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Article 26. Notification of Avoidance

TEXT OF ARTICLE 26

A declaration of avoidance of the contract is effective only if made by notice to the other party.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

26A Effective declaration of avoidance

26A1 Notice to the other party required

26A2 Effectiveness of dispatch of notice (see art. 27)


DESCRIPTORS

Avoidance


CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

UNCITRAL has identified relevant cases in Digests containing case annotations for each article of the CISG. For Art. 26, the UNCITRAL Digest cites twelve cases: nine from Germany, and one each from the ICC, Australia and Austria.

Presented below is a composite list of Art. 26 cases reporting these UNCITRAL Digest cases and other Art. 26 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the August 1999 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.

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.
 

Netherlands 3 February 2009 Gerechtshof [Appellate Court] Leeuwarden (JPB Industrial Services B.V. v. Buchen Industrial Services N.V.) 26A [translation available]
 

Netherlands 7 October 2008 Gerechtshof [Appellate Court] Arnhem (Arens Sondermachinen GmbH v. Smit Draad / Draad Nijmegen B.V.) [abstract available]

Serbia 15 July 2008 Foreign Trade Court of Arbitration, Serbian Chamber of Commerce (Milk packaging equipment case) 26A1 [translation available]

France 27 May 2008 Cour d'appel [Appellate Court] Rennes (Brassiere cups case) 26A [translation available]
 

Spain 27 December 2007 Audiencia Provincial [Appellate Court] Navarra (Case involving machine to repair bricks)

Germany 21 November 2007 Oberlandesgericht [Appellate Court] Koblenz (Shoes case) 26A [translation available]

Slovak Republic 25 October 2007 Regional Court [District Court] Zilina (Elastic fitness clothing case) 26A [translation available]

American Arbitration Association 23 October 2007 [Interim Award] (Macromex Srl. v. Globex International Inc.) 26A

Serbia 1 October 2007 Foreign Trade Court of Arbitration, Serbian Chamber of Commerce (Timber case) 26A1 [translation available]

China October 2007 CIETAC Arbitration Award [CISG 2007/03] (CD-R and DVD-R production line systems case) 26A1 [translation available]

Switzerland 30 August 2007 Kantonsgericht [District Court] Zug (GMS modular case) 26A [translation available]

Austria 4 July 2007 Oberster Gerichtshof [Supreme Court] (Auto case) [translation available]

Slovak Republic 27 June 2007 Supreme Court Zilina (Elastic fitness clothing case) 26A [translation available]
 

Belgium 28 June 2006 Hof von Beroep [Appellate Court] Gent (Mushrooms case)

Belgium 24 April 2006 Hof van Beroep [Appellate Court] Antwerpen (GmbH Lothringer Gunther Grosshandelsgesellschaft für Bauelemente und Holzwerkstoffe v. NV Fepco International) 26A [translation available]

Spain 21 March 2006 Appellate Court Castellón (case on apparatus for the reduction of consumption of gasoline) 26A1

Russia 1 March 2006 Arbitration Award 101/2005 [translation in process]

Austria 23 January 2006 Oberlandesgericht [Appellate Court] Linz (Auto case) 26A [translation available]

Russia 20 January 2006 Arbitration Award 84/2005 [translation in process]
 

Russia 30 November 2005 Arbitration Award 76/2005

Germany 29 November 2005 Landgericht [District Court] München (Frozen vegetables case) 26A [translation available]

Russia 18 October 2005 Arbitration Award 21/2005 (Varnish and paint machine case) 26A [translation available]

Belgium 14 September 2005 Rechtbank van Koophandel [District Court] Hasselt (Drukkerij Baillien en Maris NV v. Hunterskil Howard BV)

Spain 26 July 2005 Audiencia Provincial [Appellate Court] Cordoba

Russia 27 May 2005 Arbitration Award 95/2004 26A [translation available]

Spain 31 March 2005 Audiencia Provincial [Appellate Court] Valencia (Oranges case) 26A1 [translation available]

China 28 February 2005 CIETAC Arbitration Award [CISG 2005/06] (Wool case) 26A [translation available]

China 24 February 2005 CIETAC Arbitration Award [CISG 2005/07] (Pork case) 26A1 [translation available]

Switzerland 21 February 2005 Kantonsgericht [Appellate Court] Valais / Wallis (CNC machine case) [translation available]

Italy 11 January 2005 Tribunale [District Court] Padova (Rabbit case) [translation available]
 

