Go to Database Directory || Go to Information on other available case data
Search the entire CISG Database (case data + other data)

2,000 cases 7,500 case annotations

Article 45. Remedies available to Buyer

TEXT OF ARTICLE 45

(1) If the seller fails to perform any of his obligations under the contract or this Convention, the buyer may:

(a) exercise the rights provided in articles 46 to 52;

(b) claim damages as provided in articles 74 to 77.

(2) The buyer is not deprived of any right he may have to claim damages by exercising his right to other remedies.

(3) No period of grace may be granted to the seller by a court or arbitral tribunal when the buyer resorts to a remedy for breach of contract.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

45A Summary of buyer's remedies for breach by seller (art. 45(1))

45B Remedies under articles 46-52 do not bar damages (art. 45(2))

45C No grace period to delay buyer's exercise of remedies (art. 45(3))


DESCRIPTORS

Cumulation or election of remedies


CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

UNCITRAL has identified relevant cases in Digests containing case annotations for each article of the CISG. UNCITRAL cites 23 cases in its Digest of Art. 45 case law:

Egypt       1           ICC      1           Switzerland        4
France 2 Netherlands      1 United States        3
Germany      9 Russian Federation      1 TOTAL:   23

Presented below is a composite list of Art. 45 cases reporting UNCITRAL Digest cases and other Art. 45 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 10 May 2002 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.
 

Switzerland 19 November 2008 Bundesgericht [Supreme Court]

Germany 18 November 2008 Oberlandesgericht [Appellate Court] Brandenburg (Beer case) [translation available]

Chile 22 September 2008 Corte Suprema [Supreme Court] (Jorge Plaza Oviedo v. Sociedad Agricola Sacor Limitada) [translation available]

Switzerland 12 September 2008 Amtsgericht [District Court] Sursee (Second-hand tractor case)

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

Germany 5 March 2008 Oberlandesgericht [Appellate Court] München (Stolen car case) [translation available]

Serbia 23 January 2008 Foreign Trade Court of Arbitration, Serbian Chamber of Commerce (Chrystal white sugar case) [translation available]

Spain 17 January 2008 Tribunal Suprema [Supreme Court] (Used automobiles case) [translation available]
 

Austria 19 December 2007 Oberster Gerichtshof [Supreme Court] (Laminated glass case) [translation available]

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

Austria 24 September 2007 Oberlandesgericht [Appellate Court] Linz (Laminated glass case) [translation available]

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

Netherlands 29 August 2007 Rechtbank [District Court] Dordrecht (Isolcell Italia S.p.A. v. B. Numansdorp B.V)

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

Switzerland 25 June 2007 Handelsgericht [Commercial Court] Zürich (Printed materials case) [translation available]

Spain 16 May 2007 Tribunal Supremo [Supreme Court] (Water apparatus case)

Germany 21 March 2007 Oberlandesgericht [Appellate Court] Dresden (Stolen automobile case) [translation available]

Austria 23 February 2007 Landesgericht [District Court] Salzberg (Laminated glass case)

Spain 20 February 2007 Appellate Court Madrid (Olive oil case) [translation available]

France 13 February 2007 Cour de cassation [Supreme Court] (Computer motherboard case) [translation available]

Germany 17 January 2007 Oberlandesgericht [Appellate Court] Saarbrücken (Marble panel case) [translation available]

Germany 12 January 2007 Oberlandesgericht [Appellate Court] Köln (Paperboard containers case) [translation available]
 

Switzerland 19 December 2006 Obergericht [Appellate Court] Zug (Stove case) [translation available]

Germany 14 December 2006 Oberlandesgericht [Appellate Court] Koblenz (Bottles case) [translation available]

Germany 12 December 2006 Landgericht [District Court] Coburg (Plants case) [translation available]

Russia 15 November 2006 Arbitration Award 98/2006

Germany 19 October 2006 Oberlandesgericht [Appellate Court] Koblenz (T-Shirts case) [translation available]

Germany 13 September 2006 Landgericht [District Court] Berlin (Auston Martin automobile case) [translation available]

China September 2006 CIETAC Arbitration Award [CISG 2006/09] (Apparel case) [translation available]

United States 23 August 2006 Federal District Court [New York] (TeeVee Tunes v. Gerhard Schubert GmbH)

Germany 14 August 2006 Oberlandesgericht [Appellate Court] Köln (Potatoes case) [translation available]

Germany 21 June 2006 Amtsgericht [Lower Court] Landsberg (Dust ventilator case) [translation available]

Switzerland 23 May 2006 Tribunal cantonal [Higher Cantonal Court] Valais (Suits case) [translation available]

Spain 22 May 2006 Court of First Instance of Badalona (Bermuda shorts case) [translation available]

China 21 May 2006 CIETAC Arbitration Award [CISG/2006/01] (Diesel generators case) [translation available]

Russia 19 May 2006 Arbitration Award 122/2005

Germany 20 April 2006 Landgericht [District Court] Aschaffenburg (Cotton twilled fabric case) [translation available]

Russia 13 April 2006 Arbitration Award 105/2005 [translation available]

Netherlands 1 March 2006 Rechtbank [District Court] Arnhem [translation available]

Ukraine 15 February 2006 Arbitration Award (Coal case) [translation available]

Germany 8 February 2006 Oberlandesgericht [Appellate Court] Karlsruhe (Hungarian wheat case) [translation available]

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

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

Germany 11 January 2006 Bundesgerichtshof [Supreme Court] (Automobile case) [translation available]
 

China 9 November 2005 CIETAC Arbitration Award [CISG/2005/04] (DVD machines case) [translation available]

Austria 8 November 2005 Oberster Gerichtshof [Supreme Court] [translation available]

Spain 26 September 2005 Audiencia Provincial [Appellate Court] Palencia (Printing machine case) [translation available]

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

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

Germany 11 April 2005 Landgericht [District Court] Frankfurt [translation available]

Switzerland 5 April 2005 Bundesgericht [Federal Supreme Court] [translation available]

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

Russia 24 January 2005 Arbitration Award 68/2004 [translation available]
 

Russia 29 December 2004 Arbitration Award 189/2003 [translation available]

Germany 10 December 2004 Landgericht [District Court] Bayreuth (Tiles case) [translation available]

Ukraine 18 November 2004 Arbitration Award (Manufactured articles case) [translation available]

Ukraine 19 October 2004 Arbitration Award (Iron and steel castings case) [translation available]

Switzerland 21 September 2004 Amtsgericht [District Court] Luzern-Land [translation available]

Germany 6 September 2004 Landgericht [District Court] Hamburg [translation available]

Switzerland 7 July 2004 Bundesgericht [Supreme Court] (Cable drum case) [translation available]

Russia 25 June 2004 Arbitration Award 120/2003 [translation available]

Germany 1 June 2004 Landgericht [District Court] Saarbrücken (Pallets case) [translation available]

Germany 28 May 2004 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]

Russia 28 May 2004 Arbitration Award 175/2003 45A [translation available]

