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Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 318-324. Reproduced with permission of the publisher, Kluwer Law International, The Hague.

Article 48

Cure After Date for Delivery; Requests for Clarification

A. Tools for Cooperation
      (1) The Convention
B. Cure and Delay in Delivery
C. Care and Advance for Fundamental Breach
D. Requests for Clarification
      (1) Proposal to Cure by Repair
      (2) Proposal to Make a Late Delivery
      (3) Failure to Receive the Notice

§292 A. Tools for Cooperation

A sales transaction may be regarded (at the extremes) either as a duel fought with deadly weapons or as a relationship calling for cooperation and accommodation. The latter, of course, is the attitude of persons engaged in commerce; this approach is reflected in several provisions of the Convention.

§293 (1) The Convention

Two articles deal with the cure of defective performance. Article 37, supra at §245, gives the seller the right to cure defective performance up to the date for delivery; the present Article gives the seller a more restricted right to cure defects in performance after the date for delivery.

Article 48 [1]

"(1) Subject to article 49, the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the buyer retains any right to claim damages as provided for in this Convention.

"(2) If the seller requests the buyer to make known whether he will accept performance and the buyer does not comply with the request within a reasonable time, the seller may perform within the time indicated in his request. The buyer may not, during that period of [page 318] time, resort to any remedy which is inconsistent with performance by the seller.

"(3) A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph, that the buyer make known his decision.

"(4) A request or notice by the seller under paragraph (2) or (3) of this article is not effective unless received by the buyer."

§ 295 B. Cure and Delay in Delivery

Paragraph (1) provides that "even after the date for delivery" the seller may remedy " any failure to perform his obligations." This language is broad enough to include a defect in documents. Cf. Art. 34, §220, supra. If the seller tenders delivery either (a) after a delay that constitutes a fundamental breach or (b) after the expiration of a period fixed by the buyer under Article 47 (supra at §287) the buyer may "declare the contract avoided" under Article 49(1), infra at §303. Time that has passed cannot be recalled; "remedy" is intrinsically impossible. On the other hand, if the seller’s delay in delivery does not fall under either (a) or (b), above, the buyer must accept the delivery; there is no need for "cure."

In sum, paragraph (1) addresses the seller’s right to remedy defects or deficiencies in goods that have been tendered—by substituting conforming goods for defective goods or by repairing (or replacing) a defective component part. (As we shall see, paragraphs (2)–(4) are not so limited and apply to a seller’s inquiry as to whether the buyer will accept a late delivery. See infra at §297.)

§ 296 C. Cure and Advance for Fundamental Breach

The relationship between cure and remedies based on "fundamental breach" has already been introduced in connection with the definition of "fundamental breach." (See Article 25, supra at §184.) The issue is important and merits attention in the present setting; the following illustration will recall Example 25A, supra at §184.

Example 48A. Seller delivered a machine to Buyer. When Buyer tested the machine a defect in one of the component parts prevented the machine from operating. Only Seller had replacement parts for the machine. Buyer notified Seller that the machine had failed to operate. Seller offered immediately to replace the defective part but Buyer refused this offer [page 319] and declared that the contract was avoided. The time required for replacing the defective part was not important to Buyer; his contention was that the machine had failed to function and that this constituted a fundamental breach of the sales contract (Art. 25) empowering him to avoid the contract (Art. 49(1)(a)).

In the 1978 Draft Convention, the provision allowing a seller to cure after the date for delivery (Art. 44(1) which became Art. 48(1) in the Convention) opened with these words: "Unless the buyer has declared the contract avoided in accordance with article 45 [now article 49]...." At the Diplomatic Conference several delegates expressed their concern that, in situations like Example 48A, this "Unless" clause might be construed to authorize avoidance of the contract that would frustrate the seller’s right to cure. There was widespread agreement that whether a breach is fundamental should be decided in the light of the seller’s offer to cure (Art. 25, supra at §184) and that the buyer’s right to avoid the contract (Art. 49(1)) should not nullify the seller’s right to cure (Art. 48(1)). However, it was difficult to find language that would clearly express the proper relationship between avoidance and cure. Finally, the Conference adopted a joint proposal prepared by delegates who had been anxious to protect the seller’s right to cure. Under this proposal, the "Unless..." clause of the 1978 Draft was deleted and replaced by the present cross-reference to Article 49.[5]

In cases like Example 48A, the seller’s right to cure could not have been frustrated even under the 1978 version that included the "Unless" clause; any other result would have nullified the Convention’s narrow and specific provision authorizing cure.[6]

The amendment to Article 48(1) leaves little room for doubt. The [page 320] seller’s right to cure should also be protected if, in cases like Example 48A, where cure is feasible, the buyer hastily declares the contract avoided before the seller has an opportunity to cure the defect. As was noted under Article 25, supra at §181, whether a breach is "fundamental" should be decided in the light of all of the circumstances. In cases like Example 48A, where cure is feasible and where an offer of cure can be expected, one cannot conclude that the breach is "fundamental" until one knows the answer to this question: Will the seller cure?