Russia 2 November 2004 Arbitration Award 188/2003 26A [translation available]

Germany 15 September 2004 Oberlandesgericht [Appellate Court] München 26A [translation available]

Austria 29 July 2004 Oberlandesgericht [Appellate Court] Graz (Construction equipment case) 26A [translation available]

Germany 22 July 2004 Oberlandesgericht [Appellate Court] Düsseldorf 26A1 [translation available]

Belgium 4 June 2004 Rechtbank van Koophandel [District Court] Kortrijk 26A [translation available]

Russia 28 May 2004 Arbitration Award 175/2003 26A [translation available]

Netherlands 27 January 2004 Gerechtshof [Appellate Court] 's-Hertogenbosch

Switzerland 27 January 2004 Kantonsgericht [District Court] Schaffhausen [translation available]
 

Germany 26 November 2003 Landgericht [District Court] Hamburg (Phtalic Anhydride case) [translation available]

Netherlands 23 April 2003 Gerechtshof [Appellate Court] 's-Gravenhage 26A [translation available]

Germany 18 March 2003 Landgericht [District Court] Giessen

Netherlands 29 January 2003 Rechtbank [District Court] Zwolle

ICC 2003 International Court of Arbitration, Case 11849 (Fashion products case) 26A1 [English text]
 

Germany 14 October 2002 Oberlandesgericht [Appellate Court] Köln 26A [translation available]

Spain 3 October 2002 Audiencia Provincial [Appellate Court] Pontevedra 26A [digest available]

China 10 June 2002 CIETAC Arbitration award [translation available]

China 4 February 2002 CIETAC Arbitration Award [CISG/2002/03] (Styrene monomer case) 26A1 [translation available]
 

Germany 21 December 2001 Landgericht [District Court] Hamburg (Natural stones case) 26A1 [translation available]

Austria 5 July 2001 Oberster Gerichtshof [Supreme Court] (Pentium computer parts case) 26A [translation available]

China February 2001 CIETAC Arbitration Award [CISG/2001/01] (Equipment, material and services case) [translation available]
 

Switzerland 15 September 2000 Bundesgericht [Federal Supreme Court] [4C.105/2000] 26A [translation available]

China 1 February 2000 CIETAC Arbitration award 26A [translation available]

Hungary 2000 Budapest Arbitration proceeding VB 99144 (Grape sticks case) [translation available]
 

* ICC August 1999 International Court of Arbitration, Case 9887 [English text]

Russia 7 June 1999 Arbitration award 238/1998 26A [translation available]

China 4 June 1999 CIETAC Arbitration Award [CISG/1999/28] (Industrial raw material case) 26A1 [translation available]

China 8 April 1999 CIETAC Arbitration Award CISG/1999/21] (New Zealand raw wool case) [translation available]

ICC March 1999 International Court of Arbitration, Case 9978 [English text]

Austria 24 February 1999 Oberlandesgericht [Appellate Court] Graz (Military weapons case) [translation added]

* Germany 13 January 1999 Oberlandesgericht [Appellate Court] Bamberg 26A [translation available]

China 6 January 1999 CIETAC Arbitration Award [CISG/1999/04] (Australian raw wool case) 26A [translation available]
 

* Germany 29 December 1998 Hamburg Arbitration award 26A [translation available]

Italy 11 December 1998 Corte di Appello [Appellate Court] Milano[translation available]

Russia 22 October 1998 Arbitration award 196/1997 [translation available]

Italy 20 March 1998 Corte di Appello [Appellate Court] Milano[translation available]

Russia 5 March 1998 Arbitration award 160/1997 26A [translation available]
 

China 26 June 1997 CIETAC Arbitration Award [CISG/1997/17] (Monohydrate zinc sulphate case) 26A [translation available]

* Germany 25 June 1997 Bundesgerichtshof [Federal Supreme Court] 26A1 [translation available]

Russia 11 May 1997 Arbitration award 2/1995 26A [translation available]

Austria 20 March 1997 Oberster Gerichtshof [Supreme Court] (Mono ammonium phosphate case) 26A [translation available]

Germany 28 February 1997 Oberlandesgericht [Appellate Court] Hamburg 26A [translation available]

Germany 31 January 1997 Oberlandesgericht [Appellate Court] Koblenz 26A

ICC January 1997 International Court of Arbitration, Case 8786 26A [English text]
 

