] (Medicine manufacturing equipment case) 25A [translation available]
Switzerland 12 December 2002 Kantonsgericht [District Court] Zug 25B [translation available]
China 27 November 2002 Higher People’s Court of Ningxia Hui Autonomous Region 25B [translation available]
Ukraine 25 November 2002 Arbitration Award 25A [translation available]
China 11 November 2002 CIETAC Arbitration Award [CISG 2002/26] (Platform case) 25B [translation available]
China 6 November 2002 CIETAC Arbitration Award [CISG 2002/25] (Pipe equipment case) 25B [translation available]
Switzerland 5 November 2002 Handelsgericht [Commercial Court] Aargau 25A [translation available]
China 4 November 2002 CIETAC Arbitration Award [CISG 2002/08] (Beech log case) 25B [translation available]
Germany 14 October 2002 Oberlandesgericht [Appellate Court] Köln 25B [translation available]
China 9 October 2002 CIETAC Arbitration Award [CISG 2002/13] (Elevator case) 25B [translation available]
Canada 20 September 2002 Manitoba Court of Queen's Bench (Brown & Root v. Aerotech) 25A ; 25B
China 9 September 2002 CIETAC Arbitration Award [CISG 2002/22] (Elevator case) 25B [translation available]
China 9 August 2002 CIETAC Arbitration Award [CISG 2002/21] (Yellow phosphorus case) 25B [translation available]
China 15 July 2002 CIETAC Arbitration Award [CISG 2002/19] (Coating equipment case) 25B [translation available]
Germany 2 July 2002 Landgericht [District Court] Saarbrücken [translation available]
Germany 1 July 2002 Oberlandesgericht [Appellate Court] München 25B [translation available]
Switzerland 11 April 2002 Tribunal Cantonal [Appellate Court] Vaud
Switzerland 1 March 2002 Zivilgericht [Civil Court] Basel 25B [translation available]
Germany 27 February 2002 Landgericht [District Court] München [translation available]
Switzerland 25 February 2002 Kantonsgericht [District Court] Schaffhausen [translation available]
Germany 20 February 2002 Landgericht [District Court] München 25B [translation available]
Spain 12 February 2002 Audiencia Provincial [Appellate Court] Barcelona 25A
China 4 February 2002 CIETAC Arbitration Award [CISG/2002/03] (Styrene monomer case) 25B [translation available]
China 4 February 2002 CIETAC Arbitration Award [CISG 2002/17] (Steel bar case) 25B [translation available]
China 2002 Shanghai Yangpu District People's Court (China Xhanghai Dongda Import & Export Corp. v. Germany Laubholz – Meyer Corp) 25B [translation available]
United States 17 December 2001 U.S. District Court [Michigan] (Shuttle Packaging v. Tsonakis) 25B
* Italy 13 December 2001 Tribunale [District Court] Busto Arsizio 25A
Germany 12 November 2001 Oberlandesgericht [Appellate Court] Hamm (Memory module case) 25B [translation available]
Australia 12 October 2001 Supreme Court of Queensland, Court of Appeal (Downs Investments v. Perwaja Steel) 25A ; 25B
Austria 5 July 2001 Oberster Gerichtshof [Supreme Court] (Pentium computer parts case) 25A [translation available]
China 22 March 2001 CIETAC Arbitration Award [CISG/2001/02] (Mung bean case) 25B [translation available]
Germany 12 March 2001 Oberlandesgericht [Appellate Court] Stuttgart 25B [translation available]
Australia 17 November 2000 Supreme Court of Queensland (Downs Investment v. Perwaja Steel) 25A ; 25B
France 12 October 2000 Cour d'appel [Appellate Court] Paris
Germany 12 October 2000 Landgericht [District Court] Stendal 25B [translation available]
China 29 September 2000 CIETAC Arbitration Award [CISG 2000/15] (Cushion case) 25B [translation available]
Austria 28 September 2000 Oberlandesgericht [Appellate Court] Graz (Computer phone board case) 25B [translation available]
Switzerland 15 September 2000 Bundesgericht [Federal Supreme Court] [4C.105/2000] 25B [translation available]
Russia 24 August 2000 Arbitation Court [Appellate Court] for the Moscow Region [translation available] China 10 August 2000 CIETAC Arbitration award 25B [translation available]
China 27 July 2000 CIETAC Arbitration award 25B [translation available]
Mexico 14 July 2000 Juzgado de Primera Instancia [Court of First Instance] Tijuana [translation available]
Russia 13 June 2000 Arbitration Award No. 280/1999 [translation available]
* Austria 13 April 2000 Oberster Gerichtshof [Supreme Court] [translation available] Germany 6 April 2000 Landgericht [District Court] München 25B [translation available]
China 11 February 2000 CIETAC Arbitration award 25B [translation available]
Russia 11 February 2000 Arbitration Award No. 226/1999 [translation available]
China 1 February 2000 CIETAC Arbitration award 25A [translation available]
China 31 January 2000 CIETAC Arbitration Award [CISG/2000/09] (Clothes case) 25B [translation available]
China 2000 CIETAC Arbitration Award [CISG 2000/17] (Souvenir coins case) 25B [translation available]
China 31 December 1999 CIETAC Arbitration Award [CISG/1999/32] (Steel coil case) 25B [translation available]
United States 7 December 1999 Federal District Court [Illinois] (Magellan International v. Salzgitter Handel) 25A
Germany 26 November 1999 Oberlandesgericht [Appellate Court] Hamburg 25A [translation available]
Denmark 10 November 1999 Veste Landsret [Western High Court] 25A [translation available]
Russia 27 October 1999 Arbitration award 269/1998 [translation available]
* France 21 October 1999 Cour d'appel [Appellate Court] Grenoble 25A [translation available]
China 10 August 1999 CIETAC Arbitration Award [CISG 1999/35] (Raincoat case) 25B [translation available]
ICC August 1999 International Court of Arbitration, Case 9887 [English text]
Russia 7 June 1999 Arbitration award 238/1998 25B [translation available]
China 4 June 1999 CIETAC Arbitration Award [CISG/1999/28] (Industrial raw material case) 25B [translation available]
China June 1999 PRC Arbitration award 25B [translation available]
ICC June 1999 International Court of Arbitration, Case 9187 [English text]
* France 26 May 1999 Cour de Cassation [Supreme Court] (Schreiber v. Thermo Dynamique) [translation available]
* United States 17 May 1999 U.S. District Court [Louisiana] (Medical Marketing v. Internazionale Medico Scientifica) 25B
China 12 April 1999 CIETAC Arbitration Award [CISG/1999/22] (Bud rice dregs case) 25A1 ; 25B [translation available]
China 8 April 1999 CIETAC Arbitration Award [CISG/1999/21] (New Zealand raw wool case) 25B [translation available]
Austria 11 March 1999 Oberster Gerichtshof [Supreme Court] [translation available]
China 1 March 1999 CIETAC Arbitration Award [CISG/1999/12] (Canned mandarin oranges case) 25A [translation available]
ICC March 1999 International Court of Arbitration, Case 9978 [English text]
China 12 February 1999 CIETAC Arbitration Award [CISG/1999/08] (Chrome plating production line equipment case) 25B [translation available]
* France 4 February 1999 Cour d'appel [Appellate Court] Grenoble 25B [translation available]
China 6 January 1999 CIETAC Arbitration Award [CISG/1999/04] (Australian raw wool) 25B [translation available]
ICC 1999 International Court of Arbitration, Case 10274 25B [English text]
Germany 29 December 1998 Hamburg Arbitration award [translation available]
Mexico 30 November 1998 Compromex Arbitration award 25B [translation available]
Switzerland 30 November 1998 Handelsgericht [Commercial Court] Zürich 25B [translation available]
Russia 24 November 1998 Arbitration award 96/1998 25B [translation available]
Denmark 4 November 1998 Randers Byret [County Court] (Christmas tree case) 25B [translation available]
* Switzerland 28 October 1998 Bundesgericht [Federal Supreme Court] (Meat case) 25B [translation available]
Russia 22 October 1998 Arbitration award 196/1997 [translation available]
Russia 5 October 1998 Arbitration award 53/1997 25B [translation available]
China 25 September 1998 CIETAC Arbitration Award [CISG 1998/12] (Health supplement case) 25B [translation available]
Germany 22 September 1998 Oberlandesgericht [Appellate Court] Oldenburg 25A [translation available]
Finland 30 June 1998 Helsingin hovioikeus [Appellate Court] Helsinki 25A [translation available]
Switzerland 24 March 1998 Obergericht [Appellate Court] Zug
* Italy 20 March 1998 Corte di Appello [Appellate Court] Milano 25B [translation available]
China 23 January 1998 CIETAC Arbitration Award [CISG 1998/13] (Kidney bean case) [translation available]
China 19 December 1997 CIETAC Arbitration Award [CISG/1997/36] (Steel case) 25A [translation available]
China 16 December 1997 CIETAC Arbitration Award [CISG/1997/35] (Hot-dipped galvanized steel coils case) 25B [translation available]
Austria 10 December 1997 Vienna Arbitration award S 2/97 25A1 [translation available]
ICC December 1997 International Court of Arbitration, Case 8817 [translation available]
Spain 3 November 1997 Audiencia Provincial [Appellate Court] Barcelona 25B
