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Reproduced with permission from 23 International Lawyer (1989) 443-483

excerpt from

Reconciliation of Legal Traditions in the U.N. Convention on Contracts for the International Sale of Goods

Alejandro M. Garro [*]


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Specific Performance

The disparity between civil law and common law traditional perceptions to the law of sales was particularly evident in the field of remedies.[65] Two remedies uncharacteristic of the common law found their place in the Convention with little opposition from common law delegates. First, the Convention allows either buyer or seller, on delay of the other, to "fix an additional period of time of reasonable length of performance of the [other] of his obligations.[66] Failure of the other to meet such a reasonable deadline is then grounds for termination.[67] Second, the Convention allows the buyer unilaterally to reduce the price of non-conforming goods to the degree of the deficiency.[68]

The Convention's provisions more startling to the common law lawyer's traditional perception of remedies are those concerning specific performance. Article 46 confers on the buyer the right to demand specific performance of the seller's obligations to deliver the goods and the documents and transfer ownership over the goods. Article 62 entitles the seller to require the buyer to pay the price and take delivery or perform his other obligations. The right to demand specific performance is not conditional on the inadequacy of damages. Thus, in theory, the Convention assumes that specific performance will be more readily available than substitutional relief.[69] This is consistent with the traditional preference of civil law systems for specific relief [70] and with the economic needs of countries with planned economies that lack markets for substitute transactions.[71] For largely historical reasons, the right to obtain specific performance is uncongenial to common law lawyers,[72] who sought a compromise solution satisfactory to their legal tradition and alleged economic needs.[73]

By way of compromise, article 28 provides that neither the buyer nor the seller are entitled to specific performance unless the court would do so under the law of the forum in respect of similar contracts of sale not governed by the Convention. This provision ensures that common law courts will not have to abandon their traditional position at the cost of uniformity, although it would not, of course, protect a party from a common law country against the granting of specific performance by a court in a civil law country. Because the draftsmen of the Convention were unable to agree on a uniform substantive rule, an action for specific performance will depend on the vagaries of the forum's law.[74] This was a clear compromise impairing the unification of law,[75] although not recognizable as a compromise by a simple reading of the general provisions on the seller's and buyer's remedies.

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FOOTNOTES

* Alejandro M. Garro, Lecturer in Law, Columbia University. This paper was submitted to the 81st Annual Meeting of the American Association of Law Libraries, June 26-29, 1988.

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65. See generally Gonzalez, supra note 43, at 79: Stern, A Practitioner's Guide to the United Nations Convention for the International Sale of Goods, 16 N.Y.U. J. Int'l L. & Pol'y 81 (1983).

66. Convention, supra note 3, art. 47 (buyer may fix an additional period of time of reasonable length for the seller to deliver) and art. 63 (seller may extend the time for the buyer to pay the price or take delivery).

67. Convention, supra note 3, art. 49(1)(b) (for buyer); art. 64(1)(b)(for seller). If buyer or seller fails to comply within this additional period, the other may withdraw from the contract without regard to whether the breach is fundamental. Without such an extra time, a party may withdraw only for "fundamental breach" a concept which is defined in art. 25 of the Convention.

68. Convention, supra note 3, art. 50. Under Roman law a seller was only liable for damages if he was guilty of fault or fraud, which could not be imputed to the seller for delivering nonconforming goods. To prevent the seller's unjust enrichment, Roman law developed the action for the reduction of price (quanti minoris). Under similar circumstances, the buyer's remedies at common law are limited to damages, See generally Bergsten & Miller, The Remedy of Reduction of Price, 27 Am. J. Comp. L. 225, 272 275 (1979).

69. Arts. 46 and 62 of the Convention, supra note 3, expressly limit the right to specific performance to cases of fundamental breach, or where the aggrieved party has resorted to an inconsistent alternative remedy (e.g., if the buyer has "reduced the price" under art. 50 or has declared the contract avoided under art. 49). See Kastely, The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention, 63 Wash. L. Rev. 607, at 617-24 (1988) [hereinafter Kastely, The Right to Require Performance] (suggesting that art. 7 implicitly requires that the right to performance be exercised in good faith); Ullen, The Efficiency of Specific Performance: Toward a Unified Theory of Contract Remedies, 83 Mich. L. Rev. 341, 390-93 (1984) [hereinafter Ullen, The Efficiency of Specific Performance] (noting that art. 77, interpreted as a general duty to mitigate damages, imposes an additional limitation on the right to performance).