Germany 4 December 1996 Bundesgerichtshof [Federal Supreme Court] [translation available]

Austria 7 November 1996 Oberlandesgericht [Appellate Court] Wien (Vienna)

ICC September 1996 International Court of Arbitration, Case 8574 26A [English text]

China 18 August 1997 CIETAC Arbitration Award [CISG/1997/26] (Vitamin C case) 26A [translation available]

Switzerland 31 May 1996 Arbitration ZHK 273/1995 [Zürich Chamber of Commerce] 26A [English text]

China 17 April 1996 CIETAC Arbitration Award [CISG/1996/19] (Air purifier case) 26A [translation available]

Germany 21 March 1996 Hamburg Arbitration award [translation available]

* Austria 6 February 1996 Oberster Gerichtshof [Supreme Court] [translation available]

China 30 January 1996 CIETAC Arbitration Award [CISG/1996/05] (Compound fertilizer case) 26A [translation available]
 

Germany 19 December 1995 Landgericht [District Court] Krefeld

Germany 21 September 1995 Landgericht [District Court] Kassel 26A [translation available]

Germany 21 August 1995 Landgericht [District Court] Ellwangen [translation available]

Austria 23 May 1995 Oberlandesgericht [Appellate Court] Linz

* Australia 28 April 1995 Federal District Court, Adelaide (Roder v. Rosedown) 26A

Russia 3 April 1995 Arbitration Court of Moscow City 26A [translation available]

China 22 March 1995 CIETAC Arbitration Award [CISG/1995/05] (Down jacket and winter coat case) 26A [translation available]

ICC March 1995 International Court of Arbitration, Case 7645 26A [English text]

* Germany 12 February 1995 Bundesgerichtshof [Supreme Court] [translation available]

* Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] [translation available]

ICC 1995 International Court of Arbitration, Case 8128 26A1 [translation available]
 

Germany 15 September 1994 Landgericht [District Court] Berlin 26A [translation available]

Germany 14 June 1994 Amtsgericht [Lower Court] Nordhorn 26A [translation available]

Germany 4 May 1994 Amtsgericht [Lower Court] Charlottenburg 26A [translation available]

* Germany 20 April 1994 Oberlandesgericht [Appellate Court] Frankfurt 26A1

* Germany 2 March 1994 Oberlandesgericht [Appellate Court] München [translation available]

China 20 February 1994 CIETAC Arbitration Award [CISG/1994/03] (Cysteine case) 26A1 [translation available]
 

* Germany 14 October 1992 Amtsgericht [Lower Court] Zweibrücken (Shoes case) 26A1 [translation available]

ICC 1992 International Court of Arbitration, Case 7197
 

Germany 17 September 1991 Oberlandesgericht [Appellate Court] Frankfurt 26A [translation available]

* Germany 16 September 1991 Landgericht [District Court] Frankfurt 26A [translation available]
 

Germany 24 April 1990 Amtsgericht [Lower Court] Oldenburg (Fashion textiles case) 26A1 [translation available]


UNCITRAL CASE DIGEST

The UNCITRAL Digest of case law on the United
Nations Convention on the International Sale of Goods
[*]

A/CN.9/SER.C/DIGEST/CISG/26 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 26
Digest of Article 26 case law
-    Purpose of the provision
-    Form of notice
-    Contents of notice
-    Addressee of the notice
-    Communication of notice]
ARTICLE 26

     A declaration of avoidance of the contract is effective only if made by notice to the other party.

DIGEST OF ARTICLE 26 CASE LAW

Purpose of the provision

1. The article provides that any avoidance must be declared by the party who intends to terminate the contract and that the declaration must be effected by notice to the other party. The CISG does not acknowledge an automatic termination of contract.[1]

2. The purpose of the notice requirement is to ensure that the other party becomes aware of the status of the contract.

Form of notice

3. The notice need not be given in a particular form (see also art. 11). It therefore can be made in writing or even orally.[2] Also, a notice in the statement of claim filed with the court suffices.[3]

4. Article 26 does not mention the possibility of an implicit notice. Several courts have had to deal with this issue. One court found that the mere purchase by the buyer of substitute goods does not constitute a valid (implicit) notice of declaration of avoidance;[4] another court decided that the fact that the buyer sends back the delivered goods without further explanation does not amount to a valid notice of declaration of avoidance.[5]