China 8 October 1997 CIETAC Arbitration Award [CISG/1997/29] (Industrial tallow case) 25A [translation available]
* Switzerland 26 September 1997 Handelsgericht [Commercial Court] Aargau (Cutlery case) 25B [translation available]
Germany 15 September 1997 Landgericht [District Court] Heilbronn 25A [translation available]
China 8 September 1997 CIETAC Arbitration Award [CISG/1997/27] (BOPP film case) 25B [translation available]
China 18 August 1997 CIETAC Arbitration Award [CISG/1997/26] (Vitamin C case) 25A [translation available]
China 5 August 1997 CIETAC Arbitration Award [CISG/1997/25] (Cold-rolled coils case) 25B [translation available]
China 21 July 1997 CIETAC Arbitration Award [CISG/1997/22] (Yam-dyed fabric case) 25B [translation available]
China 7 July 1997 CIETAC Arbitration Award [CISG/1997/20] (Isobutanol case) 25B [translation available]
Hungary 1 July 1997 Fovárosi Bíróság [Metropolitan Court] [translation available]
China 27 June 1997 CIETAC Arbitration Award [CISG/1997/18] (Kidney beans case) 25B [translation available]
China 26 June 1997 CIETAC Arbitration Award [CISG/1997/17] (Monohydrate zinc sulphate case) 25A [translation available]
China 25 June 1997 CIETAC Arbitration Award [CISG/1997/16] (Art paper case) 25B [translation available]
Russia 13 May 1997 Arbitration award 3/1996 25B [translation available]
Russia 11 May 1997 Arbitration award 2/1995 25B [translation available]
* Germany 24 April 1997 Oberlandesgericht [Appellate Court] Düsseldorf 25B [translation available]
China 4 April 1997 CIETAC Arbitration Award [CISG/1997/04] (Black melon seeds case) [translation available]
* Russia 4 April 1997 Arbitration award 387/1995 25B [translation available]
* Germany 28 February 1997 Oberlandesgericht [Appellate Court] Hamburg 25B [translation available]
Finland 18 February 1997 Turun hovioikeus [Appellate Court] Turku 25A [translation available]
China 6 February 1997 CIETAC Arbitration Award [CISG/1997/38] (Silicon-carbide case) 25B [translation available]
* Switzerland 5 February 1997 Handelsgericht [Commercial Court] Zürich [translation available]
* Germany 31 January 1997 Oberlandesgericht [Appellate Court] Koblenz 25B [translation available]
Germany 8 January 1997 Oberlandesgericht [Appellate Court] Köln 25B [translation
available]
* ICC January 1997 International Court of Arbitration, Case 8786 25B [English text]
ICC 1997 International Court of Arbitration, Case 8782 25A [English text]
China 23 December 1996 CIETAC Arbitration Award [CISG/1996/57]
France 9 December 1996 Tribunal de commerce [District Court] Poitiers
China 28 November 1996 CIETAC Arbitration Award [CISG/1996/54] (Moly-oxide case) [translation available]
China 10 October 1996 CIETAC Arbitration Award [CISG/1996/45] (Petroleum coke case) [translation available]
China 18 September 1996 CIETAC Arbitration Award 25B [translation available] ICC September 1996 International Court of Arbitration, Case 8574 25B [English text]
China 16 August 1996 CIETAC Arbitration Award [CISG/1996/39] (Dioctyl phthalate case) 25B [translation available]
China 8 August 1996 CIETAC Arbitration Award [CISG/1996/36] (Diaper machine case) 25B [translation available]
China 30 July 1996 CIETAC Arbitration Award [CISG/1996/33] (Ferro-molybdenum alloy case) 25A [translation available]
Switzerland 31 May 1996 Zürich Chamber of Commerce, Arbitration ZHK 273/1995 25A [English text]
China 22 May 1996 CIETAC Arbitration Award [CISG/1996/25] (Broadcasting equipment case) 25B [translation available]
China 17 April 1996 CIETAC Arbitration Award [CISG/1996/19] (Air purifier case) 25B [translation available]
* Germany 3 April 1996 Bundesgerichtshof [Federal Supreme Court] 25B [translation available]
Germany 27 March 1996 Landgericht [District Court] Oldenburg 25B
Germany 21 March 1996 Hamburg Arbitration award [translation available] China 8 March 1996 CIETAC Arbitration Award [CISG/1996/13] (Horsebean case) 25B [translation available]
China 15 February 1996 CIETAC Arbitration Award [CISG/1996/10] (Hot-rolled plates case) 25B [translation available]
Austria 6 February 1996 Oberster Gerichtshof [Supreme Court] [translation available]
China 5 February 1996 CIETAC Arbitration Award [CISG/1996/07] (Antimony ingot case) 25B [translation available]
China 30 January 1996 CIETAC Arbitration Award [CISG/1996/05] (Compound fertilizer case) 25B [translation available]
* France 23 January 1996 Cour de Cassation [Supreme Court] [translation available]
Russia 19 December 1995 Arbitration award 133/1994 25B [translation available]
China 15 December 1995 CIETAC Arbitration Award [CISG 1995/12] (Used re-rolling rails case ) [translation available]
* United States 6 December 1995 Federal Appellate Court [2nd Circuit] (Delchi Carrier v. Rotorex) 25A
Russia 1 December 1995 Arbitration award 22/1995 25B [translation available]
Switzerland 30 November 1995 Kantonsgericht [District Court] Zug
* Germany 12 October 1995 Landgericht [District Court] Trier [translation available]
Germany 2 October 1995 Landgericht [District Court] Hamburg
Germany 21 September 1995 Landgericht [District Court] Kassel 25B [translation available]
Germany 21 August 1995 Landgericht [District Court] Ellwangen 25B [translation available]
* Germany 24 May 1995 Oberlandesgericht [Appellate Court] Celle [translation available]
Germany 2 May 1995 Amtsgericht [Lower Court] Bayreuth 25B [translation available]
* Australia 28 April 1995 Federal District Court, Adelaide (Roder v. Rosedown) 25B
* France 26 April 1995 Cour d'appel [Appellate Court] Grenoble (Marques Roque v. Manin Riviére) 25B [translation available]
* Switzerland 26 April 1995 Handelsgericht [Commercial Court] Zürich 25C [translation available]
Russia 25 April 1995 Arbitration award 161/1995 25B [translation available]
Russia 25 April 1995 Arbitration award 200/1994 25B
[translation available]
China 23 April 1995 CIETAC Arbitration Award [CISG/1995/07] (Australian raw wool case) 25B [translation available]
* Germany 5 April 1995 Landgericht [District Court] Landshut 25B [translation available]
China 22 March 1995 CIETAC Arbitration Award [CISG/1995/05] (Down jacket and winter coat case) 25B [translation available]
* Germany 8 March 1995 Bundesgerichtshof [Federal Supreme Court] [translation available]
ICC March 1995 International Court of Arbitration, Case 7645 25B [English text]
* France 22 February 1995 Cour d'appel [Appellate Court] Grenoble 25B [translation available]
Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] 25B [translation available]
Germany 1 February 1995 Oberlandesgericht [Appellate Court] Oldenburg [translation available]
ICC January 1995 International Court of Arbitration, Case 7754 [English text]
ICC 1995 International Court of Arbitration, Case 8128 25B [translation available]
Germany 14 December 1994 Oberlandesgericht [Appellate Court] Hamburg
China 25 October 1994 CIETAC Arbitration Award [CISG/1994/13] (High tensile steel bars case) 25B [translation available]
Germany 15 September 1994 Landgericht [District Court] Berlin [translation available]
United States 9 September 1994 Federal District Court [Northern Dist. NY] (Delchi Carrier v. Rotorex) 25A
China 5 September 1994 CIETAC Arbitration Award [CISG/1994/10] (Weaving machines, tools and accessories case) 25B [translation available]
Germany 25 August 1994 Landgericht [District Court] Düsseldorf
Germany 6 July 1994 Landgericht [District Court] Oldenburg
* Austria 1 July 1994 Oberlandesgericht [Appellate Court] Innsbruck [translation available]
Germany 4 May 1994 Amtsgericht [Lower Court] Charlottenburg 25A [translation available]
Germany 20 April 1994 Oberlandesgericht [Appellate Court] Frankfurt 25B
China 6 April 1994 CIETAC Arbitration Award [CISG/1994/05] (Printing machine case) 25B [translation available]
Germany 2 March 1994 Oberlandesgericht [Appellate Court] München 25B [translation available]
Germany 10 February 1994 Oberlandesgericht [Appellate Court] Düsseldorf [6 U 119/93] [translation available]
* Germany 18 January 1994 Oberlandesgericht [Appellate Court] Frankfurt 25B [translation available]
* Germany 14 January 1994 Oberlandesgericht [Appellate Court] Düsseldorf 25B [translation available]
ICC 1994 International Court of Arbitration, Case 7531 25B [English text]
Germany 18 November 1993 Oberlandesgericht [Appellate Court] Düsseldorf 25B
China 26 October 1993 CIETAC Arbitration Award [CISG/1993/12] (Frozen beef case) 25B [translation available]
China 20 July 1993 CIETAC Arbitration Award [CISG/1993/10] (Shaping machine case) 25B [translation available]
Germany 12 March 1993 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
China 25 February 1993 CIETAC Arbitration Award [CISG/1993/05] (Terylene texturing machine case) 25B [translation available]
