Article 80 [1]
[TEXT OF THE UNIFORM LAW]
A party may not rely [3] on a failure of the other party to perform [2], to the extent [6] that such failure was caused [5] by the first party's act or omission [4].
[WORDS AND PHRASES, CONCEPTS
1. article 80 is a rule and an expression of a general principle of the Convention
2. a party may not rely on a failure of the other party to perform …
3. a party may not rely on a failure of the other party to perform …
4. … to the extent that such a failure was caused by the first party's act or omission
5. … to the extent that such a failure was caused by the first party's act or omission
6. … to the extent that such failure was caused by the first party's act or omission ]
[COMMENTARY]
[1] [article 80 is a rule and an expression of a general principle of the Convention]
[1.1] At the proposal of the former GDR this article was unanimously adopted and included
in the Convention (O.R., 386 fol, 135 fol). Its content is obviously an expression of general
principles, in particular that of good faith, respectively a concrete manifestation of it, the
prohibition to contradict one's own behaviour (venire contra factum proprium). When one,
however, wants to deduce too many concrete solutions from general principles, the latter are
overextended and become void of substance, which in practical terms means that the decisions
are shifted to judges. It was useful, therefore, to include such a rule (Tallon/BB, 596). [page
335]
[1.2] Article 42, paragraph 2; subpara. (b) provides for a concrete manifestation of the
principle of Article 80. This special norm existed before Article 80 was drafted and continues
in existence, although it is consumed by the latter.
[2] [a party many not rely on a failure of the other party to perform …]
Failure to perform refers to any breach of contract just like Article 79 (note 2 of Article 79).
[3] [a party may not rely on a failure of the other party to perform …]
[3.1] The party in breach can, therefore, not assert any claims because of a breach of
contract. It not only has no right to claim damages, as in the event of grounds for exemption
in the meaning of Article 79, it has no right to performance nor to avoidance. When the
debtor is hindered in performing in time by the party in breach, e.g. because of belated
communication of instructions for dispatch, the seller cannot dispatch the goods, the party in
breach will have to accept the late delivery without having the right to require any sanction.
When the party in breach has caused the non-conform or defective delivery, e.g. sub-supply
of material having non-apparent defects, he cannot require delivery of substitute goods or
repair or reduction of the price, etc.
[3.2] The acts by the creditor which cause the breach of contract will generally represent
themselves as breach of contract committed by the former (note 4) so that the debtor being
the creditor of those acts can assert the respective claims. He will have the right to claim
damages only to the extent to which the party in breach cannot rely on impediments. Among
the rest of the claims, which are retained in any case, the right to avoid the contract is of
special relevance. In asserting that right, the fate of the blocked contract can be decided once
and for all.
[3.3] There is no general obligation (Stoll/Freiburg, 280) for the debtor to overcome or avoid
the failure with respect to his own performance, as under Article 79, paragraph 1 in regard
to the disturbances emanating from the party in breach.
The debtor will in many cases be interested, however, to overcome a disturbance in order to
be able to perform himself. Article 65 of the CISG provides for such a possibility.
Furthermore, the debtor can, under the CISG, be considered as being entitled and in part also
obligated to avoid or to overcome disturbances which emanate from the other party in the
customary way. This follows, above all, from the principle of good faith (Article 7, paragraph
1), e.g. when the failure because of the creditor's act or omission is minor compared to the
breach of contract (note 5). It could play a role whether the creditor's act or omission was
caused by impediments. The principle of cooperation between the parties, which can be
regarded [page 336] as implemented in the Convention (Article 7, paragraph 2), has a similar
effect. The debtor could also be obliged to take such measures in the frame of his obligation
to mitigate losses (Article 77). Hence, the seller himself instead of the buyer could provide
the means of transportation, procure himself material or parts to be supplied by the buyer after
he had granted the party in breach an additional possibility to do so. The additional expenses
incurred by the seller from those acts could, under the CISG, be claimed by him as damages
where the disturbance caused by the party in breach was a breach of contract and where there
are not grounds for exemption. Since this is not always the case, the debtor insofar runs a
risk. He might, however, claim the additional expenses as an increase in the price without
impediments becoming effective. The seller might have other rights under national law which
allowed him to compensate for additional expenses, e.g. from unjust enrichment when
material was procured in replacement. It should be mentioned in this context that there are
also such rules under domestic law relating to surrogates for performance or services without
mandate or, less frequent, fictitious declarations or vicarious performance.
The acts carried out by the debtor in replacement are covered by the CISG only insofar as
they do not change the character of the contract. Hence a contract on the delivery of a medal
stand cannot be turned into one on the delivery of a machine because the buyer has not
delivered his sub-supplies.
