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Reproduced with permission from 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 57-82

The Buyer's Remedy of Avoidance under the CISG:
Acceptable from a Common Law Perspective?

Tobias Plate [*]

Introduction
Scope of Application of the CISG
Avoidance of the Contract under the CISG
    3.1 Article 49(1): Under which circumstances can the buyer avoid the contract?
          (A) Avoidance for fundamental breach under Article 49(1)(a)
   (A1) Obligations of the seller
   (A2) Types of breach of contract
   (A3) Breach must be fundamental
          (B) Avoidance in cases of non-delivery
   (B1) Non-delivery of the goods
   (B2) Additional period of time for performance and the failure to deliver within this period
    3.2 Article 49(2): Under which circumstances may the buyer lose the right to avoid the contract?
          (A) Cases of late delivery: Article 49(2)(a)
          (B) Other types of breach: Article 49(2)(b)
    3.3 Declaration of avoidance as required by Article 26
Outline of the Common Law Equivalent and Comparison
    4.1 Discharge or cancellation
    4.2 Comparative evaluation - Is the CISG regime acceptable?
Conclusion

1.  INTRODUCTION

Over recent decades, international trade has become more intense than ever. The invention of new means of communication technology has made it easier and faster for people from different corners of the world to conclude contracts with each other. Where buyer and seller have their places of business in different countries, it is generally not obvious which legal regime applies to the contract between the parties. The consequence of legal uncertainty is self-evident. Additionally, it is quite likely that the law the contract is eventually governed by will be unfamiliar to at least one of the parties. This party is likely to incur extra costs from conducting business under an unfamiliar set of rules and from obtaining legal advice on these. All this is bound to increase the risks involved in international business and to decrease its efficiency. The only real solution to this problem is a unified substantive regime that applies everywhere. Accordingly, numerous efforts have been made over many decades to achieve an international unification of certain areas of the law which are relevant to international trade. Sales contracts have occupied a key position in these efforts towards a global unification of the law. John O. Honnold, one of the most important legal scholars involved in the process of drafting the Vienna Sales Convention said: "The half century of work that culminated in the 1980 Convention was sustained by the need to free international [page 57] commerce from a Babel of diverse domestic legal systems".[1] Admittedly, an international unification of the law may result in short term uncertainty, but significantly enhances legal certainty in the long run. A uniform body of rules that is applied in most countries of the world also avoids or at least reduces the time-consuming and expensive litigation that is often inevitable in order to identify the proper law of the contract.

The Vienna Sales Convention represents a great step into the direction of legal certainty and towards the rationalisation and an increase in the efficiency of international business. It has surpassed the expectations of those who were involved in the drafting of the Convention. The States that have now ratified the Convention participate in 60% of the World's external trade.[2] This tremendous acceptance of the Vienna Sales Convention almost forces other states to become members to the Convention if they do not want to be put at a disadvantage as far as their external trade relations are concerned. This is especially so since, pursuant to Art. 1(1)(b) of the CISG, cases may occur where the Convention applies although only one of the states involved in a transaction is a signatory. It is through this that even in non-member States lawyers and businesspeople nevertheless have to be familiar with the regulations for which the Convention provides.

Many years passed by before the CISG was finally ready for adoption. In fact, the work on an international unification of the law on the sale of goods can be traced back to the 1920s. In 1928, two years after the founding of the International Institute for the Unification of Private Law, Ernst Rabel suggested an international unification of the law on the sale of goods. Finally, in 1964, two conventions were adopted in The Hague, the Uniform Law of International Sale (ULIS) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULFC). However, these conventions did not attain a great effect of unification since they were only implemented by nine States.[3] The underlying reason for this lack of universal success was probably the uneven and inadequate participation by representatives from different legal, social and economic backgrounds.[4] Any such bias was essentially avoided in the negotiations towards the follow-up convention. Based on the two Conventions of 1964, a single treaty was drawn up covering the formation of sales contracts and at the same time governing sales [page 58] contracts that have actually come into existence. The result was the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG).[5] It was intended to supersede both ULIS and ULFC.[6] Since its entry into force in 1988, the number of Contracting States has risen to 60, including various common law countries such as the United States, Australia, Canada and New Zealand but not the United Kingdom.[7] Hence, the Convention can be characterised as one of the most successful attempts to unify parts of the law of international commerce. Pursuant to Art. 1 of the CISG,[8] the general conflict of laws rules are excluded.[9] Hence the Convention is (once enacted) superior to domestic law, and also to the national conflict of laws rules.[10]

The Convention regulates the obligations of both buyer and seller. It also includes remedies for breach of contract, thereby providing for a complete, well-structured system of remedies. There are two categories of remedies: one where the contract between the parties can be cancelled by one of the parties, and another where the remedy is granted but the contract between the parties is preserved.[11]

The CISG distinguishes between remedies that the buyer and seller can invoke in the event of a breach of contract by the other party (Arts. 45 to 52 and Arts. 61 to 65 respectively). Articles 74 to 77 provide for remedies that both parties are entitled to rely on. Each party can claim damages for breach of contract irrespective of any of the other remedies.

Concerning the buyer's remedies, he or she can require the seller to perform his or her original contractual obligations (Article 46(1)). In case the goods are not in conformity with the contract, the buyer, unlike the seller, can either demand the delivery of [page 59] substitute goods or can ask for the defective merchandise to be repaired. Additionally, and parallel to the seller's rights and remedies, the buyer may fix an additional period for performance, the 'Nachfrist'. This German expression is used as this concept was borrowed from German law.[12] The purpose of this period is to indicate what is the latest point of time in which the buyer is prepared to accept performance. The most drastic of all the remedies that are at the buyer's disposal is the avoidance of the contract between the parties in accordance with Art. 49. This power to avoid the contract may best be defined by rephrasing it as rejection, rescission or cancellation.[13] The consequence is the extinction of both parties' obligations under the contract: Art. 81(1). If the price has already been paid or the goods have been delivered, the obligation of concurrent restitution arises as laid down in Art. 81(2).