Germany 10 March 2004 Oberlandesgericht [Appellate Court] Celle [translation available]

Germany 2 February 2004 Landgericht [District Court] Hamburg

Switzerland 13 January 2004 Bundesgericht [Supreme Court]
 

China 18 December 2003 CIETAC Arbitration Award [CISG/2003/12] (AOE and PECVD machines case) [translation available]

Spain 5 November 2003 Audiencia Provincial [Appellate Court] Vizcaya

Russia 22 October 2003 Arbitration Award No. 134/2001 [translation available]

Germany 15 September 2003 Oberlandesgericht [Appellate Court] Rostock [translation available]

Switzerland 19 August 2003 Tribunal Cantonal [Appellate Court] Valais [translation available]

China 3 June 2003 CIETAC Arbitration Award [CISG/2003/01] (Clothes case) [translation available]

Russia 23 May 2003 Arbitration Award No. 161/2002 [translation available]

Russia 16 April 2003 Arbitration Award No. 99/2002

Spain 21 March 2003 Appellate Court Barcelona (Moulding machine case)

Russia 17 February 2003 Arbitration Award No. 168/2001 [translation available]

Australia 17 January 2003 Supreme Court of Western Australia (Ginza Pte Ltd v Vista Corporation Pty Ltd) 45B
 

Germany 19 December 2002 Oberlandesgericht [Appellate Court] Karlsruhe [translation available]

China 18 December 2002 CIETAC Arbitration Award [CISG 2002/14] (Sausage casing case) [translation available]

Ukraine 25 November 2002 Arbitration Award [translation available]

Switzerland 15 November 2002 Cour de Justice [Appellate Court] Genève

Switzerland 5 November 2002 Handelsgericht [Commercial Court] des Kantons Aargau 45A [translation available]

China 21 October 2002 CIETAC Arbitration Award [CISG 2002/16] (Engraving machine case) [translation available]

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

Germany 22 August 2002 Oberlandesgericht [Appellate Court] Schleswig 45B [translation available]

Germany 26 July 2002 Oberlandesgericht [Appellate Court] Zweibrücken [translation available]

Argentina 21 July 2002 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court] [translation available]

Germany 4 June 2002 Landgericht [District Court] Stuttgart [translation available]

Switzerland 12 May 2002 Obergericht [Appellate Court] Luzern

* United States 10 May 2002 Federal District Court [New York] (Geneva Pharmaceuticals v. Barr Labs)

Finland 12 April 2002 Hovrätt [Appellate Court] Turku [translation available]

Germany 11 April 2002 Amtsgericht [Lower Court] Viechtach [translation available]

Bulgaria 28 February 2002 Bulgaria Chamber of Commerce Arbitration award, Case 26/00 45B [translation available]

Switzerland 25 February 2002 Kantonsgericht [District Court] Schaffhausen [translation available]

Denmark 31 January 2002 Maritime Commercial Court [translation available]

Switzerland 17 January 2002 Handelsgericht [Commercial Court] Bern [translation available]

Belgium 15 January 2002 Tribunal de commerce [District Court] Namur [translation available]

Austria 14 January 2002 Oberster Gerichtshof [Supreme Court] [translation available]

Germany 9 January 2002 Bundesgerichtshof [Federal Supreme Court] [translation available]
 

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

Germany 31 October 2001 Bundesgerichtshof [Federal Supreme Court] [translation available]

Italy 28 September 2001 Milan Arbitration proceeding (Steel wire case) [English text]

Germany 30 July 2001 Landgericht [District Court] Braunschweig [translation available]

Belgium 27 June 2001 Hof van Beroep [Appellate Court] Antwerpen [translation available]

Germany 29 March 2001 Landgericht [District Court] Trier 45B [translation available]

Germany 12 March 2001 Oberlandesgericht [Appellate Court] Stuttgart [translation available]

Austria 24 January 2001 Oberlandesgericht [Appellate Court] Graz (Ice cream robots case) [translation available]
 

Germany 23 October 2000 Oberlandesgericht [Appellate Court] Dresden (Powdered milk case) [translation available]

Austria 7 September 2000 Oberster Gerichtshof [Supreme Court] [translation available]

China 10 August 2000 CIETAC Arbitration award 45A [translation available]

Austria 13 April 2000 Oberster Gerichtshof [Supreme Court] [translation available]

Germany 13 April 2000 Amtsgericht [Lower Court] Duisburg [translation available]

Germany 6 April 2000 Landgericht [District Court] München [translation available]

Spain 27 March 2000 Audiencia Provincial [Appellate Court] Navarra

Austria 9 March 2000 Oberster Gerichtshof [Supreme Court] [translation available]

Russia 24 January 2000 Arbitration award 54/1999 [translation available]
 

ICC 20 December 1999 International Court of Arbitration (Copper cable case) [translation available]

* Germany 26 November 1999 Oberlandesgericht [Appellate Court] Hamburg [translation available]

Germany 18 November 1999 Oberlandesgericht [Appellate Court] Koblenz

ICC August 1999 International Court of Arbitration, Case 9083 [translation available]

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

ICC July 1999 International Court of Arbitration, Case 9448 [English text]

ICC June 1999 International Court of Arbitration, Case 9187 [English text]

Germany 25 May 1999 Landgericht [District Court] Berlin [translation available]

Belgium 18 May 1999 Hof van beroep [Appellate Court] Antwerpen (Vandermaesen Viswaren v. Euromar Seafood) [translation available]

China 12 April 1999 CIETAC Arbitration Award [CISG/1999/22] (Bud rice dregs case) [translation available]

China 30 March 1999 CIETAC Arbitration Award [CISG/1999/17] (Electric heater case) [translation available]

Germany 24 March 1999 Bundesgerichtshof [Federal Supreme Court] 45A [translation available]

Germany 19 March 1999 Landgericht [District Court] Zwickau

ICC March 1999 International Court of Arbitration, Case 9978

Switzerland 10 February 1999 Handelsgericht [Commercial Court] Zürich [translation available]
 

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

Canada 16 December 1998 Ontario Court, General Division (Nova Tool v. London Industries) 45A

Germany 26 November 1998 Landgericht [District Court] Mainz [translation available]

* Switzerland 28 October 1998 Bundesgericht [Federal Supreme Court] (Meat case) 45B [translation available]

Germany 11 September 1998 Oberlandesgericht [Appellate Court] Koblenz [translation available]

Russia 11 September 1998 Arbitration award 407/1996 [translation available]

Germany 29 July 1998 Landgericht [District Court] Erfurt [translation available]

Austria 26 May 1998 Oberster Gerichtshof [Supreme Court]

Germany 31 March 1998 Oberlandesgericht [Appellate Court] Zweibrücken (Vine wax case) [translation available]

Germany 24 March 1998 Landgericht [District Court] Berlin (Knitwear case) [translation available]

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

* France 18 March 1998 Cour d’appel [Appellate Court] Paris [translation available]

* France 4 March 1998 Cour d’appel [Appellate Court] Paris [translation available]

Austria 12 February 1998 Oberster Gerichtshof [Supreme Court] [translation available]

