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Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 304-312. Reproduced with permission of the publisher, Kluwer Law International, The Hague.

Article 46

Buyer's Right to Compel Performance

Text of Article
A. The General Rule for "Requiring" Performance
B. The Concession to the Rules of the Forum: Article 28
      (1) Requiring Performance by the Seller at Common Law
C. Limits on Compelling Performance under Article 46
      (1) Resort to Inconsistent Remedies
      (a) Inconsistency: Form and Substance
      (2) Compelling Delivery of Substitute Goods
      (3) Repair
D. Limits Set by Other Parts of the Convention
      (1) Special Rules on Requiring Performance and Domestic Law (Article 28)
E. Evaluation

§ 279 As we have seen (Art. 28, supra at §196), domestic legal systems follow varying practices concerning "requiring performance" (in common law parlance, "specific performance"). The result has been a series of delicate adjustments and compromises. We have already seen a concession to domestic practice in Article 28 which carves out an exception from the right to "require performance" that is given to the buyer in Article 46 and to the seller in Article 62. The general rule on the buyer’s right to require performance is as follows:

Article 46 [1] Specific Performance

"(1) The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement.

"(2) If the goods do not conform with the contract, the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under article 39 or within a reasonable time thereafter.

"(3) If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter."[page 304]

§ 280 A. The General Rule for "Requiring" Performance

Paragraph (1) of Article 46 lays down the general rule that the buyer may " require performance" by the seller; the seller’s package of remedies (Ch. III, Sec. III) has a parallel rule (Art. 62) that the seller may "require the buyer to pay the price." Both articles reflect the principle, embedded in civil law theory, that an aggrieved party may "require" the other party specifically to perform its contractual obligations.[2]

The rule of paragraph (1) that the buyer may require the seller to perform its "obligations" may be invoked in a wide variety of circumstances. The most common example is when the seller fails to procure or produce the goods or to deliver them at the place (Art. 31) or date (Art. 33) provided by the contract. In addition, subject to restrictions stated in Article 46(1) & (2) (§§283284 infra), a buyer may require the seller to deliver goods that are in conformity with the contract (Art. 35). Under Article 46(1) the seller may also require the seller to perform its obligations under Articles 41 and 42 to deliver goods free from any right or claim of a third party; we have considered (§270.1 supra) the use of Article 46 to require the seller to remove such claims or to defend them on behalf of the buyer. It is not possible to itemize all of the applications of Article 46 (or of the seller’s parallel remedy under Article 62) since these provisions apply generally to the parties’ "obligations" under the Convention and the contract (Arts. 6, 30, 53).

§ 281 B. The Concession to the Rules of the Forum: Article 28

Article 28, supra at §194, states that even though the Convention’s general rules provide that a "party is entitled to require performance," a court "is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention." As was noted under Article 28 (§§191, 195, supra), this concession to the procedures of the forum was granted by ULIS (1964) in response to the objection that common-law systems compelled ("specific") performance only when alternative remedies ( e.g., damages) were not adequate. Comparative research also revealed that some civil law systems would not always compel [page 305] performance by the coercive measures, such as imprisonment for contempt, that may be available in "common law" systems; as a consequence flexibility based on Article 28 is not confined to common law jurisdictions.

§ 281.1 [(1)] Requiring Performance by the Seller at Common Law

"Common law" restrictions on requiring (specific) performances of sellers’ obligations are sometimes exaggerated. It is true that common law courts will not ordinarily compel a seller to deliver goods that the buyer can readily acquire; common examples are standard raw materials—wheat, cotton or the like. In these cases the courts usually find that the buyer’s only loss is the added cost of purchasing the goods—a loss that can readily be ascertained and compensated by awarding damages. However, if substitute goods can not readily be obtained because of shortages or their unique character the buyer’s loss may not be readily measured or compensated by a damage-award. Other examples include a seller’s repudiation of a long-term contract; in this and similar situations the buyer’s loss may be difficult to ascertain. In these and many other situations where damages do not fully compensate the buyer one may expect a favorable response to an action to require ("specific") performance.[3]

§ 282 C. Limits on Compelling Performance Under Article 46

(1) Resort to Inconsistent Remedies

Paragraph (1) of Article 46 withdraws the right to compel performance when "the buyer has resorted to a remedy that is inconsistent with this requirement." For example, the buyer loses the right to compel delivery when the buyer takes the position that it will not accept the goods— e.g., by declaring the contract avoided (Art. 49(1)). The basic inconsistency between these remedies is made explicit in Article 81, infra at §439:[page 306] Avoidance "releases both parties from their obligations under [the contract] subject to any damages that may be due."