This paper raises the question of whether the CISG regime on the avoidance of sales contracts is acceptable from a common law perspective.

2. SCOPE OF APPLICATION OF THE CISG

Article 1 contains the prerequisite of internationality. According to this precondition, the Convention does not come into operation unless the places of business of the parties to the contract are set in different States.[14] Article 1(1) provides that the CISG applies to contracts for the sale of goods whenever the places of business of the parties involved are located in States that are parties to the Convention or if the rules of private international law refer to the law of a Contracting State. The first alternative does not refer to the nationality of the parties: see Art. 1(3). The reason for the second alternative is that the Vienna Sales Convention is intended to form part of the domestic law of all the signatories.

Pursuant to Art. 2(a), a given set of facts falls outside the scope of the Convention if the contract of sale can be characterised as a consumer contract, that is, if the goods are not meant for a commercial purpose. The aim of this exception is to avoid conflicts between [page 60] the Vienna Sales Convention on the one hand and the obligatory regulations of domestic law having as their objective the protection of consumers on the other hand.[15]

3. AVOIDANCE OF THE CONTRACT UNDER THE CISG

The most important provision dealing with the buyer's right to avoid the contract is Art. 49. In paragraph (1) of that provision, it is laid down which requirements have to be fulfilled for the buyer to be entitled to avoid the contract. In case the seller does not perform one of his or her obligations, the buyer can declare the contract avoided it if the non-performance amounts to a fundamental breach, Art. 49(1)(a). If the seller fails to deliver the goods and still does not deliver them within an additional period set by the buyer, the buyer can avoid the contract even if the non-delivery does not constitute a fundamental breach of the contract, Art. 49(1)(b).

Paragraph (2) provides for situations where the buyer loses the remedy of avoidance. These rules are mainly concerned with time limits for making the declaration of avoidance.[16] These will be dealt with in more detail under Section 3.2 (below).

3.1 Article 49(1): Under which circumstances can the buyer avoid the contract?

The first paragraph of Art. 49 contains two different rights of avoidance: avoidance due to a fundamental breach and avoidance because of non-delivery.

     (a) Avoidance for fundamental breach under article 49(1)(a)

Pursuant to Art. 49(1)(a), the buyer may avoid the contract if the seller has failed to perform any of his or her obligations under the contract or the Convention as long as this failure constitutes a fundamental breach of the contract. Accordingly, it must first be ascertained which obligations are the seller's and which different kinds of breach of contract exist. Finally, the prerequisites for a breach to be fundamental must be identified. [page 61]

(a1) Obligations of the seller

According to Art. 30, it is the seller's obligation to "deliver the goods, hand over any documents relating to them and transfer the property in the goods". As per Art. 33(c), these obligations have to be performed "within a reasonable time after the conclusion of the contract". In cases where a particular date or period of time for performance has been agreed on, the seller has to effect delivery "on that date" (Article 33(a)) or "within that period" (Article 33(b)).

(a2) Types of breach of contract

Although the Convention uses both the expression 'breach of contract' and the phrase 'failure to perform', it is based on a single notion of breach of contract as both terms are intended to have the same meaning.[17] Still, when dealing with the question of remedies, a distinction between violations of the different obligations of the seller should be made.[18] These obligations may explicitly be provided for by the Convention itself or they may be obligations created and defined individually by the parties, as long as they still fall under the notion of 'sales law'.[19] The different types of breach of contract notably include non-performance, delayed performance, and the delivery of non-conforming merchandise as per Art. 35. Other failures to perform include the delivery of a wrong quantity, a failure to transfer the property in the goods (Article 30) or the merchandise being subject to third party claims or rights (Article 41). A breach of contract is not dependent on any fault or circumstances giving rise to any kind of responsibility by the party in breach.[20] According to Art. 79, the seller may, in cases of a lack of fault, be exempt from liability for damages. However, the buyer's right to avoid the contract remains unaffected by such an exemption.

Normally, the buyer cannot invoke any remedies before a failure to perform has occurred. However, the buyer may be entitled to remedies if it is obvious that the other party will not perform one of his or her obligations at all and sometimes also if it is clear [page 62] that the seller will not perform by the date agreed between the parties.[21] This is also expressly laid down in Art. 72(1).

An eventual non-performance of the obligation to deliver always constitutes not only a breach of contract, but also a fundamental breach. Such a non-performance may occur when it has become impossible to perform the contract because the goods have been destroyed or because they have perished. Another reason may be that the seller is simply no longer willing to perform his or her obligations under the contract. What, at first sight, seems to be a case of non-performance, may well turn out to be one of delayed performance. Compared to cases of non-performance that constitute fundamental breaches straight away, it is, of course, less obvious how cases of a mere delay should be dealt with. The question of the circumstances under which a mere delay constitutes a fundamental breach will be addressed below.[22]

Pursuant to Arts. 35 and 36, there are several variations of how goods may not be in conformity with the contract. Article 35(2) provides that an individual agreement between the parties as to particular characteristics, qualities or specifications of the merchandise shall take precedence over the subsidiary rules provided in Art. 35(2)(a)-(d). Accordingly, the concept of 'lack of conformity' includes a wrong quantity of goods as well as merchandise of inferior quality or otherwise not fitting the description provided for by the agreement between the parties. Merchandise that is simply different from the goods the parties had contracted for is not in accordance with the regulations of the contract, even if these goods are of reasonable quality.[23] However, by virtue of Art. 39, the delivery of non-conforming goods constitutes a failure of performance only if the buyer has given notice to the seller of the defect within a reasonable period of time after having become aware of the defect or at least after the buyer ought to have become aware of the defect. This notice has to be given within two years after the physical transfer of the goods.