China 20 January 1998 CIETAC Arbitration Award 45A [translation available]
 

China 31 December 1997 CIETAC Arbitration Award [CISG/1997/37] (Lindane case) [translation available]

Germany 5 November 1997 Oberlandesgericht [Appellate Court] Hamm [translation available]

* Switzerland 28 October 1997 Tribunal Cantonal [Appellate Court] Valais

Switzerland 26 September 1997 Handelsgericht [Commercial Court] Aargau (Cutlery case) [translation available]

Germany 15 September 1997 Landgericht [District Court] Heilbronn [translation available]

Germany 21 August 1997 Oberlandesgericht [Appellate Court] Köln [translation available]

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

* Germany 23 July 1997 Bundesgerichtshof [Federal Supreme Court] [VIII ZR 134/96] [Benetton II] [translation available]

Germany 9 July 1997 Oberlandesgericht [Appellate Court] München [7 U 2070/97] [translation available]

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

Hungary 8 May 1997 Budapest Arbitration award Vb 96036

China 11 April 1997 CIETAC Arbitration Award [CISG/1997/05] (Silicon metal case) [translation available]

China 4 April 1997 CIETAC Arbitration Award [CISG/1997/04] (Black melon seeds case) [translation available]

* Switzerland 5 February 1997 Handelsgericht [Commercial Court] Zürich 45A [translation available]

Germany 31 January 1997 Oberlandesgericht [Appellate Court] Koblenz [translation available]

Germany 8 January 1997 Oberlandesgericht [Appellate Court] Köln 45A [translation available]

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

ICC 1997 International Court of Arbitration, Case 8855

ICC 1997 International Court of Arbitration, Case 8782 [English text]
 

China 23 December 1996 CIETAC Arbitration Award [CISG/1996/57] (Carbazole case) 45A [translation available]

* Germany 11 December 1996 Bundesgerichtshof [Supreme Court] [translation available]

Belgium 8 October 1996 Rechtbank van Koophandel [District Court] Hasselt

Germany 2 October 1996 Landgericht [District Court] Heidelberg

China 4 September 1996 CIETAC Arbitration Award [CISG/1996/41] (Natural rubber case) [translation available]

Germany 25 June 1996 Landgericht [District Court] Paderborn [translation available]

* ICC June 1996 International Court of Arbitration, Case 8247 [English text]

Switzerland 31 May 1996 Zürich Chamber of Commerce, Arbitration ZHK 273/1995 45A [English text]

* Germany 21 May 1996 Oberlandesgericht [Appellate Court] Köln 45A [translation available]

Netherlands 21 May 1996 Gerechtshof [Appellate Court] Arnhem [translation available]

Germany 19 April 1996 Landgericht [District Court] Aachen

* Germany 21 March 1996 Hamburg Arbitration award 45B [translation available]

Germany 15 March 1996 Oberlandesgericht [Appellate Court] Frankfurt [Benetton II] 45B [translation available]

Russia 12 March 1996 Arbitration award 166/1996 45B [translation available]

China 8 March 1996 CIETAC Arbitration Award [CISG/1996/12] (Old boxboard corrugated cartons case) [translation available]

Germany 28 February 1996 Landgericht [District Court] Oldenburg (Egg case) [translation available]

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

Germany 19 December 1995 Landgericht [District Court] Krefeld

China 15 December 1995 CIETAC Arbitration Award [CISG 1995/12] (Used re-rolling rails case ) [translation available]

* United States 6 December 1995 Federal Circuit Court of Appeals [2d Cir.] (Delchi Carrier v. Rotorex)

Switzerland 30 November 1995 Kantonsgericht [District Court] Zug

Germany 16 November 1995 Landgericht [District Court] Köln

Germany 12 October 1995 Landgericht [District Court] Trier [translation available]

Germany 11 October 1995 Landgericht [District Court] Düsseldorf [translation available]

* Netherlands 9 October 1995 Gerechtshof [Appellate Court] ‘s-Hertogenbosch

* Egypt 3 October 1995 Arbitration award (Cairo Chamber of Commerce & Industry) [translation available]

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

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

Germany 23 June 1995 Amtsgericht [Lower Court] München [translation available]

* Germany 9 June 1995 Oberlandesgericht [Appellate Court] Hamm [translation available]

Austria 23 May 1995 Oberlandesgericht [Appellate Court] Linz

Switzerland 26 April 1995 Handelsgericht [Commercial Court] Zürich [translation available]

Germany 5 April 1995 Landgericht [District Court] Landshut [translation available]

Germany 20 March 1995 Landgericht [District Court] München 45A [translation available]

* Russia 16 March 1995 Arbitration award 155/1994 [translation available]

Netherlands 1 March 1995 Arrondissementsrechtbank [District Court] Zwolle

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

Germany 15 February 1995 Landgericht [District Court] Oldenburg

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

Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 3758/94] (Plastic granulate case) [translation available]
 

Germany 9 November 1994 Landgericht [District Court] Oldenburg 45A [translation available]

* United States 9 September 1994 Federal District Court [New York] (Delchi Carrier v. Rotorex)

Germany 23 June 1994 Landgericht [District Court] Düsseldorf [translation available]

Netherlands 16 March 1994 arrondissementsrechtbank [District Court] Zwolle

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

Germany 10 February 1994 Oberlandesgericht [Appellate Court] Düsseldorf [6 U 32/93] [translation available]

* Germany 10 February 1994 Oberlandesgericht [Appellate Court] Düsseldorf [6 U 119/93] [translation available]

Netherlands 4 February 1994 Arrondissementsrechtbank [District Court] 's Hertogenbosch

ICC 1994 International Court of Arbitration, Case 7531 [English text]

ICC 1994 International Court of Arbitration, Case 7565 [English text]
 

Germany 2 July 1993 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]

Germany 14 April 1993 Amtsgericht [Lower Court] Cloppenburg [translation available]

Germany 12 March 1993 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
 

Germany 22 December 1992 Landgericht [District Court] Darmstadt

Germany 9 December 1992 Landgericht [District Court] Frankfurt

Germany 3 July 1992 Landgericht [District Court] Heidelberg [translation available]
 

Germany 14 August 1991 Landgericht [District Court] Baden-Baden [translation available]

Germany 31 January 1991 Amtsgericht [Lower Court] Frankfurt [translation available (excerpt)]
 

Iran/U.S. Claims Tribunal 16 June 1988 (Islamic Republic of Iran v. U.S.)


CASE DIGEST AND ANALYSIS
-   UNCITRAL's case law digest; and
-   An analysis of CISG jurisprudence

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

A/CN.9/SER.C/DIGEST/CISG/45 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 45
Digest of Article 45 case law
-    Meaning and purpose of provision
-    Non-performance of an obligation as prerequisite for remedies
-    Rights under Articles 46-52
-    Claim of damages
-    Cumulation of remedies (45(2))
-    No grace periods (45(3))
-    Further questions
-    Burden of proof ]
ARTICLE 45

     (1) If the seller fails to perform any of his obligations under the contract or this Convention, the buyer may:

     (a) exercise the rights provided in articles 46 to 52;
     (b) claim damages as provided in articles 74 to 77.  