70. See generally Dawson, Specific Performance in France and Germany, 57 Mich. L. Rev. 495 (1959); Szladits, The Concept of Specific Performance in Civil Law, 4 Am. J. Comp. L. 208, 233 (1955); Treitel, Specific Performance in the Sale of Goods, 1966 Bus. L. 211. It should be noted, however, that the rules on specific performance differ widely even among civil law jurisdictions. See generally Treitel, Remedies for Breach of Contract (Courses of Action Open to a Party Aggrieved), in VII International Encyclopedia of Comparative Law ch. 16 12 (1976); G. H. Treitel, Remedies For Breach of Contract 43-75 (1988).

71. See generally I. Szasz, The CMEA Uniform Law for International Sales 167 (2d ed. 1985); Comment, The Convention on Contracts for the International Sale of Goods and the General Conditions for the Sale of Goods, 12 Ga. J. Int'l & Comp. L. 451, 457 (1982).

72. See generally E. Farnsworth, Contracts 829-30 (1982); Farnsworth, Damages and Specific Relief, 27 Amer. J. Comp. L. 247, 250-51 (1979). Although the contemporary advantage of substitutional relief has been placed on "fundamental notions of economics" rather than history, not all economists agree that specific performance involves the inefficient use of economic resources. See Schwartz, The Case for Specific Performance, 89 Yale L.J. 271 (1979); Ullen, The Efficiency of Specific Performance, supra note 69, at 341; see also Kastely, The Right to Require Performance, supra note 69, at 629 ("[T]he most persuasive conclusion is that specific performance may be the most efficient remedy, even where alternative goods are available to the buyer."). But see Ziegel, The Remedial Provisions in the Vienna Sales Convention: Some Common Law Perspectives, in International Sales, supra note 13, 9.03, at 9-10 ("To a common law mind it may seem puzzling that civilians are still so attached to a remedy that is inefficient economically, at any rate in those cases where damages would adequately compensate the buyer").

73. Farnsworth, Damages and Specific Relief, 27 Am. J. Comp. L. 247, 249 (1979) (characterizing the language of art. 26 of the 1978 UNCITRAL Draft as a "sham compromise" and asking for the adoption of art. VII of ULIS, which was later carried forward in art. 28 of the Convention).

74. Professor Honnold notes that the availability of specific performance is mostly academic in international sales transactions, since practical businessmen are unlikely to spend time and money in expensive transnational litigation to enforce international sales contracts. See J. Honnold, Uniform Law, supra note 13, at 24; see also Winship, Export-Import Sales, supra note 9, at 209; Reinhart, Development of a Law for the International Sale of Goods, 14 Cumb. L. Rev. 89, 98-99 (1984). However, the uncertainty regarding the right to specific performance caused by art. 28 may result in unfairness in those cases where the aggrieved party would prefer full performance. See Kastely, Unification and Community: A Rhetorical Analysis of the United Nations Sales Convention, 8 Nw. J. Int'l L. & Bus. 574, 615 (1988) [hereinafter Kastely, Unification and Community] ("[S]ince Article 28 makes the availability of specific performance dependent on the law of the forum, parties will be encouraged to forum-shop for a national court system that will or will not grant specific performance."); Kastely, The Right to Require Performance, supra note 69, at 627 ("Because parties at the time of a breach will not know whether the right to performance will eventually be enforced, it will be very difficult for them to evaluate and to settle informally their mutual rights and obligations.").

75. See Kastely, The Right to Require Performance, supra note 69, 627-37 (arguing that none of the reasons given by the delegates from the United States and the United Kingdom in favor of allowing their courts to apply domestic law regarding the remedy of specific performance justifies the abandonment of the Convention's goal of uniformity): Kastely, Unification and Community, supra note 74, at 615 (pointing out that the compromise forced by some common law countries "tends to portray the member states as petty, nationalistic, and capable of wielding inequitable influence."); see also Drobnig, General Principles of Contract Law, in Dubrovnik Lectures, supra note 13, at 305, 319-22.

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Pace Law School Institute of International Commercial Law - Last updated August 16, 1999
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