Professor Will in an incisive analysis of this problem (B-B Commentary 349–352) rightly emphasizes the buyer’s need for a prompt and clear answer to the above question: "Will the seller cure?" Will suggests (p. 351) that the buyer should not be required to delay avoidance of the contract unless the answer to the above question is "Yes" based on the buyer’s "actual knowledge (good experience with the seller, and ad hoc commitment, the underlying conditions of sale)...". Fortunately, the parties can avoid doubt by communicating with each other.

The first step normally must be taken by the buyer since the defect usually comes to light during inspection or testing at the end of transport. Let us suppose that, in a case like Example 48A, on June 1, shortly after arrival of the goods, Buyer telexed: "Machine does not operate apparently because of a defect in Part X. Will you remedy the defect? Must have machine in working order by June 20 or will be forced to avoid contract and obtain machine elsewhere. Need to know by June 10 what you plan to do with respect to arrival of your engineer and plans for repair."

Such a telex would respond to the parties’ normal commercial interests to maintain a productive business relationship. In addition, the telex lays the foundation for protecting Buyer’s legal rights if (contrary to normal practice) Seller should fail to cooperate: (1) The telex satisfies the buyer’s obligation under Article 39 to notify the seller of the lack of conformity. (2) Since the seller has the "obligation " to supply the buyer with goods that conform to the contract (Art. 35), the telex constitutes a Nachfrist notice under Article 47 fixing "an additional time of reasonable length for performance by the seller of his obligations"; until the seller refuses or the fixed time expires the time does not run on the period within which the buyer may take further steps such as avoidance for fundamental breach. (Art. 49(2)(b)(ii)). (3) This advanced stage of the relationship between the parties, with the buyer in possession of defective goods shipped by the seller, leads to the conclusion that the seller also has the "obligation" to respond to the buyer’s request for early information regarding the seller’s plans concerning cure. (See §100 supra, on the "general principle" (Art. 7(2)) to communicate information needed by [page 321] the other party derived (e.g.) from Articles 19(2), 21(2), 26, 39(1) and, in a closely-related setting, Articles 47(2) and 48(2).) On this assumption the buyer’s request for early (June 10) information about the seller’s plans may also be supported by the notice-avoidance provisions of Articles 47(1) and 49(1)(b).

The buyer’s inquiry need not follow the style or approach of the above example. Moreover, in normal business relationships the Convention’s sanctions for failing to reply to the buyer’s inquiry will be irrelevant: When cure of a defect is feasible the seller will be anxious to effect the cure to preserve good business relationships and also to minimize the loss resulting from avoidance of the contract. The point of the above example is to suggest that the buyer need not be consumed by doubt over whether the seller will cure the defect; a simple inquiry will provide the answer.

Decisions: Examples of "Cure":   (1) FR. CA Grenoble, RG 93/4879, 26 April 1995, Roque v Sarl. B claimed that hangar delivered by S was defective; S’s repairs barred B’s attempt to avoid contract. CLOUT 152, UNILEX D. 1995-14.  (2) SWITZ. Pr. Locarno-C., 6252, 27 April 1992. S delivered furniture to B, who claimed that the cushions were defective. S offered to replace the cushions. B rejected S’s offer and claimed avoidance of the contract. Held: Under Art. 48, B should have accepted S’s offer to cure. UNILEX D. 1992-10.  (3) GER. OLG Koblenz, 2 U 31/96, 31 January 1997. B notified S that acrylic blankets S delivered did not conform to contract. S offered to remedy the non-conformity; B rejected the offer and declared avoidance of the contract. Held: S’s offer to cure made the breach not fundamental, as required for avoidance. UNILEX D.1997-4. (Note also the relation between cure and avoidance in §295, supra.)

Comments on Cure: Ahdar, R.J., Cure by Seller, (1990) (Lloyd’s) M. & C. Comm. L. Q. 364–382; Schneider, E.C., 7 Ariz. J. Int. & Comp. L 69-103 (1989); Schlechtriem, Com. (1998) 402–413 (Huber).

§ 297 D. Requests for Clarification

As was suggested supra at §292, a modern sale involves a relationship that may require cooperation. This calls for open lines of communication between the parties so that each knows what to expect from the other. In business practice this is taken for granted; paragraphs (2)–(4) of Article 48 give legal effect to this expectation. We shall first examine a proposal to cure a failure of performance under paragraph (1) and then consider the applicability of paragraphs (2)–(4) in other situations.[page 322]

§298 (1) Proposal to Cure by Repair

Example 48B. The facts are like those in Example 48A: Seller delivered a machine to Buyer; Buyer notified Seller that it failed to operate. Seller thereupon wired Buyer, "My mechanics will arrive within one week to put the machine in operation." Buyer did not reply. At the time stated in Seller’s wire his mechanics arrived to repair the machine but Buyer refused to admit them on the ground that the machine was too defective for repair.

Buyer acted wrongfully in refusing to permit the mechanics to make the repair. Seller’s notice complied with Article 48(2) and (3). The notice did not expressly request Buyer "to make known whether he will accept performance" (Art. 48(2)) but, by virtue of paragraph (3), the seller’s notice "that he will perform" is assumed to include a request "that the buyer make known his decision." Consequently, "the seller may perform within the time indicated in his request."