China Post-1992 CIETAC Arbitration Award [CISG/1993/14] (White cardboard scrap paper case) [translation available]
Germany 22 December 1992 Landgericht [District Court] Darmstadt
Germany 14 October 1992 Amtsgericht [Lower Court] Zweibrücken
Germany 30 September 1992 Landgericht [District Court] Berlin 25B [translation available]
Germany 22 September 1992 Oberlandesgericht [Appellate Court] Hamm (Frozen bacon case) 25B [translation available]
Germany 3 July 1992 Landgericht [District Court] Heidelberg 25B [translation available]
* ICC 1992 International Court of Arbitration, Case 7585 25B [English text]
China 30 October 1991 CIETAC Arbitration award 25B [translation available]
* Germany 17 September 1991 Oberlandesgericht [Appellate Court] Frankfurt 25B [translation available]
Germany 16 September 1991 Landgericht [District Court] Frankfurt 25B [translation available]
Germany 14 August 1991 Landgericht [District Court] Baden-Baden [translation available]
Germany 13 August 1991 Landgericht [District Court] Stuttgart (Women's clothes case) 25B [translation available]
Germany 21 December 1990 Amtsgericht [Lower Court] Ludwigsburg 25B [translation available]
* Italy 24 November 1989 Pretura circondariale [District Court] Parma 25A1 [translation available]
CASE DIGEST AND ANALYSIS
The UNCITRAL Digest of case law on the United
A/CN.9/SER.C/DIGEST/CISG/25 [8 June 2004]
A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result. DIGEST OF ARTICLE 25 CASE LAW
1. Article 25 defines the notion of fundamental breach as used in various provisions of the Convention. A fundamental breach in this specific sense is a prerequisite for certain remedies under the Convention, such as the party’s right to terminate the contract (articles 49(1)(a) and 64(1)(a); but see also articles 51(2), 72(1), 73(1) and (2)), the right to require delivery of substitute goods presupposes a fundamental breach (article 46(2)). A fundamental breach also has some bearing under the risk provisions of the Convention (article 70). In general article 25 defines the boarder line between the "normal" remedies for breach of contract -- like damages and price reduction -- and incisive remedies like termination and specific performance. Definition of fundamental breach 2. A fundamental breach requires first, that one party has committed a breach of contract. The breach of any obligation under the contract suffices irrespective whether the duty had been specifically contracted for or followed from the provisions of the Convention. Even the breach of any collateral duty can amount to a fundamental breach. For example, a manufacturer’s duty to deliver goods under a certain trademark exclusively to the buyer has been held to have been fundamentally violated when the manufacturer displayed those goods at a fair for sale and kept them there despite a warning by the buyer.[1] 3. In order to rank as fundamental a breach must be of a certain nature and weight. The aggrieved party must have suffered such detriment as to substantially deprive it of what it was entitled to expect under the contract. The breach must therefore nullify or essentially depreciate the aggrieved party’s justified contract expectations. What expectations are justified depends on the specific contract and the risk allocation envisaged by the contract provisions, on customary usages and on the additional provisions of the Convention. For example, buyers cannot normally expect that delivered goods comply with regulations and official standards in the buyer’s country.[2] Therefore, e.g., the delivery of cadmium-contaminated mussels has not been regarded as a fundamental breach since the buyer could not have expected that the seller met the contamination-standards in the buyer’s country and since the consumption of the mussels in small portions as such did not endanger a consumer’s health.[3] 4. Article 25 requires further that the violating party must have foreseen the result of the breach of the contract. However, the provision does not mention at which time the consequences of the breach must have been foreseeable. One court has decided that the time of conclusion of contract is the relevant time.[4] Specific situations of fundamental breach 5. Courts have decided whether certain typical fact patterns constitute
fundamental breaches. It has been determined on various occasions that the failure to perform a contractual duty constitutes a fundamental breach of contract unless the party has a justifying reason to withhold its performance. This has been decided in the case of final non-delivery [5] as well as in the case of final non-payment.[6] However, if only a minor part of the contract is finally not performed, e.g., one delivery out of several deliveries is not supplied, this remains a simple, non-fundamental breach of contract.[7] On the other hand a final and unjustified announcement of the intention not to
fulfil one’s own contractual obligations has been found to constitute a fundamental breach.[8] Likewise, the insolvency and placement of the buyer under administration has been held to constitute a fundamental breach under article 64 since it deprives the unpaid seller of what it was entitled to expect under the contract, namely payment of the full price.[9] It has also been determined that non-delivery of the first instalment in an instalment sale gives the buyer reason to believe that further instalments will not be delivered and therefore a fundamental breach of contract was to be expected (art. 73(2)).[10] 6. As a rule late performance – be it late delivery of the goods or late
payment of the price – does not constitute in itself fundamental breach of
contract.[11] Only when the time for performance is of essential importance either if it is so contracted [12] or if it is due to evident circumstances (e.g., seasonal goods)[13] then delay as such can amount to a fundamental breach.[14] But even if there is no fundamental breach, the Convention allows the aggrieved party to fix an additional period of time for performance; if the party in breach fails to perform during that period, the aggrieved party thereupon may declare the contract avoided (arts. 49(1)(b) and 64(1)(b)).[15]
Therefore in case of a delay in the performance, but only in that case,
the lapse of that additional period turns a non-fundamental breach into a
fundamental one. 7. If defective goods are delivered, the buyer can terminate the contract when the non-conformity of the goods is to be regarded as a fundamental breach (art. 49 par. 1 (a)). It therefore becomes essential to know under what conditions delivery of non-conforming goods constitutes a fundamental breach of contract. Court decisions on this point have found that any non-conformity concerning quality remains a mere, non-fundamental breach of contract as long as the buyer – without unreasonable inconvenience – can use the goods or resell them even with a rebate.[16] For example, the delivery of frozen meat which was too fat and too wet and consequently worth 25.5% less than meat of the contracted quality according to an expert opinion was not regarded as a fundamental breach of contract since the buyer had the opportunity to resell the meat at a lower price or to otherwise process it.[17] On the contrary, if the non-conforming goods cannot be used or resold with reasonable effort this constitutes a fundamental breach and entitles the buyer to declare the contract avoided.[18] This has been held to be the case as well where the goods suffered from a serious and irreparable defect although they were still useable to some extent (e.g. flowers which were supposed to flourish the whole summer but did so only for part of it).[19] Courts have considered a breach to be fundamental without reference to possible alternative uses or resale by the buyer when the goods had major defects and the buyer needed the goods for manufacture.[20] The same conclusion had been reached where the non-conformity of the goods resulted from added substances the addition of which was illegal both in the country of the seller and the buyer.[21] 8. Special problems arise when the goods are defective but repairable. Some courts have held that easy reparability excludes any fundamentality of the breach.[22] Courts are reluctant to consider a breach to be fundamental when the seller offers and effects speedy repair without any inconvenience to the buyer.[23] 9. The violation of other contractual obligations can also amount to a fundamental breach. It is, however, necessary that the breach deprives the aggrieved party of the main benefit of the contract and that this result could have been foreseen by the other party. Thus, a court stated that there is no fundamental breach in case of delivery of the wrong certificates pertaining to the goods if either the goods were nevertheless merchantable or if the buyer itself could – at seller’s expense – easily get the correct certificates.