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Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods

Professor Jacob S. Ziegel, University of Toronto
July 1981

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Article 26

A declaration of avoidance of the contract is effective only if made by notice to the other party.

COMMENT

1. "Avoidance" is used in CISG in the sense of cancellation for cause. Cf. UCC 2-106(4), 2-703(f), 2-711(1). "Avoidance" is generally used in Anglo-Canadian law in the context of contracts induced by the misrepresentation or other misconduct of one of the parties rather than to describe the remedy available for breach of a contractual obligation. However, CISG's use of the term seems to me quite acceptable and not likely to cause confusion even among common law lawyers.

2. The OSGA contains no general notice provision corresponding to art. 26. There is an express notice requirement in OSGA 46(2) with respect to the right of resale of an unpaid seller and an implied notice requirement in OSGA 34 involving the buyer's right to reject non-conforming goods. Other situations will be governed by common law principles. The general common law rules are (a) that the party in breach cannot unilaterally terminate the agreement without the consent of the other party [cf. Decro-Wall International S.A. v. Practitioners in Marketing Ltd. (1971) 2 All E.R. 216 (C.A.)]; and (b) that a party who is entitled to elect among two or more remedies must communicate his election to the other party. In other words, the common law, like CISG, does not recognize a doctrine of ipso facto avoidance. There may be circumstances when, at common law, the aggrieved party may have no option but to treat the contract as avoided: for example, where the other party has become bankrupt or, in the case of a sale of specific goods, the goods have been destroyed owing to the seller's fault. In such cases the aggrieved party would not be electing a remedy and a notice requirement would make little sense. It is not clear whether CISG envisages a different result, i.e., whether a declaration of avoidance is always necessary. Cf. arts. 49. 64. Even if the answer is yes, the difference would not appear to be of great practical importance given the fact that no formal requisites are prescribed for the giving of a notice of avoidance. See art. 27.

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Pace Law School Institute of International Commercial Law - Last updated April 23, 1999
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