Other breaches of contract may include missing or defective documents, defect in title or the failure to perform one of the various other obligations arising from the individual contractual agreement between the parties. [page 63]

(a3) Breach must be fundamental

According to Art. 49(1)(a), a failure to perform entitles the buyer to avoid the contract only if this failure amounts to a fundamental breach. Still, it proves to be almost impossible to delineate a general definition of the concept of fundamental breach. Accordingly, Gyula Eörsi advocates that, "there is no point in trying to give a definition of something so flexible and general."[24] Indeed, during the Diplomatic Conference on the International Sale of Goods held in The Hague[25] and again at the UN Conference in Vienna,[26] it was even suggested the notion of fundamental breach should not be defined at all. [27]

Article 25 of the Convention reads:

"A breach of contract [...] is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result."

A concept of this nature can only be shaped by case law.[28] Yet, some definite criteria can be identified. The notion depends on the importance of the obligation that has been breached, which is dependent on the content of the individual agreement between the parties. Whether or not a breach is fundamental cannot be determined independently.[29] [page 64] The international negotiations leading up to ULIS [30] and later at the Vienna Conference [31] also concluded that the seriousness of the breach can only be determined with reference to the regulations of the individual contract. It all depends on the question which contractual terms contain material or essential obligations. If such a term has been breached this breach is fundamental, regardless of the loss suffered. Therefore, the aggrieved party does not have to prove any kind of damage. In fact, the avoidance might even be a means that is used precisely to prevent losses from occurring.[32] Although the concept of fundamentality thus primarily depends on the particular contract, "a certain minimum degree of seriousness" of the breach is required for it to be fundamental.[33] The main criterion for determining the nature of the breach is whether the injured party has lost his or her interest in the further existence of the contract.[34]

Article 25 makes reference to the 'foreseeability' of fundamental breach by stating, "[...], unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result". The significance of this phrase is problematic and contentious. The meaning of this part of the provision changed during its history. The result is uncertainty. The prevailing view is that the phrase must be considered a subjective excuse for the party in breach.[35] More than that, it is contended that the question of foreseeability is relevant for ascertaining the significance of the obligation in question.[36] If a contractual provision was deemed a condition in English legal terminology, either expressly or in view of the circumstances, then the party in breach could have been aware that a breach of this term would be fundamental in nature.

In comparison, exemptions from liability due to the occurrence of unforeseeable impediments fall within the scope of Art. 79. The foreseeability of the particular amount [page 65] of loss the aggrieved party has incurred, is dealt with by Art. 74. In these two provisions, the issue of foreseeability only affects the amount of damages the party in breach is liable for. Hence, the issue of the foreseeability of the fundamental character of a breach of contract has to be distinguished from these distinct questions of foreseeability. Only in cases where the importance of the obligation in question has not been expressly manifested and cannot be established by way of construction as per Art. 8(1) and (2), the foreseeability clause comes into operation, only excusing the party in breach if a reasonable person in the same sector of trade would also not have been aware of the fundamental character of the obligation. Cases in which this excuse comes into operation are rare. Therefore, the phrase starting with "unless" is almost meaningless and thus, superfluous.[37]

In order to establish when the prerequisite of 'fundamental breach' is fulfilled, the different types of breach of contract delineated above have to be looked into more thoroughly. First, there are cases where the seller does not deliver the goods at all. These are cases of fundamental breach, regardless of whether it has become impossible to deliver the goods at all or whether the goods are unavailable because they have been delivered to another customer.[38]

Second, in cases where it has not yet become impossible to deliver the goods, but where the seller has seriously and definitely refused to perform, there is also a fundamental breach of contract because the buyer has no reason to believe that this refusal will be anything other than permanent.[39] Whereas it makes no difference if the seller is unwilling or unable to perform, it has to be clear that the refusal is the seller's "last word".[40]

Third, there are cases where the seller has failed to deliver the goods by a certain date that the parties have agreed on in their contract. If performance is still possible and there has not been an ultimate refusal by the seller to perform, the performance is only delayed. Such a failure does not necessarily constitute a fundamental breach straight away. However, lateness may fulfil the requirements of a fundamental breach if time is of the essence according to the contractual agreement. In cases where the specific date was of particular importance to the buyer, and the seller could have been aware of that at the time of the conclusion of the contract, a failure to perform by that date represents a [page 66] fundamental breach. Take, for example, the case of a bridegroom who has ordered a wedding cake, which is finally delivered two days after the wedding.

A fourth variation of breach is the delivery of defective goods. In this context, even the failure to provide goods that are in conformity with certain safety standards does not necessarily constitute a fundamental breach, not even where the defect has engendered personal injury or damage in property.[41] However, as a general rule, the delivery of at least potentially dangerous goods amounts to a fundamental breach for the purposes of Arts. 25 and 49(1)(a). The same applies to the failure to comply with a contractual provision stipulating that the merchandise has to be free of hazardous features.

