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Reproduced with permission from the Cornell Review of the Convention on Contracts for the International Sale of Goods (1995) 51-94

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[Effective declaration of avoidance]
[Article 26]

For a declaration of contract avoidance to be effective, Article 26 requires that it is made by notice to the other party. One of the main issues under Article 26 is the required content of the notice. Generally, the notice has to make clear to the other party that the contract is avoided. However, the degree of clarity required in the notice is unsettled.[131] This question is very important because a notice of avoidance not meeting the requirements of Article 26 will not be effective, and the party may subsequently lose the right to avoid the contract under Articles 49(2) or 64(2).

According to the OLG Frankfurt am Main, the declaration of avoidance is effective if the avoiding party unmistakably tells the other party that the contractual relationship will be terminated [OLG Frankfurt 17 September 1991].[132] In one case, the AG Oldenburg in Holstein stated that the buyer's refusal to take delivery would suffice as an Article 49 declaration of avoidance [AG Oldenburg 24 April 1990].[133] This is especially true in the cases of late delivery where the refusal to accept delivery has a clear meaning.[134] On the other hand, the meaning would not be clear if the buyer rejects defective goods, because the rejection could be understood as a demand for substitute delivery under Article 46(2).

According to the LG Frankfurt am Main, a buyer who sends back one part of the goods and demands credit but declares that he will pay for the other part which he has already resold has not made an effective declaration of avoidance [LG Frankfurt 16 September 1991].[135] The court held that, although the seller had committed a fundamental breach which allowed the buyer to avoid the contract under Article 49, the buyer did not make explicit his desire to avoid the contract as required by Article 26.[136] This is not convincing. The return of the goods and the additional demand for a credit entry unmistakably show that the buyer did not want substitute delivery, but instead wanted to terminate the contract. The buyer's actions should have been understood as a partial avoidance under Article 51(1). The issue should have been whether a partial avoidance was possible in those circumstances.

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FOOTNOTES

* Professor of Law at the University of Bonn, Germany, from 1992 to February 1995. Currently, Professor of Law at the University of Linz, Austria. Address: Institut für Handels-und Wertpapierrecht, Universität Linz, A-4040 Linz-Auhof, Austria, Europe.

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131. For discussion of the contents of contract avoidance notices, see, e.g., Enderlein et al., supra note 15, at 105; Hans G. Leser, Art. 26: Aufhebungserklärung, in Kommentar zum Einheitlichen UN-Kaufrecht 221, 223-24 (Ernst van Caemmerer & Peter Schlechtriem eds., 2d ed. 1995); Karollus, supra note 20, at 151.

132. Judgment of Sept. 17, 1991, OLG Frankfurt am Main, 1991 RIW at 951.

133. Judgment of Apr. 24, 1990, AG Oldenburg in Holstein, 1991 IPRax at 338.

134. Fritz Enderlein, Die Verpflichtung des Verkäufers zur Einhaltung des Lieferzeitraums und die Rechte des Käufers bei dessen Nichteinhaltung nach dem UN-Übereinkommen über Verträge über den internationalen Warenkauf,1991 IPRax 313, 315.

135. Judgment of Sept. 16, 1991, LG Frankfurt am Main, 1991 RIW at 953.

136. Id.

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[Time for delivery]
[Article 33]

The AG Oldenburg in Holstein dealt with a sales contract which provided for the delivery of textiles on "July, August and September +/-" [AG Oldenburg 24 April 1990] [146] The intended meaning of this delivery requirement was not clear; the seller argued that delivery was due only at the end of September, while the buyer argued that delivery of one-third of the total quantity was due in each of the three months. However, the court did not consider the delivery requirement, holding that the buyer could not avoid the contract under Article 33 even if his interpretation of the delivery date was correct.[147]

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FOOTNOTES

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146. Judgment of Apr. 24, 1990, AG Oldenburg in Holstein, 1991 IPRax 336.

147. See infra part V.8. For critical commentary on this case, see Enderlein, supra note 134, at 314.

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[Avoidance issues in this case and in other German cases]
[Article 49]

In most cases of late delivery, the buyer can avoid the contract only after fixing an additional period for delivery.[188] Only under exceptional circumstances does late delivery constitute a fundamental breach and allow immediate avoidance.[189] An example of exceptional circumstances is the late delivery of fashionable articles. However, in a case involving fashionable articles, the AG Oldenburg in Holstein discussed only Article 49(1)(b) and dismissed the buyer's declaration of avoidance because he had not fixed an additional period for delivery [AG Oldenburg 24 April 1990].[190] Perhaps the court did not sufficiently consider Article 49(1)(a).[191] This result could be correct because, apart from the fact that there may have been no delay at all,[192] the parties indicated the delivery dates with the symbol "+/-." The intended meaning of this symbol could have been that there was no precise time for delivery. If so, the delayed delivery would not have constituted a fundamental breach.

