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Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 76
The Contract/Market Differential

293. As an alternative to the contract/cover differential, a more 'abstract' measure of damages available to a party electing to avoid is set forth in Article 76. If there is a 'current' (i.e. market) price for the goods concerned,[1] the party claiming damages may, if he has not covered by purchase or resale under Article 75, recover the difference between the price fixed by the contract and such current price at the time of avoidance. In addition, the injured party may recover further damages under Article 74.[2]

An injured seller or buyer who has in fact entered a substitute (cover) transaction cannot claim market-price damages under Article 76.[3]

Unlike the avoidance analogues of certain domestic law, the Convention does not make a formal distinction between rejected and accepted goods.[4] If, however, the party claiming damages has avoided the contract after taking over the goods, the current price at the time of such taking over shall be applied instead of the current price at the time of avoidance.[5]

1. According to Article 76(2), the 'current price' is the price prevailing at the place where delivery of the goods should have been made or, if there is no current price at that place, the price at such other place as serves as a reasonable substitute, making due allowance for differences in the cost of transporting the goods.
2. Article 76(1), first sentence.
3. According to Article. 76(1), the market-price formula is available only if the avoiding party 'has not made a purchase or resale under article 75.'
4. Compare, e.g. the American UCC scheme as described by Flechtner, H., op. cit.
5. Article 76(1), second sentence. [page 157]

Pace Law School Institute of International Commercial Law - Last updated April 5, 2005
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