If the defect is serious but can be remedied by repair or the provision of substitute goods as per Art. 48(1), there is only a fundamental breach in two situations. First, there is fundamental breach if the seller is unable to remedy the defect within a reasonable period of time, be it by delivery of substitute goods, repair or the removal of a defect in title. Second, there is always a fundamental breach if any delay caused by the seller's attempts to cure the defect is unreasonable because time was of the essence under the parties' contractual agreement.[42]

     (b) Avoidance in Cases of Non-delivery

If the breach of contract consists in the seller's complete failure to deliver the goods, there is another possibility of avoiding the contract. The buyer has the right to fix an additional period of time for delivery and wait until this period expires. If the seller fails to deliver the goods within this 'Nachfrist', the buyer is authorised to avoid the contract pursuant to Art. 49(1)(b). Hence, the buyer may be well advised to fix an additional period if there is no certainty as to the fundamental nature of the breach. However, it is important to understand that the right to avoid the contract because of the expiry of an additional period of time is only at the buyer's disposal in cases of non-delivery and not in any other situations of breach of contract, such as, for example, the delivery of defective goods.[43] In accordance with Art. 31, where the term of delivery is referred to in more detail, (a) non-delivery and (b) the delivery of goods that are not in conformity with the contract constitute two totally separate kinds of breach of contract.[44] [page 67]

Having clarified that the right of avoidance for fundamental breach has to be differentiated from the right of avoidance for non-delivery within an additional period of time, it is necessary to examine what the term 'delivery' as opposed to other obligations under the contract actually means. Subsequently, the requirements for an effective Nachfrist notice will be expounded.

(b1) Non-delivery of the goods

Non-delivery has to be distinguished from a general failure to perform. In accordance with Arts. 30 and 31, delivery under the UN Convention consists in the act, which the seller is obliged to perform in order to give the buyer possession of the goods.[45] Regarding common usage, delivery means to take goods to the places or people they are addressed to.[46] These definitions all refer to the physical transfer of the merchandise.

For this reason, the buyer cannot fix an additional period in order to clarify whether, for instance, a defect in the goods amounts to a fundamental breach or whether the seller's failure to remedy such defect constitutes a fundamental failure to perform. In this, the CISG differs considerably from the ULIS under which the buyer would have had this means of clarification at his or her disposal. If defective goods have been delivered to the buyer's place of business that is not a case of non-delivery, although there is a breach of contract. Indeed, there is only non-delivery for the purposes of Art. 49(1)(b) if the buyer has received nothing at all.[47] Even if the seller has delivered completely different goods, this does not amount to non-delivery. However, the parties may stipulate that, under their contract, the term delivery shall have a slightly or even considerably different meaning.

(b2) Additional period of time for performance and failure to deliver within this period

In a case of non-delivery, the buyer has to fix an additional period of time for performance as per Art. 47(1), which is commonly referred to as the 'Nachfrist' notice.

The Nachfrist notice does not have to meet any formal requirements. The mere dispatch of the Nachfrist notice is sufficient. As per Article 27, the risk of transmission is not the [page 68] buyer's.[48] Even an oral notice suffices.[49] The setting of this additional period involves a specific demand for performance[50] coupled with a certain date which manifests when performance will be accepted at the latest by the party waiting for delivery. This date has to be determinable by simple calendar reference.[51] Therefore, it is acceptable that performance be required by a certain date or within a particular span of time, but only if the beginning of this span of time is certain at the time of fixing the additional period. Thus, the demand that delivery be made 'immediately' or 'as quickly as possible' is insufficient for lack of certainty.[52] The demand must be clear. Overstated politeness is not advisable and may result in a Nachfrist notice being ineffective. However, the buyer does not have to combine the demand for performance with the threat to look to his or her legal rights or even with the threat that performance will no longer be accepted after the date set.[53]

A further requirement for a Nachfrist notice to be effective is that the additional period must be 'of reasonable length', as determined on a case-by-case basis.[54] Various factors are taken into account, including the period of time originally envisaged for delivery, the nature of the impediment to delivery, the seller's possibilities of, and time needed for delivery, and the buyer's particular interests in speedy performance.[55] In any event, it has to be considered that the period is 'additional' in nature, in that the seller does not have to be treated in a way to allow him or her enough time to start lengthy preparations for delivery that he or she has not even begun.[56]

If the additional period of time fixed by the buyer is too short, Art. 49(1)(b) has to be interpreted in such a way that the actual Nachfrist initiates a period of reasonable length.[57] However, if the buyer has fixed too short a period and accordingly declares the [page 69] avoidance of the contract upon the expiration of that period, this constitutes a breach of contract itself, resulting in the seller being entitled to invoke the rights provided for by Arts. 72(1) and (3).

If the seller still intends to perform but realises that the additional period fixed by the buyer is too short to effect performance, he or she is entitled by Article 48(2) to suggest a 'counter-period'. If this counter-period is not acceptable to the buyer, he or she must object without delay.

Finally, the buyer can only cancel the contract in accordance with Art. 49(1)(b) if the seller fails to effect delivery of the goods within the additional period of time for performance fixed by the buyer. If the buyer realises during the additional period that even the prerequisites of Art. 49(1)(a) would have been fulfilled it is now impossible to avoid the contract before the additional period has expired; he or she is bound by his or her own decision to fix an additional period of time for performance: Art. 47(2).[58] This protection is vital for the seller, for he or she has to rely on the buyer's declaration when trying to cure the defect, possibly at considerable expense.[59] Thus, the only situation in which cancellation is possible before the expiry of the Nachfrist is the case where the seller declares an ultimate refusal to perform within the period fixed.

3.2 Article 49(2): Under which circumstances may the buyer lose the right to avoid the contract?

Article 49(2) probably contains "the most complicated rule of the entire Convention".[60] It provides for certain circumstances, under which the buyer may lose his or her right to avoid the contract, given the prerequisites of paragraph (1) are satisfied. Subparagraph (a) deals with the particular line-up of late delivery, whereas subparagraph (b) establishes regulations for other cases of breach of contract.

     (a) Cases of late delivery: article 49(2)(a)

If the delivery of the goods is delayed, the buyer may wish to avoid the contract. It can be read into Arts. 49(2)(a) and (b) that the buyer may wait as long a time as he or she [page 70] wants before avoiding the contract, provided that the goods remain undelivered.[61] Although this might result in the seller's liability for damages being increased, this is still in accordance with Art. 77, a provision that sets up the premise that any loss should be mitigated.

