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DECLARATION OF AVOIDANCE:
Perspectives from the CISG, UNIDROIT Principles and PECL and case law

[2nd edition: Case annotated update (June 2005)]

Chengwei Liu
LL.M. of Renmin University of China; E-mail: <lexway@mail.com>.

  1. General
  2. Ideas behind the general rule
          2.1 Ipso facto avoidance excluded
          2.2 A single notice sufficient
  3. Exceptions to the general rule
  4. Form and contents of the notice
          4.1 No specific form required
          4.2 The possibility of an implicit notice
          4.3 Specificity of the notice
  5. Declaration "within a reasonable time"

Key provisions at issue

The breach of a contractual obligation never leads to the automatic avoidance of the contract by law -- even if, as is the case here, one party is substantially deprived of what she is entitled to expect under the contract (Art. 25 CISG; citations omitted). The avoidance of a contract is made by unilateral declaration of the party faithful to the contract to the other party (citation omitted); it does not require a specific form and generally, with the exception of the cases of Art. 49(2) CISG [or Art. 64(2) on "reasonable time" requirement], is not subject to a specific deadline (citation omitted).[1]

1. General

Under the United Nations Convention on Contracts for the International Sale of Goods (1980; "CISG" or "Convention"), a number of articles provide a right for either party to avoid a contract where there has been a fundamental breach of contract, namely, Arts. 49/64 (avoidance in general), 72 (avoidance due to anticipatory breach) and 51/73 (avoidance in respect of separable parts or installments).

However, these provisions merely grant a right to the relevant party to unilaterally influence the legal relationship between the contractual parties. A fundamental breach of a sales contract never leads automatically to the avoidance of such a contract by operation of law. To the contrary, it is always mandatory to declare the avoidance of the contract.[2] Clearly, each of these provisions entitles the aggrieved party to "declare" the contract avoided. Such a declaration of avoidance is effective only if made by notice to the other party according to CISG Art. 26. This Art. 26 is a general provision relating to the right of either injured party (seller or buyer) to avoid [3] that expressly states:

A declaration of avoidance of the contract is effective only if made by notice to the other party.

The rule embodied in CISG Art. 26 is "a manifestation of practical good sense in trading relations,"[4] with the purpose "to ensure that the other party becomes aware of the status of the contract."[5]

Such a notification requirement is also contemplated in UNIDROIT Principles of International Commercial Contracts (1994; "UNIDROIT Principles") Art. 7.3.2(1), which states: "The right of a party to terminate the contract is exercised by notice to the other party." The official UNIDROIT Commentary contributes the following with regard to the reasoning behind this:[6]

"Para. (1) of [Art. 7.3.2] reaffirms the principle that the right of a party to terminate the contract is exercised by notice to the other party. The notice requirement will permit the non-performing party to avoid any loss due to uncertainty as to whether the aggrieved party will accept the performance. At the same time it prevents the aggrieved party from speculating on a rise or fall in the value of the performance to the detriment of the non-performing party."

A similar rule is also found in the Principles of European Contract Law (1998; "PECL") Art. 9:303(1), which reads: "A party's right to terminate the contract is to be exercised by notice to the other party." Like UNIDROIT Commentary, the PECL Comment can also be helpful in determining the need behind the notification requirement:[7]

"Fair dealing requires that an aggrieved party which wishes to avoid (terminate) a contract normally give notice to the defaulting party. The defaulting party must be able to make the necessary arrangements regarding goods, services and money at its disposal. Uncertainty as to whether the aggrieved party will accept performance or not may often cause a loss to the defaulting party which is disproportionate to the inconvenience which the aggrieved party will suffer by giving a notice. When performance has been made, passiveness on the side of the party which was to receive performance may cause the performing party to believe that the former has accepted the performance even if it was too late or defective. If, therefore, the aggrieved party wishes to terminate the contract it must notify the other party within reasonable time. [...]."

In any event, the language of CISG Art. 26 contemplates notice by the party seeking the avoidance as an essential element of the whole exercise of declaring the contract avoided.[8] Under Art. 26, the contract is avoided as a result of the other party's fundamental breach only if the aggrieved party declares the contract avoided.

2. Ideas behind the general rule

2.1 Ipso facto avoidance excluded

Prescribing a declaration of avoidance, the CISG breaks with the concept of ipso facto avoidance, i.e., avoidance by virtue of law, which played a great role in the ULIS, thus overcoming the uncertainty as to whether, and possibly when, the contract is avoided.[9] Although the concept of ipso facto or automatic avoidance was acknowledged to be useful in checking the buyer's profits from price fluctuations, the predominant view was that this problem could be tackled successfully without resorting to the notion of ipso facto avoidance.[10]

As indicated by Art. 26, the Convention is based on the existence of a clear-cut declaration, ruling out avoidance of a contract automatically or ipso facto. This position guarantees more stability in the relations between the seller and the buyer. The conclusion is: If an injured party does not declare the contract avoided, it remains valid.[11] This has been repeatedly noted in case law. For instance, the Tribunal in [ICC September 1996 International Court of Arbitration, Case 8574] holds, the Convention does not recognize the concept of ipso facto avoidance.[12] Specifically, as the Tribunal in [Russian Federation 22 October 1998 Arbitration award 196/1997] notes, "in accordance with Art. 26 CISG, a party which decided to avoid the contract must notify the other party of that decision. Without such a notification, the contract cannot be declared avoided."[13] Put it another way, in conformity with the Court in [Germany 13 January 1999 Oberlandesgericht [Appellate Court] Bamberg]:[14]

"Only avoidance of contract [by a declaration through a notice given according to Art. 26] makes it clear that the contract will not be performed. When the contract is avoided, the parties lose the right to perform and regain their freedom of disposition. Up until then it is their duty to remain loyal to the contract. [...]. The CISG does not provide for an automatic legal termination of contract (citations omitted)."

As correctly noted in [ICC March 1999 International Court of Arbitration, Case 9978]:[15]

"It is, [...], one of the major characteristics of the UN-Sales Convention, when compared to its predecessors, the Hague Sales Conventions of 1964, that international sales contracts are not invalidated ex lege but only in case of a clear and unambiguous declaration of avoidance by one of the parties pursuant to Art. 26 CISG."

