CISG Article 71
1. A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of: (a) a serious deficiency in his ability to perform or in his creditworthiness; or (b) his conduct in preparing to perform or in performing the contract.
2. If the seller has already dispatched the goods before the grounds described in the preceding paragraph become evident, he may prevent the handing over of the goods to the buyer even though the buyer holds a document which entitles him to obtain them. The present paragraph relates only to the rights in the goods as between the buyer and the seller.
3. A party suspending performance, whether before or after dispatch of the goods, must immediately give notice of the suspension to the other party and must continue with performance if the other provides adequate assurance of his perfomance.
ULIS Article 73
1. Each party may suspend the performance of his obligations whenever, after the conclusion of the contract, the economic situation of the other party appears to have become so difficult that there is good reason to fear that he will not perform a material part of his obligations.
2. If the seller has already dispatched the goods before the economic situation of the buyer described in paragraph 1 of this Article becomes evident, he may prevent the handing over of the goods to the buyer even if the latter holds a document which entitles him to obtain them.
3. Nevertheless, the seller shall not be entitled to prevent the handing over of the goods if they are claimed by a third person who is a lawful holder of a document which entitles him to obtain the goods unless the document contains a reservation concerning the effects of its transfer or unless the seller can prove that the holder of the document, when he acquired it, knowingly acted to the detriment of the seller.
"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].
Go to Database Directory || Go to CISG Table of Contents