The buyer does not forfeit his or her right to avoid the contract immediately when the goods are delivered. However, the buyer must, as a general principle, avoid the contract relatively quickly ("within a reasonable time") after the actual delivery if the avoidance is to be based on the delay. It depends on the particular facts of the individual case whether a certain period of time is considered to be reasonable.[62] In this context, mention may be made of perishable goods that cannot otherwise be sold if the buyer waits for too long before cancelling the contract. In these cases, the buyer must declare the avoidance of the contract without unnecessary delay, that is, almost instantaneously.[63]

     (b) Other Types of Breach: Article 49(2)(b)

All types of breach of contract other than a delay in delivery are dealt with by Art. 49(2)(b). Generally, the buyer must declare the avoidance of the contract within a reasonable time after he or she knew of the breach or could have been aware of it: Art. 49(2)(b)(i). However, this does not imply that the buyer is under an obligation to reassure himself or herself that there is no breach of contract. The only exception is laid down in Article 38. Pursuant to this provision, the buyer must examine the goods for defects and other kinds of non-conformity.

After the "reasonable time" has expired, the buyer no longer has the right to avoid the contract. Again, the reasonableness of the time has to be determined according to the particular circumstances of the case. However, in comparison to Art. 49(2)(a), the buyer does not have to declare the avoidance of the contract without any delay, but may be allowed some time to consider the situation.[64] The reason is that, typically, cases of non-delivery can usually more easily be identified than other variations of breach. [page 71]

If a case involves defective goods and the seller intends to repair these goods as a consequence of a notice by the buyer, the reasonable period of time the buyer is allowed to wait before avoiding the contract must not expire while the seller is still trying to remedy the breach.[65]

When the time limit in Art. 49(2)(b)(i) has already passed, avoidance might still be possible in accordance with Art. 49(2)(b)(ii). On the expiration of this Nachfrist, the buyer is entitled to avoid the contract; naturally only in cases of fundamental breach. A loss of the buyer's right to avoid the contract pursuant to Art. 49(2)(b)(ii) is always of only a temporary nature, since the buyer can regain this right by fixing a new additional period of time for performance.[66] The buyer would otherwise, in cases of fundamental breach, always have to avoid the contract at the earliest possibility in order to prevent a loss of his or her right to avoidance because of Art. 49(2)(b)(i). This, however, would conflict with the principle that international contracts should be upheld as long as possible.

If an additional period of time has not been fixed by the buyer but has instead been proposed by the seller and the buyer has accepted this suggestion, the buyer is not entitled to avoid the contract within this period [Article 48(2), second sentence]. Yet, if the seller has not remedied his or her failure within that period the buyer's right to avoid the contract arises within a reasonable time after the expiration of that period: Art. 49(2)(b)(iii). This observation is valid even in the event that the period provided in Art. 49(2)(b)(i) has already expired.[67]

3.3 Declaration of avoidance as required by article 26

Neither in cases of fundamental breach nor in cases of non-delivery as per Art. 49(1)(b) does the CISG provide for ipso facto avoidance. The termination of the contract between the parties must always be brought about by a declaration: Art. 26. This regulation provides that, "a declaration of avoidance of the contract is effective only if made by notice to the other party". The declaration does not have to meet any specific formal preconditions. It can even be made orally or be inferred from the buyer's conduct as long as this conduct is unambiguous.[68] Following the predominant view in the scholarly [page 72] writings on the Convention, this declaration must be unconditional.[69] However, in cases where the seller has not delivered the goods within the contractual time limit, the buyer is entitled to combine a Nachfrist notice with a declaration of avoidance to take effect in the event that the seller still fails to deliver.[70] The reason for this exception is that this principle should not apply to conditions which depend on the addressee's (the seller's) own conduct since he or she does not deserve any protection in this case. The exact wording of the declaration of avoidance is immaterial as long as the intended legal consequences are sufficiently clear. For example, it may be sufficient for the buyer to return the goods, stating that they were delivered late.[71]

The dispatch of the declaration of avoidance alone is sufficient such as with all the declarations made under the CISG, since, by virtue of Art. 27, the risk of the transmission of documents or information as between the parties is not placed on the party who intends to rely on the communication.

4. OUTLINE OF THE COMMON LAW EQUIVALENT AND COMPARISON

This next section provides an overview of the common law rules on the termination of sales contracts, followed by a comparison with and a subsequent evaluation against the CISG.

4.1 Discharge or cancellation

Under the common law doctrine, the legal remedies which result in the extinction of both parties' obligations under the contract, are generally referred to as rejection, rescission, cancellation and discharge. Historically, the common law was reluctant to release a party from its contractual obligations on the mere ground that the other party has committed a breach of this contract. The underlying rationale for this was the common law doctrine of caveat emptor, which was based on the "flourishing of individualistic philosophy" at that time.[72] This doctrine implies that, essentially, it is the buyer's responsibility to examine the goods before the purchase is made. Hence, the [page 73] termination of a contract was considered acceptable merely in cases where one party's promise had been given precisely in exchange for the other party's promise. In cases of this kind, a cancellation was held to be justified because of a disturbance of the contractual equilibrium, considering the great degree of dependency between the obligations of both parties.[73] However, this historical reluctance towards the remedy of cancellation was relaxed late in the eighteenth century. Judges developed a legal regime under which the buyer's right of rejection was dependent on the seriousness of the breach in question.

