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Reproduced with permission of 25 Journal of Law and Commerce (Spring 2006) 489-508

Fundamental Breach of Contract Under the UN Sales Convention
-- 25 Years of Article 25 CISG --

Franco Ferrari [*]

  1. Introduction
  2. The Concept of the Fundamental Breach of Contract
    1. The Breach of an Obligation as a Prerequisite for the Fundamental Breach of Contract
    2. The Detriment as a Precondition for Fundamental Breach
    3. The Foreseeability of the Detriment
  3. Fundamental Breach in Specific Situations
  4. Concluding Remarks

I. INTRODUCTION

This past year, the United Nations Convention on Contracts for the International Sale of Goods [1] (hereinafter "CISG") [2] celebrated its twenty-fifth anniversary. This provides an opportunity for a brief examination of one of the key provisions of the CISG, namely Article 25. This Article is the dispositive [3] provision that defines the concept of "fundamental breach," a concept which is of central importance to the CISG's remedial system.[4] This [page 489] provision's central importance stems from the fact that a "fundamental breach" triggers particularly far-reaching legal consequences.[5] Thus, a party's ability to avoid the contract (even without fixing an additional time-limit),[6] the buyer's entitlement to substitute delivery [7] and the question of who carries the risk in case of delivery of defective goods [8] all depend on a fundamental breach. From what has just been said, it follows that Article 25 itself does not lay down the various instances in which a fundamental breach is relevant; [9] rather, it constitutes a "tool with the help of which to distinguish between a fundamental and a simple breach of contract." [10] As for the legal consequences of the fundamental breach, these must be derived from the various more specific provisions of the CISG or the contract.[11] This is why it is correct to emphasize, as some commentators have done, that Article 25 cannot be applied alone, but only in conjunction with other provisions which contemplate a fundamental breach as a prerequisite.[12]

The reason for limiting particularly drastic legal consequences (such as the avoidance of the contract) to cases in which the breach of contract is fundamental lies, on the one hand, in ensuring the performance of the contract despite a (non-fundamental) breach [13] to avoid considerable unnecessary and [page 490] unproductive costs,[14] such as those associated with the return or storage of the goods.[15] On the other hand, this limitation helps to contain the number of cases in which the damaged party may take advantage of the defaulting party's breach in order to revise an agreement based on a specific economic situation or to shift the risk of a change in the market conditions to the other party.[16]

II. THE CONCEPT OF THE FUNDAMENTAL BREACH OF CONTRACT

1. The Breach of an Obligation as a Prerequisite for the Fundamental Breach of Contract

Article 25 defines the fundamental breach autonomously,[17] i.e., independently from any domestic preconceptions. In doing so, Article 25 complies with the obligation set forth in Article 7(1) to interpret the CISG in light of its international character [18] and prevents recourse to domestic legal concepts, which would compromise the unification efforts pursued by the CISG.[19] One must not, therefore, assimilate the Convention's concept of the fundamental breach to the identically worded notion in English contract law.[20] [page 491] Indeed, a "nationalistic" interpretation of the CISG must be avoided even in the (rare) cases where the original versions of the CISG use terms which have a precise meaning in a particular legal system [21] (such as "fundamental breach"),[22] at least as long as the drafters have not intentionally borrowed those terms from a particular domestic legal system.[23] Where, however, the drafting history suggests that a particular concept is based upon a domestic conception, "the aim it serves in the domestic context may be taken into account for the purposes of its comprehension and interpretation." [24]

Pursuant to Article 25, a breach of contract -- whatever its nature -- is fundamental when it substantially deprives the other party of what it is entitled to expect under the contract, provided that the party in breach did not foresee and a reasonable person of the same kind in the same circumstances could not have foreseen such a result. [page 492]

As pointed out by legal scholars and courts alike, the definition of fundamental breach is very vague.[25] Whether, however, the concept can only be defined through its practical application, as some suggest,[26] must be doubted. On the contrary, in this author's opinion, it is possible to define the concept of "fundamental breach" on the basis of the elements by which it is characterised (such as breach of an obligation, detriment, legitimate expectations, and foreseeability) in a way that can prove useful for the CISG's practical application.

The most important precondition [27] of the CISG's concept of "fundamental breach" is the breach of an obligation deriving from either the contract, the practice established between the parties, or the usages referred to in Article 9 of the CISG.[28] Where no such breach occurred, Article 25 cannot apply.[29] Thus, there can be no fundamental breach where a party whose behaviour is incompatible with its obligations is entitled not to comply with those obligations,[30] as in the case where the debtor exercises the right to refuse performance [31] or where the creditor fails to collaborate with the debtor thus making it impossible for the latter to perform.[32]

The CISG does not distinguish between the breach of principal and ancillary obligations.[33] "[E]ven the violation of an obligation which is not a [page 493] principal obligation under the contract, but an ancillary one can [thus] be fundamental," [34] as long as the obligation is closely connected to the exchange of goods [35] or the parties have subjected it to the rules of the CISG.[36] It is thus not surprising that a French court has applied Article 25 to the breach of a contractually agreed upon re-import prohibition; [37] nor is it surprising that a German court has held that "the buyer may, in accordance with Article 49(1)(a), request the avoidance of the contract if the non-performance constitutes a fundamental breach of the contract, which may also be the case where an ancillary obligation arising for instance from an exclusivity agreement is breached." [38]

Article 25 does not distinguish between the various types of breaches, [39] such as non-delivery, non-payment, impossibility, delay, etc.,[40] but rather creates a unitary concept of the breach of contract.[41] [page 494]

2. The Detriment as a Precondition for Fundamental Breach

"Fundamental breach" further requires the damaged party to suffer a detriment such that it is substantially deprived of what it could have expected under the contract. The term "detriment," which is not being used in any other provision of the CISG [42] and which is nowhere defined in the Convention,[43] must be construed extensively [44] and is not to be analogized to the concept of "damages" referred to in Article 74.[45] The concept of "detriment" comprises all (actual and future) [46] negative consequences of any possible breach of contract,[47] not only actual and future monetary loss, but also any other kind of negative consequences.[48]

A breach of contract is fundamental when the detriment suffered by the damaged party is such that it is "substantially deprived of what [it] is entitled to expect under the contract." [49] The wording of Article 25 clearly indicates that the fundamental character of the breach -- to be assessed by the judge [50] -- does not, contrary to what had been provided for by the 1978 draft,[51] depend on the extent of the detriment.[52] Rather, it depends upon the [page 495] impairment of the justified contractual expectations of the damaged party.[53] This impairment must be so serious that it suppresses the damaged party's interest in the performance of the contract [54] or that said party can no longer be expected to be satisfied with less drastic remedies such as damages, price reduction or repair.[55] This is in line with the basic principle inspiring the CISG, according to which the avoidance of the contract in cases of fundamental breach should constitute an ultima ratio remedy.[56] Whether the [page 496] impairment is, in fact, of such seriousness must be decided on a case-by-case basis.[57] It is, however, possible to identify certain lines of cases which strongly suggest the existence of a fundamental breach of contract. These lines of cases will be examined infra.[58]

From the language of Article 25, it can be derived that the extent of the detrimental consequences of a breach of contract must be assessed by reference to what the damaged party "could have expected under the contract." [59] This does not mean, however, that one must take into consideration the non-defaulting party's will or the interests it wanted to reach.[60] As the express reference in Article 25 to the contract indicates,[61] one must rather take into account the more objective [62] contractual expectations as they result from the specific contract.[63] This is a matter of contract interpretation.[64] In this context, one must have regard not only to the contractual language, [65] but also to the practice established between the [page 497] parties,[66] and other circumstances preceding the conclusion of the contract [67] (such as the contractual negotiations).