In any event, automatic or ipso facto avoidance was deleted from the remedial system in this Convention because it led to uncertainty as to whether the contract was still in force or whether it had been ipso facto avoided.[16]

2.2 A single notice sufficient

Assuming the injured party is entitled to avoid by reason of a fundamental breach, or the breaching party's failure to duly comply with a reasonable Nachfrist notice, a single Article 26 notice will suffice: unlike some domestic systems, the Convention does not first require a "warning" notice which declares in advance the injured party's intention to avoid.[17]

This Convention requires only one notice, the notice of the declaration of avoidance.[18] However, this one-notice proposition should be distinguished out from several particular situations:

   -    Nachfrist notice: A party who declares the contract avoided pursuant to CISG Art. 49(1)(b) / 64(1)(b) must have previously fixed an additional period of time of reasonable length for performance by the other party under Art. 47(1) / 63(1). In such a case, the party who declares the contract avoided must normally send two communications to the other party.[19]
 
   -    Impediment notice: A party who invokes an exemption due to the occurrence of an impediment within CISG Art. 79, must give notice to the other party (Art. 79(4)), so as to enable the latter to take all the steps necessary to overcome the consequences of the failure.[20] Where the party declares avoidance due to an exempted breach, therefore, would send two notices.
 
   -    Non-conformity notice: CISG Art. 39 shows that the Convention requires a proper notice to the other party of the lack of conformity of the goods,[21] without which the aggrieved buyer is precluded from exercising any remedies based on the non-conformity, including avoidance of the contract. Thus, for an avoidance due to the delivery of non-conforming goods, the aggrieved buyer would normally send two notices.

Note, however, the aggrieved party may, already in fixing a Nachfrist notice, declare the contract avoided if the other party does not perform within that additional period; or there may be the possibility under which force majeure brings automatic termination of the contract (see Section 3, below). In particular, it has been properly pointed out, in the CISG regime a notice can serve as both Art. 26 and Art. 39 notice if it adequately meets the requirements for each provision; therefore, separate notices are not required.[22] Thus, where a buyer wishes to avoid a contract based on a non-conformity of the goods, notice of non-conformity of the goods and notice of avoidance can be combined and expressed in one declaration;[23] albeit the specifications of the two notices differ to some extent.[24]

In addition to the above characteristic, it is also noted that, by way of contrast with the approach of some civil law jurisdictions, there is no requirement in the CISG regime that the party avoiding the contract obtain judicial approval or confirmation of the avoidance.[25] Under the Convention (also the approach under the two sets of Principles), avoidance can be effected by the act of the aggrieved party alone; it does not have to bring an action in court in order to have the contract terminated. If the requirements of the relevant rules are satisfied, they do not provide for any period of grace to be granted to the defaulting party by a court or an arbitral tribunal.[26]

That is to say, the declaration leads to prompt avoidance of the contract; no further steps are required, neither agreement by the other party nor assistance by the courts.[27] It follows that the contract is avoided at the time notice of the declaration of avoidance is given to the other party.[28] On the other hand, since it is made dependent on a declaration, the entitled party can consciously decide to continue to claim performance of the contract even when there are grounds for avoidance. This being the case, the rule also has the effect of preserving the contract and its specific performance.[29]

3. Exceptions to the general rule

As noted above, Art. 26 makes one of the significant advances of the Convention over the ULIS as well as some domestic systems. Excluded are ipso facto avoidance and advance notice.[30] In this regard, both UNIDROIT Principles Art. 7.3.2(1) and PECL Art. 9:303(1) contain a general rule requiring the declaration of termination. However, exceptions to this general rule have been further contemplated under the two sets of Principles.

One such exception is found in PECL Art. 9:303(4), which states:

If a party is excused under Article 8:108 through an impediment which is total and permanent, the contract is terminated automatically and without notice at the time the impediment arises.

Despite this exception, it is noted in the Comment on PECL Art. 9:303(4), in cases of only partial or temporary impediment, however, the defaulting party may still tender performance, and a notice of termination by the aggrieved party will be needed. Note further that in cases of excused non-performance, the non-performing party has a duty to give notice of the impediment.[31] The reasons behind this exception may be, as it would be pointless to give the aggrieved party the right to keep in force a contract which has become totally and permanently impossible to perform, it follows that in such a case it is unnecessary to require a declaration of termination. The result is the same as in those legal systems under which force majeure brings automatic termination of the contract.[32]

However, such an exception is found neither in CISG nor in UNIDROIT Principles. Nevertheless, it seems appropriate to argue that, the notice requirement does not necessarily apply where the failure in performance is due to a supervening event for which neither party is contractually responsible. Such an event may lead to automatic discharge.[33] In this regard, it is noted that the term avoidance is used under the Convention to designate both the termination of the contract as a consequence of the non-performance imputable to the debtor and the disappearance of a contract which follows from an impossibility of performance (which term is used also in reference to nullity). The two cases are indeed distinguishable. In case of impossibility, the disappearance of the contract takes place by operation of the law whereas in case of non-performance imputable to the debtor, a prior declaration by the creditor is needed.[34] Furthermore, one should also note that a discharge due to impediment under Art. 79 differs from termination for contractual default, most obviously in that it excludes all claims for damages.[35]

Another exception is found in both UNIDROIT Principles Art. 7.1.5(3) and PECL Art. 8:106(3), namely, a notice setting a reasonable period during which the defaulting party must perform may provide that at the end of the period the contract shall terminate automatically if performance has still not been made.[36] This refers to the Nachfrist remedy, under which when upon expiry of the period of time fixed for performance the defaulting party has not performed, or when it has declared before that time that it will not perform, the aggrieved party may declare the contract terminated. However, the aggrieved party may provide in a Nachfrist notice for automatic termination. This is expressed in both UNIDROIT Principles Art. 7.1.5(3) and PECL Art. 8:106(3), under which the aggrieved party may say in its notice that the contract shall terminate without further notice if the defaulting party fails to perform within the period of the notice. In that case, according to the PECL Comment, if the defaulting party in fact tenders performance after the date set in the notice, the aggrieved party may simply refuse to accept it.[37]

This second exception seems to be also read from the CISG context. It is argued that an entitled party can (irrespective of the requirement of a declaration of avoidance), achieve partly similar effects (of automatic termination) when he, in cases where the right to avoid the contract follows from the expiry of a Nachfrist without performance (Art. 49(1)(b) / 64(1)(b)), already in fixing such Nachfrist, declares the contract avoided if the other party does not perform within that additional period.[38]

However, if the aggrieved party actually knows that the defaulter is still attempting to perform after the date set in the Nachfrist notice, good faith requires it to warn the defaulter that the performance will not be accepted.[39] This is expressed in PECL Art. 9:303(3)(b), which states:

If, however, the aggrieved party knows or has reason to know that the other party still intends to tender within a reasonable time, and the aggrieved party unreasonably fails to notify the other party that it will not accept performance, it loses its right to terminate if the other party in fact tenders within a reasonable time.