[24] The unjustified denial of contract rights of the other party – e.g. the validity of a retention of title clause and the seller’s right to possession of the goods [25] or the unjustified denial of a valid contract after having taken possession of samples of the goods [26] – can amount to a fundamental breach of contract. The same is true when resale restrictions have been substantially violated.[27] 10. A special case is the delayed acceptance of the goods. A delay in accepting the goods will generally not constitute a fundamental breach, particularly when there is only a few days of delay.[28] 11. The cumulated violation of several contractual obligations makes a fundamental breach more probable but does not automatically constitute a fundamental breach.[29] Whether a fundamental breach exists depends on the circumstances of the case as well as on whether the breach resulted in the aggrieved party losing the main benefit of, and the interest in, the contract.[30] 12. Article 25 regulates also to some extent the burden of proof. As far as foreseeability is concerned the burden lies on the party in breach.[31] This party has to prove that it did not foresee the detrimental effect of its breach and that a reasonable person of the same kind in the same circumstances would not have foreseen such an effect. The aggrieved party on the other hand has to prove that the breach deprived it substantially of what it was entitled to expect under the contract.[32] FOOTNOTES
* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.
[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.] 1. CLOUT case No. 2 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 17 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910917g1.html>];
see also CLOUT case No. 217 [SWITZERLAND Handelsgericht [Commercial Court] Aargau 26 September 1997, available online at <http://cisgw3.law.pace.edu/cases/970926s1.html>]
. 2. CLOUT case No. 123 [GERMANY Bundesgerichtshof [Supreme Court] 8 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950308g3.html>];
see CLOUT case No. 418 [UNITED STATES Medical Marketing v. Internazionale Medico Scientifica Federal District Court [Louisiana] 17 May 1999 available online at <http://cisgw3.law.pace.edu/cases/990517u1.html>] (in the same sense and relying on
CLOUT case No. 123 [GERMANY Bundesgerichtshof [Supreme Court] 8 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950308g3.html>];
[AUSTRIA Oberster Gerichtshof [Supreme Court] 13 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000413a3.html>]. 3. CLOUT case No. 123 [GERMANY Bundesgerichtshof [Supreme Court] 8 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950308g3.html>]. 4. CLOUT case No. 275 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 24 April 1997, available online at <http://cisgw3.law.pace.edu/cases/970424g1.html>] (see full text of the decision). 5. CLOUT case No. 90 [ITALY Pretura circondariale [Court of First Instance] Parma 24 November 1989, available online at <http://cisgw3.law.pace.edu/cases/891124i3.html>] (only partial and very late delivery);
CLOUT case No. 136 [GERMANY Oberlandesgericht [Appellate Court] Celle 24 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950524g1.html>] (see full text of the decision). 6. CLOUT case No. 130 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 14 January 1994, available online at <http://cisgw3.law.pace.edu/cases/940114g1.html>]. 7. CLOUT case No. 275 GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 24 April 1997, available online at <http://cisgw3.law.pace.edu/cases/970424g1.html>]. 8. See CLOUT case No. 136 [GERMANY Oberlandesgericht [Appellate Court] Celle 24 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950524g1.html>]. In that case the seller had given notice that he had sold the specified good to another buyer.
See also [RUSSIA Arbitration Award case No. 387/1995 of 4 April 1997; available at <http://cisgw3.law.pace.edu/cases/970404r1.html>] (final refusal to pay the price). 9. CLOUT case No. 308 [AUSTRALIA Roder v. Rosedown [Federal Court] 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>]. 10. CLOUT case No. 214 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 5 February 1997, available online at <http://cisgw3.law.pace.edu/cases/970205s1.html>]. 11. [ITALY Corte di Appello [Appellate Court] Milano 20 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980320i3.html>] (late delivery); CLOUT case No. 275 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 24 April 1997, available online at <http://cisgw3.law.pace.edu/cases/970424g1.html>] (late delivery);
CLOUT case No. 301 [ICC Court of Arbitration case No. 7585 of 1992, available online at <http://cisgw3.law.pace.edu/cases/927585i1.html>]
(late payment). 12. CLOUT case No. 277 [GERMANY Oberlandesgericht [Appellate Court] Hamburg 28 February 1997, available online at <http://cisgw3.law.pace.edu/cases/970228g1.html>] (the late delivery under a CIF sale was held to be a fundamental breach of contract). 13. [ITALY Corte di Appello [Appellate Court] Milano 20 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980320i3.html>] (in that case the buyer had ordered seasonal knitted goods and pointed to the essential importance of delivery at the fixed date although only after conclusion of the contract);
[ICC Court of Arbitration case No. 8786 of January 1997, available online at <http://cisgw3.law.pace.edu/cases/978786i1.html>]. 14. CLOUT case No. 275 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 24 April 1997, available online at <http://cisgw3.law.pace.edu/cases/970424g1.html>]; (late delivery constitutes a fundamental breach when the buyer would prefer non-delivery instead and the seller could have been aware of this). 15. See, e.g. CLOUT case No. 301 [ICC Court of Arbitration case No. 7585 of 1992, available online at <http://cisgw3.law.pace.edu/cases/927585i1.html>]. 16. CLOUT case No. 171 [GERMANY Bundesgerichtshof [Supreme Court] 3 April 1996, available online at <http://cisgw3.law.pace.edu/cases/960403g1.html>];
CLOUT case No. 248 [SWITZERLAND Bundesgericht [Supreme Court] 28 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981028s1.html>]. 17. CLOUT case No. 248 [SWITZERLAND Bundesgericht [Supreme Court] 28 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981028s1.html>]. 18. CLOUT case No. 150 [FRANCE Cour de Cassation [Supreme Court] 23 January 1996, available online at <http://cisgw3.law.pace.edu/cases/960123f1.html>] (artificially sugared wine);
CLOUT case No. 79 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 18 January 1994, available online at <http://cisgw3.law.pace.edu/cases/940118g1.html>] (shoes with splits in the leather) (see full text of the decision);
[GERMANY Landgericht [District Court] Landshut 5 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950405g1.html>] (T-shirts which shrink by two sizes after first washing). 19. CLOUT case No. 107 [AUSTRIA Oberlandesgericht [Appellate Court] Innsbruck 1 July 1994, available online at <http://cisgw3.law.pace.edu/cases/940701a3.html>]. 20. See CLOUT case No. 138 [UNITED STATES BP Oil International v. Empresa Estatal Petroleos de Ecuador, [Federal Appellate Court] [2nd Circuit] 6 December 1995, available online at <http://cisgw3.law.pace.edu/cases/991207u1.html>] (lower cooling capacity and higher power consumption than contracted of compressors delivered for the manufacture of air conditioners);
CLOUT case No. 150 [FRANCE Cour de Cassation [Supreme Court] 23 January 1996, available online at <http://cisgw3.law.pace.edu/cases/960123f1.html>] (artificially sugared wine) (see full text of the decision);
CLOUT case No. 315 [FRANCE Cour de Cassation [Supreme Court] 26 May 1999, available online at <http://cisgw3.law.pace.edu/cases/990526f1.html>] (metal sheets absolutely unfit for the foreseen kind of manufacture by the buyer's subbuyer) (see full text of the decision);
see also [ITALY Tribunale [District Court] Busto Arsizio 13 December 2001, available online at <http://cisgw3.law.pace.edu/cases/011213i3.html>] published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150-155, also available on Unilex (delivery of a machine totally unfit for the particular use which was made known to the seller and which was incapible of reaching the promised production level represented a "serious and fundamental" breach of the contract, since the promised production level had been an essential condition for the conclusion of the contract, and therefore forming the basis for termination). 21. Compare CLOUT case No. 150 [FRANCE Cour de Cassation [Supreme Court] 23 January 1996, available online at <http://cisgw3.law.pace.edu/cases/960123f1.html>] (artificially sugared wine which is forbidden under EU-law and national laws) (see full text of the decision); CLOUT case No. 170 [GERMANY Landgericht