The interpretation is unproblematic when the parties have (without the use of standard contract terms) expressly or tacitly agreed that a particular obligation or a specific kind of detriment must be regarded as fundamental.[68] The situation is more difficult when the parties use standard terms.[69] In this respect, it must be observed that the validity of such standard terms must be determined in accordance with the applicable domestic law, since the CISG itself does not deal with this issue.[70] Under German law, for instance, standard contract terms are subject to the rules of Section 305 BGB ff.[71] Among those provisions, Section 305(2)(1) BGB is particularly important, as it would probably invalidate those standard terms which elevate any kind of breach of contract (even the slightest one) to fundamental ones [72] or which state that even the most serious breaches cannot ever amount to a fundamental breach.[73]

Where the parties have themselves not specified the importance of the various contractual obligations, that importance must be determined on the basis of the rules of contract interpretation set forth by the CISG itself, namely Article 8.[74] Although the importance that the performance of a particular obligation has for the non-defaulting party must be determined on a [page 498] case-by-case basis,[75] it is possible to create lines of situations that allow one to more easily establish whether a breach is fundamental or not.[76] These lines of situations will be examined infra.[77]

3. The Foreseeability of the Detriment

A breach of contract is not fundamental when the defaulting party did not foresee the detrimental consequences [78] and when a reasonable person, of the same kind and in the same circumstances, would not have foreseen these consequences.[79] From this, one can easily derive that one must not only take into account the actual subjective knowledge of the defaulting party.[80] Rather, one has to also (i.e., cumulatively) [81] inquire into whether an average party to the same kind of contract and in the same circumstances would have foreseen the result.[82] This objective evaluation [83] is mandated by Article 8(2).[84]

Unlike the ULIS,[85] the CISG does not specify which moment in time is relevant for the determination of the foreseeability. The majority opinion considers that the relevant moment is the time of the conclusion of the contract. [86] Some commentators, however, also suggest taking into [page 499] consideration information communicated after the conclusion of the contract.[87] This author concurs with the majority opinion.[88] This is due to the fact that the fundamental character of the breach relates to the legitimate expectations "under the contract," i.e., the expectations set forth in the contract and, thus, at the time of the contract conclusion. Allowing for communications made after the conclusion of the contract to become relevant would permit a unilateral modification of the balance of the parties' interests as laid out in the contract, which is hardly appropriate.[89] This, however, does not exclude the possibility of a modification of that balance by way of an agreement of the parties.[90]

III. FUNDAMENTAL BREACH IN SPECIFIC SITUATIONS

Although the existence of a fundamental breach has to be evaluated on a case-by-case basis,[91] it is possible to establish different lines of situations which more easily allow for such an evaluation.[92] [page 500]

In the case of definite non-performance, the non-defaulting party is essentially deprived of what it could have expected under the contract. A definite non-performance must, thus, be considered a fundamental breach of contract in the sense of Article 25,[93] independent of whether the definite non-performance is due to objective or subjective impossibility.[94] A non-justified and definite refusal to perform must be assimilated to the definite non-performance, [95] at least as long as the refusal is not limited to a secondary aspect.[96] Whether a specific declaration or a particular behaviour amounts to a definite refusal to perform (rather than to a mere inquiry into whether there is a willingness to terminate the contract) is an issue of interpretation [97] to be solved on the grounds of Article 8.

As for the delivery of defective goods, it only amounts to a fundamental breach of contract when the defect is such [98] that the non-defaulting party cannot be expected to be satisfied with damages or a price reduction.[99] This [page 501] is in line with the general principle underlying the CISG pursuant to which the maintenance of the contract is to be preferred over its termination,[100] and, thus, the principle according to which avoidance of the contract is a remedy of last resort.[101] Thus, the delivery of defective goods, the defect of which can only be cured within an unreasonable period of time or with excessive efforts on the part of the debtor, must generally be considered a fundamental breach of contract.[102] Consequently, an easy and expeditious possibility and willingness to repair the defect [103] excludes that a breach is fundamental.[104]

"[S]ince, as long and insofar as (even) a serious defect may be cured through repair or substitute delivery, performance by the seller remains possible and the buyer's interest in performance is intact. According to legal writers and case law under the CISG, a [page 502] serious defect does therefore not constitute a fundamental breach of contract if the defect can be cured and the seller is willing to do so, as long as the buyer does not suffer undue delay or any other burden."[105]

This reasoning also applies where the defective goods can, without disproportionate additional efforts [106] or in the context of the ordinary business activity,[107] be used,[108] incorporated into other goods [109] or sold [110] (albeit only to knockdown prices).[111] This is also true with respect to the delivery of an aliud,[112] unless the buyer has a particular interest in a specific good. Furthermore, what has been said with regard to the defects of the goods also applies, in principle, to legal defects,[113] i.e., those referred to in Articles 42 and 43.

Like the late delivery of conforming documents, the delivery of non-conforming documents also can constitute a fundamental breach.[114] With respect to this line of cases, in determining whether a breach is fundamental, one must also take into account the possibility to cure the defect by means of reasonable efforts,[115] as well as the possibility of using the goods despite that defect.[116] The same is true in respect of packaging defects: [117] as long as they [page 503] do not considerably affect the interests of the buyer as laid out in the contract, they do not constitute a fundamental breach.[118]

As asserted both by commentators and courts, a mere delay in delivery of the goods does not per se amount to a fundamental breach.[119] Only where it can be derived from either the agreement of the parties, the practice established between them or the usages which bind the parties pursuant to Article 9 that compliance with a particular deadline is essential for the buyer [120] (as in those cases, where the delivery date is a fixed date,[121] the necessary compliance with which can be derived, for instance, from the buyer's reference to the a fixed date for the delivery to the sub-buyers [122]), can the delay be considered a fundamental breach of the contract.[123] Whether the [page 504] insertion of a CIF-clause indicates that compliance with the contractually fixed deadline is essential -- and, thus, whether non-compliance constitutes a fundamental breach in the sense of Article 25 -- is questionable.[124]

It should be mentioned that the particular importance of the date of delivery may occasionally result from the nature of the goods.[125] Non-compliance with this date may constitute a fundamental breach, for instance, where seasonal goods are involved.[126] Nevertheless, "absent an agreement of the parties to that effect, a delay of one day may not be considered as being fundamental." [127] Where, however, the goods are delivered at a much later date, the delay generally constitutes a fundamental breach.[128]

As far as the principal obligation of the buyer is concerned, it must be observed that the mere delay in payment does not generally constitute a fundamental breach in the sense of Article 25.[129] Indeed, the interests of the [page 505] creditor seem sufficiently protected [130] by the possibility for the creditor to claim (moratory) damages and to start the process of avoidance of the contract by granting an additional period of time for performance.[131] Generally, the buyer's failure to take delivery of the goods does not constitute a fundamental breach of contract either.[132] The breach of the obligation to take delivery constitutes a fundamental breach [133] only when the seller has a particular interest in the timely taking of delivery,[134] or when the failure to take delivery is due either to a definite refusal to do so [135] or a case of impossibility.[136]

As far as the breach of additional obligations is concerned, it only amounts to a fundamental breach when it leads to a serious impairment of the legitimate interests of the non-defaulting party [137] in the sense discussed above. [138] This may be the case, for instance, where an exclusivity agreement [139] or a prohibition to re-import the goods [140] is breached, or where an obligation to return the containers in which the goods were transported [141] is violated.[142] The breach of the contractually agreed upon obligation to [page 506] provide a bank statement confirming the future issuance of letters of credit does not generally [143] constitute a fundamental breach: [144]

"[T]his is the more so as, where no such statement is provided, the [non-defaulting party] is sufficiently protected by the remedies set forth in Article 71 I CISG. It can, indeed, suspend the performance of its own obligations when it appears, after the conclusion of the contract, that the other party is likely not to perform a substantial part of its obligations due to a significant defect in its ability to perform or creditworthiness or due to its behaviour prior to, and during, the performance."[145]

Only when the breach of the contractually agreed upon ancillary obligation impacts negatively on the basic relationship of trust -- which is necessary to the performance of the contract -- does it qualify as a fundamental breach in the sense of Article 25.[146]

Finally, it must be observed that the breach of an obligation is not necessarily "fundamental" only because that breach is malicious.[147] This is due to the fact that the fundamental character of the breach is not linked to the importance of the breach, but rather to the impairment of an (important) interest of the creditor.[148] Only where the malicious behaviour negatively impacts the trust between the parties that is essential to the contractual relationship (in those cases, where the defaulting party has to still perform some other obligations) can the maliciousness itself turn an ordinary breach into a fundamental one.[149] [page 507]

IV. CONCLUDING REMARKS

The preceding remarks clearly show the central importance of the concept of the "fundamental breach." It is, therefore, not surprising that there are a growing number of decisions involving the application of Article 25.[150] The first decision applying the CISG in the year of its twenty-fifth anniversary [151] also dealt with that provision. It held that the breach of a contractually agreed upon obligation to clean and disinfect, prior to the delivery of the purchased animals, the stables in which sick animals had earlier been kept, amounts to a fundamental breach. [page 508]


FOOTNOTES

* Full Professor of International Law, Verona University School of Law; Hauser Global Visiting Professor, New York University School Law; former Legal Officer, United Nations Office of Legal Affairs, International Trade Law Branch.

1. For the text of the United Nations Convention on Contracts for the International Sale of Goods, see 19 I.L.M. 668 (1980).

2. For a paper examining the various abbreviations used in legal writing to refer to the CISG, see Axel Flessner & Thomas Kadner, CISG? Zur Suche nach einer Abkürzung für das Wiener Übereinkommen über Verträge über den internationalen Warenkauf. 3 ZEITSCHRIFT FÜR EUROPÄISCHES PRIVATRECHT 347 (1995).