The above exception deals with the situation where the aggrieved party has reason to know that the defaulting party is still intending to perform within a reasonable time, but it no longer wishes to receive the performance. In this case, it would be contrary to good faith for it to allow the defaulter to incur further effort in preparing to perform and then to terminate when performance is tendered. Therefore, PECL Art. 9:303(3)(b) requires it in this situation to notify the other party that it will not accept the performance, on pain of losing its right to terminate if the other party does in fact perform within a reasonable time.[40]

Despite the possible justifications for the above exceptions, as avoidance of the contract by one party may have serious consequences for the other party,[41] in and of itself, a breach of contract does not lead to the avoidance of the contract as a matter of law. Avoidance requires, as a rule, "a unilateral declaration of the party loyal to the contract made to the other party."[42] That is to say, unless the other party agrees otherwise, if the injured party does not declare the contract avoided, the contract continues in force:[43]

"There must be a positive act, on the part of the [aggrieved party] to declare his intention to terminate. This principle is of a general nature applicable to all cases of avoidance under the Convention, whether it affects the whole contract or only part of it, and irrespective of whether it is based on an actual or anticipatory breach."

4. Form and contents of the notice

4.1 No specific form required

As discussed above, as a rule, avoidance is effective only if notice thereof is given by the aggrieved party to the defaulting party.[44] However, unless the reservation (e.g., under CISG Arts. 12 and 96) applies,[45] the notice need not be given in a particular form. It therefore can be made in writing or even orally.[46]

Generally speaking, avoidance of contract is effected by a unilateral declaration of the non-breaching party to the other party. The declaration of avoidance does not have to satisfy any form requirements.[47] Thus, it is even held that a notice in the statement of claim filed with the court suffices. For instance, the Court in [Australia 28 April 1995 Federal District Court, Adelaide (Roder v. Rosedown)] holds that the seller, by filing a statement of claim with it, has satisfied the condition for an effective avoidance of the contract required by Art. 26 CISG, namely to give notice of avoidance to the other party.[48] Similarly, it is held in [Austria 28 April 2000 Oberster Gerichtshof [Supreme Court]], "the declaration of avoidance is generally not bound to any specific form or time frame under the CISG, so that the statement of claim can replace the declaration of avoidance."[49]

Although there is no form requirement in the CISG for notice giving, one main problem is that oral/telephonic notices are difficult to prove, and many cases concern notices which the buyer claims were given over the telephone. The burden of evidence of notice giving is clearly on the buyer, and if this cannot be proven, the judge will not allow the buyer to rely on the notice, and this will result in the loss of a remedy.[50] In particular, it would not be consistent with good faith and fair dealing for a party to rely on, for instance, a purely casual remark made to the other party. For notices of major importance written form may be appropriate.[51] Additionally, it is to be bear in mind that, "this informality principle does not apply if the contract, usages or practices provide otherwise (Articles 6 and 9)."[52]

4.2 The possibility of an implicit notice

CISG Art. 26 does not mention the possibility of an implicit notice.[53] Several courts have dealt with this issue. But it remains unclear whether an implicit notice is possible. In practice, it is still disputed.

For instance on the one side, the Court in [Germany 16 September 1991 Landgericht [District Court] Frankfurt] decides that the fact that the buyer sent back the delivered goods without further explanation does not amount to a valid notice of declaration of avoidance.[54] The Court in [Germany 13 January 1999 Oberlandesgericht [Appellate Court] Bamberg] similarly finds that the mere purchase by the buyer of substitute goods does not constitute a valid (implicit) notice of declaration of avoidance.[55] It is held, on the other side, in [Austria 29 June 1999 Oberster Gerichtshof [Supreme Court]] that avoidance could also be done over the telephone, as well as impliedly.[56] In this regard, the Court in [Germany 17 September 1991 Oberlandesgericht [Appellate Court] Frankfurt] holds:[57]

"An explicit reference to the avoidance of the contract, pursuant to the CISG, was not required for the validity of the legal effects of the avoidance of the contract (citation omitted). It was sufficient that the [buyer] made clear that she would not pay the assignor's bill because of her breach of contract, because meanwhile the delivered model shoes became useless to her."

After all, as the Court in [Switzerland 15 September 2000 Bundesgericht [Federal Supreme Court] (4C.105/2000)] states,[58]

"the CISG does not provide any obligation concerning the form of the avoidance of sale contracts (citation omitted). Therefore, it is accepted that a conclusive conduct constituted by a rejection of the goods that do not conform to the contract and a refusal to pay may, depending on the circumstances (emphasis added), be held as an implicit declaration of avoidance of the contract (citation omitted)."

In essence, however, it appears irrelevant whether an implicit notice is possible. In this regard, the Court in [Germany 16 September 1991 Landgericht [District Court] Frankfurt] provides a persuasive ruling,[59]

"it may remain undecided whether or not one would be at all in the position to declare impliedly the avoidance of a sales contract (citations omitted). Even if an implied declaration of avoidance were possible, the recipient of this declaration must be in the position to undoubtedly realize the [aggrieved party]'s obvious will not to be bound any longer under the sales contract (citations omitted)."

A similar statement is made in [Austria 6 February 1996 Oberster Gerichtshof [Supreme Court]]:[60]

"In this case, the controversy about whether the declaration to avoid the contract in the sense of Art. 49(1) [or Art. 64(1)] CISG has to be explicit (citation omitted) or whether conclusive conduct is sufficient (citation omitted), is irrelevant. For even if a conclusive declaration to avoid a contract is regarded as sufficient, the intention of the [aggrieved party] not to adhere to the contract anymore has to be obvious beyond any doubt (citation omitted). In this respect, the requirements for the clarity of the declaration have to be set at a high level (citation omitted)."