     (2) The buyer is not deprived of any right he may have to claim damages by exercising his right to other remedies.

     (3)  No period of grace may be granted to the seller by a court or arbitral tribunal when the buyer resorts to a remedy for breach of contract.

DIGEST OF ARTICLE 45 CASE LAW

Meaning and purpose of provision

1. This provision gives an overview of the remedies available to the buyer when the seller has committed a breach of contract by non-performance of any of its contractual duties.[1] In its paragraph (1)(a), the provision simply refers to other provisions, namely articles 46-52, which specify the conditions under which the rights provided by those provisions may be exercised. On the other hand, article 45(1)(b) constitutes the basis for the buyer right to claim damages and as such has great practical importance.[2] As far as the amount of damages is concerned, it is to be adjudicated according to articles 74 6. Article 45(2) allows the combination of the right to damages with other remedies. Article 45(3) limits the ability of courts and arbitral tribunals to grant periods of grace which would depreciate the remedial system of the Convention.

2. Article 45 does not enumerate the buyer remedies exhaustively. The Convention provides for further remedies, e.g., in article 71 3 or 84(1). Nevertheless, article 45 is exhaustive in the sense that it preempts the buyer from being able to invoke contractual remedies otherwise available under the applicable domestic law, since the Convention excludes recourse to domestic law where the Convention provides a solution.[3]

Non-performance of an obligation as prerequisite for remedies

3. The availability of any remedy to the buyer presupposes that the seller has failed to perform an obligation deriving either from the contract, from trade usages, from practices between the parties or from the Convention. Even if an additional duty for instance, the duty to extend a bank guaranty in favour of the buyer [4] has been breached the buyer is entitled to the remedies available under the Convention. The extent of the seller failure to perform is irrelevant for the purposes of deciding whether the buyer is entitled to the remedies. Of course, there are some remedies that are available to the buyer only where the breach is fundamental. Generally, the reasons for the seller breach are irrelevant, too, except for the purposes of article 79(5). In particular, article 45(1) does not require that the seller acted with negligence or intent.

4. However if the seller responsibility for a breach depends on further conditions in particular on a timely and orderly notice of the buyer (articles 38, 39, 43) then the additional conditions must be satisfied in order for the buyer to preserve its right to the available remedy.

Rights under Articles 46-52

5. Article 45(1)(a) merely refers to articles 46 52. Although the remedies provided for in these articles all require that a breach of an obligation has occurred they make distinctions as to the kind of breach that occurred. Thus, articles 46(2), 49(1)(a) and 51(2) require a fundamental breach. Article 49(1)(b) applies only in case of non-delivery; for article 50 it is doubtful whether its application extends also to other cases than delivery of non-conforming goods. Article 51 concerns partial non-performance; article 52 deals with early delivery and with excess delivery.

Claim of damages

6. Article 45(1)(b) lays down the substantive conditions for a claim of damages of the buyer.[5] In case of breach of a contractual obligation of any sort by the seller the buyer who has suffered damage as a result of that breach can claim damages. It has been found that the buyer can claim damage which ensued through the delivery of defective goods.[6] A buyer can also claim damages for any incurred loss when the seller declares in advance that it will be unable to deliver on time thereby committing an anticipatory breach of contract in the sense of article 71.[7] However, if the contract or the Convention requires further conditions for the entitlement of the buyer like the notice requirement under articles 38, 39, and 43 these conditions must also be satisfied.[8]

7. In contrast to many national systems the right to claim damages does not depend on any kind of fault, on any breach of express promise or the like but presupposes merely an objective failure of performance.[9] Only under the conditions of article 79 or in case of article 80 the seller is exempted from liability.[10]

8. Articles 74-77 to which article 45(1)(b) refers provide rules for the calculation of the amount of damages but do not form a basis for a claim of damages.[11]

9. The decisions that applied article 45(1)(b) evidence no difficulty with the application of this provision as such.[12] Problems may arise as to the existence and extent of an obligation of the seller or to the amount of damages. But since both aspects are dealt with by other provisions (articles 30-44 and 74-77 respectively), article 45(1)(b) is merely referred to, without being discussed in detail.[13]

Cumulation of remedies (45(2))

10. The right to claim damages is the remedy that is always available to the buyer if a breach of contract has caused the buyer any damage. This right can be cumulated with any other remedy in order to get compensation for any damage which would otherwise remain. The amount of damages, however, depends on which other remedy has been resorted to by the buyer.[14]

No grace periods (45(3))

11. Article 45(3) limits the ability of courts and arbitral tribunals to grant a period of grace and to extend the time for performance when the buyer holds the seller liable for a breach of contract.[15] Although such possibility could be regarded as a matter of procedural law and therefore outside the Convention scope of application, the provision nevertheless explicitly excludes it. The provision addresses only judiciary bodies. The parties are, however, free to extend or otherwise modify the period for performance at any time.

Further questions

12. The place of performance for all rights and claims under article 45 follows the place of performance of the primary obligation to deliver, to hand over documents et cetera which has been breached.[16] Therefore it is important to determine the place of performance of the primary obligation.

13. The Convention does not deal with the statute of limitations.[17] The limitation of the rights and claims granted under article 45 has thus to be determined according to the applicable national law or as far as applicable according to the United Nations Convention on the Limitation Period in the International Sale of Goods of 1974 as amended in 1980.

Burden of proof

14. The question of burden of proof is only relevant for a damages claim under article 45(1)(b) since the other parts of the provision do not grant concrete rights on the basis of which the buyer could sue. For the damages claim the burden is on the buyer who has to prove the breach of an obligation by the seller as well as the damage caused by that breach. According to article 79, the burden then lies on the seller to prove any exempting circumstances.


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 Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 37 (index to the remedies available to the buyer).

2. See, e.g., CLOUT case No. 85 [UNITED STATES Delchi Carrier v. Rotorex Federal District Court [New York] 9 September 1994 available online at <http://cisgw3.law.pace.edu/cases/940909u1.html>] (appellate decision: CLOUT case No. 138 [UNITED STATES Delchi Carrier v. Rotorex, Federal Appellate Court [2nd Circuit] 6 December 1995, available online at <http://cisgw3.law.pace.edu/cases/951206u1.html>]; CLOUT case No. 140 [RUSSIA Arbitration Award case No. 155/1994 of 16 March 1995; available online at <http://cisgw3.law.pace.edu/cases/950316r1.html>]; [EGYPT Arbitration Award Cairo Chamber of Commerce and Industry 3 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951003e1.html>]; CLOUT case No. 166 [GERMANY Hamburg Arbitration Award case of 21 March / 21 June 1996; available online at <http://cisgw3.law.pace.edu/cases/960321g1.html> / <http://cisgw3.law.pace.edu/cases/960621g1.html>] (see full text of the decision); [ICC Court of Arbitration, case No. 8247 of June 1996, available online at <http://cisgw3.law.pace.edu/cases/968247i1.html>]; CLOUT case No. 236 [GERMANY Bundesgerichtshof [Supreme Court] 23 July 1997, available online at <http://cisgw3.law.pace.edu/cases/970723g2.html>]; CLOUT case No. 248 [SWITZERLAND Bundesgericht [Supreme Court] 28 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981028s1.html>] (see full text of the decision).