[District Court] Trier 12 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951012g1.html>] (watered wine) (see full text of the decision). 22. [SWITZERLAND Handelsgericht [Court] Zürich 26 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950426s1.html>]. 23. CLOUT case No. 152 [FRANCE Cour d'appel [Appellate Court] Grenoble 26 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950426f2.html>]; CLOUT case No. 282 [GERMANY Oberlandesgericht [Appellate Court] Koblenz 31 January 1997, available online at <http://cisgw3.law.pace.edu/cases/970131g1.html>]. 24. CLOUT case No. 171 [GERMANY Bundesgerichtshof [Supreme Court] 3 April 1996, available online at <http://cisgw3.law.pace.edu/cases/960403g1.html>]. 25. CLOUT case No. 308 [AUSTRALIA Roder v. Rosedown [Federal Court] 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>]. 26. CLOUT case No. 313 [FRANCE Cour d'appel [Appellate Court] Grenoble 21 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991021f1.html>] (see full text of the decision). 27. CLOUT case No. 2 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 17 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910917g1.html>];
CLOUT case No. 154 [FRANCE Cour d'appel [Appellate Court] Grenoble 22 February 1995, available online at <http://cisgw3.law.pace.edu/cases/950222f1.html>];
CLOUT case No. 82 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 10 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940210g2.html>] (see full text of the decision);
CLOUT case No. 217 [SWITZERLAND Handelsgericht [Commercial Court] Aargau 26 September 1997, available online at <http://cisgw3.law.pace.edu/cases/970926s1.html>]. 28. CLOUT case No. 243 [FRANCE Cour d'appel [Appellate Court] Grenoble 4 February 1999, available online at <http://cisgw3.law.pace.edu/cases/990204f1.html>]. 29. CLOUT case No. 171 [GERMANY Bundesgerichtshof [Supreme Court] 3 April 1996, available online at <http://cisgw3.law.pace.edu/cases/960403g1.html>] (see full text of the decision). 30. Id. (see full text of the decision). 31. Id. (see full text of the decision). 32. Id. (see full text of the decision). Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*] excerpt from Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
[...] B. Fundamental ... Breach Essential to a determination of the liability of buyers and sellers is whether there has been a
fundamental breach or anticipatory breach of contract. Under Article 25, a fundamental breach of
contract occurs when an act by one of the parties results in the other party being substantially
deprived of what it expected under the contract.[683] However, the detriment caused by the
breach must have been foreseeable. If the breaching party did not foresee, and a reasonable person
in the same circumstances would not have foreseen such a result, there is no fundamental breach.
[684] A fundamental breach gives the non-breaching party the right to avoid the contract or to
require the delivery of substitute goods.[685] If the breach is [page 410] considered non-material, the aggrieved party is entitled to damages, but not the remedy of avoidance.[686] [...] 1. Fundamental Breach: Article 25 The concept of fundamental breach under Article 25 is very restrictive. A breach must concern the
essential content of the contract in order for it to be considered fundamental.[699] Courts and
arbitral decisions have focused on three types of breaches as potentially fundamental -- late delivery,
deficiencies in the goods, and failure to uphold specific contractual terms. First, late delivery does not generally constitute a fundamental breach. [700] Similarly, there
cannot be a fundamental breach for failure to deliver where the parties have not agreed on a precise
date of delivery.[701] A buyer's refusal to take delivery of goods may also not be considered a
fundamental breach under certain circumstances. In one case involving staggered deliveries from May
to December, the parties agreed that in return for a price reduction, the September delivery would
take place in late August.[702] At the time of delivery, the buyer refused the goods and
demanded the delivery be postponed until September. A French court [page 412] determined that
the buyer did not commit a fundamental breach, because the buyer was entitled to regard the bringing
forward of the delivery date to late August as merely a reciprocal concession for a financial
advantage.[703] As such, it could not be expected to have understood that a few days' delay in
taking delivery would constitute a fundamental breach on its part. Accordingly, the seller should have
granted the buyer additional time in which to take delivery. However, a delay in delivery can rise to a level of a fundamental breach when a timely delivery is in
the special interest of the buyer.[704] The importance of the delivery date must be foreseeable
at the time of the conclusion of the contract.[705] Depending on the circumstances of the
transaction, such as the need to honor obligations to downstream purchasers, the delivery time may
be considered a material term. Second, a common type of breach is the delivery of deficient or defective goods or documents. In
a German case of non-conformity of documents, a buyer made alternative arguments of non-conforming delivery amounting to fundamental breach and non-conforming delivery amounting to
a non-delivery.[706] This case, popularly known as the "blue cobalt" case, involved a contract
that required the goods to be of British origin and accompanied by a certificate of origin. The seller
delivered the goods to a warehouse in Antwerp, as required by the contract, and sent certificates of
origin to the buyer. The certificates of origin indicated that the goods were of South African origin.
The buyer declared the contract avoided on the grounds that the non-conforming certificate
constituted a fundamental breach and that because of the defective document there was no true
delivery. The court rejected the buyer's Article 49(1)(b) (non-delivery) claim that the non-conforming
delivery was a non-delivery. The court reasoned that under the CISG, non-conforming delivery still
constitutes delivery, making Article 49(1)(b) not available to the buyer. The court also rejected the
buyer's avoidance claim under Article 49(1)(a) (fundamental breach) holding that it failed to prove
a fundamental breach. It asserted that the buyer failed to present evidence that South African cobalt
could not be sold or that the seller could not obtain conforming documents of origin. The later
assertion seems fanciful since the cobalt was clearly not of British origin. This case demonstrates that
the concept of fundamental breach is narrowly construed under the CISG.[707] [page 413] Third, defects are considered fundamental only when the buyer is substantially deprived of what he
was entitled to under the contract.[708] For example, tiles sold as "impermeable" which turned
out to be easily stained by household items, such as juice, constituted a fundamental breach of the
contract.[709] A shipment of jeans that contained the wrong quantity and were incorrectly
labeled with the wrong sizes fundamentally breached the contract.[710] In Delchi Carrier S.p.A.
v. Rotorex Corp., the Court of Appeals for the Second Circuit held that a fundamental breach of
contract occurred when air compressors did not conform to the sample model and the accompanying
specifications regarding cooling capacity and energy consumption.[711] However, the burden
remains on the buyer to prove that due to the non-conformity, the goods provided were substantially
below what was stipulated in the contract.[712] Fundamental breach under Article 25 is not confined to untimely delivery or delivery of non-conforming goods. Under certain circumstances, any provision in a contract can be considered
material and the breach would be considered fundamental. For example, a French seller of jeans
negotiated a contract with an American buyer that specified that the ultimate destination of the goods
was to be either South America or Africa.[713] During the performance of the contract, the
buyer repeatedly ignored the seller's demand for proof of destination. Subsequently, the seller learned
that a shipment of the jeans was delivered in Spain. A French court found that the buyer disregarded
the seller's destination requirement and that this "attitude" constituted a fundamental breach of the
contract.[714] Failure to abide by exclusivity provisions can also give rise to a fundamental breach under Article 25.