In this regard, a leading guidance may be found in [ICC March 1999 International Court of Arbitration, Case 9978]:[61]

"[O]ne of the major characteristics of the UN-Sales Convention [is], when compared to its predecessors, the Hague Sales Conventions of 1964, that international sales contracts are not invalidated ex lege but only in case of a clear and unambiguous declaration of avoidance by one of the parties pursuant to Art. 26 CISG. For this reason, a notice of avoidance under Art. 26 CISG must satisfy a high standard of clarity and precision (emphasis added) (citation omitted). [...]. It does not matter that Claimant did not use the technical terms 'avoidance' or 'avoid'. Declarations of avoidance under Art. 26 CISG may be made implicitly, provided that it is made clear to the other party that the party entitled to avoidance does not intend to stand by the contract any more (citation omitted)."

In sum, on the one hand, a fitting declaration within CISG Art. 26, under Art. 11 CISG without requirements as to form, that is directed to the termination of the business relationship is sufficient for such a notice.[62] On the other hand, the notice must clearly express that the aggrieved party now treats the contract as terminated. A mere announcement of future termination, statement urging delivery, or the return of the goods without comment does not suffice.[63] This latter refers to the specificity of the notice and will be emphasized below.

4.3 Specificity of the notice

While there are no specific requirements as to form or content, the entitled party's declaration must at least make it clear that the other party no longer can count on the former's performance in respect of the sales contract concerned.[64]

That is to say, the notice must express with sufficient clarity that the party will not be bound by the contract any longer and considers the contract terminated.[65] As already noted above (4.2), the case law supports a high standard of clarity of the notice. For instance, it is held in [ICC March 1999 International Court of Arbitration, Case 9978], pursuant to Art. 26 CISG, a contract is avoided "only in case of a clear and unambiguous declaration of avoidance by one of the parties pursuant to Art. 26 CISG," and "a notice of avoidance under Art. 26 CISG must satisfy a high standard of clarity and precision."[66] In [Austria 28 April 2000 Oberster Gerichtshof [Supreme Court]], it is also held that, the declaration "must be unambiguous in that the [aggrieved party] does not wish to keep the contract on foot."[67]

It does not matter whether or not one would be at all in the position to declare impliedly the avoidance, for even if an implied declaration of avoidance were possible (e.g., a conclusive declaration to avoid a contract may be regarded as sufficient), according to the Court in [Germany 16 September 1991 Landgericht [District Court] Frankfurt], "the recipient of this declaration must be in the position to undoubtedly realize the [aggrieved party]'s obvious will not to be bound any longer under the sales contract";[68] or, in conformity with the Court in [Austria 6 February 1996 Oberster Gerichtshof [Supreme Court]], "the intention of the [aggrieved party] not to adhere to the contract anymore has to be obvious beyond any doubt (citation omitted). In this respect, the requirements for the clarity of the declaration have to be set at a high level."[69] Therefore, without further comments or explanations indicating the clear intention, "any announcement that the contract will be terminated in future if the other party does not react or a letter demanding either price reduction or taking the delivered goods back or the mere sending back of the goods does not constitute a valid notice because it does not state in unequivocal terms that the party wanting to terminate the contract believes that the contract is terminated. The same is true if a party requests damages."[70]

In a word, the notice must clearly express that the aggrieved party now treats the contract as terminated.[71] However, the term "(declaration of) avoidance" need not be used nor need the relevant provision of the Convention be cited. The use of similar terms is sufficient.[72] As stated in [ICC March 1999 International Court of Arbitration, Case 9978]:[73]

"It does not matter that Claimant did not use the technical terms 'avoidance' or 'avoid'. Declarations of avoidance under Art. 26 CISG may be made implicitly, provided that it is made clear to the other party that the party entitled to avoidance does not intend to stand by the contract any more (citation omitted)."

Thus, though a high level is to be set regarding the notice, parties' declarations should be interpreted in conformity with what a reasonable person would have understood in the same circumstances.[74] That is to say, it must be evident to a reasonable person (using the criteria of CISG Art. 8) that the notice in question must clearly express the aggrieved party's wish to avoid the contract as a remedy in consequence of a particular breach. Implied intentions to avoid can be permitted, but the implication must be very strong.[75] In any event, in exercising a right to avoidance, one should be in conformity with the Court in [Switzerland 20 February 1997 Bezirksgericht [District Court] Saane]:[76]

"The party that petitions for the avoidance of the sales contract must expressly declare the agreement avoided vis-à-vis the opposite party so that there are not any remaining doubts upon the incentive of the petitioning party. Hereby, the declaring party exercises a right to influence the parties' contractual relationship by his unilateral declaration. Hence, such a declaration has the same effect as the declaration of a rescission. However, such a declaration of avoidance must be explicitly recognizable and realizable to the other party (citation omitted)."

But it should also be mentioned that, even if the aggrieved party did not make a declaration to that effect, a contract may be avoided if the other party so agrees. Thus, for instance, in [Switzerland 5 November 2002 Handelsgericht [Commercial Court] Aargau], where it is found that "the [buyer] was not able to declare the contract avoided in a legally binding way in his writing of 14 June 2000," the Court nevertheless rules:[77]

"In this case, the legal consequences depend on the reaction of the seller. Only if the seller consents to the avoidance of the contract will the contract get avoided. If, however, the seller disagrees with the avoidance of the contract or does not declare the contract avoided himself, the contract consequently will continue (citation omitted)."

The same is true even where no grounds for avoidance (especially a fundamental breach) were substantiated or found. For instance, in [Austria 11 September 1997 Oberster Gerichtshof [Supreme Court]], where "the threat of an avoidance could not be found," the Court still finds the contract avoided, due to the buyer's implicit agreement as to the avoidance of the contract, stating in pertinent part that, "as the Court of First Instance (at least plausibly) found an approval by the buyer to the declaration of avoidance and to the recission of the contract of sale of goods ... By this, the right to claim restoration is certified."[78]

5. Declaration "within a reasonable time"

As noted above, avoidance under the Convention in all cases can be effected by a simple declaration of the entitled party to the other through a notice given under Art. 26, although it must be clearly announced in a proper way. The Convention does not, as a rule, require that the notice of termination must be in a particular form or by a specific means of transmission. It may, therefore, be written or oral, and may be transmitted by any means whatsoever.[79] Furthermore, the notice required by Art. 26 is effective if it is properly "dispatched" pursuant to Art. 27. The principle underlying this rule and its exceptions is that transmission risks should fall on the party in breach rather than on an aggrieved party who, in this setting, is exercising a right to avoid the contract.[80]