In New Zealand, the issue of cancellation of contracts in general is regulated in the Contractual Remedies Act 1979. The New Zealand Sale of Goods Act 1908 also contains specific rules and regulations on sales contracts. Thus, the issue of discharge or cancellation of contracts for the sale of goods is dealt with by the Sale of Goods Act 1908 alone.[74] This Act is practically a reiteration of the United Kingdom Sale of Goods Act 1893, which in turn only restated the common law on sale contracts.[75] The view that the New Zealand Sale of Goods Act 1908 derogates the Contractual Remedies Act 1979 is supported by the cases of Finch Motors Ltd v Quin (No 2)[76] and Broadlands Finance v Inwood.[77] Therefore, the Contractual Remedies Act 1979 is excluded. The effect is that, instead, the common law - either independently or as preserved in the act - applies to this category of cases. According to the common law, any failure by a party to perform one of his or her obligations constitutes a breach of contract.[78] Yet, not every kind of breach entitles the buyer to treat the contract as repudiated, that is, to cancel the contract.

Overall, the provisions dealing with cancellation in the New Zealand Sale of Goods Act 1908 are fairly strict on the seller. If the seller does not deliver merchandise that is precisely in accordance with the stipulations contained in the contractual agreement, the buyer can reject the merchandise. It can be derived from s. 13(1) of the Sale of Goods [page 74] Act 1908 that the buyer is entitled to treat the contract as repudiated if any condition remains unfulfilled. As opposed to the breach of a condition, the breach of a warranty does not give rise to the buyer's right to cancel the contract.[79] A contractual obligation constitutes a condition if it goes so directly to the substance of the contract or is so essential to its very nature, that a breach of it may fairly be considered a substantial failure to perform the contract at all.[80] Whether this requirement is met, depends on the construction and interpretation of the contractual agreement as between the parties. According to s. 13(2) of the Sale of Goods Act 1908, it has to be established how important the relevant contractual term was for the parties.

Concerning the breach of timing obligations, there is no mention of conditions and warranties. Instead, it turns on the question of whether the obligation to meet a particular deadline is of the essence or not.[81] However, if a timing obligation is considered to be of the essence, it is deemed to be a condition.[82]

Besides warranties and conditions, there are also so-called innominate terms. Whether a breach of such an innominate term gives rise to the buyer's right to cancel the contract again depends on the importance of the particular term for the whole transaction. Accordingly, the buyer is entitled to treat the contract as repudiated if the nature of the breach is so as to "deprive the innocent party of substantially the whole benefit that party was entitled to receive under the contract".[83] Indeed, this definition seems to be extremely close to the definition of fundamental breach in Art. 25 of the CISG.[84] However, under the Sale of Goods Act 1908, the mere stipulation of a certain time for delivery in a commercial contract is usually considered a condition. This is particularly underpinned by the decision of the House of Lords in Bunge Corp v Tradax SA where it was held that regulations as to time will typically be considered to be of the essence in mercantile contracts.[85] In contrast, under the CISG, the violation of a contractual stipulation as to time only amounts to a fundamental breach in exceptional circumstances.[86] Consequently it is submitted that the hurdle that has to be taken for [page 75] avoidance or cancellation is significantly higher in the Vienna Sales Convention than under the Sale of Goods Act 1908.

Another instance where a contract can be cancelled according to the Sale of Goods Act 1908 relates to a sale by description. This notion is very wide. Therefore, a purchase nearly always amounts to a sale by description except in cases where the goods are sold without any description, either explicit or implicit, and if there is no statement included about them as an essential part of their identity.[87] The description may quite simply be a reference to a specific class or kind of goods. If a contract can be characterised as a sale by description there is an implied condition that the merchandise will correspond with this description.[88]

Finally, the contract of sale may contain implied terms as to the quality of a product or its fitness for particular purposes. Section 16 of the Sale of Goods Act 1908 lays down the general rule that there is normally no implied condition as to the quality or fitness of the goods for any particular purpose, unless such an implication is justified by usages of trade. At the same time, the provision contains a list of exceptions, which indeed results in the quality of the goods quite often being a condition. If the buyer has communicated to the seller, at least impliedly, what kind of purpose the goods are meant for, an implied condition is usually held to be incorporated into the contract that the goods are at least reasonably fit for this purpose. This does not necessarily mean that the goods have to be perfect or have to be in accord with certain average standards; they only have to be reasonably fit for the purpose.[89] A breach of such a condition brings about the buyer's right to cancel the contract, that is, to treat the contract as repudiated if the goods do not meet this standard.

The same applies if the quantity of the goods does not meet the contractual prerequisites.[90] The set of facts before the court in Re Moore & Co and Landauer & Co[91] illustrates the characteristics of the buyer's right to cancel the contract on the ground of a wrong quantity of goods. In this case, two parties agreed in a contract of sale that one of them should deliver canned fruit to the other. Furthermore, they stipulated that the fruit cans should be packed in cases of thirty cans each. The seller, being under the obligation to hand over the goods, delivered exactly the right overall [page 76] amount. However, half of the cases did not contain thirty cans each but only twenty-four. Although it is arguable that this was a comparatively negligible deviation from the contract, it was held that the buyer was entitled to reject the entire delivery.[92]

Summing up, it can be established that the regimes on avoidance and cancellation under the CISG and the Sale of Goods Act 1908 respectively are by no means poles apart. Although the rules on conformity in the Convention do not make use of expressions such as 'conditions' and 'warranties', there is no substantial difference in that respect.[93] However, the requirements that have to be fulfilled according to Art. 49 of the CISG are more demanding than under the New Zealand regime. Thus, the UN Sales Convention lays more emphasis on preserving the contract since it is more difficult for the buyer to terminate the contract than it is under New Zealand law.

The English Sale of Goods Act 1979 is, in essence, the same as New Zealand sales law. Hence, it is unnecessary to present it separately. Both in English and in New Zealand sales law, there are particular provisions concerning consumer sales that differ significantly from the regulations delineated above.[94] However, since the CISG does not apply to consumer contracts by virtue of Art. 2(a), these rules are of no relevance for the purposes of a comparison to the UN Convention.