§ 282.1 (a) Inconsistency: Form and Substance

Inconsistency between avoidance and requiring performance is evident when the buyer declares the contract avoided (E.g. "I avoid: Don’t ship the goods") and later demands performance: "Ship the goods". Indeed, the rule of Article 46(1) that a buyer may not "require performance" if it "has resorted to a remedy that is inconsistent with this requirement" serves a policy that is deeper than the logic (or esthetics) of inconsistency—the likelihood of reliance on the buyer’s declaration by stopping production, reselling the goods, or canceling the reservation of shipping space.

In examining the Convention’s rules on risk of loss (Article 70, §382.1, infra) it may be relevant to consider whether a buyer who has received seriously defective goods may concurrently: (A) under Article 49(1)(a) declare the contract avoided ("I avoid: Take back the goods") and also (B) under Article 46(2) require the seller to deliver substitute goods. Whether the remedies are inconsistent calls for comparing their impact in specific situations. Both call for the buyer to return the goods. Article 82(1) (§§445448, infra) provides: "(1) The buyer loses the right to declare the contract avoided or to require the seller to deliver substitute goods " if the buyer can not return the goods. The remedies are consistent in other respects such as requirements of notification (Arts. 46(2), 49(2)(b)) and recovery of damages (Arts. 45, 74, 81(1)).

In sum, the two remedies do not violate Article 46(1)’s prohibition of "inconsistent" remedies when they are exercised concurrently; indeed, a buyer’s reference to "avoidance" in connection with a demand under Article 46(2) for substitute goods is redundant since it repeats one aspect of the buyer’s rights under Article 46(2)—the buyer’s right to require the seller to take back the defective goods. On the other hand, inconsistency may arise if the buyer declares that the contract is avoided under Article 49(1) or 46(2).

It is not feasible here to explore questions of inconsistency of remedies in the various settings in which they may arise. This discussion is designed to suggest that applying the rule prohibiting inconsistent remedies calls for attention to their impact in specific situations.

§ 283 (2) Compelling Delivery of Substitute Goods

Paragraph (2) of Article 46 governs the scope of specific performance when the seller tenders goods that do not conform to the contract. When [page 307] the non-conformity is unimportant, compelling a second delivery may impose burdens that are out of proportion to the buyer’s needs; hence this remedy is available "only if the lack of conformity constitutes a fundamental breach of contract...."[4]

Example 46A. Seller delivered goods that were seriously defective—i.e., a "fundamental breach" under Article 25. Buyer telexed, "Rejecting shipment for the following serious defects [specifying them]. Demand prompt delivery in conformity with the contract". Seller replied, "Your rejection of the goods avoided the contract which (CISG 81) releases both of us from our obligations under the contract".

Seller’s point based on Article 81 ("avoidance...releases both parties from their obligations...") is, of course, in error for it fails to note that Article 46(2) makes a special and narrow exception from the general rule on avoidance in Article 81; both provisions must be given effect whereas Seller’s argument would nullify Article 46(1).

Could Seller have invoked the above rule on avoidance in Article 81 if Buyer had telexed: " Avoid contract for the following serious defects... Demand prompt delivery...(etc.)". The ill-advised use of words referring to "avoidance" should not prejudice the buyer: Under Article 46(2) the buyer was entitled to refuse the goods for fundamental breach and demand substitute goods; the buyer’s position was clear in spite of the improper language. (The above example may help to expose the snares concealed in the phrase "avoidance of the contract". The implications of the "avoidance" remedy are articulated in Articles 47–49, 51, 72, 73, 81 and 82.)

Example 46B. A contract called for a shipment of 100 X-type machines. Seller shipped the 100 machines but inspection on arrival showed that 10 were defective. This defect was so serious that if all of the machines had been subject to this defect there would have been a "fundamental breach" of the contract: Buyer could have rejected the entire shipment (Arts. 25 and 49(1)(a), §304 infra). However, the defect in the ten machines did not interfere with Buyer’s use or marketing of the other 90 machines. Under Article 46(2) may Buyer, by appropriate notice, require Seller to deliver (a) ten conforming machines to substitute for the defective ones or (b) a new shipment of one hundred conforming machines?

As we shall see, Article 51 addresses this question (§§316317 infra). Article 51(1) states that "if only part of the goods delivered is in conformity [page 308] with the contract, articles 46 to 50 apply in respect of the part ...which does not conform." Thus, the answer to the first question is Yes: By virtue of Articles 46(2) and 51(1) Buyer may require Seller to substitute ten conforming machines for the defective units. Under Article 51(2) (§317 infra) the answer to the second question is probably No: If it is feasible to deal separately with the conforming and non-conforming units and the defects in the ten machines are not a "fundamental breach" of the entire contract, Buyer may not require Seller to deliver an entirely new shipment. (See Flechtner, Pittsburgh Symposium 53, 86–87.)