For these reasons, CISG Arts. 49(2) and 64(2) prescribe that such a notice must be communicated "within a reasonable time." By virtue of Art. 49(2) CISG, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided if the buyer does not declare this (in respect of any breach other than late delivery) within a reasonable time after the buyer knew or ought to have known of the breach (Art. 49(2)(b)(i)),[81] or after the expiration of any additional period of time fixed by the buyer in accordance with Art. 47(1) CISG, or after the expiration of any additional period of time indicated by the seller (in accordance with Art. 48(2) CISG).[82] Thus, on the one hand, provided that all prerequisites for termination of the contract by the buyer are met, the buyer is entitled to terminate the contract at any time. On the other hand, if the seller has delivered the goods the buyer loses the right to avoid the contract if the buyer does not exercise it within a reasonable time (Art. 49(2)).[83] Looked at from the point of the seller, it is also apparent, on the one hand, from Art. 64(2) that the seller may declare the contract avoided as long as the buyer has not paid the price. Once the price has been paid, however, the declaration of avoidance is subject to certain rules of timing. When the buyer performs its obligations, albeit belatedly, the seller loses the right to declare the contract avoided unless the seller does so before it has become aware of the performance having been rendered (Art. 64(2)(a)). In other cases, the right is lost after the expiration of a reasonable period of time starting from the moment when the seller knew or ought to have known of the breach (Art. 64(2)(b)(i)) or, where an additional period of time was fixed in accordance with Art. 63(1), following the expiration of that additional period.[84]

The ideas underlying this timeframe may be drawn from case law. For instance, Art. 49(2) is intended, according to the Court in [Germany 2 March 1994 Oberlandesgericht [Appellate Court] München],[85]

"to prevent a long state of uncertainty for the [seller] after the delivery and to inform the [seller] of how he himself may proceed with the goods. At the same time, the provision is supposed to exclude speculation on the part of the [buyer]. It seeks to prevent the possibility that the [buyer] initially tries and demands the -- possibly profitable -- purchase price [...] and then, after the failure of this attempt, releases the goods to the [seller]."

It is similarly held in [Germany 1 February 1995 Oberlandesgericht [Appellate Court] Oldenburg]:[86]

"A fundamental idea of the CISG is that the seller has a right, worthy of protection, to learn as soon as possible whether or not the buyer is going to declare the contract avoided. A lengthy pending status is irreconcilable with this right (citation omitted)."

It is to be noted that Art. 49(2) presupposes that the seller has delivered. Thus, this paragraph is not concerned with Art. 49(1)(b) and considers only the situations covered by Art. 49(1)(a). The fact that the goods have come under the buyer's control justifies the application of stricter standards because of the underlying principle of good faith in international transactions.[87] In this regard, it is noted in [Russian Federation 22 October 1998 Arbitration award 196/1997]:[88]

"According to Art. 49 CISG, the [buyer] had the right to avoid the contract even after the delivery of the goods had taken place. However, under Art. 49(2)(a) CISG, 'the buyer loses the right to declare the contract avoided unless he does so, in respect of late delivery, within a reasonable time after he has become aware that delivery has been made.' In such a situation, when the delivery has been already made, the avoidance of the contract involves additional factors. That is why the CISG sets a time limit for the buyer to exercise the right to avoidance. As commentaries [Honnold] note, 'avoidance of the contract leads to crucial consequences as to the responsibility for handling and taking care of the goods. A delay with notification of avoidance causes unforeseen expenses, unreasonable risks, price variation, etc.' (Citation omitted.)"

In any event, undue delay in declaring avoidance of the goods creates risks of needless cost and risk with respect to the care and return of the goods and, when the goods are subject to market fluctuations, may give the buyer a chance to speculate at the seller's risk (similar case for the seller under Art. 64).[89] However, the immediate problem is that the timeframe is so flexible, and subject to different guidelines in its interpretation of "reasonable time." The timeframe was meant to be flexible, determinable by the facts of the case in each instance, but this poses a problem for numerous systems of law who wish to form into a more tangible/rigid concept (primarily Civil Law systems). There is no clear way to define this timeframe, or the criteria which influence it. Most scholars and jurisdiction are in favor of retaining the inherent flexibility of the provision to suit it to each case, with the determination of certain criteria for shortening/lengthening it. Some criteria for reducing the timeframe in most circumstances include: rapid deterioration of the goods (economic or physical), or other reason why time would be of the essence between the parties (See also CISG Art. 9).[90]

Generally speaking, the length of "reasonable time" depends on trade practices and the particular circumstances of the case.[91] In any event, the time limit to declare the contract avoided pursuant to CISG Art. 49(2) / 64(2) should not be calculated too long in the interest of clarifying the legal relationship of the parties as quickly as possible.[92] Interestingly, both sets of Principles do set out the timeliness of notification as "reasonable time" in line with the CISG timeframes, but do not assist in the determination of how this reasonable time-period is to be measured.[93] In this regard, the official UNIDROIT commentary on Art. 7.3.2(2)[94] provides a not very helpful definition of "reasonable time":[95]

"What is 'reasonable' depends upon the circumstances. In situations where the aggrieved party may easily obtain a substitute performance and may thus speculate on a rise or fall in the price, notice must be given without delay. When it must make enquiries as to whether it can obtain substitute performance from other sources the reasonable period of time will be longer."

Similarly, the PECL requires notice in reasonable time for all terminations. In this, the PECL expresses its comprehensive commitment to the good faith principle (see PECL Art. 1:201).[96] The official commentary on PECL Art. 9:303(2)[97] states:[98]

"What is a reasonable time will depend upon the circumstances. For instance the aggrieved party must be allowed long enough for it to know whether or not the performance will still be useable by it. If delay in making a decision is likely to prejudice the defaulting party, for instance because it may lose the chance to prevent a total waste of its efforts by entering another contract, the reasonable time will be shorter than if this is not the case. If the defaulting party has tried to conceal the defects, a longer time may be allowed to the aggrieved party."

In this regard, it is also noted, PECL Art. 1:302 supplies some guidelines to "reasonableness":

Under these Principles reasonableness is to be judged by what persons acting in good faith and in the same situation as the parties would consider to be reasonable. In particular, in assessing what is reasonable the nature and purpose of the contract, the circumstances of the case and the usages and practices of the trades or professions involved should be taken into account.

