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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 61

(1) If the buyer fails to perform any of his obligations under the contract or this Convention, the seller may:

(a) exercise the rights provided in articles 62 to 65;

(b) claim damages as provided in articles 74 to 77.

(2) The seller is not deprived of any right he may have to claim damages by exercising his right to other remedies.

(3) No period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract.

COMMENT

1. Art. 61 is the counterpart to art. 45 on the buyer's remedies where the seller is in default. However, some comparisons of a general character may be helpful at this point between the seller's remedies in the provincial Acts and his remedies under the convention.

2. It is customary at common law to distinguish between the unpaid seller's rights against the goods and his personal right against the buyer. See OSGA 38-46, and 47-48 and 52. The same distinction is observed in CISG. However, the distinction is less obvious in CISG, first, because of the exercise of the seller's in rem rights are not linked to questions of title (cf. art. 4(b)), secondly, because the seller's right of lien or stoppage in transitu is absorbed in the wider concept of a right to suspend performance where there are reasonable grounds for believing that the other party will not be able to perform his obligations (see art. 71), and, thirdly, because the unpaid seller's right of resale, after avoidance of the contract, is merely treated as a convenient means of measuring his damages. See art. 76 and cf. UCC 2-706.

2. CISG confers a much broader right to compel specific performance of the buyer's obligations than does the OSGA. The OSGA does not recognize such a right except with respect to the right to payment. Even the right to payment is heavily circumscribed in OSGA 47. However, as previously noted, art. 28 exempts a court from having to enter judgment for specific performance unless it would do so under its own law in respect of similar contracts of sale. An important question arises in this context with respect to the meaning of "specific performance". For a court to order the buyer to take delivery clearly would amount to such an order and, since such an order would not ordinarily be made at common law, art. 28 will apply. But what of a judgment for the price? It is not ordinarily treated as an order for specific performance unless it has been issued by a court exercising its equitable jurisdiction. Where does this leave art. 28? Will it be argued that terminology and means of enforcement are irrelevant for the purposes of art. 28 and that what matters is whether a national court would make such an order however it is designated?

If the answer is yes, then a further point of exegesis requires consideration. The seller's right to sue for the price is much broader under CISG than it is under OSGA 47. Does this matter for the purposes of applying art. 28 or is it sufficient that a national court would be willing to make an order under some circumstances? It seems to me the point can be argued both ways, but an important consideration would be whether the seller has already earned the price or whether he is trying to force the buyer to do those things that will enable the seller to do so.

3. The seller's right to claim damages under CISG is broader than his common law rights in several respects: (a) CISG semble permits the seller to sue for damages, direct and consequential, as well as for the price ; it was for a long time thought that this was not possible at common law but the position is now unsettled as a result of dicta in Trans Trust S.P.R.L. v. Danubian Trading Co. Ltd. [[1952] 2 Q.B. 297 (C.A.); Benjamin, para. 1195]; (b) the test of remoteness of damages in art. 74 is substantially more generous to the plaintiff than the test of remoteness under the rules in Hadley v. Baxendale; and (c) where there is an available market for the goods the seller is not restricted, as he is under OSGA 48(3), to suing for the difference between the contract price and the market price. Art. 74 entitles him to resell the goods and sue for his actual loss.

4. It is difficult to generalize from the above comparison and to claim tha the CISG remedial regime is superior or inferior to the common law structure. The point is, they differ in some important respects. Some of the CISG features commend themselves on principle; others less so. The more questionable features will be referred to again in the Comments accompanying the articles in question.

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