3. For a reference to the provision's dispositive nature, see, e.g., Martin Karollus, Art. 25, in KOMMENTAR ZUM UN-KAUFRECHT. ÜBEREINKOMMEN DER VEREINTEN NATIONEN ÜBER VERTRÄGE ÜBER DEN INTERNATIONALEN WARENKAUF (CISG) 254, 272 (Heinrich Honsell ed., 1997); Briggitta Lurger, Die wesentliche Vertragsverletzung nach Art. 25 CISG, INTERNATIONALES HANDELSRECHT 91, 93 (2001); HELGA RUDOLPH, KAUFRECHT DER EXPORT- UND IMPORTVERTRAGS: KOMMENTIERUNG DES UN-ÜBEREINKOMMENS ÜBER INTERNATIONAL WARENKAUFVERTRAGE MIT HINWEISEN FÜR DIE VERTRAGSPRAXIS 186 (1996); WOLFGANG WASMER, VERTRAGSFREIHEIT IM UN-KAUFRECHT 93 (2004).

4. Josef Aicher, Leistungsstörungen aus der Verkäufersphäre, in DAS EINHEITLICHE WIENER KAUFRECHT 111, 124 (Hans Hoyer & Willibald Posch eds., 1992); BERTRAND BOTZENHARDT, DIE AUSLEGUNG DES BEGRIFFS DER WESENTLICHEN VERTRAGSVERLETZUNG IM UN-KAUFRECHT 155 (1998); CHRISTOPH BRUNNER, UN-KAUFRECHT -- CISG: KOMMENTAR ZUM ÜBEREINKOMMEN DER VEREINTEN NATIONEN ÜBER DEN INTERNATIONALEN WARENKAUF VON 1980, at 133 (2004); MARIA GIOVANNA CUBEDDO, L'IMPORTANZADELL'INADEMPIMENTO 190 (1995); Urs Peter Gruber, Art. 25, in 3 MÜNCHENER KOMMENTAR ZUM BGB 2284, 2285 (2004); Leonardo Graffi, Case Law on the Concept of "Fundamental Breach" in the Vienna Sales Convention, 3 INT'L BUS. L.J. 338 (2003); Gabriele Kandut & Willibald Posch, Die allgemeinen Bestimmungen über den Warenkauf: Arts. 25-29, in DAS EINHEITLICHE WIENER KAUFRECHT 59, 60 (Hans Hoyer & Willibald Posch eds., 1992); Ulrich Magnus, Beyond the Digest: Part III (Articles 25-34, 45-52), in THE DRAFT UNCITRAL DIGEST AND BEYOND: CASES, ANALYSIS AND UNRESOLVED ISUES IN THE U.N. SALES CONVENTION 319, 320 (Franco Ferrari et als. 2004) [hereinafter Magnus, Beyond the Digest]; Ulrich Magnus, Wiener UN-Kaufrecht, in J. VON STAUDINGER'S KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH MIT EINFUHRUNGSGESETZUND NEBENGESETZEN 254 (13th ed. 1995) [hereinafter Magnus, Wiener UN-Kaufrecht].

5. JORGE ADAME GODDARD, EL CONTRATO DE COMPRAVENTA INTERNACIONAL 231 (1994); BOTZENHARDT, supra note 4, at 37; Henry Deeb Gabriel, General Provisions, Obligations of the Seller, and Remedies for Breach of Contract by the Seller, in THE DRAFT UNCITRAL DIGEST AND BEYOND: CASES, ANALYSIS AND UNRESOLVED ISUES IN THE U.N. SALES CONVENTION 336-37 (Franco Ferrari et al. eds., 2004); Graffi, supra note 4, at 338; JOHN O. HONNOLD, UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED NATIONS CONVENTION 205 (3d ed. 1999); GERT REINHART, UN-KAUFRECHT, KOMMENTAR ZUM ÜBEREINKOMMEN DER VEREINTEN NATIONEN VOM 11. APRIL 1980 ÜBER VERTRÄGE ÜBER DEN INTERNATIONALEN WARENKAUF 66 (1991); Hanns-Christian Salger, Art. 25, in INTERNATIONALES EINHEITSKAUFRECHT, SCHRIFTENREIHE RECHTDER INTERNATIONALEN WIRTSCHAFT 205 (Wolfgang Witz et al. eds., 2000).

6. See CISG arts. 49(1)(a), 51(2), 64(1)(a), 72(1), 73(1) & (2).

7. See CISG art. 46(2).

8. See CISG art. 70.

9. Ingo Saenger, Art. 25, in KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH, BAND 3 1297-2385, EGBGB, CISG 2795, 2796 (Hein Georg Bamberger & Herbert Roth eds., 2003); Antonio Cabanillas Sanchez, Art. 25, in LA COMPRAVENTA INTERNACIONAL DEMERCADERIAS 211, 220 (Luis Diez-Picazo & Ponce de Léon eds., 1998).

10. Magnus, Wiener UN-Kaufrecht, supra note 4, at 255; see also BOTZENHARDT, supra note 4, at 178.

11. see also Gabriel, supra note 5, at 337; Karollus, supra note 3, at 256.

12. Karollus, supra note 3, at 259.

13. Saenger, supra note 9, at 2796; ALEJANDRO GARRO & ALBERTO ZUPPI, COMPRAVENTA INTERNACIONAL DE MERCADERIAS 134 (1990); in case law, see, for instance, Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

14. Compare Clemens Pauly, The Concept of Fundamental Breach as an International Principle to Create Uniformity of Commercial Law, 19 J.L. & COM. 221, 225 (2000): The remedy of contract avoidance is supposed to be a remedy of last resort, and a court is supposed to try to save the deal as much as possible. Under CISG, the stake for the aggrieved buyer to return non-conforming goods to the seller, or to require substitution, is considerably higher than the prerequisites for a claim for damages. The explanation for this high burden of proof lies in the international character of the transactions. In a CISG setting, goods are being shipped around the world, generating immense costs for shipping, insurance, storage, financing, etc. The goal of saving those deals thus not only reduces costs, but also promotes performance and assures that the parties can rely on their agreements. see also BERNARD AUDIT, LA VENTE INTERNATIONALE DE MARCHANDISES, CONVENTION DES NATIONS UNIES DU 11 AVRIL 1980 at 118-19 (1990); GARRO & ZUPPI, supra note 13, at 135.

15. See Kandut & Posch, supra note 4, at 60 f.; Martin Karollus, Zur Falschlieferung und den Rechtsfolgen im internationalen Kaufrecht, 52 JURISTEN-ZEITUNG 38 (1997); Gruber, supra note 4, at 2285; Christoph Benicke, Art. 25, in MÜNCHENER KOMMENTAR ZUM HANDELSGESETZBUCH. BAND 6. 373-406. CISG 465, 466 (Karsten Schmidt ed., 2004).

16. For this statement, see Benicke, supra note 15, at 466.

17. See Michael R. Will, Art. 25, in THE 1980 VIENNA SALES CONVENTION. COMMENTARY ON THE INTERNATIONAL SALES LAW 205, 209 (Massimo C. Bianca & Michael J. Bonell eds., 1987); Karollus, supra note 3, at 260.

18. See, for example, Franco Ferrari, Uniform Interpretation of The 1980 Uniform Sales Law, 24 GA. J. INT'L & COMP. L. 183 (1994); Franco Ferrari, La jurisprudence sur la CVIM: un nouveau défi pour les interprètes?, 4 INT'L BUS. L.J. 495 (1998).

19. See Graffi, supra note 4, at 338-39; Salger, supra note 5, at 206.

20. GARRO & ZUPPI, supra note 13, at 134; ROLF HERBER & BEATE CZERWENKA, INTERNATIONALES KAUFRECHT, KOMMENTARZU DEM ÜBEREINKOMMEN DER VEREINTEN NATIONEN VOM 11. APRIL 1980 ÜBER VERTRÄGE ÜBER DEN INTERNATIONALEN WARENKAUF 130 (1991); HONNOLD, supra note 5, at 205; Kandut & Posch, supra note 4, at 61; Magnus, Wiener UN-Kaufrecht, supra note 4, at 255-56; Jean Thieffry, Les nouvelles règles de la vente internazionale, 15 INT'L TRADE L. & PRAC. 369, 379 (1989).