The above guidelines to "reasonableness", however, are general and somewhat circular -- "reasonable" is what reasonable persons, acting in good faith, would "consider reasonable." Indeed, although used frequently, the expression "reasonable time" is not defined in the CISG or in the UNIDROIT Principles or PECL. Courts and commentators offer contextual criteria, noting that what may constitute "reasonable" in any given case may be effected by the nature of the goods, the transaction, the payment arrangements, third party claims, and whether legal advice or expert opinions were actually necessary in order to determine concrete rights (e.g., in cases of non-conformity merely sorting the matter out may be, for practical reasons, longer than under no tender at all). Courts have ruled on the reasonable length of time taking all such circumstances into account; and, in the absence of clear indicators, the question of when the period begins to run is invariably left to judicial discretion.[99]

Arguably, reasonableness, while understandably palatable and thus popular in modern drafting, is a very wide and flexible term which can be understood very differently. It permeates both sets of principles as well as the CISG. But it does not specifically define anything, leaving the practitioner with little by way of a yardstick with which to measure a time-period.[100] More helpful is the notion that reasonableness is contextual, and takes into consideration "the nature and purposes of the contract, the circumstances of the case," etc..[101]


FOOTNOTES

1. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 6 February 1996; No. 10 Ob 518/95. Translation by Heidi Keschenat, translation edited by Ruth M. Janal; available at: <http://www.cisg.law.pace.edu/cases/960206a3.html>.

2. See Judgment by [Landgericht [District Court] Frankfurt am Main, Germany 16 September 1991; No. 3/11 O 3/91. English translation by Stefan Kuhm; available at: <http://www.cisg.law.pace.edu/cases/910916g1.html>.

3. See Joseph Lookofsky in "The 1980 United Nations Convention on Contracts for the International Sale of Goods": J. Herbots editor / R. Blanpain general editor, Suppl. 29 International Encyclopaedia of Laws -- Contracts, Kluwer Law International (December 2000), p. 79; available at: <http://www.cisg.law.pace.edu/cisg/biblio/loo26.html>.

4. See Samuel K. Date-Bah in Commentary on the International Sales Law: The 1980 Vienna Sale Convention, Cesare Massimo Bianca & Michael Joachim Bonell eds., Milan (1987), p. 224; available at: <http://www.cisg.law.pace.edu/cisg/biblio/date-bah-bb26.html>.

5. See UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods (8 June 2004), A/CN.9/SER.C/DIGEST/CISG/26: Digest 6; available at: <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.

6. See Comment on Art. 7.3.2 UNIDROIT Principles: Comment 1; available at: <http://www.cisg.law.pace.edu/cisg/principles/uni26.html>.

7. See Comment and Notes to PECL Art. 9:303: Comment A; available at: <http://www.cisg.law.pace.edu/cisg/text/peclcomp26.html>.

8. See Samuel K. Date-Bah, supra. n. 4; p. 225.

9. See Fritz Enderlein & Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods, Oceana Publication (1992), p. 116; available at: <http://www.cisg.law.pace.edu/cisg/biblio/enderlein.html>.

10. See Samuel K. Date-Bah, supra. n. 4; pp. 223-224.

11. See Vienna Convention for the Contracts for the International Sale of Goods: Commentary, Moscow (1994); p. 76. (Cited in Judgment by Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia 22 October 1998; No. 196/1997. English translation by Alexander Morari, translation edited by Mykhaylo Danylko; available at: <http://www.cisg.law.pace.edu/cases/981022r1.html>.)

12. See Judgment of ICC Arbitration Case No. 8574 of September 1996; available at: <http://www.cisg.law.pace.edu/cases/968574i1.html>.

13. See Judgment by Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia 22 October 1998; No. 196/1997. English translation by Alexander Morari, translation edited by Mykhaylo Danylko; available at: <http://www.cisg.law.pace.edu/cases/981022r1.html>.

14. See Judgment by Oberlandesgericht [Court of Appeal] Bamberg, Germany 13 January 1999; No. 3 U 83/98. English translation by Ruth M. Janal; available at: <http://www.cisg.law.pace.edu/cases/990113g1.html>.

15. See Judgment of ICC Arbitration Case No. 9978 of March 1999; available at: <http://www.cisg-online.ch/cisg/urteile/708.htm>.

16. See Documentary History of the Uniform Law for International Sales, Kluwer (1989); pp. 58-59.

17. See Joseph Lookofsky, supra. n. 3; p. 80.

18. See Secretariat Commentary on Art. 24 of the 1978 Draft [draft counterpart of CISG Art. 26]: Comment 3; available at: <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-26.html>.

19. Ibid. at fn. 2.

20. See Denis Tallon in Commentary on the International Sales Law: The 1980 Vienna Sale Convention, Cesare Massimo Bianca & Michael Joachim Bonell eds., Milan (1987), p. 586; available at: <http://www.cisg.law.pace.edu/cisg/biblio/tallon-bb79.html>.

21. See Judgment by Landgericht [District Court] Stendal, Germany 12 October 2000; No. 22 S 234/94. Translation by Ruth M. Janal; translation edited by Camilla Baasch Andersen; available at: <http://www.cisg.law.pace.edu/cases/001012g1.html>.

22. See Camilla Baasch Andersen in "Selected Notice Requirements under CISG, PECL and UNIDROIT Principles: CISG Arts. 39 & 26; UNIDROIT Principles Arts. 1.9, 3.14, 7.3.2.; PECL Arts. 1.303, 3.304, 4.112, 9.303, 13.104" (November 2004); available at: <http://www.cisg.law.pace.edu/cisg/principles/uni26.html>.

23. UNCITRAL Digest 5 on CISG Art. 26; supra. n. 5.

24. For instance, the Court in [Italy 13 December 2001 Tribunale [District Court] di Busto Arsizio] states that the "reasonable time" ex Art. 49 CISG differs from the "reasonable time" ex Art. 39 CISG with respect to both its starting point and its lengh. Since in the system of the Convention the remedy of avoidance of contract represents a last resort as compared to all the other remedies available to the buyer, it follows that the starting point of the time limit for declaring avoidance is not the same moment as that of the time limit for giving notice of non-conformity. In fact, whereas non-conformity has to be notified as soon as it is discovered or ought to have been discovered, avoidance has to be declared only after it appears that the non-conformity amounts to a fundamental breach which cannot be otherwise remedied. (See UNILEX Abstract of this Judgment; available at: <http://www.unilex.info/case.cfm?pid=1&do=case&id=927&step=Abstract>.)