3. [UNITED STATES Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc. Federal District Court [New York] 10 May 2002, available online at <http://cisgw3.law.pace.edu/cases/020510u1.html>].

4. See [EGYPT Arbitration Award Cairo Chamber of Commerce and Industry 3 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951003e1.html>].

5. A parallel provision is article 61(1)(b), which entitles the seller to claim damages for any breach of contract by the buyer.

6. See for example CLOUT case No. 125 [GERMANY Oberlandesgericht [Appellate Court] Hamm 9 June 1995, available online at <http://cisgw3.law.pace.edu/cases/950609g1.html>] (seller who had delivered and installed defective windows was held liable to compensate buyer costs of replacing the defective windows).

7. [ICC Court of Arbitration, case No. 8786 of January 1997, available online at <http://cisgw3.law.pace.edu/cases/978786i1.html>].

8. See, e.g., [ICC Court of Arbitration, case No. 8247 of June 1996, available online at <http://cisgw3.law.pace.edu/cases/968247i1.html>]; CLOUT case No. 364 [GERMANY Landgericht [District Court] Köln 30 November 1999, available online at <http://cisgw3.law.pace.edu/cases/991130g1.html>]; see also Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 34-36.

9. See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 37.

10. For an instance in which the exemption under article 79 was found not to be applicable, see CLOUT case No. 140 [RUSSIA Arbitration Award case No. 155/1994 of 16 March 1995; available online at <http://cisgw3.law.pace.edu/cases/950316r1.html>].

11. See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 37.

12. See, e.g., the decisions cited above in footnote 2.

13. See as further examples: 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. 83 [GERMANY Oberlandesgericht [Appellate Court] München 2 March 1994, available online at <http://cisgw3.law.pace.edu/cases/940302g1.html>] (see full text of the decision); CLOUT case No. 168 [GERMANY Oberlandesgericht [Appellate Court] Köln 21 May 1996, available online at <http://cisgw3.law.pace.edu/cases/960521g1.html>] (see full text of the decision); [ICC Court of Arbitration, case No. 8247 of June 1996, available online at <http://cisgw3.law.pace.edu/cases/968247i1.html>]; CLOUT case No. 214 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 5 February 1997, available online at <http://cisgw3.law.pace.edu/cases/970205s1.html>]; [SWITZERLAND Tribunal cantonal [Appellate Court] Valais 28 October 1997, available online at <http://cisgw3.law.pace.edu/cases/971028s1.html>]; CLOUT case No. 293 [GERMANY Hamburg Arbitration award 29 December 1998, available online at <http://cisgw3.law.pace.edu/cases/981229g1.html>]; CLOUT case No. 348 [GERMANY Oberlandesgericht [Appellate Court] Hamburg 26 November 1999, available online at <http://cisgw3.law.pace.edu/cases/991126g1.html>].

14. See Digest, articles 74 6.

15. This is possible, e.g., under art. 1184 par. 3 and art. 1244 of the French Code civil and in legal systems which have been influenced by the French civil code.

16. [GERMANY Bundesgerichtshof [Supreme Court] 11 December 1996, available online at <http://cisgw3.law.pace.edu/cases/961211g1.html>]; CLOUT case No. 268 [GERMANY Bundesgerichtshof [Supreme Court] 11 December 1996, available online at <http://cisgw3.law.pace.edu/cases/961211g1.html>]; [NETHERLANDS Gerechtshof [Appellate Court] 's-Hertogenbosch 9 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951009n1.html>]; CLOUT case No. 244 [FRANCE Cour d'appel [Appellate Court] Paris 4 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980304f1.html>]; CLOUT case No. 245 [FRANCE Cour d'appel [Appellate Court] Paris 18 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980318f1.html>].

17. See Digest, article 1, n. 13.


ANALYSIS OF CISG CASE LAW

Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*]

excerpt from

The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence

Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
Virginia Maurer and Marisa Pagnattaro

[...]

C. Remedies

The remedies for breach of contract by the seller are addressed in CISG Articles 45 through 52. Article 45 outlines the basic remedies of the buyer for the seller's breach.[618] Article 45's remedial framework does not distinguish between material and non-material breaches.[619] Therefore, Article 45 must be read in conjunction with the notion of a fundamental breach described in Article 25.[620] Enforcing its rights to substituted goods, [page 401] extension of time, and avoidance found in Articles 46-52 does not prevent the buyer from subsequently seeking damages under Articles 74-76.[621] To this end, the following sections will review the range of buyer remedies outlined in Article 45.[622]

[...]


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.

[...]

618. See, e.g., OLG Dusseldorf 17 U 82/92, Jan. 8, 1998, supra note 345; AG Frankfurt 32 C 1074/90-41, Jan. 13, 1991 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/910131g1.html> [English translation by Stefan Kuhm, translation edited by Camilla Baasch Andersen]; HG Zürich, HG 95 0347 Feb. 5, 1997 (Switz.), available at <http://cisgw3.law.pace.edu/cases/970205s1.html>; Schiedsgericht der Handelskammer Hamberg [Arbitration Tribunal], Mar. 21, 1996 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/960321g1.html> [English translation by ICCA]; OLG Zweibrucken 2 U 27/01, Jul. 26, 2002, supra note 567; SA P. v. AWS, R.G. no. 982/01, Jan. 15, 2002 (Belg.), available at <http://cisgw3.law.pace.edu/cases/020115b1.html> [English translation by Charles Sant 'Elia, translation edited by Thalia Kruger]; OGH 10 OB 518/95, Feb. 6, 1996, supra note 134.

619. See Enderlein & Maskow, supra note 20, at 177.

620. See generally, Robert Koch, The Concept of Fundamental Breach of Contract under the United Nations Convention for the International Sale of Goods, in, Review of the Convention on Contracts for the International Sale of Goods, 1999, at 177-354, available at <http://cisgw3.law.pace.edu/cisg/biblio/koch.html>.

621. CISG, supra note 4, at art.45.

622. Id. at art. 45(1); see also OLG Koln 27 U 58/96, Jun. 14, 1994, supra note 543. This German case provided an opportunity for interpretation of Article 45(1). A Dutch seller delivered tannery machines to a German buyer, but he retrieved them to make adjustments. The seller agreed to return the machines at a certain time. When he failed to do so, the buyer was forced to contract with a third-party for the tanning of hides. The seller's suit for the price of the machines was met with a counterclaim against the seller for the expense of covering with the third party contract. The Seller argued that the failure to perform a secondary obligation collateral to the contract did not give rise to a claim for damages under the CISG Article 45(1).

[...]

Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence


ANNOTATED COMPARATIVES

Comparison of CISG Article 45/61 remedial provisions
and counterpart PECL Articles 8:101 and 8:102

LIU, Chengwei [*]
May 2004

a. Remedies available to a party are a key consideration for that party, particularly if the contract is breached. However, issues relating to remedial provisions are difficult and central substantive issues have been the focus of a large part of the discussion and deliberation surrounding application of commercial law.[1] At the same time, no aspect of a system of contract law is more revealing of its underlying assumptions than is the law that prescribes the relief available for breach of contract.[2] It is where a system's solutions to a large proportion of real world disputes in commercial transactions are to be found. In practical terms, it may be said that the remedial scheme is the substantive heart of a particular system of contract law, which will be a powerful support for the harmonization of actual outcomes and improve the reliability of the often unpredictable results of disputes.[3]

b. Generally speaking, the remedies available to an aggrieved party for a breach of contract can in all significant legal systems be classified into three basic categories.

-   Firstly, an aggrieved party may be able to claim specific performance. As such, specific performance hardly gives the aggrieved party exactly the performance to which he was entitled to, unless it is supplemented with some kind of an additional remedy, such as monetary relief.
- Secondly, the aggrieved party may have the right to require substitutionary relief. A relevant relief here is compensation, and almost always a monetary compensation for the loss that the party has suffered for performance not received.
- Finally, the aggrieved party may have the right to put an end to the contractual relationship. In such a case, the third remedy can also be seen in that the aggrieved party is put into a position where he would have been had the contract never been made.

The three categories are not exclusive in that monetary compensation will also very often be available together with a claim for specific performance and an act to put an end to the contract. Furthermore, the above mentioned basic categories of remedies also appear in different variations, such as a right to price reduction and suspension of performance.[4]

a. The CISG follows the above mentioned three-category system. The remedies available for a breach of contract are summarized under the Convention in Arts. 45 and 61. These Articles set forth reciprocal remedies for the buyer and seller for breach of contract. According to Art. 45(1) which specifies remedies for breach of contract by the seller, in case of a seller's non-compliance with a contract or CISG obligation, in principal the following five legal remedies (defects rights) are at the buyer's disposal:

-   Right to performance (Art. 46(1));
-   Right to cure (Art. 48);
-   Right to avoid the contract because of a fundamental breach of contract (Art. 49(1)(a));
-   Right of price reduction (Art. 50, sentence 1);
-   Right to damages (Art. 45(1)(b) in connection with Arts. 74-77).[5]

Thus, Art. 45 offers an overview of the remedies available to the buyer in the event of a breach -- specific performance, avoidance, compensatory damages, and price reduction. In a parallel manner, the seller's remedies are enumerated at Art. 61(1) when the buyer is in default. Although the remedies available to the seller under Art. 61(1) are comparable to those available to the buyer under Art. 45(1), they are less complicated. This is so because the buyer has only two principal obligations, to pay the price and to take delivery of the goods, whereas the seller's obligations are more complex. Therefore, the seller has no remedies comparable to the following which are available to the buyer: reduction of the price because of non-conformity of the goods (Art. 50), right to partially exercise his remedies in the case of partial delivery of the goods (Art. 51), and right to refuse to take delivery in case of delivery before the date fixed or of an excess quantity of goods (Art. 52).[6]

d. Under the Convention the notion "breach of contract" covers all failures of a party to perform any of his obligations.[7] The notion of breach of contract under the CISG comprises any non-fulfilment of contractual obligations. Those obligations may have their origin not only in the contract between parties, but also in the Convention, established practices and usages (Art. 9). This refers to non-fulfilment of obligations by the seller and to non-performance of obligations by the buyer. The rights of the other party are provided for in parallel: compare Art. 45 et seq. with Art. 61 et seq. There is no distinction between breaches of main obligations or breaches of auxiliary obligations, rather, a distinction is made between fundamental breaches of contract and other breaches of contract (Art. 25). A breach of contract constitutes an objective fact; no matter whether the party who commits the breach is at fault or not.[8] In other words, by contrast with the ULIS approach where each individual type of breach was followed by the proper remedy, the CISG uses the uniform term of breach of contract, which under the CISG comprises any non-fulfilment of contractual obligations whether the party who commits the breach is at fault or not.

e. This is true of the PECL, which also uses the unitary concept of non-performance (for the sake of simplicity, the term non-performance is used here equally to the CISG term breach) both for the excused and the non-excused non-performance. It is noted that non-performance as used in the PECL covers failure to perform an obligation under the contract in any way, whether by a complete failure to do anything, late performance or defective performance. Furthermore, it covers both excused and non-excused non-performance.[9] On the other hand, according to PECL Art. 8:101, the remedies available for non-performance depend upon whether the non-performance is not excused, is excused due to an impediment under Art. 8:108 or results from behavior of the other party. A non-performance which is not excused may give the aggrieved party the right to claim performance -- recovery of money due (Art. 9:101) or specific performance (Art. 9:102) -- to claim damages and interest (Arts. 9:501 through 9:510), to withhold its own performance (Art. 9:201), to terminate the contract (Arts. 9:301 through 9:309) and to reduce its own performance (Art. 9:401). If a party violates a duty to receive or accept performance, the other party may also make use of the remedies just mentioned.[10] Thus, the PECL also generally corresponds with the major legal systems in providing the above mentioned three-category remedial system.

f. However, under certain conditions the breaching or non-performing party may be exempted from certain consequences of a failure to perform his obligations while the other remedies remain unaffected and are still available to the aggrieved party. Textually, the excuse granted in Art. 79 CISG exempts only the breaching party from liability for damages. All the other remedies of the other parties are not affected by this excuse, i.e., demand for performance, reduction of the price or avoidance of the contract.[11] The Secretariat Commentary clearly states: "Even if the impediment is of such a nature as to render impossible any further performance, the other party retains the right to require that performance under article 42 or 58 [draft counterpart of CISG article 46 or 62]."[12] In other words, even in case of impossibility, the other party could ask for specific performance -- a result that is hardly convincing.[13] By contrast, PECL Art. 8:101(2) specifies that where there is an impediment which fulfils the conditions set by PECL Art. 8:108, the aggrieved party may resort to any of the remedies set out in PECL Chapter 9 except claiming performance and damages. Any form of specific performance (Arts. 9:101 and 9:102) is by definition impossible.[14] However, this rigid solution might lead to some unreasonable situations particularly in case of temporary impediments. Although it seems to amount to an obvious contradiction because it is supposed that performance is not possible, it has become clear at least that the right to performance continues to exist in the event of temporary grounds for exemption and that auxiliary claims that are related to it, like interest, continue to accumulate.[15]