We must assume that paragraph (2) of this article does not merely duplicate paragraph (1). Hence, the rule of paragraph (2) that when the buyer fails to respond "the seller may perform within the time indicated in his request" is not confined to the circumstances for cure stated in paragraph (1). For example, if the seller’s request proposes to cure the defect within two weeks, the buyer who fails to respond may not contend that cure within the two-week period is barred as an "unreasonable delay" under paragraph (1). Here, again, the Convention gives effect to the parties’ duty to communicate—in this setting to prevent avoidable expense. See §§100, 292, and 296, supra.

§299 (2) Proposal to Make a Late Delivery

As was noted at §295, the provision on cure in paragraph (1) extends to " any failure" by a seller to perform its obligations—language that literally includes a late delivery, although it is difficult to envisage a way to "remedy" a delay that has occurred. This difficulty, however, does not extend to the provisions on communications in paragraphs (2)–(4).

Example 48C. The contract for the sale of a machine called for delivery to Buyer on June 1. Seller fell behind schedule and on May 31 he sent Buyer the following wire: "Regret cannot deliver machine until June 10. Will you accept delivery on that date?" Buyer did not respond; Seller delivered the machine on June 10. Buyer refused to accept the delivery and [page 323] declared the contract avoided on the ground that the delay in delivery constituted a fundamental breach.

Seller’s inquiry of May 31 was authorized by Article 48(2): the wire requested Buyer to "make known" whether he would "accept performance." Seller needed this information before laying out the funds necessary to complete the machine and transport it to Buyer. Buyer had a duty to respond; as a result of his failure "the seller may perform within the time indicated in his request." In short, Buyer lost any right he might have had to avoid the contract because of the delay specified in Seller’s communication of May 31. (Of course, Seller is liable for any damages. Art. 48(1).)[7]

§ 300 (3) Failure to Receive the Notice

Article 27 laid down the general rule that a party discharges its duty to notify by dispatching a notice "by means appropriate in the circumstances"; under this rule the risks of delay or non-transmission fall on the addressee. Paragraph (4) reverses this rule for communications under paragraphs (2) and (3). Here the one giving the notice is in breach of contract; a seller who has deviated from the contract may not impose on the buyer a duty to respond to an inquiry that he did not receive. (See Art. 27, supra at §190.) On the other hand, if the aggrieved buyer dispatches an objection to the proposed cure and the message fails to arrive, Article 27 provides that such a failure of transmission "does not deprive [the buyer] of the right to rely on the communication." In sum, the exception to the general "dispatch" rule carved out by Article 48(4) applies only to the request by the seller—the party who is in breach of contract. See Secretariat Commentary Art. 44, para. 15 O.R. 41, Docy. Hist. 431.[page 324]

FOOTNOTES: Chapter on Article 48

1. Art. 48 was based on Art. 44 of the 1978 Draft. Paragraph (1) was redrafted at the Diplomatic Conference by deleting an opening phrase, "Unless the buyer has declared the contract avoided..." and by deleting (after "obligations") the phrase, "if he can do so without such delays as will amount to a fundamental breach of contract." ULIS 44(1) contains a similar provision permitting cure "after the date fixed for the delivery of the goods."

[Editor's note: Footnotes 2, 3 and 4 not present in the text]

5. The initial proposals: Com. I Art. 44, paras. 3(i) & (iii); the group proposal, id. para. 6, Alt. II (para. (1)). Discussion and action: SR 20 paras. 37–76; SR. 22 paras. 5–21 O.R. 114–115, 341–343, 351, Docy. Hist. 686–687, 562–564, 572. See also Seciat. Commy. O.R. 41–42, Docy. Hist. 431–432 (paras. 6, 17).

6. Avoidance under Art. 49(1) is applicable to a wide range of circumstances other than cure, whereas the cure provisions of Art. 48(1) could be frustrated by an unqualified application of Art. 49(1). In such situations, a general provision yields to the specific. The same result follows from the conclusion that an offer to cure prevents the breach from being "fundamental." See Art. 25, supra at §181. See the discussions in UNCITRAL (1977), VIII YB 31 para. 94, Docy. Hist. 324. Also supporting the view that the right to cure limits avoidance: Huber, 43 Rabels Z 413, 489–491; Mertens & Rehbinder Art. 37 at 2, p. 18. See also GDR Int. Comm. Contracts Act. 1976, §281, Enderlein, 3 Dr. et Pr. Comm. Int. 123, 136 (1977). Cf.  Schlechtriem, 1986 Commentary 78. But see Will, B-B Commentary 348: The cross-reference to Art. 49 in Art. 48(1) is "enigmatic" and leaves the relationship to avoidance "open to interpretation".

7. At the Diplomatic Conference the brief discussion of paragraphs (2)–(4) indicated that these provisions could have wider scope than cure under paragraph (1). Thus, a proposal to make a separate article of paras. (2)–(4) was considered merely a matter of drafting and was referred to Drafting Committee. SR. 22, paras. 17, 43. O.R. 352, 352, Docy. Hist. 573, 574.

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