§ 284 (3) Repair

Under paragraph (3) the buyer’s right to "require the seller to remedy the lack of conformity by repair" is slightly stronger than the buyer’s right under paragraph (2) to require "delivery of substitute goods." Requiring the delivery of substitute goods—a new shipment of a raw commodity or the substitution of a new machine—might involve transportation costs that would be unreasonably onerous when the non-conformity is insubstantial. Repair of the goods—which might merely involve a mechanical adjustment or replacing a defective part—usually is more efficient; the buyer may require the seller to "repair" even when the breach is not fundamental. However, repair may not be required when this remedy would be "unreasonable having regard to all the circumstances." At the Diplomatic Conference in the course of framing paragraph (3) it was noted that some minor repairs could be made more readily by the buyer, particularly when the seller’s facilities for repair are in a distant country. The statutory language was designed to encourage a reasonable and flexible approach to such cases.[5]

§ 285 D. Limits Set by Other Parts of the Convention

The discussion of Article 28, supra at §193, mentioned other provisions of the Convention that, in some situations, would restrict actions to compel performance. The Convention’s rules on the obligation to preserve and dispose of goods (Arts. 85, 86, 88(2)), and on the duty to mitigate loss (Art. 77) in some settings may bar specific performance; the reasons will be examined in the commentaries to these articles. As was mentioned in discussing the "good faith" principle of Article 7, supra at [page 309] §95, that principle may call for a restrained interpretation of the Convention’s provisions on compelling performance when a party seeks this remedy only after a delay that permits him to speculate at the expense of the other party—as when a buyer seeks to compel delivery (rather than damages) only after a sharp rise in the market, or when a seller seeks to require specific performance (rather than damages) only after a market collapse.[6]

§ 285.1 (1) Special Rules on Requiring Performance and Domestic Law (Article 28)

As we have seen, Article 46(2) provides that in specified circumstances the buyer may require the seller to deliver "substitute goods" (§183, supra) and Article 46(3) specifies the circumstances in which the buyer may require the seller to "repair" defective goods (§184, supra ). Do domestic rules of the forum accepted by Article 28 supersede those of Article 46(2) or (3)? [7]

The problem needs to be broken apart. Suppose that a buyer, invoking the law of the forum, seeks to require a seller to deliver substitute goods even though the lack of conformity is not a fundamental breach as required by Article 46(2). Or suppose that a buyer, invoking the law of the forum, seeks to require the seller to repair the goods even though, pursuant to Article 46(3), under "all the circumstances" requiring the seller to repair "is unreasonable". In these cases the buyer’s attempt to invoke domestic law is untenable: Article 28 applies only when the buyer " is entitled to performance" in " accordance with the provisions of this Convention ". A less technical but more substantial reason is that the international community decided that it would be appropriate to require substitute delivery and repair only under the conditions specified in Article 46(2) and (3).

Now let us suppose that domestic law of the forum would not require the seller to deliver substitute goods or repair non-conforming goods in [page 310] cases where the conditions specified in Article 46(2) and (3) were satisfied. Does Article 28 authorize the court to apply its domestic rules in place of those of the Convention?

Article 28, standing alone, seems to say that domestic law will prevail but this conclusion would overlook the specificity and nuanced character of the rules of Article 46(2) and (3) governing these precise situations. In the absence of evidence that UNCITRAL and the Diplomatic Conference faced this problem and evidenced a decision to give an unqualified reading to Article 28, Articles 46(2) and (3) should be regarded as lex specialis qualifying the general provisions of Article 28. Indeed, it seems out of keeping with the spirit of fairness that was characteristic of UNCITRAL and the Diplomatic Conference to conclude that, in facing these specific cases, the law-makers would decide to restrict the grounds for relief in some jurisdictions without requiring liberalization of the grounds in others.[8]

§ 286 E. Evaluation

It would be easy to over-estimate the importance of the Convention’s rules on "requiring" performance. Buyers seldom need to coerce sellers to replace or repair defective goods (Arts. 46(2) & (3)). Replacement and repair are opportunities sought by sellers—to preserve good will, reduce damage liability and avoid the drastic remedy of avoidance of the contract. In the infrequent instances where sellers are unwilling to perform, coercing performance is seldom so speedy and effective as purchasing substitute goods. The delays inherent in obtaining coerced performance usually render this remedy impractical even for domestic transactions and are magnified when the parties are far apart. Active participants in commerce and their legal advisors who are familiar with the practical problems of coercing action usually choose to supply their needs elsewhere and proceed with business—subject to compensation for damages after the cumbersome processes of litigation have taken their course.