g. Despite the exempted remedies difference, there is agreement between the CISG and the PECL that the fact that the non-performance is caused by the creditor's act or omission has an effect to that extent on the remedies open to the obligee. This is expressed by either CISG Art. 80 or PECL Art. 8:101(3). It would be contrary to good faith and fairness for the creditor to have a remedy when it is responsible for the non-performance. In such a case, the most obvious situation is the so-called mora creditoris, where the creditor directly prevents performance (e.g., access refused to a building site). But there are other cases where the creditor's behavior has an influence on the breach and its consequences. In other cases where there is also a non-performance by the debtor, the creditor may exercise the remedies for non-performance to a limited extent. When the loss is caused both by the debtor -- which has not performed -- and the creditor -- which has partially caused the breach by its own behavior -- the creditor should not have the whole range of remedies. The creditor's contribution to the non-performance has an effect on the remedy "to the extent that (the other party's) failure to perform (is) caused by its own act or omission." In other words, this effect may be total, that is to say that the creditor cannot exercise any remedy, or partial. The exact consequence of the creditor's behavior will be examined with each remedy.[16] In any event, a non-performance which is due solely to the other party's wrongful prevention does not give the latter any remedy. In most of the systems, the party who has prevented performance will himself be the non-performing party against whom the remedies may be exercised.[17]

h. Among other things, it is to be noted that CISG Art. 45(2)/61(2) provides that a party who resorts to any remedy available to him under the contract or this Convention is not thereby deprived of the right to claim any damages which he may have incurred. Thus, the cumulation of damage claims with other remedies is explicitly contemplated. In other words, either Art. 45(2) or Art. 61(2) rejects the notion that the buyer/seller is forced to elect between claiming damages and exercising the other remedies conferred on him under the Convention, viz., specific performance and avoidance. The common law position is the same and, in particular, it is basic law that a buyer who rejects non-conforming goods or cancels the contract on some other ground is not thereby deprived of his entitlement to damages.[18] Thus, the right to claim damages exists either as an exclusive right or as a supplementary right besides the right to require performance or payment, to reduce the price or to avoid the contract. The rule in CISG Art. 45(2)/61(2) is followed and furthered in a separate Art. 8:102 under the PECL. As is stated: "Remedies which are not incompatible may be cumulated." A party which is entitled to withhold its performance and to terminate the contract may first withhold and then terminate. A party which pursues a remedy other than damages is not precluded from claiming damages. A party which terminates the contract may, for instance, also claim damages.[19]

i. It is a truism that a party cannot at the same time pursue two or more remedies which are incompatible with each other. Thus a party cannot at the same time claim specific performance of the contract and terminate it. If a party has received a non-conforming tender, it cannot exercise its right to reduce its own performance and at the same time terminate the contract. A non-performance which causes the aggrieved party to suffer a loss may give it a right to be compensated for that loss, but it cannot be awarded more than the "réparation int égrale". Thus, if it has accepted a non-conforming tender, the value of which is less than that of a conforming tender, and if it has claimed or obtained a reduction of the price corresponding to the decrease in value, it cannot also claim compensation for that same decrease in value as damages. When two remedies are incompatible with each other, the aggrieved party will often have to choose between them. However, PECL Art. 8:102 does not preclude an aggrieved party which has elected one remedy from shifting to another later, even though the later remedy is incompatible with the first remedy elected. If, after having claimed specific performance, it learns that the defaulting party has not performed or is not likely to do so within a reasonable time, the aggrieved party may terminate the contract. On the other hand, an election of a remedy is often definite and will preclude later elections of incompatible remedies. A party which has terminated the contract cannot later claim specific performance, because by giving notice of termination the aggrieved party may have caused the other party to act in reliance of the termination. If a defaulting party has adapted itself to a claim for specific performance and taken measures to perform within a reasonable time, the aggrieved party cannot change its position and terminate the contract. This applies when the defaulting party has received a notice fixing an additional time for performance. The rule is in accordance with the widely accepted principle that when a party has made a declaration of intention which has caused the other party to act in reliance of the declaration the party making it will not be permitted to act inconsistently with it. This follows from the general principle of fair dealing.[20]

j. However, it should be mentioned here that not only the obligations of the parties but also the remedies may be changed by them in their contract. The provisions in either CISG Art. 45/61 or PECL Arts. 8:101 and 8:102 are premised on the assumption that the parties have not chosen some other remedy or remedies within their contractual relationship. Any such remedies chosen by the parties would always prevail. Contractual freedom is thus the rule, also reflecting the starting point for various legal systems in general. Moreover, it is important to note that the remedies available for a breach of contract will be subject to, not only the express agreement made between the parties, but also any practice or usage which can be regarded as an implied part of the agreement. In case of a breach of contract it is, therefore, necessary to first look into the contract executed between the parties or any practice or usage of relevance.[21] Only if the agreement and any relevant practice or usage is silent, the provisions of the applicable rules - CISG, UNIDROIT Principles or PECL or any other laws -- concerning remedies will be at hand. However, it should also be noted that, in cases of such remedies chosen by the parties or implied by relevant practice or usage, potential uncertainty may arise depending on the types of remedies chosen by the parties. This becomes a clearer problem in the context of the CISG, Art. 4 of which sets forth the scope of its application and expressly excludes "the validity of the contract or of any of its provisions or of any usage." Moreover, although the CISG does give the parties the freedom to choose their own remedies, it is not necessarily clear that these remedies will be enforced the same way in every country, if at all.[22]

k. Finally, it is to be noted that, under the Convention, Art. 45(3)/61(3) each provides that if the entitled party resorts to a remedy for breach of contract, no court or arbitral tribunal may delay the exercise of that remedy by granting a period of grace either before, at the same time as, or after the buyer has resorted to the remedy. Such provision seems desirable in international trade.[23] Thus, domestic laws that permit the courts or arbitral tribunals to grant a seller in breach extra time to perform are expressly excluded. This is mainly because the Convention specifically rejects the idea that in a commercial contract for the international sale of goods the party may, as a general rule, avoid the contract merely because the contract date for performance has passed and the obligated party has not as yet performed its obligations. In these circumstances, as a general rule, the other party may do so if, and only if, the failure to perform on the contract date causes him substantial detriment [results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract] and the party in default foresaw or had reason to foresee such a result. As a result of this rule in the Convention, there was no reason to allow the buyer/seller to apply to a court for a delay of grace, as is permitted in some legal systems. Moreover, the procedure of applying to a court for a delay of grace is particularly inappropriate in the context of international commerce, especially since this would expose the parties to the broad discretion of a judge who would usually be of the same nationality as one of the parties.[24] Nonetheless, if the parties have expressly referred to an arbitral procedure that allows such feature, the arbitration rule should prevail over Art. 45 or 61, following the principle of Art. 6. But, the mere fact that the parties are litigating before a court whose procedure allows some "délai de grace" should not be regarded as an agreement to have such a rule apply.[25]


FOOTNOTES

* LL.M. of Renmin University of China; Attorney-at-Law on Global Law Office; 37th Floor, Jing Guang Center, Hu Jia Lou, Chaoyang District; Beijing 100020 China; <Lexway@mail.com>.

