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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 78

If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74.

COMMENT

1. Art. 78 is new and was added at Vienna at the request largely of various European delegates who felt keenly that the convention would be seriously incomplete without some provision on an aggrieved party's entitlement to interest. However, there were sharp differences of opinion about the content of such a provision and art. 78 represents an uneasy compromise between those who were altogether opposed to an interest provision and those who wanted a statement, however bland, at least recognizing the right.

2. Art. 78 is more conspicuous for the questions it fails to answer than the questions it answers. In particular, it does not stipulate the rate of interest or how the rate is to be determined by a tribunal in the absence of explicit guidance in the convention. The delegates were acutely aware of these questions but were unable to reach agreement on appropriate answers. It is equally unclear (at least to me) to what extent the rules of private international law may be involved (via art. 7) to supply the missing answers or what is the proper relationship between art. 78 and a claim for damages under art. 74.

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