4.2 Comparative evaluation - is the CISG regime acceptable?

Generally, in common law legal systems a great extent of precision and detail is expected from a legal text. Accordingly, judicial interpretation is narrower and more literal than in the civil law tradition.[95] The UN Sales law had to find a compromise between these two different legal traditions.

The New Zealand Law Commission itself determined in its Report No. 23 that "[t]he substantive rules are acceptable to and accepted by civil and common law jurisdictions, developed and developing countries, capitalist and socialist economies, ...".

The CISG introduces new concepts and thus also new uncertainties, but, comparing this to the situation before there was any unified regime, there is probably much less [page 77] uncertainty now that the CISG exists.[96] Besides, it should be mentioned that it is always a possibility for parties to develop their own rules or stipulate that their contract shall be governed by a completely different set of rules. This possibility is specifically laid down in Art. 6 of the CISG, which is a restatement of a general principle of private international law.

A basic difference between the rules on avoidance of the contract contained in the Convention on the one hand and the common law rules on cancellation on the other, is that the Vienna Sales Convention attaches great importance to the preservation of the contract between the parties involved, even though a breach has occurred. As a consequence, remedies other than cancellation are more widely available to the buyer under the CISG than is normally the case according to New Zealand sales law.[97] However, the remedy of cancellation, avoidance or discharge is not so easily available. For instance, the definition of fundamental breach is very narrow. By virtue of Art. 48, the seller is entitled to cure the breach. This results in the limitation of the buyer's freedom under New Zealand law to reject the goods.[98] Thus, the sales contract is preserved notwithstanding a breach. The buyer does not have a right to terminate the contract if there has only been a relatively minor breach of contract committed by the other party.

A completely new concept to common law jurisdictions is the buyer's right to fix an additional period for performance, the Nachfrist notice. There is no real common law counterpart to this legal phenomenon. The only question under New Zealand and English law is whether a breach of the obligation to deliver within a certain time limit is sufficiently substantial to authorise the buyer to cancel the contract.[99] Since, under English and New Zealand law, a breach of a timing obligation mostly gives rise to the buyer's right to cancel the contract straight away, there is no need for rules on concepts such as that of an additional period of time for performance.

Unlike the common law, the Vienna Sales Convention has detailed regulations on this concept. The entire concept of the Nachfrist notice under the Vienna Sales Convention has been explicated in detail. It has the basic effect that, in cases of a delay in delivery, the buyer can fix an additional period of time for performance, especially when he or she is unsure whether the delay already constitutes a breach of contract, which is [page 78] sufficiently severe to justify an avoidance of the contract straight away [Article 49(1)(a)].[100] In comparison to the buyer's right to terminate the contract immediately, this also contributes to the preservation of the contract since the defaulting party is given time to cure the breach by delivering the goods. While this approach is foreign to the English and New Zealand Sale of Goods Acts, it is not inconsistent with common law legal traditions. At the end of the day, it is not an uncommon clause to have in a contract that the seller shall have the right to remedy his or her breach within a reasonable period of time. Also, the duty to mitigate losses might require the buyer to show some patience before he or she terminates the contract.[101] Besides, the buyer is not prevented from declaring a waiver of his or her strict right to punctual delivery. This waiver may be combined with a declaration having the same effect as a Nachfrist notice.[102] The existence of the buyer's right to proceed as described is also supported by the case of Charles Rickards v Oppenhaim,[103] where it was held that the buyer is authorised to "give a notice bringing the matter to a head" if he or she has waived the initially agreed time limit for delivery before. The additional period must be reasonable and the buyer is prevented from invoking other remedies before the expiration of this period of time. Altogether, the results under the CISG and the common law are therefore similar in a lot of cases.[104]

In addition to the issue of the Nachfrist, the fact that the buyer may lose his or her remedies in case of a failure to give notice in time [Article 49(2)] constitutes another difference between the regime as set out in the Convention and the common law rules. The underlying rationale of this peculiarity is the need for greater certainty on an international level.

The Convention extensively uses concepts of reasonableness ('reasonable period of time') and good faith. The latter term is not expressly used in the legal regime on avoidance. However, when interpreting and applying the Convention, regard must be had to these principles. Thus, good faith and reasonableness also affect the application of the rules on the avoidance of the contract. These concepts are familiar to common lawyers. The New Zealand 1908 Sale of Goods Act also refers to these standards.[105] [page 79]

5. CONCLUSION

The buyer's right to avoid his or her contract with the seller under the CISG is mainly regulated in Art. 49. For the buyer's right of avoidance to arise, there always has to be a breach of contract in the first place. In contrast to the sales laws of England and New Zealand, the Vienna Convention does not distinguish between the breach of conditions, warranties and innominate terms. Instead, there is a single notion of breach. This difference, however, does not result in extremely different outcomes and proves not to be too significant.

The stricter requirements for the fundamentality of the breach under the CISG as well as the idea of introducing the concept of a Nachfrist, granting the seller an opportunity to remedy his or her breach of contract, both serve a single purpose. The whole thrust of the Vienna Sales Convention is on preserving the contract. None of the parties should be allowed to set aside the contract between them for a relatively minor breach of contract. This is achieved both by usually requiring an extremely serious breach of contract for the buyer's right of avoidance to arise and by providing for several circumstances in which the seller obtains a further opportunity to cure. It is submitted that this primary discrepancy between the Vienna Sales Convention on the one hand and the New Zealand and English laws on cancellation on the other hand is justified. In international business transactions, the amount of goods contracted for is generally larger than is the case in contracts concluded on a national plane. Moreover, the cost of the transportation of the goods is significantly higher in cross-border commerce. For all these reasons, a termination of the contract, resulting in both parties being obliged to return what they have received under the contract, is generally detrimental to both parties to the transaction. Hence, the underlying concern of the Vienna Sales Convention is to avoid this result almost at any cost.