Contents of notice

5. The notice must express with sufficient clarity that the party will not be bound by the contract any longer and considers the contract terminated.[6] Therefore, any announcement that the contract will be terminated in future if the other party does not react [7] or a letter demanding either price reduction or taking the delivered goods back [8] or the mere sending back of the goods [9] does not constitute a valid notice because it does not state in unequivocal terms that the party wanting to terminate the contract believes that the contract is terminated. The same is true if a party requests damages.[10] However, the term “(declaration of) avoidance” need not be used nor need the relevant provision of the Convention be cited.[11] The use similar terms is sufficient. Thus, one court found that the buyer effectively gave notice by declaring that it could not use the defective goods and that it placed them at the disposal of the seller.[12] The same has been ruled with respect to a letter in which the buyer stated that no further business with the seller would be conducted.[13] Notice of non-conformity of the goods and notice of avoidance can be combined and expressed in one declaration.[14]

Addressee of the notice

6. The notice must be directed to the other party, normally the other party to the original contract or its authorised agent. If the contractual rights have been assigned to a third party the declaration must be addressed to this new party.[15]

Communication of notice

7. Generally notice of avoidance need not be given within a specified time. Articles 49(2) and 64(2), however, prescribe that notice must be communicated within a reasonable time. Concerning article 49 it has been held that notice after several months is clearly not reasonable.[16] To meet any time limit dispatch of the notice within the period is sufficient (see art. 27).


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. See CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the decision); CLOUT case No. 294 [GERMANY Oberlandesgericht [Appellate Court] Bamberg 13 January 1999, available online at <http://cisgw3.law.pace.edu/cases/990113g1.html>]; [ICC Court of Arbitration, case No. 9887 of August 1999, available online at <http://cisgw3.law.pace.edu/cases/999887i1.html>].

2. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>].

3. CLOUT case No. 308 [AUSTRALIA Roder v. Rosedown [Federal Court] Adelaide 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>].

4. CLOUT case No. 294 [GERMANY Oberlandesgericht [Appellate Court] Bamberg 13 January 1999, available online at <http://cisgw3.law.pace.edu/cases/990113g1.html>].

5. CLOUT case No. 6 [GERMANY Landgericht [District Court] Frankfurt 16 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910916g1.html>].

6. Id.

7. [GERMANY Landgericht [Lower Court] Zweibrücken 14 October 1992, available online at <http://cisgw3.law.pace.edu/cases/921014g1.html>].

8. [GERMANY Oberlandesgericht [Appellate Court] München 2 March 1994, available online at <http://cisgw3.law.pace.edu/cases/940302g1.html>].

9. CLOUT case No. 6 [GERMANY Landgericht [District Court] Frankfurt 16 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910916g1.html>].

10. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>].

11. CLOUT case No. 6 [GERMANY Landgericht [District Court] Frankfurt 16 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910916g1.html>] (see full text of the decision).

12. CLOUT case No. 235 [GERMANY Bundesgerichtshof [Supreme Court] 25 June 1997, available online at <http://cisgw3.law.pace.edu/cases/970625g2.html>].

13. CLOUT case No. 293 [GERMANY Arbitration award [Arbitral Tribunal] Hamburg 29 December 1998, available online at <http://cisgw3.law.pace.edu/cases/981229g1.html>].

14. CLOUT case No. 235 [GERMANY Bundesgerichtshof [Supreme Court] 25 June 1997, available online at <http://cisgw3.law.pace.edu/cases/970625g2.html>].

15. CLOUT case No. 6 [GERMANY Landgericht [District Court] Frankfurt 16 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910916g1.html>] (see full text of the decision).

16. See CLOUT case No. 124 [GERMANY Bundesgerichtshof [Supreme Court] 15 February 1995, available online at <http://cisgw3.law.pace.edu/cases/950215g1.html>] (notice after 5 months: too late); CLOUT case No. 84 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 20 April 1994, available online at <http://cisgw3.law.pace.edu/cases/940420g1.html>] (2 months: too late); CLOUT case No. 83 [GERMANY Oberlandesgericht [Appellate Court] München 2 March 1994, available online at <http://cisgw3.law.pace.edu/cases/940302g1.html>] (4 months: too late); CLOUT case No. 6 [GERMANY Landgericht [District Court] Frankfurt 16 September 1991, available online at <http://cisgw3.law.pace.edu/cases/910916g1.html>] (1 day: in time) (see full text of the decision).