In one case, an Italian manufacturer agreed to produce shoes according to a German buyer's
specifications. At a trade fair, the seller displayed some of the shoes produced under the [page 414]
specifications, bearing a trademark of which the buyer was the licensee.[715] After the seller
refused to remove the shoes, the buyer avoided the contract. The court held that the seller's breach
of the ancillary duty of preserving exclusivity constituted a fundamental breach of the contract.
[716] [...] FOOTNOTES * For a subsequent text on this subject by these authors, see Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer & Marisa Pagnattaro, "International Sales Law: A Critical Analysis of CISG Jurisprudence", Cambridge University Press (2005) 241 p. [...] 683. CISG, supra note 4, at art. 25. See, e.g., Med. Mktg. Int'l, Inc. v. Internazionale Medico
Scientifica, S.r.l., No. 99-0380-5(1), 1999 WL 311945. 684. Id. at art. 25. See generally, Koch, supra note 620 (discussing the concept of fundamental
breach under the CISG); Clemens Pauly, The Concept of Fundamental Breach as an International
Principle to Create Uniformity of Commercial Law, 19 J.L. & Com. 221, 229-32 (2000) (discussion
includes German concepts related to fundamental breach, including the fact that German sales law
does not distinguish between general and fundamental breach). 685. See CISG, supra note 4, at arts. 46, 49, 51, 64, 70, and 72 (referring specifically to the
concept of a "fundamental breach" to determine liability). 686. See id. at arts. 49(1)(a), 51(2), 64(1)(a), 72(1), and 73. [...] 699. See, e.g., FCF S.A. v. Adriafil Commerciale S.r.l., BGE 4C.105/2000, supra note 646
(breach must concern the essential content of the contract, the goods, or the payment of the price
concerned, and it must lead to serious consequences to the economic goal pursued by the parties). 700. OLG München 10 O 5423/01, July 1, 2002, supra note 647. 701. OLG München 7 U 1720/94, Feb. 8, 1995 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/950208g1.html> [English translation by Stefan Kuhm, translation edited by Camilla Baasch Andersen]. 702. SARL Ego Fruits v. La Verja, RG 98/02700, Feb. 4, 1999, supra note 504. 703. Id. 704. OLG Hamburg 1 U 167/95, Feb. 28, 1997 (F.R.G.), CLOUT Case No. 277, available at
[<http://cisgw3.law.pace.edu/cases/970228g1.html>]. 705. For example, the use of the Incoterm "CIF" by definition determines the contract to be a
transaction for delivery by a fixed date. Id. 706. BGHZ VIII ZR 51/95, Apr. 3, 1996, supra note 576. 707. Id. 708. International Chamber of Commerce Arbitral Award 1994, ICC International Court of
Arbitration Bulletin Vol. 6, No. 2, 67, CLOUT Case No. 304, available at
[<http://cisgw3.law.pace.edu/cases/947531i1.html>] [English text]. 709. LG Saarbrücken 8 O 49/02, July 2, 2002 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/020702g1.html> [English translation by Julian Waiblinger, translation edited by Camilla Baasch Andersen]. 710. OLG Hamburg 1 U 31/99 (Nov. 26, 1999 Germany) available at
<http://cisgw3.law.pace.edu/cases/991126g1.html> [English translation by Annemieke Romein, translation edited by Dr. Loukas Mistelis]. 711. 71 F.3d 1024, 1027-29 (2d Cir. 1995). 712. See, e.g., BGHZ VIII ZR 51/95, supra note 576 (buyer was unable to demonstrate that the
quality of the goods it received was inferior to what was agreed upon). 713. S.A.R.L. Bri Prod. "Bonaventure" v. Société Pan Africa Export, Feb. 22, 1995 (Fr.), CLOUT Case No. 154, available at [<http://cisgw3.law.pace.edu/cases/950222f1.html>] [English translation by Gary F. Bell]. In
another case, it was determined that a buyer's failure to pay large sums due as "performance
payments" was a fundamental breach of contract. Shuttle Packaging Sys., L.L.C. v. Jacob Tsonakis,
Ina S.A., 01-CV-691, 2001 WL 34046276 (W.D. Mich. Dec. 17, 2001). 714. S.A.R.L. Bri Prod. "Bonaventure," supra note 713. 715. OLG Frankfurt 5 U 164/90, Sept. 17, 1991, supra note 651. 716. Id. Compare FCF S.A. v. Adriafil Commerciale S.r.l., BGE, Sept. 15, 2000 (Switz.),
available at <http://cisgw3.law.pace.edu/cases/000915s2.html> [English translation by Alban Renaud, translation edited by Claude Witz and Julia Eisengräber]. That case involved a buyer who
purchased shoes through a commercial agent. After the buyer learned that identical shoes made by
an Italian manufacturer were being offered for sale by a competing retailer at a considerably lower
price, the buyer attempted to avoid the contract. Holding that the buyer was not entitled to avoid the
contract, the court stated that there was no fundamental breach because the manufacturer had no
knowledge about the branches of its business partners. Ultimately, the two cases can be reconciled
under the principle that an ancillary obligation can only be a basis for a fundamental breach when it
goes to the principle performance under the contract. See, e.g., LG Frankfurt 3/11 O 3/91, Sept. 16,
1991, supra note 651. [...] Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence
ANNOTATED COMPARATIVES
Robert Koch [*]
The concept of fundamental breach under Article 25 CISG plays a crucial role within the remedial
system of the CISG because it determines the availability of the avoidance remedy in respect of any
breach other than late performance (Articles 49(1)(a), 64(1)(a), 72(1) and 73(1) CISG), and of the
substitute delivery remedy (Article 46(2) CISG). Fundamental breach is also important for the transfer of risk (Article 70 CISG). Its UNIDROIT Principles counterpart, fundamental non-performance, is defined in in Article 7.3.1(2) of the UNIDROIT Principles. Unlike Article 25
CISG, its scope is limited to the termination of a contract. Before addressing the issue of whether or
not Article 7.3.1(2) of the UNIDROIT Principles may be used to interpret or supplement Article 25
CISG, it is necessary to first take a closer look at the elements constituting fundamental breach,
since recourse to the UNIDROIT Principles is only admissible where the language of the CISG
provision gives rise to doubts as to the precise meaning of its content.[1] II. ELEMENTS CONSTITUTING FUNDAMENTAL BREACH
Article 25 provides that a breach is fundamental if
Australia
2
Germany
11
Russian Federation
1
Austria
1
ICC
2
Switzerland
3
France
6
Italy
3
United States
2 TOTAL
31
- UNCITRAL's case law digest; and
- An analysis of CISG jurisprudence
Nations Convention on the International Sale of Goods [*]
Reproduced with the permission of UNCITRAL
Digest of Article 25 case law
- Purpose of the provision
- Definition of fundamental breach
- Specific situations of fundamental breach
- Burden of proof]
ARTICLE 25
ANALYSIS OF CISG CASE LAW
The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence
Virginia Maurer and Marisa Pagnattaro
- UNIDROIT Principles
- PECL comparative
Contracts May Be Used to Interpret or Supplement Article 25 CISG
November 2004
II. Elements Constituting Fundamental Breach
1. Detriment
2. Substantial deprivation
3. Foreseeability
a. Function of this requirement
b. Reasonable person test
c. Relevant point in time
III. The Concept of Fundamental Non-Performance under the UNIDROIT Principles
1. Article 7.3.1(2) of the UNIDROIT Principles
2. Article 7.1.4 of the UNIDROIT Principles
IV. Permissibility of Using the Criteria Employed by Article 7.3.1(2) and Article 7.1.4(1) of the
UNIDROIT Principles in Determining Fundamental Breach
1. Identical underlying purpose of the fundamental breach/fundamental non-performance requirement
2. Conformity of the UNIDROIT criteria with the CISG's rules on interpretation?
a. Strict compliance and no-reliance
b. Intentional or reckless non-performance
c. Disproportionate loss for the party in breach as negative requirement
3. Curability of the breach
a. Relationship between cure and avoidance for fundamental breach
b. Wording of Article 50 CISG
c. Doctrinal reasons against consideration of curability
d. Overriding purpose of the fundamental breach requirement
"... it results in such detriment to the other party as substantially to deprive him of what
he is entitled to expect under the contract, unless the party in breach did not foresee and
a reasonable person of the same kind in the same circumstances would not have foreseen such result."