25. See J. W. Carter in "Party Autonomy and Statutory Regulation: Sale of Goods": 6 Journal of Contract Law, North Ryde NSW, Australia (1993); p. 107; available at: <http://www.cisg.law.pace.edu/cisg/biblio/carter3.html>.

26. See Comment and Notes to PECL Art. 9:301: Comment B; available at: <http://www.cisg.law.pace.edu/cisg/text/peclcomp49.html>. (See also the rule generally stated in CISG Art. 45(3)/61(3).)

27. See Fritz Enderlein & Dietrich Maskow, supra. n. 9; p. 292.

28. Comment 2 of Secretariat Commentary on Art. 24 of the 1978 Draft [draft counterpart of CISG Art. 26]; supra. n. 18.

29. See Fritz Enderlein & Dietrich Maskow, supra. n. 9; p. 116.

30. See Will in Commentary on the International Sales Law: The 1980 Vienna Sale Convention, Cesare Massimo Bianca & Michael Joachim Bonell eds., Milan (1987), p. 362; available at: <http://www.cisg.law.pace.edu/cisg/biblio/will-bb49.html>.

31. Comment D on PECL Art. 9:303; supra. n. 7.

32. See Comment and Notes to PECL Art. 8:108: Comment D; available at: <http://www.cisg.law.pace.edu/cisg/text/peclcomp79.html>.

33. See Mirghasem Jafarzadeh in "Buyer's Right to Withhold Performance and Termination of Contract: A Comparative Study Under English Law, Vienna Convention on Contracts for the International Sale of Goods 1980, Iranian and Shi'ah Law"; (December 2001); available at: <http://www.cisg.law.pace.edu/cisg/biblio/jafarzadeh1.html>.

34. See Denis Tallon in Commentary on the International Sales Law: The 1980 Vienna Sale Convention, Cesare Massimo Bianca & Michael Joachim Bonell eds., Milan (1987), p. 602; available at: <http://www.cisg.law.pace.edu/cisg/biblio/tallon-bb81.html>

35. See Mirghasem Jafarzadeh, supra. n. 33.

36. The final clause of UNIDROIT Principles Art. 7.1.5(3) reads: "The aggrieved party may in its notice provide that if the other party fails to perform within the period allowed by the notice the contract shall automatically terminate." Note that Art. 7.1.5(4) introduce a but rule that: "Paragraph (3) does not apply where the obligation which has not been performed is only a minor part of the contractual obligation of the non-performing party." The second sentence of PECL Art. 8:106(3) similarly states: "The aggrieved party may in its notice provide that if the other party does not perform within the period fixed by the notice the contract shall terminate automatically."

37. See Comment and Notes to PECL Art. 8:106: Comment F. available at: <http://www.cisg.law.pace.edu/cisg/text/peclcomp47.html>.

38. See Fritz Enderlein & Dietrich Maskow, supra. n. 9; p. 117.

39. Comment F on PECL Art. 8:106; supra. n. 37.

40. Comment C on PECL Art. 9:303; supra. n. 7.

41. Comment 1 of Secretariat Commentary on Art. 24 of the 1978 Draft [draft counterpart of CISG Art. 26]; supra. n. 18.

42. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 9 March 2000; No. 6 Ob 311/99z. Translation by Marko Maljevac, translation edited by Ruth M. Janal; available at: <http://www.cisg.law.pace.edu/cases/000309a3.html>.

43. See Mirghasem Jafarzadeh, supra. n. 33.

44. Comment B PECL Art. 9:301; supra. n. 26.

45. See UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods (8 June 2004), A/CN.9/SER.C/DIGEST/CISG/49: Digest 3; available at: <http://www.uncitral.org/english/clout/digest_cisg_e.htm>. CISG Art. 12 reads: "Any provision of article 11, article 29 or Part II of this Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in a Contracting State which has made a declaration under article 96 of this Convention. The parties may not derogate from or vary the effect or this article." CISG Art. 96 reads: "A Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing may at any time make a declaration in accordance with article 12 that any provision of article 11, article 29, or Part II of this Convention, that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be made in any form other than in writing, does not apply where any party has his place of business in that State." Several States, including P.R. China, made declarations under Art. 96 rejecting provisions of CISG that allowed effective notification in form other than in writing -- e.g., Arts. 11, 12, 96. Despite this, it is noted that the "informality principle" has been clearly adopted by the subsequent China Contract Law (introduced in 1999).

46. UNCITRAL Digest 3 on CISG Art. 26; supra. n. 5.

47. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 28 April 2000; No. 1 Ob 292/99v. English translation by Ruth M. Janal, translation edited by Elisabeth Opie; available at: <http://www.cisg.law.pace.edu/cases/000428a3.html>.

48. See Judgment by Federal Court, South Australian District, Adelaide, Australia 28 April 1995; No. SG 3076 of 1993; FED No. 275/95; available at: <http://www.cisg.law.pace.edu/cases/950428a2.html>.

49. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 28 April 2000; supra. n. 47.

50. See Camilla Baasch Andersen, supra. n. 22.

51. See Comment and Notes to PECL Art. 1:303: Comment B; available at: <http://www.cisg.law.pace.edu/cisg/text/peclcomp27.html>.

52. See the remarks at <http://www.cisg.law.pace.edu/cisg/text/e-text-26>.

53. UNCITRAL Digest 4 on CISG Art. 26; supra. n. 5.

54. See Judgment by [Landgericht [District Court] Frankfurt am Main, Germany 16 September 1991; supra. n. 2.

55. See Judgment by Oberlandesgericht [Court of Appeal] Bamberg, Germany 13 January 1999; supra. n. 14.

56. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 29 June 1999; No. 1 Ob 74/99k. Translation by Dr. Peter Feuerstein, translation edited by Todd J. Fox; available at: <http://www.cisg.law.pace.edu/cases/990629a3.html>.

57. See Judgment by Oberlandesgericht [Court of Appeal] Frankfurt, Germany 17 September 1991; No. 5 U 164/90. English translation from 12 Journal of Law and Commerce 261-270 (1993); available at: <http://www.cisg.law.pace.edu/cases/910917g1.html>.

58. See Judgment by Bundesgericht [Supreme Court], Switzerland 15 September 2000; No. 4C.105/2000. English translation by Alban Renaud, translation edited by Claude Witz and Julia Eisengräber; available at: <http://www.cisg.law.pace.edu/cases/000915s2.html>.

59. See Judgment by [Landgericht [District Court] Frankfurt am Main, Germany 16 September 1991; supra. n. 2.

60. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 6 February 1996; supra. n. 1.