ANNOTATED COMPARATIVES
-  UNIDROIT and PECL

Selected Notice Requirements under CISG, PECL and UNIDROIT Principles: CISG Arts. 39 & 26; UNIDROIT Principles Arts. 1.9, 3.14, 7.3.2.; PECL Arts. 1.303, 3.304, 4.112, 9.303, 13.104

Camilla Baasch Andersen [*]
November 2004

  1. Introduction
  2. CISG Vantage Point: All Non-conformities Require Specific and Timely Notice
  3. PECL and UNIDROIT Principles: Only Avoidance ("Termination") Requires Notice
  4. Form of "Notice"
  5. Case law and Issues of Notification
  6. Timelines
  7. Specificity
  8. Conclusion

I. Introduction

Doctrinal writing and caselaw on the problems of notice giving abound where the CISG is concerned (whereas there is little reported on the PECL or UNIDROIT) - it is one of the most popular areas of dispute as a proper notification is central to any remedial relief. The second opinion from the CISG Advisory Council [1] focuses on the requirements of examination and notification, and contains an overview of the relevant caselaw on point.

CAVEAT on terminology: Any comparison of notice requirements under the PECL, UNIDROIT and CISG will unearth a significant difference in terminology. The CISG solely encompasses selected formalities concerning validity of contract (such as form of communication, form of contract: Art. 12), but sets most validity issues outside the sphere of application by way of Article 4(a). It thus does not concern itself with most cases where the contract is not valid due to misrepresentation, threat, fraud or similar formality. It also uses the term "avoid" for termination and revocation as the only language of contract cancellation. In contrast, both the UNIDROIT Principles and the PECL refer to rescission by the term "avoid" and use "termination" for the equivalent to the CISG term "avoidance". The following will employ CISG terminology and indicate where it is not used in the same manner in the UNIDROIT Principles and the PECL.

II. CISG Vantage Point: All Non-conformities require specific and timely notice

Article 39 CISG requires notice for ALL non-conformities, and in addition to this Article 26 CISG requires notice in case of avoidance specifying this remedy. Both must be given within "reasonable time". A single notice can satisfy both requirements. The consequence of not giving a notice within reasonable time is for Art. 26 that the contract cannot be avoided, and for Art. 39 a complete loss of all remedies under the CISG (excepting the existence of a reasonable excuse under Art. 44 or the sellers bad faith or negligence under Art. 40 - the latter will only apply if notice is given within the two-year cut-off period in Article 39(2)).

Both notices pose two problems. First of all, what is "reasonable time" (CISG Arts. 39 and 26, and, secondly, what is what degree of particularity is required, i.e., in "specifying the nature of the non-conformity" (CISG Art. 39) and/or providing a proper "declaration of avoidance" (CISG Art. 26).

III. PECL and UNIDROIT: Only Avoidance ("Termination") Requires Notice

In the PECL and the UNIDROIT Principles, there are two immediate contrasts to the CISG approach.

First of all, because these two sets of principles also deal with the validity of contracts, they include notification requirements for rescission of contract in case of invalidity, which they both term "avoidance" (UNIDROIT Principles Art. 3.14; and PECL Art. 4.112).

Secondly, in contrast to CISG Art. 39, not all remedies in effect of breach require a formal notification under the PECL or UNIDROIT. However, the two counterpart instruments do contain requirements for notification of avoidance (CISG terminology) like CISG Art. 26 does, namely in PECL 9.303 and UNIDROIT 7.3.2.

The CISG equivalent to the notification requirements in the UNIDROIT Principles and the PECL is thus not Art. 39, but Art. 26. However, the notice provision in Art. 26 also requires that the conditions of Art. 39 be met, as no remedy can be exercised without a CISG Art. 39 notice. Note, however, that in the CISG regime a notice can serve as both Art. 26 and Art. 39 notice if it adequately meets the requirements for each provision; therefore, separate notices are not required. Thus, where a buyer wishes to avoid a contract based on a non-conformity of the goods, the situation is very similar under all three regulatory frameworks.

Interestingly, both sets of Principles do set out the timeliness of notification as "reasonable time" in line with the CISG timeframes, but do not assist in the determination of how this reasonable time-period is to be measured. Reasonableness, while understandably palatable and thus popular in modern drafting, is a very wide and flexible term which can be understood very differently. It permeates both sets of principles as well as the CISG. But it does not specifically define anything, leaving the practitioner with little by way of a yardstick with which to measure a time-period (see section VI, infra, on the issue of timeliness).

