2008 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods
Digest of Article 63 case law [reproduced with permission of UNCITRAL] [*]
(1) The seller may fix an additional period of time of reasonable length for
performance by the buyer of his obligations.
(2) Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort to any remedy for breach of contract. However, the seller is not deprived thereby of any right he may have to claim damages for delay in performance.
1. In permitting the seller to fix an additional period of time for the buyer to perform, article 63 grants the seller a right equivalent to that granted to the buyer in article 47: the two provisions are conceived in the same fashion and worded in comparable terms. The principal purpose of article 63, parallel to that of article 47, is to clarify the situation that arises when a buyer has not performed one of his fundamental obligations -- to pay the price or to take delivery of the good -- in the required time: if a seller facing this situation fixes an additional period of time, pursuant to article 63, for the buyer to perform, and the additional period elapses without result, the seller is entitled to declare the contract avoided without having to prove that the buyer's delay in performance is a fundamental breach of contract (article 64(1)(b)). Thus article 63 is especially useful when it is unclear whether the buyer's delay has become a fundamental breach.
2. Article 63(1) requires that the additional period of time fixed by the seller be of reasonable length. Decisions addressing what constitutes a reasonable length of time are rare. Article 63(2) specifies that, during the additional period that a seller has fixed he may not resort to remedies for the buyer's breach (although he retains the right to claim damages resulting from the buyer's delay); this limitation does not apply, however, if the buyer declares that he will not perform within the additional period.
Illustrations of recourse to an additional period of time
3. Sellers have in fact invoked article 63 and fixed an additional period of time for the buyer to perform, thereby giving tribunals the opportunity to apply the provision. Examples in case law include granting an additional period to pay the price, to secure issuance of a letter of credit, and to take delivery of the goods.
* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.UNCITRAL.org/pdf/english/clout/CISG_second_edition.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:
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1. [FRANCE Cour d'appel, Grenoble 4 February 1999 (Orange juice case)].
2. ITALY Corte di Appello di Milano 11 December 1998 (Printer device case) (Bielloni Castello S.p.A. v. EGO S.A.)].
3. [AUSTRIA Oberster Gerichtshof 28 April 2000 (Jewelry case)]
4. [SWITZERLAND Bezirksgericht der Sanne 20 February 1997 (Spirits case)]; [ICC International Court of Arbitration, Award 7585 of 1992 (Foamed board machinery case)]; [AUSTRALIA Supreme Court of Queensland 17 November 2000 (Scrap steel case)]. In the latter case, however, the fixing of an additional period of time by the seller was inconsequential, since the court found that a fundamental breach of contract had occurred. For a case involving the granting of an additional period of time for the opening of a letter of credit required under a distribution agreement, see [UNITED STATES Federal District Court, Southern District of New York, 21 July 1997 (Helen Kaminski v. Marketing Australian Products)].
5. [GERMANY Landgericht Aachen 14 May 1993 (Electronic hearing aid case)].