CISG Article 71 ULIS Article 73
1. A party may suspend the 1. Each party may suspend
performance of his obligations the performance of his obligations
if, after the conclusion of the whenever, after the conclusion of
contract, it becomes apparent the contract, the economic situation
that the other party will not of the other party appears to have
perform a substantial part of become so difficult that there is good
his obligations as a result of: reason to fear that he will not
(a) a serious deficiency in his perform a material part of his
ability to perform or in his obligations.
creditworthiness; or (b) his
conduct in preparing to perform 2. If the seller has already
or in performing the contract. dispatched the goods before the
economic situation of the buyer
2. If the seller has already described in paragraph 1 of this
dispatched the goods before Article becomes evident, he may
the grounds described in the prevent the handing over of the
preceding paragraph become goods to the buyer even if the
evident, he may prevent the latter holds a document which
handing over of the goods to the entitles him to obtain them.
buyer even though the buyer holds
a document which entitles him 3. Nevertheless, the seller shall
to obtain them. The present not be entitled to prevent the
paragraph relates only to the handing over of the goods if
rights in the goods as between they are claimed by a third
the buyer and the seller. person who is a lawful holder
of a document which entitles
3. A party suspending him to obtain the goods unless
performance, whether before or the document contains a
after dispatch of the goods, reservation concerning the
must immediately give notice of effects of its transfer or unless
the suspension to the other the seller can prove that the holder
party and must continue with of the document, when he acquired it,
performance if the other knowingly acted to the
provides adequate assurance detriment of the seller.
of his perfomance.
"The rights to suspend performance and to stop goods in transit in the event of an imminent breach of contract . . . were included in Article 73 ULIS . . . in terms largely similar to those of Article 71 CISG. . . .
"Unlike Article 73 ULIS, Article 71(3) CISG requires notice of the exercise of the right of suspension or stoppage to be given to the other party; this is intended to increase cooperation between the parties. In addition, Article 71(3) . . . provides for the possibility of assurance being provided by a party in order to neutralize an imminent breach of contract. . . ." Leser in Commentary on the International Sale of Goods, Peter Schlechtriem ed. (Oxford 1998) 522 [citations omitted].
Pace Law School Institute of
International Commercial Law
- Last updated July 30, 1999