The official UNIDROIT commentary [2] contributes the following with regard to the reasoning behind the provision 7.3.2:

Para. (1) of this article reaffirms the principle that the right of a party
to terminate the contract is exercised by notice to the other party. The
notice requirement will permit the non-performing party to avoid any loss
due to uncertainty as to whether the aggrieved party will accept the
performance. At the same time it prevents the aggrieved party from
speculating on a rise or fall in the value of the performance to the
detriment of the non-performing party.
[3]

While this can be helpful in determining the need behind a notification requirement and thus help indicate the necessity for speediness, it does not help define the concept of "reasonable time".

IV. Form of "Notice"

Extensions or embellishments of notice requirements are found in both UNIDROIT Principles Art. 1.9. and PECL Art. 1.303. These two provisions are remarkably similar in content, both providing that notice may be given by any "appropriate" means, that it is effective when reaching the addressee with "reaches" defined as delivered to business or mailing address or habitual residence. They also both define "notice" as a communication or declaration ("…of intention", according to UNIDROIT).

It seems unnecessary to restate these basic principles of offer and acceptance, common to all three regimes, especially for notice giving, and the fact that the CISG is commonly accepted to have the same rules for notices without such special codification would seem to render this regulating superfluous.

PECL Art. 1.303 contains a further embellishment of the distribution of risk for notices for non-performance delayed or altered in transit. Subsection (4) provides that such notices (including anticipatory non-performance) if dispatched properly, shall have effect as if they had arrived under normal circumstances. This curious special rule also seems superfluous, imposing a "mailbox rule" which is seen to apply to notices in other regulatory frameworks even without the inclusion of such a provision.

While these provisions do embellish the concept of a notice to some extent, they do not help as guidelines for any further determination of the two main problems of notification, namely timeliness and specificity. There is - as of yet - very little caselaw available on the application of the corresponding PECL and UNIDROIT provisions to assist with a determination of these issues.

An overview of CISG caselaw on the form of notice can be found in section 2 of the CISG Case Law annexed to the CISG Advisory Opinion 2.[4] Although there is no form requirement in the CISG for notice giving, one main problem is that oral/telephonic notices are difficult to prove, and many cases concern notices which the buyer claims were given over the telephone. The burden of evidence of notice giving is clearly on the buyer, and if this cannot be proven, the judge will not allow the buyer to rely on the notice, and this will result in the loss of a remedy (notwithstanding CISG Arts. 44 and 40).[5] It is worth noting that no form requirement in the CISG prevents the requirements of Arts. 39 and 26 from being met in a single notice if it specifies both the nature of the non-conformity and the intention to avoid (see section VI, infra).

V. Caselaw and Issues of Notification

Due to the lack of cases involving the UNIDROIT and PECL, an analysis of these issues is solely based on the caselaw of the CISG.

VI. Timeliness

Much has been written on the timeliness of notification under Art. 39 (which also includes Art. 26) of the CISG.[6] The immediate problem is that the timeframe is so flexible, and subject to different guidelines in its interpretation of "reasonable time". The timeframe was meant to be flexible, determinable by the facts of the case in each instance, but this poses a problem for numerous systems of law who wish to form into a more tangible/rigid concept (primarily Civil Law systems). In Germany and Switzerland, attempts for introducing a generous "grosszugige monat" guideline of an outside period of one month determinable by the facts of the case to reduce it have found some support.[7] In Austria, similar attempts to determine a more objective and rigid timeframe of 14 days have surfaced in caselaw.[8] The Swiss Courts have followed the German evolution of a one month timeframe in some cases.[9]

There is no clear way to define this timeframe, or the criteria which influence it. This is - although it ideally would not be - subject to the jurisdiction in question, and its influences. Most scholars and jurisdiction are in favor of retaining the inherent flexibility of the provision to suit it to each case, with the determination of certain criteria for shortening/lengthening it. Some criteria for reducing the timeframe in most circumstances include: rapid deterioration of the goods (economic or physical),[10] or other reason why time would be of the essence between the parties (See also CISG Art. 9). If more rigid standards for the determination of "reasonable time" were to become universally accepted across the different jurisdictions, then it might be possible to look for guidelines in the PECL or the UNIDROIT Principles, but no such standards exist here.