Article 25 CISG attempts to define fundamental breach in terms of "detriment," "substantial deprivation," and "foreseeability". There is no reference to examples of events that transform a simple breach of contract into a fundamental breach.[2]
1. Detriment
The CISG does not contain any definition for the term "detriment." It is thus unclear whether the detriment requires actual injury, damage or loss, and whether it refers only to material losses or to intangible losses as well. It is also unclear whether a legal detriment, as distinguished from a detriment in fact, is required.[3] Neither the French, Spanish or Russian versions of detriment,[4] nor the Secretariat Commentary on the 1978 Draft Convention, provides any greater assistance in this respect. The latter states that: "The determination whether the injury is substantial must be made in the light of the circumstances of each case, e.g., the monetary value of the contract, the monetary harm caused by the breach, or the extent to which the breach interferes with other activities of the injured party."[5] It seems that the detriment element serves as mere filter for those cases in which breach of a fundamental obligation occurred but has caused no injury. For example, where the seller fails in his duty to package or insure the goods but they arrive safely, there is no detriment. If, on the other hand, the buyer lost a customer or the opportunity to resell the goods, there would be a detriment.[6]
2. Substantial deprivation
A breach must cause a detriment that "substantially deprives" the aggrieved party of what he is "entitled to expect under the contract" in order for it to be fundamental. The reference to the expectation under the contract makes clear that the yardstick for breach of contract is first and foremost to be found in the express and implied terms of the contract itself. This reference leaves open the question of whether other circumstances of the case, including the negotiations, trade practices established between the parties, usages, and any subsequent conduct of the parties should also be taken into account. Moreover, it is unclear when a breach substantially deprives the aggrieved party of his expectations. Is a party, for instance, substantially deprived when he has completely lost his interest in the performance? Or does substantial deprivation require that the aggrieved party's purpose in entering the contract be "frustrated" or the benefit of the bargain be lost due to the breach? Is the monetary injury or harm suffered by the non-breaching party decisive? Literal interpretation does not provide answers to any of these questions.[7]
3. Foreseeability
a. Function of this requirement
From the wording of the conditional clause "unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such result", one may infer that there is a requirement of foreseeability of the consequences of the breach. It thus confirms the opinion of many scholars that foreseeability is not only a burden of proof rule, but it also requires taking into account the breaching party's knowledge or foreseeability of the harsh consequences of the breach in determining whether or not it is fundamental.[8] On the other hand, the foreseeability requirement under Article 25 CISG has a similar effect as the foreseeability requirement under the general rule for calculation of damages in Article 74 CISG, since it limits the rights of the aggrieved party in the event the other party did not foresee the far-reaching consequences and helps determine the severity of the breach.[9] It therefore seems plausible to conclude that only the detriment/substantial deprivation component is what makes a breach "fundamental," and that the foreseeability element serves solely to exempt the breaching party from his liability for breach of the contract.[10]
b. Reasonable person test
Another ambiguity results from the phrase "and a reasonable person of the same kind in the same circumstances."[12] In order to determine "foreseeability," the subjective and objective perspective of the party in breach must be considered. Additionally, the objective perspective of the reasonable merchant in the breaching party's position is relevant.[12] In other words, the party in breach is considered to have been able to foresee the consequences of the breach if, when objectively viewed, it is determined that he could or should have known them. But what happens when the breaching party had special knowledge and thus could have foreseen more than the average merchant? The conjunction "and," makes it possible to conclude that such special knowledge cannot be taken into account, allowing the breaching party to escape a finding of fundamental breach by hiding behind the paradigm of the reasonable person of the same kind in the same circumstances.[14]
c. Relevant point in time
Finally, the text of Article 25 CISG does not expressly address the point in time at which the foreseeability standard is to be applied. The use of the present tense "[a] breach of contract committed ... is fundamental if it results" in depriving the other party "of what he is entitled to expect under the contract" makes it possible to conclude that a judge should place himself at the time the breach of contract has occurred.[14] Likewise, where Article 25 CISG states "unless the party in breach did not foresee ... such a result" it would appear that one should be placed at the time of the breach.[15] The French, Spanish and Russian text of Article 25 CISG, however, give rise to a different conclusion. The use of the past tense "était" instead of "est," "tenia" instead of "tiene," and "byla" instead of "yest" in the French, Spanish and Russian texts, respectively, conveys the impression that the formation of the contract is the relevant point in time to determine foreseeability.[16] This view is confirmed by the reference to the rights which the aggrieved party was entitled to expect under the contract.[17]
III. CONCEPT OF FUNDAMENTAL NON-PERFORMANCE UNDER UNIDROIT PRINCIPLES
1. Article 7.3.1(2) of the UNIDROIT Principles
The concept of fundamental non-performance is laid down in Article 7.3.1(2) of the UNIDROIT Principles. According to this provision "[a] party may terminate the contract where the failure of the other party to perform an obligation under the contract amounts to a fundamental non-performance." With regard to the detriment/substantial deprivation requirement, the UNIDROIT Principles provide a more express guideline than does Article 25 CISG as to which factors are relevant in determining fundamental non-performance. In addition to the general criterion laid down in Article 25 CISG (i.e., the fact that the non-performance must substantially deprive the aggrieved party of what it was entitled to expect under the contract, provided the other party could not reasonably have foreseen such a result), paragraph (2) of Article 7.3.1 of the UNIDROIT Principles indicates as further factors to be taken into account in each single case, whether:
(b) strict compliance with the obligation which has not been performed is of essence under the contract;
(c) the non-performance is intentional or reckless;
(d) the non-performance gives the aggrieved party reason to believe that it cannot rely on the other
party's future performance;
(e) the non-performing party will suffer disproportionate loss as a result of the preparation or
performance if the contract is terminated."[18]
2. Article 7.1.4 of the UNIDROIT Principles
Another relevant factor results from Article 7.1.4(1) of the UNIDROIT Principles. According to this provision, the buyer's right to terminate is suspended provided that the seller,
Moreover, according to Article 7.1.4(2) of the UNIDROIT Principles, the seller's right to cure is not precluded by notice of termination. In other words, the buyer cannot exercise his right of termination for the purpose of denying the seller an opportunity to cure. Under the UNIDROIT Principles, therefore, curability is, de facto, a relevant criterion in determining whether or not non-performance is fundamental.[19]
According to Article 7(1) CISG, "[i]n the interpretation of this Convention regard is to be had to its international character and to the need to promote uniformity in its application [...]". Since the UNIDROIT Principles are also of international character, it seems permissible to make use of them as a means of interpreting the CISG, provided that the relevant provisions of the UNIDROIT Principles serve the same purpose as their corresponding provisions in the CISG and that they are in conformity with the rules of interpretation under the CISG.[20] These rules, which can also be regarded as general principles in terms of Article 7(2) CISG, require first and foremost taking account of the plain text of a provision.[21] If the wording is vague, as with Article 25 CISG, the literal interpretation must be supported by other methods of interpretation, namely looking at the provision's legislative history, its context within the CISGs remedial system, its objectives and underlying policies.[22]
1. Identical underlying purpose of Article 25 CISG and Article 7.3.1 of the UNIDROIT Principles
By allowing avoidance/termination of the contract only when the breach/non-performance qualifies as "fundamental", Article 25 CISG and Article 7.3.1 of the UNIDROIT Principles follow the same policy, namely to preserve the enforceability of the contract whenever feasible.[23] The first condition for making use of the criteria set forth by the UNIDROIT Principles is thus fulfilled.