[4] [… to the extent that such failure was caused by the first party's act or omission]
These will mostly be breaches of contract on the part of the creditor. Whether or not there
are impediments is irrelevant to the extent to which the exemption of the debtor is at issue.
To speak in this context of fault as does Schlechtriem (100), is contrary to the system of the
Convention in our view because this would unjustly presuppose that the CISG is based on the
principle of fault, which is exactly what should be counteracted.
The act or omission can also be a conduct which is not directly related to the contract, thus
in particular an, infliction of damage (tort). The workers employed by the buyer, for instance,
because of negligence destroy the goods at a production facility of the seller.
[5] [… to the extent that such failure was caused by the first party's act or omission]
[5.1] The causality required here of the conduct of the party in breach in regard to the breach
of contract has been defined by Tallon (BB, 599) as a high degree of probability. To put it in
our own words, the breach of contract must be a characteristic consequence of the act of the
creditor which can be expected in international trade. Where the former carries out legal acts
which, because of a completely unusual chain of cause and effect, lead to the breach of
contract, there [page 337] will be no reason for exemption in our view. This will be the case,
for instance, when the goods perish while the risk is still with the seller because the buyer has
asserted his right to give instructions for dispatch in a specific way, i.e. accident on the road.
This, however, does not exclude exemption under Article 79.
[5.2] The conduct of the creditor can actually cause the breach of contract, e.g. when
technical drawings according to which the goods would have to be manufactured are not
delivered, or can break the envisaged functional synallagma so that the debtor would worsen
his legal position were he to continue his performance, e.g. when the seller does not deliver
because the letter of credit has not been opened yet, and the buyer does not pay because he
has not received the goods. Article 80 insofar constitutes a nominative expression of the
objection of the non-performed contract.
[6] [… to the extent that such failure was caused by the first party's act or omission]
Problems will arise when the breach of contract has not been caused exclusively by the
creditor, but in part by the conduct of the debtor. With respect to the debtor it would again
have to be differentiated whether or not he can rely on impediments. There are many
constellations possible. We limit ourselves to presenting principles which could, in our view,
be inferred from the regulation governing the most important case groups.
(a) When the consequences of the different causes can be delimited from one another, every
cause has to be attributed its legal remedy. A distinction will, however, have to be made of
what caused the breach of contract.
(aa) When the breach of contract, a delay offers insofar the best example, was caused by
an act or omission of the creditor, but later continued because the debtor did not display an
orderly conduct, the remedies under failure caused by an act or omission of the creditor apply
to the first period, but for the second those applicable under breaches of obligation by the
debtor. The latter may then be assessed less strictly, e.g. considering their fundamentality
being the prerequisite for an avoidance, when they are preceded by an act or omission of the
creditor.
(ab) In the event that the breach of contract becomes fundamental only as a consequence
of the cumulation of failures of the two parties, that change in the character of the breach
which is caused by an act or omission of the creditor is irrelevant in our view. To put it in
other words, the creditor may have a right to claim damages but not the right to avoid the
contract. Insofar we come to a similar conclusion as Tallon (BB, 598), even if under more
precise conditions and with a different doctrinal deduction (compare also (c)). [page 338]
(b) When a breach of contract by the debtor and an act or omission by the creditor act in
combination having the same effect, i.e. the seller is not ready to deliver and the buyer does
not give the agreed instructions for dispatch or does not open up an agreed letter of credit,
the act or omission of the creditor dominates. But exemption will become effective only in
regard to the conduct concerned. The party in breach can, therefore, not claim a breach of
contract because of the consequences of the act or omission of the creditor. The result can
be a stalemate in which the contract is neither performed nor can it be avoided by any of the
parties.
(c) The last case to be considered here is the one where the failures of the two parties are so
closely interwoven that their effects cannot be delimited and attributed to the breach of
contract which is the result of that situation, such as when the buyer provides drawings which
cannot, in part, be realized, and the seller, without referring back to the buyer, proceeds with
modifications in the realization which do not meet the intentions of the buyer. In our view,
it is appropriate in these cases to reduce, in a similar way as Tallon (BB, 598) suggests, the
legal consequences which would be the result of a breach of contract where the causes of the
breach are not taken into consideration. The reduction can be merely quantitative as in the
case of damages, insofar also grounds for exemption on the part of the debtor would have to
be, taken into account. But it may also take on a qualitative character when the right to
avoidance of the contract is turned into a claim for damages, which might then be thwarted
because of grounds for exemption, for it is assessed that the breach of contract because of the
act or omission of the creditor has passed the threshold toward a fundamental breach. Or, the
right to performance may be judged to have elapsed and the part of the debtor in the breach
of the contract is paid off because of a claim for damages by the creditor. [page 339]
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Pace Law School
Institute of International Commercial Law - Last updated September 25, 2002
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