21. For a similar statement, see also James Bailey, Facing the Truth: Seeing the Convention on Contracts for the International Sale of Goods as an Obstacle to a Uniform Law of International Sales, 32 Cornell Int'l L.J. 273, 289 (1999); Frank Diedrich, Autonome Auslegung von internationalem Einheitsrecht. Computersoftwareim Wiener Kaufrecht 74 (1994); Franco Ferrari, Der Begriff des "internationalen Privatsrechts" nach Art. I Abs. I lit.b) des UN-Kaufrechts, Zeitschrift für europäisches Privatrecht 162, 166 (1998); Franco Ferrari, Internationales Kaufrecht einheitlich ausgelegt -- Anmerkungen anläßlich eines italienischen Urteils (Trib. Vigevano, 12.07.2000), Internationales Handelsrecht 56, 57-58 (2001); Jan Kropholler, Internationales Einheitsrecht. Allgemeine Lehren 265 (1975); Paul B. Stephan, The Futility of Unification and Harmonization of International Commercial Law, 39 Va. J. Int'l L. 743, 774 (1999); for a similar statement in case law, see MCC-Marble Ceramic Inc. v. Ceramica Nuova d'Agostino S.p.A., 144 F.3d 1384, 1391 (11th Cir. 1998) (U.S. Court of Appeals (11th Circuit), 29 June 1998); for a different opinion, see Rod N. Andreason, MCC-Marble Ceramic Center: The Parol Evidence Rule and Other Domestic Law Under the Convention on Contracts for the International Sale of Goods, 1999 BYU L. Rev. 351, 355; Larry DiMatteo, An International Contract Law Formula: The Informality of International Business Transactions Plus the Internationalization of Contract Law Equals Unexpected Contractual Liability, 23 Syracuse J. Int'l L. & Com. 67, 79 (1997).

22. FABIAN BURKART, INTERPRETATIVES ZUSAMMENWIRKEN VON CISG UND UNIDROIT PRINCIPLES 146 (2000); Franco Ferrari, The Relationship Between the UCC and the CISG and the Construction of Uniform Law, 29 Loy. L.A.L. Rev. 1021, 1026 (1996); Honnold, supra note 5, at 89.

23. For a judicial application of the view expressed in the text, see RB Zwolle, Netherlands, 5 Mar. 1997, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=332&step=Abstract> (holding that "good faith" under French law differs from the good faith concept of the CISG).

24. Magnus, Wiener UN-Kaufrecht, supra note 4, at 153; for a similar statement, see WILHELM-ALBRECHT ACHILLES, KOMMENTAR ZUM UN-KAUFRECHTS ÜBEREINKOMMEN (CISG) 29 (2000); Ferrari, supra note 21, at 166; Rolf Herber, Art. 7, in KOMMENTAR ZUM EINHEITLICHEN UN-KAUFRECHT 91, 94 (Peter Schlechtriem ed., 2d ed. 1995).

25. Leonardo Graffi, Divergences in the Interpretation of the CISG: The Concept of "Fundamental Breach," in THE 1980 UNIFORM SALES LAW. OLD ISSUES REVISITED IN THE LIGHT OF RECENT EXPERIENCES 305, 311 (Franco Ferrari ed., 2003); Lurger, supra note 3, at 96; Pauly, supra note 14, at 229; for a judicial decision, see Tribunale di Padova, Italy, 25 Feb. 2004, available at <http://cisgw3.law.pace.edu/cases/040225i3.html> (referring to the fact that the "concept is rather generic").

26. In this sense see Magnus, Beyond the Digest, supra note 4, at 322; Magnus, Wiener UN-Kaufrecht, supra note 4, at 254.

27. ACHILLES, supra note 24, at 64; CUBEDDO, supra note 4, at 200.

28. Andrew Babiak, Defining "Fundamental Breach" under the United Nations Convention on Contracts for the International Sale of Goods, 6 TEMPLE INT'L & COMP. L.J. 113, 127, 133 (1992); Cabanillas Sanchez, supra note 9, at 218; RUDOLPH, supra note 3, at 187.

29. Karollus, supra note 3, at 259.

30. See ACHILLES, supra note 24, at 64; Cabanillas Sanchez, supra note 9, at 214; RUDOLPH, supra note 3, at 187.

31. See Salger, supra note 5, at 206.

32. Cabanillas Sanchez, supra note 9, at 214; Peter Schlechtriem, Art. 25, in KOMMENTAR ZUM EINHEITLICHEN UN-KAUFRECHT 307, 311 (Peter Schlechtriem & Ingeborg Schwenzer eds., 4th ed. 2004).

33. ACHILLES, supra note 24, at 64; Benicke, supra note 15, at 467; BRUNNER, supra note 4, at 135, 145; Cabanillas Sanchez, supra note 9, at 219; Graffi, supra note 4, at 339; VINCENT HEUZÉ, LA VENTE INTERNATIONALE DE MARCHANDISES -- DROIT UNIFORME 349 (2d ed. 2000); Gruber, supra note 4, at 2286; Magnus, Wiener UN-Kaufrecht, supra note 4, at 255; RUDOLPH, supra note 3, at 189; PETER SCHLECHTRIEM, INTERNATIONALES UN-KAUFRECHT 85 (2d ed. 2003); Salger, supra note 5, at 206; Sophie Stinjs & Raf van Ransbeeck, De rechtsmiddelen (algemeen), in HET WEENS KOOPVERDRAG 191, 195 (Hans van Houtte et al. eds., 1997); in case law see Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html> ("All types of contractual obligations may be relevant for the determination of the essential contractual interest, regardless of whether they are principal or ancillary obligations."); similarly see Oberlandesgericht Köln, Germany, 8 Jan. 1997, available at <http://cisgw3.law.pace.edu/cases/970108g1.html>; a different position seems to be taken by the Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html> ("Ce qui précède signifie qu'une obligation principale doit avoir été violée. ... Dans cette perspective, la violation d'une obligation accessoire ne peut constituer une contravention essentielle que si elle a des répercussions sur l'exécution des obligations principales.").

34. Oberlandesgericht Frankfurt, Germany, 17 Sept. 1991, available at <http://cisgw3.law.pace.edu/cases/910917g1.html>; in scholarly writing, see HERBER & CZERWENKA, supra note 20, at 130; Lurger, supra note 3, at 102.

35. For this statement, see Benicke, supra note 15, at 467; for a similar statement, see ACHILLES, supra note 24, at 64; more restrictively see Salger, supra note 5, at 206 (the obligation must "relate to the law of sales"); similarly Gruber, supra note 4, at 2287; Schlechtriem, supra note 32, at 310-11; for a different view, see BRUNNER, supra note 4, at 135 (suggesting to apply Article 25 also to obligations that are not typical of sales contract, "as long as the contract as a whole is subject to the CISG.").

36. In this sense see expressly Schlechtriem, supra note 32, at 310-11.

37. See Cour d'appel Grenoble, France, 22 Feb. 1995, available at <http://cisgw3.law.pace.edu/cases/950222f1.html>.

38. Oberlandesgericht Koblenz, Germany, 31 Jan. 1997, available at <http://www.cisg-online.ch/cisg/urteile/256.htm>.

39. See BOTZENHARDT, supra note 4, at 184; BRUNNER, supra note 4, at 135; Alexander Lüderitz & Christine Budzikiewicz, Art. 25, in 13 BÜRGERLICHES GESETZBUCH MIT EINFÜHRUNGSGESETZ UND NEBENGESETZEN 52 (13th ed. 2000); RUDOLPH, supra note 3, at 186-87; for a similar statement in case law, see Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html>.

40. See Saenger, supra note 9, at 2796; HERBER & CZERWENKA, supra note 20, at 130.

41. See Aicher, supra note 4, at 123; Walter Bitter & Georg Bitter, Wandlungsmöglichkeit des professionellen Käufers und Nachlieferungsrecht des Verkäufers bei aliud-Lieferung. Eine Untersuchung zum deutschen und UN-Kaufrecht, 48 BETRIEBS-BERATER 2315, 2322 (1993); BOTZENHARDT, supra note 4, at 37, 48; CUBEDDO, supra note 4, at 198; Magnus, Wiener UN-Kaufrecht, supra note 4, at 456; for a different view, see Karollus, supra note 3, at 261 (favouring a distinction of the various types of breaches).

42. HERBER & CZERWENKA, supra note 20, at 130; Will, supra note 17, at 210.

43. See Babiak, supra note 28, at 119.

44. See Karollus, supra note 3, at 262-63.

45. Accord GODDARD, supra note 5, at 232; Graffi, supra note 4, at 339; Saenger, supra note 9, at 2796; Salger, supra note 5, at 206. See, however, Cabanillas Sanchez, supra note 9, at 214 (stating that the concept of "detriment" referred to in Article 25 compares to the concept of "damages" referred to in Article 74).