61. See Judgment of ICC Arbitration Case No. 9978 of March 1999; supra. n. 15.

62. See Judgment by Schiedsgericht Hamburger Freundschaftliche Arbitrage [Arbitral Tribunal]; Germany 19 December 1998. Translation by Todd Fox, translation edited by Dr Loukas Mistelis; available at: <http://www.cisg.law.pace.edu/cases/981229g1.html>.

63. UNCITRAL Digest 3 on CISG Art. 49; supra. n. 45.

64. See Joseph Lookofsky in "The 1980 United Nations Convention on Contracts for the International Sale of Goods": J. Herbots editor / R. Blanpain general editor, Suppl. 29 International Encyclopaedia of Laws -- Contracts, Kluwer Law International (December 2000), p. 124; available at: <http://www.cisg.law.pace.edu/cisg/biblio/loo49.html>.

65. UNCITRAL Digest 5 on CISG Art. 26; supra. n. 5.

66. See Judgment of ICC Arbitration Case No. 9978 of March 1999; supra. n. 15.

67. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 28 April 2000; supra. n. 47.

68. See Judgment by [Landgericht [District Court] Frankfurt am Main, Germany 16 September 1991; supra. n. 2.

69. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 6 February 1996; supra. n. 1.

70. UNCITRAL Digest 5 on CISG Art. 26; supra. n. 5.

71. UNCITRAL Digest 3 on CISG Art. 49; supra. n. 45.

72. UNCITRAL Digest 5 on CISG Art. 26; supra. n. 5.

73. See Judgment of ICC Arbitration Case No. 9978 of March 1999; supra. n. 15.

74. See Judgment of ICC Arbitration Case No. 8128 of 1995; available at: <http://www.cisg.law.pace.edu/cases/958128i1.html>.

75. See Camilla Baasch Andersen, supra. n. 22.

76. See Judgment by Bezirksgericht [District Court] der Saane (Zivilgericht), Switzerland 20 February 1997; No. T 171/95. English translation by Stefan Kuhm; available at: <http://www.cisg.law.pace.edu/cases/970220s1.html>.

77. See Judgment by Handelsgericht [Commercial Court] Aargau, Switzerland 5 November 2002; No.: OR.2001.00029. English translation by Martin F. Koehler; available at: <http://www.cisg.law.pace.edu/cases/021105s1.html>.

78. See Judgment by Oberster Gerichtshof [Supreme Court], Austria 11 September 1997; No. 6 Ob 187/97m. English translation by Dr. Peter Feuerstein; available at: <http://www.cisg.law.pace.edu/cases/970911a3.html>.

79. See Mirghasem Jafarzadeh, supra. n. 33.

80. See John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed., Kluwer Law International, The Hague (1999), p. 215; available at: <http://www.cisg.law.pace.edu/cisg/biblio/ho26.html>.

81. A strict interpretation of the wording in Article 49(2)(b)(i) CISG calls for a solution under which the time limit for notifying avoidance is triggered at the time the buyer knew or ought to have known of the breach itself (i.e., regardless of whether he knew or ought to have known of the fundamentality of the breach). A more flexible interpretation would acknowledge the buyer's difficulties in assessing whether the breach is fundamental. Ari Korpinen recommends that flexible interpretation for the case where the defect in the delivered goods is shown to worsen gradually over time. (For details on this contributing article, see Ari Korpinen in "On legal uncertainty regarding timely notification of avoidance of the sales contract" (June 2004); available at: <http://www.cisg.law.pace.edu/cisg/biblio/korpinen.html>.)

82. See Judgment by Cour d'appel [Appeal Court] Paris, France 14 June 2001; No. RG No. 1998/38724. English translation by Audrey Turquois, translation edited by Camilla Baasch Andersen; available at: <http://www.cisg.law.pace.edu/cases/010614f1.html>.

83. UNCITRAL Digest 2 on CISG Art. 49; supra. n. 45.

84. See UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods (8 June 2004), A/CN.9/SER.C/DIGEST/CISG/64: Digest 9; available at: <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.

85. See Judgment by Oberlandesgericht [Court of Appeal] München, Germany 2 March 1994; No. 7 U 4419/93. English translation by Ruth M. Janal; available at: <http://www.cisg.law.pace.edu/cases/940302g1.html>.

86. See Judgment by Oberlandesgericht [Court of Appeal] Oldenburg, Germany 1 February 1995; No. 11 U 64/94. English translation by Dr. Peter Feuerstein, translation edited by Todd J. Fox; available at: <http://www.cisg.law.pace.edu/cases/950201g1.html>.

87. See Will, supra. n. 30; p. 364.

88. See Judgment by Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia 22 October 1998; supra. n. 11.

89. See John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed., Kluwer Law International, The Hague (1999), p. 333; available at: <http://www.cisg.law.pace.edu/cisg/biblio/ho49.html>.

90. See Camilla Baasch Andersen, supra. n. 22.

91. See Will, supra. n. 30; p. 364.

92. See Judgment by Bundesgerichtshof [Federal Supreme Court], Germany 8 March 1995; No. VIII ZR 159/94. English translation by Walter, Conston, Alexander & Green, P.C., translation edited by William M. Barron, Esq.; Birgit Kurtz, Esq.; available at: <http://www.cisg.law.pace.edu/cases/950308g3.html>.

93. See Camilla Baasch Andersen, supra. n. 22.

94. It reads: "If performance has been offered late or otherwise does not conform to the contract the aggrieved party will lose its right to terminate the contract unless it gives notice to the other party within a reasonable time after it has or ought to have become aware of the offer or of the non-conforming performance."

95. Comment 3 on Art. 7.3.2 UNIDROIT Principles, supra. n. 6.

96. See Jonathan Yovel in "Buyer's right to avoid the contract: Comparison between provisions of the CISG (Article 49) and the counterpart provisions of the PECL (Articles 9:301, 9:303 and 8:106)", April 2005; available at: <http://www.cisg.law.pace.edu/cisg/biblio/yovel49.html>.

97. It reads: "The aggrieved party loses its right to terminate the contract unless it gives notice within a reasonable time after it has or ought to have become aware of the non-performance."

98. Comment B on PECL Art. 9:303; supra. n. 7.

99. See Jonathan Yovel; supra. n. 96.

100. See Camilla Baasch Andersen, supra. n. 22.

101. See Jonathan Yovel; supra. n. 96.


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