There is, in the official UNIDROIT commentary, a not very helpful definition of "reasonable time":

Reasonable time

An aggrieved party who intends to terminate the contract must give notice
to the other party within a reasonable time after it becomes or ought to
have become aware of the non-performance (para. (2)).

What is "reasonable" depends upon the circumstances. In situations where
the aggrieved party may easily obtain a substitute performance and may thus
speculate on a rise or fall in the price, notice must be given without
delay. When it must make enquiries as to whether it can obtain substitute
performance from other sources the reasonable period of time will be longer.
[11]

And in Art. 1:302 of the PECL, "reasonable" is defined as:

Under these Principles reasonableness is to be judged by what persons acting in good faith and in the same situation as the parties would consider to be reasonable. In particular, in assessing what is reasonable the nature and purpose of the contract, the circumstances of the case and the usages and practices of the trades or professions involved should be taken into account.[12]

The overall conclusion on timeliness of notification would seem to be that it is flexible, based on circumstances of the case, for the CISG as well as the UNIDROIT timeframes, with the exception of those CISG jurisdictions which have attempted to introduce more rigid guidelines. It is clear that such jurisdictionally independent evolution of guidelines is an obstacle to applied uniformity of the CISG, but a reality nonetheless.

VII. Specificity

The degree of specificity required under CISG Art. 26 is not overly controversial. It must be evident to a reasonable person (using the criteria of CISG Art. 8) that the notice in question must clearly express the aggrieved party's wish to avoid the contract as a remedy in consequence of a particular breach. Implied intentions to avoid can be permitted, but the implication must be very strong.

The specificity required under CISG Art. 39, however, is a different and far more controversial matter. The notice must sufficiently specify the nature of the non-conformity, meaning exactly what is wrong with the goods, enabling the seller to determine a choice of action based on the notification and any request for relief. Some cases have applied this doctrine of specificity very harshly, cutting the buyer off from all relief where details of the non-conformity were lacking in the notice, even in a (strongly criticized) case where the language used to describe the non-conformity was an established phrase in the specific trade ("soft truffles" = worm ridden).[13]

Note that Art. 44 CISG may help to provide an excuse for why no properly specific notice is given, but a successful excuse for this has yet to surface in the caselaw.

VIII. Conclusion

In conclusion, a comparison of the texts of the notice requirements under the three regulatory frameworks discloses that although structured differently, and with the major discrepancy of the CISG notice requirement for all exercising of remedies in Art. 39, the three sets of rules are very reminiscent of one other.

Nevertheless, with the exception of the official commentaries, there is no aid to be found in either set of Principles which may be applied in interpreting the two issues of timeliness and specificity of notice under the Convention. The two major issues of specificity and timeliness are not addressed in a helpful way, nor is there at the time of writing any reported caselaw from these two regimes which could plausibly be used as an inspirational guideline for resolving the problems in other regimes.


FOOTNOTES

* Camilla Baasch Andersen is a lecturer in Commercial Law at the Centre for Commercial Law Studies, Queen Mary, University of London as well as a Fellow at the Pace Institute of Commercial Law. CISG-AC Opinion no 2, Examination of the Goods and Notice of Non-Conformity: Articles 38 and 39, 7 June 2004. Rapporteur: Professor Eric E. Bergsten, Emeritus, Pace University School of Law, New York; available online at <http://cisgw3.law.pace.edu/cisg/CISG-AC-op2.html>.

1. CISG-AC Opinion no 2, Examination of the Goods and Notice of Non-Conformity: Articles 38 and 39, 7 June 2004. Rapporteur: Professor Eric E. Bergsten, Emeritus, Pace University School of Law, New York; available online at <http://cisgw3.law.pace.edu/cisg/CISG-AC-op2.html>.

2. Available online at <http://cisgw3.law.pace.edu/cisg/principles/uni26.html#official>.

3. Id. Comment 1.

4. Available online at <http://cisgw3.law.pace.edu/cisg/CISG-AC-op2.html>.

5. See for examples of such cases:

    -     Germany 6 October 1995 Amtsgericht [Lower Court] Kehl, case presentation including English translation available online at <http://cisgw3.law.pace.edu/cisg/cases/951006g1.html>;
    -     Germany 22 June 1995 Landgericht [District Court] Kassel; case presentation available at <http://cisgw3.law.pace.edu/cisg/cases/950622g1.html>;
    -     Germany 23 May 1995 Oberlandesgericht [Appellate Court] Frankfurt case presentation including English translation available online at <http://cisgw3.law.pace.edu/cisg/cases/950523g1.html>;
    -     Switzerland 9 September 1993 Handelsgericht [Commercial Court] Zürich, case presentation available at <http://cisgw3.law.pace.edu/cases/930909s1.html>;

the latter clearly prescribes that the burden of proof for notice giving rests on the buyer.