It is true that meager returns can be expected from a damage claim against a seller who faces financial failure or is in the course of liquidation [page 311] or reorganization. Theoretically, the buyer’s position would be improved by forcing the seller to perform the contract. However, the recovery of penalties, like damages, would be subject to similar difficulties of collection. Can this problem be solved by harsher penalties such as committing the seller to prison for contempt of court? Domestic rules on bankruptcy and creditors’ rights may well bar the draconian allocation of the scarce resources of a failing debtor to a single creditor. And such domestic rules would not be supplanted by the Convention’s rules on "requiring performance": The rights of third parties are at stake while the Convention’s rules are confined to "the rights and obligations of the seller and the buyer" (see Art. 4, supra at §70).[9]

See: Schlechtriem, Com.(1998) 376–393 (Huber).[page 312]

FOOTNOTES: Chapter on Article 46

1. Paragraphs (1) and (2) of Art. 46 are the same as Art. 42 of the 1978 Draft. Paragraph (3) was added at the Diplomatic Conference. ULIS gave the buyer broad grounds to require performance by the seller in Arts. 24(1)(a) (date and place of delivery), 26(1) and 27(1) (date of delivery); 30(1) and 31 (place for delivery); 41(1)(a) (non-conformity of goods); 42 (remedying defects, delivering goods or missing parts); 55(2) (other obligations). However, Art. 25 of ULIS barred specific performance by the buyer when "it is a conformity with usage and reasonably possible for the buyer to purchase goods to replace those to which the contract relates" and Art. 61(2) similarly restricted the seller’s recovery of the price. In addition, ULIS 16 and Art. VII(1) of the 1964 Convention (like Art. 28 of the 1980 Convention) deferred to rules of the forum that limited the remedy of specific performance.

2. Dawson, Specific Performance in France and Germany, 57 Mich. L. Rev. 495 (1959); Treitel, Remedies (Int. Enc.) §9; Treitel, Remedies (1988) Ch. III; Benjamin §§1415–1421; Farnsworth, Damages and Specific Relief, AJCL UNCITRAL Symposium 247.

3. The above examples only suggest judicial responses in jurisdictions with which the writer is familiar. See also: D. Dobbs, Remedies §12.18, pp. 884–886 (1973); White & Summers §6–6; Farnsworth, Contracts 827–831; Benjamin §§1417–1421. As was noted supra at §270.1, on requiring the seller to take steps to remove or defend third-party claims to the goods, the inadequacy of damages could be expected to invoke specific relief in a common law jurisdiction. There are fewer situations in which a common law court would find that coercing a buyer to accept and pay for the goods would be justified by the inadequacy of a money judgment. See Art. 62, §§345349 infra.

4. "Fundamental breach" is discussed at Art. 25, supra at §181. The reasons for restricting paragraph (2) to fundamental breach were brought out at the Diplomatic Conference in resisting proposals to eliminate this restriction. O.R. 337, Docy. Hist. 558.

5. O.R. 332–333, Docy. Hist. 553–554.

6. Even civil law systems that strongly support specific performance do not permit this remedy to be abused by excessive delay. See Treitel, Remedies (Int. Enc.) §150, Treitel, Remedies (1988) 49.

7. Since Article 46(2) and (3) would require a seller to take action to redress a breach of the seller’s obligation to deliver conforming goods, these remedies fall within Article 28 as remedies "to require performance of any obligation of the other party...". Accord: Kastely, Right to Require Performance, 63 Wash. L. Rev. 607, 635–636 (1988).

8. See Kastley, n. 7 supra, 635–636: The language of Article 28 that "a court is not bound " to give specific relief indicates that courts "have discretion to vary from domestic law in order to give effect to the international character of the contract and the need for uniformity...".

9. The United States Bankruptcy Reform Act of 1978, 11 U.S.C. §365 empowers the trustee in bankruptcy to "reject any executory contract." The defendant’s inability to satisfy a judgment for damages is a basis for enjoining his commission of a tort but not for specific enforcement of a contract when the plaintiff would gain an unfair advantage over the other creditors. See Walsh, Equity 318–321 (1930); Restatement, Second of Contracts §360 Comment d, §365 Comment b.

Pace Law School Institute of International Commercial Law - Last updated February 25, 2005
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