46. For this conclusion, see also Magnus, Wiener UN-Kaufrecht, supra note 4, at 256.

47. See BOTZENHARDT, supra note 4, at 191; HERBER & CZERWENKA, supra note 20, at 130.

48. Compare Karollus, supra note 3, at 262-63; Angela Maria Romito & Charles Sant'Elia, Italian Court and Homeward Trend, 14 PACE INT'L L. REV. 179, 198 (2002). See, however, Babiak, supra note 28, at 120 ("the drafters simply and naturally intended the word 'detriment' to be synonymous with monetary injury or harm, or of a consequential harm").

49. In case law see, for instance, Landgericht Landshut, Germany, 5 Apr. 1995, available at <http://cisgw3.law.pace.edu/cases/950405g1.html> (stating that the delivery of garments that shrink up to two sizes after washing amounts to a fundamental breach); Roder Zelt- und Hallenkonstruktionen GmbH v. Rosedown Park Pty Ltd and Reginald R Eustace, Federal Court of Australia, South Australian District, Adelaide, 28 Apr. 1995, available at <http://cisgw3.law.pace.edu/cases/951130a2.html> ("the appointment of an administrator ... and the placement of the company under administration, in the circumstances of this case, resulted in such detriment to [the seller] as substantially to deprive it of what it was entitled to expect under the contract.").

50. For this statement in case law, see, e.g., Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html>; in legal writing, see AUDIT, supra note 14, at 119; Gruber, supra note 4, at 2290.

51. See HERBER & CZERWENKA, supra note 20, at 131.

52. See MARTIN KAROLLUS, UN-KAUFRECHTEINE SYSTEMATISCHE DARSTELLUNG FÜR STUDIUM UND PRAXIS 91 (1991); Lurger, supra note 3, at 91; RADIVOIE PETRIKIC, DAS NACHERFÜLLUNGSRECHT IM UN-KAUFRECHT 23 (1999); Schlechtriem, supra note 32, at 308-09; for a similar statement in case law, see Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html> ("L'importance de la violation n'est pas déterminante, seules l'étant les conséquences de celle-ci pour la partielésée."); see, however, BRUNNER, supra note 4, 135 (stating that the extent of the damage suffered "obviously" constitutes an important indicator of the fundamental character of the breach).

53. See BOTZENHARDT, supra note 4, at 166; CUBEDDO, supra note 4, at 203; Kandut & Posch, supra note 4, at 63; Karollus, supra note 3, at 263; Magnus, Wiener UN-Kaufrecht, supra note 4, at 255; RUDOLPH, supra note 3, at 187; in case law see, for instance, Handelsgericht Aargau, Switzerland, 5 Nov. 2002, available at <http://cisgw3.law.pace.edu/cases/021105s1.html> (stating that "a particularly serious impairment of the buyer's interest in the performance thus constitutes a prerequisite for a fundamental breach of contract"); see also Zivilgericht Basel-Stadt, Switzerland, 1 Mar. 2002, available at <http://cisgw3.law.pace.edu/cases/020301s1.html>.

54. See Aicher, supra note 4, at 131; Christoph Benicke, Zur Vertragsaufhebung nach UN-Kaufrecht bei Lieferung mangelhafter Ware, PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 326, 329 (1997); BRUNNER, supra note 4, at 136; FRITZ ENDERLEIN ET AL., INTERNATIONALES KAUFRECHT 101-02 (1991); Rüdiger Holthausen, Die wesentliche Vertragsverletzung nach Art. 25 UN-Kaufrecht, RECHT DER INTERNATIONALEN WIRTSCHAFT 101, 102 (1990); HONNOLD, supra note 5, at 207; Magnus, Beyond the Digest, supra note 4, at 321; Magnus, Wiener UN-Kaufrecht, supra note 4, at 256-57; KARL NEUMAYER & CATHERINE MING, CONVENTION DE VIENNE SUR LES CONTRATS DE VENTE INTERNATIONALE DE MARCHANDISES. COMMENTAIRE 212-13 (1993); REINHART, supra note 5, at 67-68; Romito & Sant'Elia, supra note 48, at 199; RUDOLPH, supra note 3, at 187; Saenger, supra note 9, at 2796; FLORIAN SCHULZ, DER ERSATZLIEFERUNGS: UND NACHBESSERUNGSANSPRUCH DES KAUFERS IM INTERNEN DEUTSCHEN RECHT, IM UCC UND IM CISG 243 (2002); Will, supra note 17, at 212-13; in case law see, for instance, Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html> ("une obligation principale doit avoir été violée de façon telle que le but économique du contrat ne puisse étre atteint, la partie lésée n'ayant plus d'intérêt à l'exécution."); Oberlandesgericht Hamburg, Germany, 14 Dec. 1994, available at <http://www.cisg-online.ch/cisg/urteile/216.htm.

55. In this sense expressly Benicke, supra note 15, at 468; see also Gruber, supra note 4, at 2287; for a similar statement in case law, see Oberlandesgericht Hamburg, Germany, 14 Dec. 1994, available at <http://www.cisg-online.ch/cisg/urteile/216.htm>; Oberlandesgericht Frankfurt, Germany, 18 Jan. 1994, available at <http://www.cisg-online.ch/cisg/urteile/123.htm>; Landgericht Kassel, Germany, 21 Sept. 1995, available at <http://www.cisg-online.ch/cisg/urteile/192.htm>; Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

56. For this statement, see also ACHILLES, supra note 24, at 65; for similar statements, see also Lurger, supra note 3, at 94 (stating that the "contract avoidance as an ultima ratio remedy forms part of the basic values of the CISG"); similarly AUDIT, supra note 14, at 118; BOTZENHARDT, supra note 4, at 57; NINA FREIBURG, DAS RECHT AUF VERTRAGAUFHEBUNG IM UN-KAUFRECHT 48-49 (Berlin, 2001); Gruber, supra note 4, at 2285; Willibald Posch & Ulfried Terlitza, Entscheidungen des österreichischen Obersten Gerichtshofs zur UN-Kaufrechtskonvention (CISG), INTERNATIONALES HANDELSRECHT 47, 50 (2001); for similar statements in case law, see, for instance, Oberlandesgericht Köln, Germany, 14 Oct. 2002, available at <http://cisgw3.law.pace.edu/cases/021014g1.html> ("The buyer shall be authorised to request avoidance only as a last resort."); Landgericht Munich, Germany, 27 Feb. 2002, available at <http://cisgw3.law.pace.edu/cases/020227g1.html> ("since restitution as a result of the avoidance of a contract is -- as is clearly illustrated by the case at hand -- particularly burdensome in the international context, avoidance should only be a remedy of last resort."); Oberster Gerichtshof, Austria, 7 Sept. 2000, available at <http://www.cisg.at/8_2200v.htm> (mentioning that the avoidance of the contract constitutes an "ultima ratio" remedy).

57. For a similar conclusion, see Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>; for similar statements in legal writing, see GODDARD, supra note 5, at 233; Babiak, supra note 28, at 120; ENDERLEIN ET AL., supra note 54, at 102; Graffi, supra note 4, at 340; HERBER & CZERWENKA, supra note 20, at 131; Kandut & Posch, supra note 4, at 64; Pauly, supra note 14, at 225.

58. See infra Part III.

59. Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

60. For a different view, see BOTZENHARDT, supra note 4, at 166; for the view expressed in the text, see also NEUMAYER & MING, supra note 54, at 214; RUDOLPH, supra note 3, at 187.

61. see also Oberlandesgericht Hamburg Germany, 14 Dec. 1994, available at <http://www.cisg-online.ch/cisg/urteile/216.htm>.

62. For this conclusion, see Karollus, supra note 3, at 263-64; in case law, see Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

63. See AUDIT, supra note 14, at 119; BOTZENHARDT, supra note 4, at 180 f.; BURGHARD PILTZ, INTERNATIONALES KAUFRECHT. DAS UN-KAUFRECHT (WIENER UBEREINKOMMEN VON 1980) IN PRAXISORIENTIERTER DARSTELLUNG 220 (1993); Salger, supra note 5, at 207.

64. See ACHILLES, supra note 24, at 65; Saenger, supra note 9, at 2796.

65. See Karollus, supra note 3, at 265.

66. See Pauly, supra note 14, at 234.

67. See CISG art. 8(3).

68. In this respect, see BOTZENHARDT, supra note 4, at 168; Benicke, supra note 15, at 468; Magnus, Wiener UN-Kaufrecht, supra note 4, at 256; Saenger, supra note 9, at 2796.