2. Conformity of the criteria with the CISG's rules on interpretation?
With regard to the second condition, a differentiation between the various factors to be considered in determining the fundamental nature of a non-performance is necessary.
a. Strict compliance and no-reliance
The reference in Article 25 CISG to the expectations under the contract allows resorting to the criteria focusing on the nature of the contractual obligation (Art. 7.3.1(2)(b) of the UNIDROIT Principles)[24] and the reliance on one party's future performance (Art. 7.3.1(2)(d) of the UNIDROIT Principles)[25] in determining fundamental breach.[26]
b. Intentional or reckless non-performance
No use can be made of the factor focusing on whether the breach was committed intentionally or recklessly (Art. 7.3.1(2)(d) of the UNIDROIT Principles). While it is true that the wording of Article 25 CISG does not prevent the determination of the fundamental nature of a breach by taking into account the breaching party's intent or conduct, it should be noted that under the CISG, "fault" is not generally a prerequisite to a finding of contractual liability and that this principle is as true with respect to the right to avoid the contract as it is to the right to require substitute delivery or to claim damages. Neither remedy depends on "fault" in the sense of deliberate or negligent wrongdoing. In light of the CISG's remedial system, it therefore seems to be more plausible not to automatically qualify any intentional or reckless breach as fundamental in terms of Article 25 CISG.[27] The intention of the breach can be only taken into account where the willful or reckless conduct creates uncertainty as to the breaching party's future performance.[28]
c. Disproportionate loss for the party in breach as negative requirement
The approach, which focuses on whether the breaching party will suffer disproportionate loss as a result of the preparation for performance if the contract is avoided (Art. 7.3.1(2)(e) of the UNIDROIT Principles), is not applicable under the CISG. First, the language of Article 25 CISG does not allow consideration of the consequences for the breaching party when the breach is treated as fundamental. Second, it is not clear under which circumstances a breaching party's loss becomes significant. Any determination of fundamental breach would therefore be arbitrary and cause uncertainty. Third, the UNIDROIT factor is aimed at limiting the exercise of the right of avoidance, not at determining fundamental breach. In other words, it limits the availability of the avoidance remedy in spite of the existence of a fundamental breach but it does not prevent a breach from being fundamental.[29]
3. Curability of the breach
With regard to this factor, it is to be noted that in industry practices and the various manufacturing, export and importing, retailing trades, the right to cure defective goods is almost invariably reserved by the seller in the case of manufactured goods of substantial value, e.g., machinery, motor vehicles, and other hard goods.[30] In these cases, no recourse to the UNIDROIT principles is necessary. In the absence of such clauses, consideration of curability as a limiting factor in determining fundamental breach, in view of its present definition, is only permissible if one argues that, where cure of a breach is feasible and the breaching party is willing to cure, the aggrieved party is not substantially deprived of his expectations under the contract. Recent case law confirms that view.[31] With regard to the buyer's right to avoidance, such an interpretation, though plausible, seems hard to reconcile with the CISG's remedial provisions, in particular with the text of Article 48(1).
a. Relationship between cure and avoidance for fundamental breach
The opening words of Article 48(1) make the seller's right to cure "[s]ubject to Article 49." Giving these words their ordinary and plain meaning, it appears that the buyer's right to declare the contract avoided in accordance with article 49(1)(a) prevails over the seller's right to cure.[32] The determination of fundamental breach in the light of any offer to cure, however, would enable the seller to prevent the buyer from avoiding the contract and would, therefore, actually allow the seller's right to cure to prevail over the buyer's right to avoid. Even if one argues that the opening words do not clarify their exact relationship, the position that the right to cure is paramount ignores the fact that the majority of the delegations at the Vienna Diplomatic Conference took the exact opposite view.[33]
b. Wording of Article 50 CISG
Another argument against the determination of fundamental breach in light of an offer to cure can be found in the text of Article 50 CISG, where it is expressly stated that the seller's right to cure prevails over the buyer's right to reduce the price. In view of such clear wording, it is plausible to conclude that if the delegates to the Diplomatic Conference had really wanted the right to cure to prevail over the right to declare the contract avoided, they would have used similar words either in Article 48 or 49 CISG.[34]
c. Doctrinal reasons against consideration of curability
Furthermore, the employment of an offer to cure as a relevant factor in determining fundamental breach would cause both theoretical and practical problems.[35] The notion of an offer retrospectively frustrating the buyer's existing right of avoidance is difficult to justify in theory. As a practical matter, this approach gives rise to the question of whether the seller must make his offer to cure before the buyer makes his notice of avoidance. If priority were decisive, one would provoke a competition between buyer and seller and produce purely arbitrary results.[36] Ignoring that such competition in exercising a remedy should not be a consideration under law, it would also leave the seller in limbo as long as he does not know of the defect.[37]
d. Overriding purpose of the fundamental breach requirement
Notwithstanding such doctrinal concerns, it cannot be disputed that the ratio legis of Article 25 CISG clearly supports the consideration of curability for determining fundamental breach.[38] The concerns, expressed by the present writer against giving the teological interpretation overriding effect where other interpretive techniques lead to different results, still apply.[39] It seems to be contrary to the principle of uniform application to disregard the plain wording in order to give effect to what it deems the overriding purpose of a single provision.[40] In the context of the seller's right to cure a defect and the buyer's right to avoid the contract, however, it is to be noted that giving account for curability is not excluded by the wording of Article 25 CISG. It would therefore seem reasonable to make use of the criteria recited in Article 7.1.4(1) of the UNIDROIT Principles to deny fundamental breach where the requirements of this provision are met. In order to avoid the aforementioned theoretical and practical problems for the seller, the right to cure should be precluded by the notice of avoidance, as is the case with Article 7.1.4(2) of the UNIDROIT Principles.
FOOTNOTES
* Professor in Commercial Law, Corporate Law and International Trade Law, Institute of Business Law, Nürtingen University (Germany).
1. See infra Section IV.
2. See Graffi, "Case Law on the Concept of "Fundamental Breach" in the Vienna Sales Convention", International Business Law Journal (2003) No. 3, at 338 (stating that the CISG simply provides general interpretive guidelines); available online at <http://cisgw3.law.pace.edu/cisg/biblio/graffi.html>; Bonell, "The UNIDROIT Principles of International Commercial Contracts and the Vienna Sales Convention (CISG) - Alternatives of Complementary Instruments?", in Uniform L. Rev. (1996) 26, at 28 (stating that the language of Article 25 CISG is "vague and ambiguous"); available online at <http://cisgw3.law.pace.edu/cisg/biblio/ulr96.html>.
3. See van der Velden, "The Law of international Sales: The Hague Conventions 1964 and the UNCITRAL Uniform Sales Code 1980 -- Some Main Items Compared", in: Voskuil & Wade eds., Hague-Zagreb Essays 4 (The Hague: Asser Instituut/Martinus Nijhoff, 1983), at 64-65 (suggesting the employment of the detriment definition given by the Corpus Iuris Secundum, according to which "the detriment need not be real and involve actual loss, nor does it necessarily refer to material disadvantage to the party suffering it, but means a legal detriment as distinguished from a detriment in fact. It has also been defined as giving up something which one had the right to keep, or doing something which one had the right to do.")
4. The French version uses the word "préjudice," the Spanish "perjuicio" and the Russian "bpeg." The English, French, Russian and Spanish versions are available online at <http://www.uncitral.org/en-index.htm>.
5. See Commentary on the Draft Convention on Contracts for the International Sale of Goods prepared by the Secretariat, Document A/CONF.97/5 (Secretariat Commentary), at Comment 3, art. 23 of the 1978 Draft Convention [which became CISG Article 25]. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-25.html>.
6. See Will, "Art. 25", Comment 2.1.1.2, in: Bianca & Bonell eds., Commentary on the International Sales Law, The 1980 Vienna Sales Convention (Milan: Giuffrè 1987); for a similar notion, see Liu, "Remedies for Non-Performance: Perspectives from CISG, UNIDROIT & PCL, at 7.2 and 8.2.2.1", available online at <http://cisgw3.law.pace.edu/cisg/biblio/chengwei.html#07-2> and <http://cisgw3.law.pace.edu/cisg/biblio/chengwei.html#08-1>; Gonzalez, "Remedies Under the U.N. Convention for the International Sale of Goods", 2 Int'l Tax & Bus. Law