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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 73

(1) In the case of a contract for delivery of goods by instalments, if the failure of one party to perform any of his obligations in respect of any instalment constitutes a fundamental breach of contract with respect to that instalment, the other party may declare the contract avoided with respect to that instalment.

(2) If one party's failure to perform any of his obligations in respect of any instalment gives the other party good grounds to conclude that a fundamental breach of contract will occur with respect to future instalments, he may declare the contract avoided for the future, provided that he does so within a reasonable time.

(3) A buyer who declares the contract avoided in respect of any delivery may, at the same time, declare it avoided in respect of deliveries already made or of future deliveries if, by reason of their interdependence, those deliveries could not be used for the purpose contemplated by the parties at the time of the conclusion of the contract.

COMMENT

1. Art. 73 deals with the effect of a breach in a contract of sale by instalments and should read in conjunction with art. 51 and the comments thereon. The rules in art. 73(1) and (2) are substantially the same as the rules in OSGA s.30 and the other provincial Acts.

2. Paragraph (3) appears to differ from the provincial law in two respects: first, in allowing an aggrieved party to return earlier conforming instalments as well as to refuse to accept future instalments and, secondly, in conferring these rights where the contract has only been avoided "in respect of any deliveries". The common law does not semble entitle the aggrieved party to return previous instalments at all and he can only refuse future instalments where he cancels the contract in its entirety. See OLRC Sales Report, pp. 547, et seq. However, these differences may be more apparent than real since the rights conferred under art. 73(3) only arise where the deliveries are interdependent. This suggests that "delivery of goods by instalments" in art 73 has a broader meaning than it has under the provincial Acts and may encompass some types of contract that are indivisible or at least indivisible in part. "Delivery of goods by instalments" is not defined in art. 73.

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