If the buyer receives non-conforming goods or goods of another kind, Article 49(1)(b) is not applicable. Therefore, the buyer can avoid only if the breach is fundamental.[193] However, Article 49(1)(b) is applicable if the buyer demands delivery of substitute goods under Article 46(2) because the substitute delivery is regarded as a delivery under Articles 31-33 and the provisions relating to delivery apply (again) [OLG Düsseldorf (6 U 119/93) 10 February 1994].[194] The buyer can fix a period for substitute delivery and avoid the contract if the seller does not deliver within the fixed period. If the buyer does not fix an additional period, avoidance is possible only if the breach is fundamental.[195] A fundamental breach occurs if the seller declares seriously and definitely (ernsthaft und endgültig) that he will not deliver substitute goods, but does not occur if he only declares that he cannot deliver at the moment [OLG Düsseldorf (6 U 119/93) 10 February 1994].[196]

According to Article 49(2)(b)(i), a declaration of avoidance based on breach other than late delivery must be made within a reasonable time after the buyer knew or ought to have known of the breach. A delay of two [OLG Frankfurt 20 April 1994] [197] or four months [OLG München 2 March 1994] [198] was held to be not reasonable. Of course, a declaration made after one day is timely [OLG Frankfurt 17 September 1991].[199]

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FOOTNOTES

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188. Id. art. 49(1)(b).

189. Id. art. 44(1)(a).

190. Judgment of Apr. 24, 1990, AG Oldenburg in Holstein, 1991 IPRax at 338.

191. See Enderlein, supra note 134, at 314-15.

192. See supra Part V.5.

193. One of the most controversial CISG issues is the definition of a fundamental breach in respect to defective goods, especially when the defect can be cured by substitute delivery or repair. See Honnold, supra note 1, §§ 184, 296; Michael Will, Article 48, in Commentary on the International Sales Law 347, 356-58 (C.M. Bianca & M.J. Bonell eds.,1987); Aicher, supra note 152, at 136-42; Martin Karollus, UN Kaufrecht: Vertragsaufhebung und Nacherfüllungsrecht bei Lieferung mangelhafter Ware, 1993 Zeitschrift für Wirtschaftsrecht 490; Peter Schlechtriem, Art. 25: Wesentliche Vertragsverletzung, in Kommentar zum Einheitlichen UN-Kaufrecht 207, 217-19 (Ernst von Caemmerer & Peter Schlechtriem eds., 2d ed. 1995); Huber, supra note 128, at 442-45.

194. Judgment of Feb. 10, 1994, OLG Düsseldorf, 1994 RIW at 1051. See Huber, supra note 128, at 449.

195. CISG, supra note 4, art. 49(1)(a).

196. Judgment of Feb. 10, 1994, OLG Düsseldorf, 1994 RIW at 1051.

197. Judgment of Apr. 20, 1994, OLG Frankfurt am Main, 1994 RIW at 595.

198. Judgment of Mar. 2, 1994, OLG München, 1994 RIW at 596.

199. Judgment of Sept. 17, 1991, OLG Frankfurt am Main, 1991 RIW at 951.

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[Buyer's obligation to take delivery]
[Article 60]

The AG Oldenburg in Holstein applied German national law in a case where the buyer did not take possession of the goods at the seller's place of business (Annahmeverzug) as required by CISG Article 31(c) [AG Oldenburg 24 April 1990].[204] I do not agree with the court's application of German national law; the court obviously did not consider that the buyer's obligation to take possession of the goods is dealt with in CISG Article 60. The application of national law in addition to the governing CISG articles seems not to be possible.[205]

The problem is, in fact, even more complicated. German national law distinguishes between a buyer's duty to take possession of the goods [206] -- the direct equivalent to and surely displaced by CISG Article 60 -- and the general concept of Annahmeverzug. In German national law, Annahmeverzug is applicable alongside the buyer's duty to take possession of the goods. Therefore, one could argue that the concept of Annahmeverzug is arguably not displaced by the CISG. But that would not be convincing, since the CISG does not make such a distinction. Most importantly, Annahmeverzug is about risk transfer, which is governed by CISG Articles 66-70.[207]

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FOOTNOTES

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204. Judgment of Apr. 24, 1990, AG Oldenburg in Holstein, 1991 IPRax at 338. See BGB §§ 293-294.

205. See Enderlein, supra note 134, at 315.

206. See BGB § 433(2).

207. For a detailed analysis of risk-passing rules, see Reinhard Geist, Die Gefahrtragung nach dem UN-Übereinkommen über den internationalen Warenkauf, 1988 WBI 349.

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