6. See, amongst many other sources, the CISG Advisory Council's second opinion, available at <http://cisgw3.law.pace.edu/cisg/CISG-AC-op2.html>. See also Camilla Baasch Andersen, "Reasonable Time in Article 39(1) of the CISG", in Review of the Convention on Contracts for the International Sale of Goods (Kluwer 1998) 66-176, available online at <http://cisgw3.law.pace.edu/cisg/biblio/andersen.html> and Peter Schlechtriem, Commentary on issues associated with Article 39(1): Lack of conformity notice, timeliness, January 2000 (commentary provided with online case presentation at <http://www.cisg.law.pace.edu/cisg/cases/991103g1.html>). A bibliography of scholarly writing on CISG Art. 39 is available at <http://cisgw3.law.pace.edu/cisg/text/e-text-39.html>.

7. Introduced in the case

    -     Germany 8 March 1995 Bundesgerichtshof [Supreme Court], case presentation including English translation available online at <http://cisgw3.law.pace.edu/cisg/cases/950308g3.html>. The German Supreme Court's judgment also includes a reference to Swiss scholar Schwenzer's writing in von Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht (Commentary on the Uniform U.N. Law of Sales) 2nd ed., (in German).

Restated in many German cases since then, the latest reference in the Bundesgerichtshof [German Supreme Court] is:

    -     Germany 3 November 1999 Supreme Court, case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/991103g1.html>.

But restatements of this principle abound in German law at all instances; see for example:

    -     Germany 29 January 1996 Amtsgericht [Lower Court] Augsburg, case presentation available online at <http://cisgw3.law.pace.edu/cisg/cases/960129g1.html>;
    -     Germany 2 July 2002 Landgericht [District Court] Saarbrücken, case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/020702g1.html>; and
    -     Germany 26 May 1998 Oberlandesgericht [Appellate Court] Thüringer [Jena], case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/980526g1.html>.

8. The "14-day" principle was first introduced in

    -     Austria 15 October 1998 Oberster Gerichtshof [Supreme Court], case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/981015a3.html>;

and was recently restated in

    -     Austria 14 January 2002 Oberster Gerichtshof [Supreme Court], case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/020114a3.html>.

9. See for instance Switzerland 30 November 1998 Handelsgericht [Commercial Court] Zürich case presentation available at <http://cisgw3.law.pace.edu/cisg/cases/981130s1.html>.

10. Scholars emphasized this before the Convention even entered into force, cf. John Honnold, Uniform Law for International Sales under the 1980 UN Convention (Kluwer, 1982): "Considerations indicating the need for speed include the perishable nature of the goods…" The reality of this consideration is extended to economic perishability, see Germany 6 October 1995 Lower Court Kehl, (where the court emphasized the need for speed as the goods were seasonal); case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/951006g1.html>.

11. Comment 3, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni26.html#official>.

12. For the definition of reasonableness recited in the Principles of European Contract Law and references to reasonableness in Continental and Common Law domestic rules, doctrine and jurisprudence, go to <http://cisgw3.law.pace.edu/cisg/text/reason.html#def>, with further references, and PECL Article 1:302. Ole Lando & Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000) 126-128. To drive home the correlation between the PECL's definition of reasonableness and the evident same meaning of this term to CISG legislators when they used the concept either specifically or as a general principle of the uniform law they drafted, see <http://cisgw3.law.pace.edu/cisg/text/reason.html#over>.

Reasonableness is also regarded as a general principle of the CISG. See Overview Comments on Reasonableness, Albert Kritzer, available online at <http://cisgw3.law.pace.edu/text/reason.html>; "Reasonableness is specifically mentioned in thirty-seven provisions of the CISG and clearly alluded to elsewhere in the Uniform Sales Law. Reasonableness is a general principle of the CISG." See also comments by Jelena Vilus, available online at http://cisgw3.law.pace.edu/cisg/text/reason.html#vilus>.

13. See Germany 24 January 1996 Landgericht [District Court] Bochum, case presentation including English translation available at <http://cisgw3.law.pace.edu/cisg/cases/960124g1.html>.


Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
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