69. See Schlechtriem, supra note 32, at 312-13.

70. In the same sense Lurger, supra note 3, at 93; Gruber, supra note 4, at 2297; Ingo Saenger, Art. 4, in KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH, supra note 9, at 2774, 2777; ANNE-KATHRIN SCHLUCHTER, DIE GULTIGKEIT VON KAUFVERTRAGEN UNTER DEM UN-KAUFRECHT: WIE GESTALTET SICH DIE ERGANZUNG DES EINHEITSRECHTS MIT DEUTSCHEN UND FRANZOSISCHEN NICHTIGKEITSNORMEN? 192 (1996); Kurt Siehr, Art. 4, in KOMMENTAR ZUM UN-KAUFRECHT. ÜBEREINKOMMEN DER VEREINTEN NATIONEN ÜBER VERTRÄGE ÜBER DEN INTERNATIONALEN WARENKAUF (CISG) 66, 69 (Heinrich Honsell ed., 1997); Oberster Gerichtshof, Austria, 7 Sept. 2000, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=473&step=Abstract>; Rb Zutphen, Netherlands, 29 May 1997, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=353&step=Abstract>; Amstgericht Nordhorn, 14 June 1994, available at <http://cisgw3.law.pace.edu/cases/940614g1.html>.

71. See Saenger, supra note 9, at 2797.

72. see also ACHILLES, supra note 24, at 65; Sebasian Kühl & Kai-Michael Hingst, Das UN-Kaufrecht und das Recht der AGB, in TRANSPORT-UND VERTRIEBSRECHT 2000, FESTSCHRIFT FÜR ROLF HERBER 50, 60 (Karl-Heinz Thume ed., 1999); Gruber, supra note 4, at 2297.

73. See BOTZENHARDT, supra note 4, at 173 f.; Gruber, supra note 4, at 2297; Karollus, supra note 3, at 273; Saenger, supra note 9, at 2797.

74. See Aicher, supra note 4, at 130; BRUNNER, supra note 4, at 136; PETRIKIC, supra note 52, at 24.

75. See Babiak, supra note 28, at 120.

76. For this statement, see also Magnus, Wiener UN-Kaufrecht, supra note 4, at 257.

77. See infra Part III.

78. See supra text accompanying note 42 ff.

79. See ACHILLES, supra note 24, at 69-70; Gruber, supra note 4, at 2298.

80. For a similar statement, see Cabanillas Sanchez, supra note 9, at 217; ENDERLEIN ET AL., supra note 54, at 103; Saenger, supra note 9, at 2798; Salger, supra note 5, at 210.

81. See HEUZÉ, supra note 33, at 350.

82. For an identical statement, see HERBER & CZERWENKA, supra note 20, at 132; see also GODDARD, supra note 5, at 233; Babiak, supra note 28, at 122; Graffi, supra note 4, at 339-40; Holthausen, supra note 54, at 105; Karollus, supra note 3, at 268-69; NEUMAYER & MING, supra note 54, at 216.

83. See Babiak, supra note 28, at 120-21; BOTZENHARDT, supra note 4, at 167; ENDERLEIN ET AL., supra note 54, at 103; HEUZÉ, supra note 33, at 349; Kandut & Posch, supra note 4, at 65; R.S. Meijer, Uncitral en het nieuwe verdrag inzake de internationale handelskoop, 55 NEDERLANDS JURISTENBLAD 1021, 1027 (1980); RUDOLPH, supra note 3, at 188; Stijns & van Ransbeeck, supra note 33, at 194.

84. See BRUNNER, supra note 4, at 136; HERBER & CZERWENKA, supra note 20, at 132; Magnus, Wiener UN-Kaufrecht, supra note 4, at 257; Salger, supra note 5, at 210.

85. See ULIS art. 10.

86. For commentators holding the view referred to in the text, see, for instance, ACHILLES, supra note 24, at 69; BRUNNER, supra note 4, at 137; FREIBURG, supra note 56, at 56; Gabriel, supra note 5, at 337; Gruber, supra note 4, at 2299; HEUZÉ, supra note 33, at 350; Holthausen, supra note 54, at 105; HERBER & CZERWENKA, supra note 20, at 132; Ulrich Huber, Der UNCITRAL-Entwurf eines Übereinkommens über internationale Warenkaufverträge, 43 RABELS ZEITSCHRIFT FÜR AUSLANDISCHES UND INTERNATIONALES PRIVATRECHT 413, 463 (1979); PILTZ, supra note 63, at 220; REINHART, supra note 5, at 68-69; BERND SCHEIFFLE, DIE RECHTSBEHELFE DES VERKAUFERS NACH DEUTSCHEM UND UN-KAUFRECHT 118 (1986); SCHLECHTRIEM, supra note 33, at 84; Ernst von Caemmerer, Die wesentliche Vertragsverletzung im international Einheitlichen Kaufrecht, in 2 FESTSCHRIFT FÜR HELMUT COING 33, 50 (1982).

87. For sources holding that it is the moment of the breach of contract that is relevant, see ENDERLEIN ET AL., supra note 54, at 104; Karollus, supra note 3, at 270; Kandut & Posch, supra note 4, at 66; GOTTFRIED MUSGER, DIE WESENTLICHE VERTRAGSVERLETZUNG 20 ff. (1989); REINHART, supra note 5, at 68-69; Jianming Shen, Declaring the Contract Avoided: The U.N. Sales Convention in the Chinese Context, 10 N.Y. INT'L L. REV. 7, 13 (1997); Will, supra note 17, at 220 ff.; going even further, see GODDARD, supra note 5, at 234, CUBEDDO, supra note 4, at 214; Cabanillas Sanchez, supra note 9, at 218; and NEUMAYER & MING, supra note 54, at 217.

88. For a similar statement in case law, see Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html>:

"La motivation du créancier doit être reconnaissable par le débiteur, lequel a su ou pu savoir que le premier considérait si essentielle l'exécution de la clause contractuelle non respectée qu'il aurait renoncé à la vente s'il avait prévu cette contravention .... Pour en juger, il faut se placer au moment de la conclusion du contrat, l'intérêt déterminant de l'une des parties devant être reconnaissable pour l'autre."

see also Oberlandesgericht Düsseldorf, Germany, 24 Apr. 1997, available at <http://cisgw3.law.pace.edu/cases/970424g1.html>.

89. See Benicke, supra note 15, at 469; Magnus, Wiener UN-Kaufrecht, supra note 4, at 258; Karl Neumayer, Offene Fragen zur Anwendung des Abkommens der Vereinten Nationen über den internationalen Warenkauf, RECHT DER INTERNATIONALEN WIRTSCHAFT 99, 104 (1994); SCHLECHTRIEM, supra note 33, at 84.

90. For a similar statement, see Schlechtriem, supra note 32, at 315-16.

91. ENDERLEIN ET AL., supra note 54, at 102; HERBER & CZERWENKA, supra note 20, at 131; Gruber, supra note 4, at 2290; Magnus, Wiener UN-Kaufrecht, supra note 4, at 256; Pauly, supra note 14, at 229.

92. For a detailed analysis of the lines of cases to be discussed in the text, see Graffi, supra note 25, at 305 ff.

93. Accord ACHILLES, supra note 24, at 66; BOTZENHARDT, supra note 4, at 198; BRUNNER, supra note 4, at 137; FREIBURG, supra note 56, at 82; Gruber, supra note 4, at 2290; Lüderitz & Budzikiewicz, supra note 39, at 52-53; Magnus, Wiener UN-Kaufrecht, supra note 4, at 258; Roberta Peleggi, Un esempio di applicazione del favor contractus quale principio ispiratore del sistema rimediale della Convenzione di Vienna sulla vendita internazionale di beni mobili, 16 DIRITIO DEL COMMERCIO INTERNAZIONALE 872, 877 (2003); RUDOLPH, supra note 3, at 188; Saenger, supra note 9, at 2797; for a similar statement in case law, see Pretura di Parma-Fidenza, Italy, 24 Nov. 1989, available at <http://cisgw3.law.pace.edu//cases/891124i3.html>.

94. See Schlechtriem, supra note 32, at 317-18. In case law, see, for example, Landgericht Ellwangen, Germany, 21 Aug. 1995, available at <http://cisgw3.law.pace.edu/cases/950821g2.html>.

95. See ACHILLES, supra note 24, at 66; Benicke, supra note 15, at 474; FREIBURG, supra note 56, at 80; Gruber, supra note 4, at 2290; Lurger, supra note 3, at 95; RUDOLPH, supra note 3, at 188; Salger, supra note 5, at 209. For case law on this issue, see Oberlandesgericht Celle, Germany, 24 May 1995, available at <http://cisgw3.law.pace.edu/cases/950524g1.html>; Schiedsgericht Hamburger Freundschaftliche Arbitrage, Germany, 29 Dec. 1998, available at <http://cisgw3.law.pace.edu/cases/981229g1.html>.

96. See ACHILLES, supra note 24, at 66; Magnus, Wiener UN-Kaufrecht, supra note 4, at 258.

97. See, however, Tribunale de Commerce de Poitiers, France, 9 Dec. 1996, available at <http://witz.jura.uni-sb.de/CISG/decisions/091296v.htm> (according to which the mere expression of the desire to avoid the contract constitutes a refusal to perform); for a criticism of this decision, see Schlechtriem, supra note 32, at 318.