1. "Among the provisions in the Draft Convention on Contracts for the International Sale of Goods which were the most difficult to formulate and are among the most likely to generate controversy are those dealing with the remedies of buyer and seller for breach of contract by the other party. Many aspects of the law of sales reflect merchant practice, and to the extent that this practice is standardized in international sales transactions, the problems in formulating the text of the Draft Convention were reduced. However the provisions in respect of breach of contract do not reflect merchant practice. They reflect the efforts of lawyers from many legal systems to reconcile their views on the appropriate actions to be taken by the parties and by a tribunal in case of breach. The result has been a series of provisions which … are in general harmony with one another but which will often be unfamiliar to lawyers from any given legal system." See Eric E. Bergsten & Anthony J. Miller in "The Remedy of Reduction of Price": 27 American Journal of Comparative Law (1979) 255-277 at 255. Available online at <http://cisgw3.law.pace.edu/cisg/biblio/bergsten.html>. This is a commentary on the remedy of reduction of price under Art. 46 of the 1978 Draft Convention, from which the basic concept of price reduction under CISG Art. 50 remains unchanged but nevertheless differs from the latter in several respects. For comparison of Art. 46 of the 1978 Draft with CISG Art. 50, see the match-up, available online at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-50.html>.

2. See E. Allan Farnsworth in "Damages and Specific Relief": 27 American Journal of Comparative Law (1979)247-253. Available online at <http://cisgw3.law.pace.edu/cisg/biblio/farns.html>.

3. For example, when commenting on Chapter 7 of the UNIDROIT Principles, Arthur Rosett states that: "In practical terms, it is the substantive heart of the whole Principles. It is where the Principles' solutions to a large proportion of real world disputes in commercial transactions are to be found. It is here that the remedial consequences of serious failures of performance are defined: orders of performance, damages, contract termination by rescission, and restitution. These are difficult and central substantive issues. Indeed, Chapter 7 is probably the most imaginative synthesis to emerge in this generation of some of the most difficult practical questions of contract law. It will be a powerful support for the harmonization of actual outcomes and improve the reliability of the often unpredictable results of disputes. The substantive content of Chapter 7 is important as an illustration of the creative power of the UNIDROIT Principles." See Arthur Rosett in "UNIDROIT Principles and Harmonization of International Commercial Law: Focus on Chapter Seven". Available online at <http://www.unidroit.org/english/publications/review/articles/1997-3.htm>.

4. See Jussi Koskinen in "CISG, Specific Performance and Finnish Law": Publication of the Faculty of Law of the University of Turku, Private law publication series B:47 (1999). Available online at <http://cisgw3.law.pace.edu/cisg/biblio/koskinen1.html>.

5. See the decision by the Swiss Commercial Court (Handelsgericht) Aargau [OR.2001.00029], 5 November 2002, translated by Martin F. Koehler. Available online at <http://cisgw3.law.pace.edu/cases/021105s1.html>.

6. See Secretariat Commentary on Art. 57 of the 1978 Draft [draft counterpart of CISG Art. 61], Comment 2. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-61.html>.

7. See Fritz Enderlein in "Rights and Obligations of the Seller under the UN Convention on Contracts for the International Sale of Goods": Petar Sarcevic & Paul Volken eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1996), p. 188. Available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein1.html>.

8. See Fritz Enderlein, Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods, Oceana Publication (1992), p. 174. Available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>.

9. See Comment and Notes to the PECL: Art. 8:101. Note 1. Available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp45.html>.

10. Ibid., Comment B.

11. See Secretariat Commentary on Art. 65 of the 1978 Draft [draft counterpart of CISG Art. 79], Comment 8. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-79.html>.

12. Ibid., Comment 9.

13. It could be argued that paragraph (5) of CISG Art. 79 entails unrealistic results. It would allow an action for specific performance in a case where the goods are destroyed and thus, the performance is physically impossible. See Denis Tallon, in Commentary on the International Sales Law - The 1980 Vienna Sales Convention, C.M. Bianca & M.J. Bonnell eds., Giuffrè: Milan (1987), p. 588.

14. See Comment and Notes to the PECL: Art. 8:108. Comment D. Available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp79.html>.

15. In this respect, the UNIDROIT Principles have found a flexible answer to the question of what is to become of the right to performance. Unlike either the CISG or the PECL which specifies the remedies, though differing from each other slightly, which the aggrieved party cannot resort to in case of exemption, the UNIDROIT Principles adhere to the principle that the excuse is general, but in Art. 7.1.7(4) they make important exceptions in determining certain claims which are not affected by force majeure, namely the right to terminate the contract or withhold delivery or request interest on money due. The Official Comment makes some of its deliberations clear: "In some cases the impediment will prevent any performance at all but in many others it will simply delay performance and the effect of the article will be to give extra time for performance. It should be noted that in this event the extra time may be greater (or less) than the length of the interruption because the crucial question will be what is the effect of the interruption on the progress of the contract." See Comment 2 on Art. 7.1.7 UNIDROIT Principles of International Commercial Contracts.)

16. Supra. fn. 10.

17. Supra. fn. 9, Note 3.

18. See Jacob S. Ziegel in "Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods": Comment 2. Available online at <http://cisgw3.law.pace.edu/cisg/text/ziegel45.html>.

19. See Comment and Notes to the PECL: Art. 8:102. Comment A. Available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp45.html>.

20. Ibid., Comments B, C.

21. Supra. fn. 4.

22. One such example would be if the parties operating under the CISG specifically agreed that the only available remedy was specific performance. Under English law, e.g., specific performance is a discretionary remedy. While it is unlikely that the parties would agree to such a remedy, there would be no conflict between the agreement for specific performance and Art. 46 of the CISG. On the other hand, an English court applying general legal principles would be unlikely to grant specific performance where the court did not consider that the situation merited the exercise of discretion in favour of specific performance. A more likely issue is the question of the quantum of damages agreed by the parties. Under the CISG, there is no limit on the amount of compensation that may be agreed to be paid upon breach of a contract. In contrast, English common law draws a distinction between genuine pre-estimates of damage (referred to as "liquidated damages") versus clauses viewed as punitive or penal. Penalty clauses are considered invalid and will not be enforced by an English court. So while the parties are generally free to choose their own remedies, English law will not enforce all of the remedies, at least not to the same degree. (See Peter A. Piliounis in "The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?" (1999). Available online at <http://cisgw3.law.pace.edu/cisg/biblio/piliounis.html>.)

23. See Secretariat Commentary on Art. 41 of the 1978 Draft [draft counterpart of CISG Art. 45], Comment 6. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-45.html>; See also Secretariat Commentary on Art. 57 of the 1978 Draft [draft counterpart of CISG Art. 61], Comment 6. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-61.html>.

24. See Secretariat Commentary on Art. 43 of the 1978 Draft [draft counterpart of CISG Art. 47], Comments 4, 5. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-47.html>; See also Secretariat Commentary on Art. 59 of the 1978 Draft [draft counterpart of CISG Art. 63], Comments 4, 5. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-63.html>.

25. See Bernard Audit in "The Vienna Sales Convention and the Lex Mercatoria": Lex Mercatoria and Arbitration, rev. ed., T. Carboneau ed.; Juris Publishing (1998) p. 285 n.47.


Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
Go to Database Directory || Go to Information on other available case data
Comments/Contributions