UNCITRAL Digest of Article 63 case law

DIGEST OF ARTICLE 63 CASE LAW

Usefulness of granting an additional period of time

1. In granting the seller the right to fix an additional period of time, article 63 is in fact giving him the same right as that granted to the buyer under article 47: the two provisions are conceived in the same fashion and worded in comparable terms. The principal purpose of article 63, as of article 47, is to clarify the situation that arises when the buyer does not perform its obligation to pay the price or take delivery of the goods in time: if the additional period of time elapses without result, the seller is entitled to declare the contract avoided even if the buyer has not been responsible for a fundamental breach of contract (art. 64(1)(b)). Article 63 is especially useful in cases where it is doubtful whether the buyer's delay in performance constitutes a fundamental breach of contract.[1]

2. The additional period of time has to be of reasonable length. Decisions about what a reasonable length is are rare.[2]

Illustrations of recourse to an additional period of time

3. In practice sellers tend to grant an additional period of time, thereby giving judges the opportunity to apply article 63. Illustrations in case law are connected with the grant of an additional period to pay the price,[3] to secure the issuance of a letter of credit [4] and to take delivery of the goods.[5]

FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

1. CLOUT case No. 243 [FRANCE Cour d'appel [Appellate Court] Grenoble 4 February 1999, available online at <http://cisgw3.law.pace.edu/cases/990204f1.html>].

2. [ITALY Corte di Appello [Appellate Court] Milano 11 December 1998, available online at <http://cisgw3.law.pace.edu/cases/981211i3.html>].

3. [AUSTRIA Oberster Gerichtshof [Supreme Court] 28 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000428a3.html>].

4. CLOUT case No. 261 [SWITZERLAND Berzirksgericht [District Court] Sanne 20 February 1997, available online at <http://cisgw3.law.pace.edu/cases/970220s1.html>]; CLOUT case No. 301 [ICC International Court of Arbitration, case No. 7585 of 1992, available online at <http://cisgw3.law.pace.edu/cases/927585i1.html>]; [AUSTRALIA Downs Investments v. Perwaja Steel [Supreme Court] Queensland 17 November 2000, available online at <http://cisgw3.law.pace.edu/cases/001117a2.html>]. However, in this case the court did not attach any particular consequences to the additional period of time fixed by the buyer since it found that a fundamental breach of contract had occurred; in this context, compare the granting of an additional period of time for the opening of a letter of credit required under a distribution agreement, CLOUT case No. 187 [UNITED STATES Helen Kaminski v. Marketing Australian Products Federal District Court [New York] 21 July 1997, available online at <http://cisgw3.law.pace.edu/cases/970721u1.html>].

5. CLOUT case No. 47 [GERMANY Landgericht [District Court] Aachen 14 May 1993; available at <http://cisgw3.law.pace.edu/cases/930514g1.html>].