98. In this context, it is relevant whether all or only part of the goods are non-conforming; see Benicke, supra note 15, at 472. For a similar statement in case law, see, for example, Oberlandesgericht Hamm, Germany, 22 Sept. 1992, available at <http://www.cisg-online.ch/cisg/urteile/57.htm> (the non-conformity of only 0.005% of the delivered goods does not warrant the avoidance of the contract with regard to the goods that remain to be delivered); Landgericht Landshut, Germany, 5 Apr. 1995, available at <http://cisgw3.law.pace.edu/cases/950405g1.html> (shrinking of all pieces of clothing that were purchased).

99. See Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html>:

Absent any contrary express contractual agreement of the parties, when assessing whether a breach of contract by the seller substantially affects the buyer's interest in performance, one must have regard to the tendency of the CISG to prevent the avoidance of the contract and to prefer price reduction or damages instead (Art. 50, 54(1)(b) CISG).

see also Oberlandesgericht Köln, Germany, 14 Oct. 2002, available at <http://cisgw3.law.pace.edu/cases/021014g1.html>; in legal writing, see Benicke, supra note 54, at 329; FREIBURG, supra note 56, at 100 f.; Gruber, supra note 4, at 2291-92.

100. See Handelsgericht Aargau, Switzerland, 5 Nov. 2002, available at <http://cisgw3.law.pace.edu/cases/021105s1.html>; similarly Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

101. See supra the text accompanying note 56.

102. In favor of the need to take into account the possibility of the seller to repair the defective goods when assessing the fundamental character of the breach, see, e.g., ACHILLES, supra note 24, at 66; Benicke, supra note 15, at 473; BOTZENHARDT, supra note 4, at 208 ff, 224; BRUNNER, supra note 4, at 141 f.; ENDERLEIN ET AL., supra note 54, at 102-03; Christiana Fountoulakis, Das Verhältnis von Nacherfüllungsrecht des Verkäufers und Vertragsaufhebungsrecht des Käufers im UN-Kaufrecht, 3 INTERNATIONALES HANDELSRECHT 160, 162 f. (2003); HERBER & CZERWENKA, supra note 20, at 131; HONNOLD, supra note 5, at 210; Lurger, supra note 3, at 98; Gruber, supra note 4, at 2292-93; MUSGER, supra note 87, at 42 f.; PILTZ, supra note 63, at 221; Schlechtriem, supra note 32, at 319; in case law, see Oberlandesgericht Köln, Germany, 14 Oct. 2002, available at <http://cisgw3.law.pace.edu/cases/021014g1.html> ("Even a serious defect does not constitute a fundamental breach of contract when the seller is willing to deliver conforming goods and when such delivery is not excessively burdensome for the buyer."); see also Landgericht München, Germany, 27 Feb. 2002, available at <http://cisgw3.law.pace.edu/cases/020227g1.html; Landgericht Regensburg, Germany, 24 Sept. 1998, available at <http://cisgw3.law.pace.edu/cases/980924g1.html>; Oberlandesgericht Koblenz, Germany, 31 Jan. 1997, available at <http://www.cisg-online.ch/cisg/urteile/256.htm>; Handelsgericht Zurich, Switzerland, 26 Apr. 1995, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=166&step=Abstract>; Cour d'Appel Grenoble, France, 26 Apr. 1995, available at <http://cisgw3.law.pace.edu/cases/950426f2.html>; for a different view, see Thomas Carsten Ebenroth, Internationale Vertragsgestaltung im Spannungsverhältnis zwischen AGBG, IPR-Gesetz und UN-Kaufrecht, JURISTISCHE BLATTER 681, 693 (1986); HEUZÉ, supra note 33, at 349 f.; Holthausen, supra note 54, at 103; KAROLLUS, supra note 52, at 142 f.; Neumayer, supra note 89, at 106; Rudolf Welser, Die Vertragsverletzung des Verkäufers und ihre Sanktion, in DAS UNCITRAL-KAUFRECHTIM VERGLEICH ZUM ÖSTERREICHISCHEN RECHT 105, 125 (Peter Doralt ed., 1985).

103. See Oberlandesgericht Koblenz, Germany, 31 Jan. 1997, available at <http://www.cisg-online.ch/cisg/urteile/256.htm>.

104. Accord Gruber, supra note 4, at 2992 ff.

105. Handelsgericht Kanton Aargau, Switzerland, 5 Nov. 2002, available at <http://cisgw3.law.pace.edu/cases/021105s1.html>.

106. Salger, supra note 5, at 207-08.

107. Oberlandesgericht Hamburg, Germany, 14 Dec. 1994, available at <http://www.cisg-online.ch/cisg/urteile/216.htm> (CISG-online No. 214).

108. See Oberlandesgericht Frankfurt, Germany, 18 Jan. 1994, available at <http://cisgw3.law.pace.edu/cases/940118g1.html> ("There might, for example, not be a fundamental breach of contract when the buyer can use the non-conforming goods without any significant additional burden.").

109. See Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html>.

110. See Oberlandesgericht Köln, Germany, 14 Oct. 2002, available at <http://cisgw3.law.pace.edu/cases/021014g1.html> (holding that "it is decisive whether the non-conformity of the goods with the contract or any other defects prevent the buyer from using or reselling these goods -- even to a lower price -- in the course of ordinary business without disproportionate efforts"); see also Oberlandesgericht Stuttgart, Germany, 12 Mar. 2001, available at <http://cisgw3.law.pace.edu/cases/010312g1.html>; Bundesgericht, Switzerland, 28 Oct. 1998, available at <http://www.cisg-online.ch/cisg/urteile/413.htm>.

111. For this conclusion, see also SCHLECHTRIEM, supra note 33, at 86 f.

112. See Benicke, supra note 15, at 472; BRUNNER, supra note 4, at 141 n.586; ENDERLEIN ET AL., supra note 54, at 103; Gruber, supra note 4, at 2294.

113. See ACHILLES, supra note 24, at 67; Gruber, supra note 4, at 2294.

114. See BRUNNER, supra note 4, at 144-45; Gruber, supra note 4, at 2294; Salger, supra note 5, at 209-10.

115. See Saenger, supra note 9, at 2797 (mentioning as an example the possibility for the buyer to procure the documents himself without difficulties).

116. In this respect, see also ACHILLES, supra note 24, at 66-67.

117. For this conclusion, see ACHILLES, supra note 24, at 66.

118. See Bundesgerichtshof, Germany, 8 Mar. 1995, available at <http://cisgw3.law.pace.edu/cases/950308g3.html>.

119. For a similar statement, see Benicke, supra note 15, at 470; Gabriel, supra note 5, at 337; Graffi, supra note 25, at 312; Graffi, supra note 4, at 341; Gruber, supra note 4, at 2290-291; HERBER & CZERWENKA, supra note 20, at 281-82; HEUZÉ, supra note 33, at 361; Magnus, Wiener UN-Kaufrecht, supra note 4, at 259, 560; Peleggi, supra note 93, at 877; Salger, supra note 5, at 208; for case law, see Oberlandesgericht München, Germany, 1 July 2002, available at <http://cisgw3.law.pace.edu/cases/020701g1.html> ("a delay in the delivery does not amount to a fundamental breach of contract in the sense of Article 25 CISG."); Landgericht München, Germany, 20 Feb. 2002, available at <http://cisgw3.law.pace.edu/cases/020220g1.html> ("Non-delivery at the contractually agreed delivery date does not constitute a fundamental breach of contract in the sense of a Article 49(1)(a)."); Oberlandesgericht Hamburg, Germany, 28 Feb. 1997, available at <http://www.cisg-online.ch/cisg/urteile/261.htm> ("late delivery should not generally be viewed as a fundamental breach of contract."); Oberlandesgericht Düsseldorf, Germany, 18 Nov. 1993, available at <http://www.cisg-online.ch/cisg/urteile/92.htm> ("late delivery does not constitute a fundamental breach under Article 25 as long as performance is possible and the debtor has not finally refused to perform."); Court of Arbitration of the International Chamber of Commerce, Award No. 8128, 1995, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=207&step=FullText> ("Le simple retard ne constitue cependant pas une contravention essentielle d'après l'article 25 de la Convention.").

120. In this respect, see also ACHILLES, supra note 24, at 66; FRITZ ENDERLEIN & DIETRICH MASKOW, INTERNATIONAL SALES LAW 114 (1992); ENDERLEIN ET AL., supra note 54, at 102-03.

121. See Aicher, supra note 4, at 131-32; BRUNNER, supra note 4, at 138- 39; Karollus, supra note 3, at 267; Magnus, Wiener UN-Kaufrecht, supra note 4, at 258; Willibald Posch, Die Pflichten des Käufers und die Rechtsbehelfe des Verkäufers, in DAS EINHEITLICHE WIENER KAUFRECHT, supra note 4, at 143, 159; RUDOLPH, supra note 3, at 188; SCHLECHTRIEM, supra note 33, at 84-85; for a similar statement in case law, see Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html>; see also Handelsgericht Kanton Aargau, Switzerland, 5 Nov. 2002, available at <http://cisgw3.law.pace.edu/cases/021105s1.html>.

122. For a reference to this hypothetical, see, e.g., Peter Schlechtriem, Art. 25, in COMMENTARY ON THE UN CONVENTION ON THE INTERNATIONAL SALE OF GOODS (CISG) 173, 182 (Peter Schlechtriem ed., 1998).

123. See Graffi, supra note 25, at 313; Andreas Kappus, Vertragsaufhebung nach UN-Kaufrecht in der Praxis, 47 NEUE JURTISTISCHE WOCHENSCHRIFT 984, 985 (1994); in case law, see Oberlandesgericht Düsseldorf, Germany, 24 Apr. 1997, available at <http://cisgw3.law.pace.edu/cases/970424g1.html> ("The late delivery as such may not generally be regarded as a fundamental breach of contract in this sense. Timely delivery must be of such interest to the buyer that he prefers not to receive the goods at all rather than to receive them late and this particular interest in timeliness must be recognisable for the seller at the conclusion of the contract."); see also Oberlandesgericht München, Germany, 8 Feb. 1995, available at <http://cisgw3.law.pace.edu/cases/950208g1.html>.

124. For a different position, see Oberlandesgericht Hamburg, Germany, 28 Feb. 1997, available at <http://www.cisg-online.ch/cisg/urteile/261.htm> (holding late delivery only constitutes a fundamental breach of contract "when the buyer has a particular interest in compliance with this date and when the seller is or can be expected to be aware of this interest. In the present case, this particular interest derives from the use of the Incoterm 'CIF' in the sales contract insofar as this Incoterm qualifies the transaction as a transaction where the date is essential.").

125. See Graffi, supra note 25, at 313; HEUZÉ, supra note 33, at 350 note 114; Benicke, supra note 15, at 470; Peleggi, supra note 93, at 877.

126. See BRUNNER, supra note 4, at 138; Gruber, supra note 4, at 2291; Holthausen, supra note 54, at 105 f.; Lurger, supra note 3, at 94; Schlechtriem, supra note 32, at 318; for a similar statement (relating to seasonal goods) in case law, see Oberlandesgericht Düsseldorf, Germany, 24 Apr. 1997, available at <http://cisgw3.law.pace.edu/cases/970424g1.html>; Corte d'Appello Milano, Italy, 20 Mar. 1998, available at <http://cisgw3.law.pace.edu/cases/980320i3.html>; Court of Arbitration of the International Chamber of Commerce, Award No. 8786, Jan. 1997, available at <http://cisgw3.law.pace.edu/cases/978786i1.html>.

127. Landgericht Oldenburg, Germany, 27 Mar. 1996, available at <http://www.cisg-online.ch/cisg/urteile/188.htm>; similarly Amstgericht Ludwigsburg, Germany, 21 Dec. 1990, available at <http://www.cisg-online.ch/cisg/urteile/17.htm> (a two-day delay in delivery does not constitute a fundamental breach); for similar statements in legal writing, see Benicke, supra note 15, at 470; BRUNNER, supra note 4, at 139.

128. See BRUNNER, supra note 4, at 139; Salger, supra note 5, at 209; in case law, see Bundesgericht, Switzerland, 15 Sept. 2000, available at <http://cisgw3.law.pace.edu/cases/000915s1.html>; Pretura Parma-Fidenza, Italy, 24 Nov. 1989, available at <http://cisgw3.law.pace.edu/cases/891124i3.html>.

129. For this conclusion, see also ACHILLES, supra note 24, at 68; ENDERLEIN ET AL., supra note 54, at 196; Graffi, supra note 4, at 342; Gruber, supra note 4, at 2295; Günter Hager, Art. 64, in KOMMENTAR ZUM EINHEITLICHEN UN-KAUFRECHT, supra note 32, 622, 623; HEUZÉ, supra note 33, at 352; Magnus, Wiener UN-Kaufrecht, supra note 4, at 259; Saenger, supra note 9, at 2797; in case law, see Court of Arbitration of the International Chamber of Commerce, Award No. 7585, 1992, available at <http://cisgw3.law.pace.edu/cases/927585i1.html> ("However, the mere fact that a buyer has some delay in payment is not always in itself a fundamental breach. According to the circumstances, delay on payment for the buyer or delay of delivery for the seller cannot be the cause of immediate avoidance of the contract.").

130. See ACHILLES, supra note 24, at 68.

131. See CISG art. 64(1).

132. See ACHILLES, supra note 24, at 68; Benicke, supra note 15, at 471; Gruber, supra note 4, at 2296; Peleggi, supra note 93, at 877; for a different position, see Kantonsgericht Zug, Switzerland, 12 Dec. 2002, available at <http://cisgw3.law.pace.edu/cases/021212s1.html>.

133. See Benicke, supra note 15, at 471; BRUNNER, supra note 4, at 148; for a similar statement in case law, see Cour d'Appel Grenoble, France, 4 Feb. 1999, available at <http://cisgw3.law.pace.edu/cases/990204f1.html>.

134. For a similar statement, see HERBER & CZERWENKA, supra note 20, at 281-82; Magnus, Wiener UN-Kaufrecht, supra note 4, at 561; Leif Sevòn, Obligations of the Buyer under the UN Convention on Contracts for the International Sale of Goods, in INTERNATIONAL SALE OF GOODS. DUBROVNIK LECTURES 203, 233 (Petar Sarcevic & Paul Volken eds., 1986).

135. See ACHILLES, supra note 24, at 68.

136. See Schlechtriem, supra note 32, at 321.

137. For this conclusion, see BRUNNER, supra note 4, at 148.

138. See supra Part II(2).

139. See Oberlandesgericht Koblenz, Germany, 31 Jan. 1997, available at <http://www.cisg-online.ch/cisg/urteile/256.htm>.

140. See Cour d'Appel Grenoble, France, 22 Feb. 1995, available at <http://cisgw3.law.pace.edu/cases/950222f1.html>.

141. See Oberlandesgericht Köln, Germany, 8 Jan. 1997, available at <http://cisgw3.law.pace.edu/cases/970108g1.html>.

142. see also ACHILLES, supra note 24, at 68; HEUZÉ, supra note 33, at 353; Lurger, supra note 3, at 102; Magnus, Wiener UN-Kaufrecht, supra note 4, at 260; PETRIKIC, supra note 52, at 23; Schlechtriem, supra note 32, at 322.

143. This is not the case, however, when the refusal to issue the letter of credit anticipates the refusal to pay; see, for example, Downs Investments v. Perwaja Steel, Supreme Court of Queensland, 17 Nov. 2000, available at <http://cisgw3.law.pace.edu/cases/001117a2.html>.

144. See ACHILLES, supra note 24, at 67; Benicke, supra note 15, at 470; BRUNNER, supra note 4, at 147.

145. Landgericht Kassel, Germany, 21 Sept. 1995, available at <http://www.cisg-online.ch/cisg/urteile/192.htm>.

146. see also Benicke, supra note 15, at 470.

147. For this view in case law, see Oberlandesgericht Hamburg, Germany, 14 Dec. 1994, available at <http://www.cisg-online.ch/cisg/urteile/216.htm>; see also Bundesgerichtshof, Germany, 3 Apr. 1996, available at <http://cisgw3.law.pace.edu/cases/960403g1.html> (referring to the question, but leaving it unanswered).

148. For this statement, see Benicke, supra note 15, at 473; see also NEUMAYER & MING, supra note 54, at 208; contra BRUNNER, supra note 4, at 136.

149. See Benicke, supra note 54, at 330; Gruber, supra note 4, at 2288; Karollus, supra note 3, at 267; Karollus, supra note 15, at 39; Saenger, supra note 9, at 2797.

150. For recent case law, see Cour d'Appel Paris, France, 4 June 2004, available at <http://cisgw3.law.pace.edu/cases/040604f1.html> (the delivery of non-conforming goods the use of which does not warrant the same degree of safety as the contractually agreed goods constitutes a fundamental breach of contract).

151. Tribunale di Padova, Italy, 11 Jan. 2005, available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=1005&step=Abstract>.


Pace Law School Institute of International Commercial Law - Last updated October 19, 2006
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