Yet, in order to answer the question of whether the CISG regime on the avoidance of a sales contract really is acceptable from a common law perspective, one also has to identify the reasons for generally striving for an international unification of law in an area such as that of contracts for the sale of goods. Adopting uniform rules always means agreeing on a compromise. Lawyers as well as business people have to get used to new regulations. At least for a certain period of time, this brings about legal uncertainty and makes business people hesitate before they engage in cross-border transactions. Only if it can be established that the development of international business truly benefits from efforts at an international unification of the law, will it be worth the temporary disadvantages that are inevitable. [page 80]

When ascertaining whether the body of rules contained in the Convention is acceptable from a common law perspective, it is worth noting that a significant number of States that play a major role in cross-border trade have apparently deemed satisfactory the substantive regulations that the Vienna Convention contains. For this reason, 60 States from different legal, social and economic backgrounds have become signatories. It is surely not without justification to consider the 1980 UN Sales Convention an acceptable compromise between common and civil law principles of sale.[106]

However, one should be aware of the fact that it is a long way from a uniform text towards a unified application of the Convention. Naturally, domestic courts will always construe and interpret a text in light of their own legal, social and economic background, tradition and education. However, in the Vienna Convention, the attempt has been made to avoid this problem to the greatest extent possible. By virtue of Art. 7, any kind of interpretation has to take into account the international character of the Convention as well as the uniformity of application. Also, the Vienna Sales Convention makes only very limited use of technical terms and concepts.[107] Besides, the common law courts' approach to interpreting international conventions seems to have moved towards the one used by courts with a civil law background. For instance, common law courts have started to look at the travaux préparatoires[108] and have begun moving from the former "strict constructionist" approach towards a more "rationale-oriented", "purposive" method of construction.[109]

Additionally, the avoidance of the contract as it is regulated in the CISG is consistent with the relevant set of rules contained in the UNIDROIT Principles, a body of regulations, which is widely considered to embody worldwide trade usages. Thus, even without an acceptance of uniform texts such as the CISG, they might at any rate be mere representations of already existing international trade usages to the same effect.

It must be borne in mind that a complete international unification of the law governing the sale of goods would probably be impossible, perhaps even absurd, where such a wide variety of disparate legal, social and economic systems are involved as this is the case concerning the member States of the Vienna Convention.[110] Aiming at simplicity [page 81] and practicality, the Convention is written in a language that is easy for business people to understand.[111]

Taking all these aspects into consideration, the question raised at the beginning can be answered essentially without hesitation. The provisions in the CISG dealing with the buyer's right to avoid the contract are acceptable from a common law perspective, in fact they represent a reasonable compromise between civil and common law backgrounds and generally do justice to the requirements of international trade. [page 82]


FOOTNOTES

* LLM Candidate, University of Canterbury, New Zealand; Participant in the Willem C. Vis International Commercial Arbitration Moot 1998/99 (University of Muenster).

1. Honnold, J.O., Documentary History of the Uniform Law for International Sales (1989) as cited in New Zealand Law Commission, Report No. 23, op cit, para 2.

2. New Zealand Law Commission, Report No. 23, op cit, para 126.

3. These states were Belgium, Gambia, Germany, Israel, Italy, Luxemburg, the Netherlands, San Marino and Great Britain. Cf Schlechtriem, P. in Schlechtriem, P., Commentary on the UN Convention on the International Sale of Goods (CISG) (2nd ed, 1998), Introduction 1.

4. New Zealand Law Commission, Report No. 23, The United Nations Convention on Contracts for the International Sale of Goods: New Zealand's Proposed Acceptance (1992), para 17.

5. As the Convention was signed in Vienna, it is also known as the 'Vienna Sales Convention'.

6. Nicholas, B., 'The Vienna Convention on International Sales Law' (1989) 105 LQR 201.

7. Information dating from 11 September 2001, available at: <http://www.uncitral.org/english/status/status-e.htm#> United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), 17 September 2001.

8. Unless indicated otherwise, all Articles mentioned are those of the 1980 UN Convention on Contracts for the International Sale of Goods.

9. Jayme, E., "Article 1", in Bianca, C.M. and Bonell, M.J., Commentary on the International Sales Law (1987), para 1.2.

10. For New Zealand specifically: New Zealand Law Commission, Report No. 50, Electronic Commerce Part I (1998), para 112

11. Piliounis, P.A., "The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are These Worthwhile Changes or Additions to English Sales Law?", Pace International Law Review (2000), 1, at p. 5; Flechtner, H.M., "Remedies under the New International Sales Convention: The Perspective from Article 2 of the UCC", 8 J L Com 53 (1988), available in Pace CISG Database, <http://www.cisg.law.pace.edu>.

12. Treitel, G.H., op cit, para 16 -149; Koch, R., "The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG)", in Review of the Convention on Contracts for the International Sale of Goods (CISG) 1998 (1999), 191 n 27; R G Lee, "The UN Convention on Contracts for the International Sale of Goods: OK for the UK?" (1993) JBL 131, at p. 139.

13. Michida, S., "Cancellation of Contract", 27 Am J Comp L 279 (1979).

14. See Honnold, J.O.,Uniform Law for International Sales under the 1980 United Nations Convention (3rd ed, 1999), Article 1, para 40.

15. Khoo, W., in Bianca, C.M. and Bonell, M.J., op cit, Article 2, No. 2.2.

16. Huber, U. in Schlechtriem, op cit, Article 49, para 2.

17. Will, M. in Bianca, C.M. and Bonell, M.J., op cit, Article 45, para 2.1.2; von Caemmerer, E., 'Wesentliche Vertragsverletzung' SJZ 1981, at p. 264.

18. Schlechtriem, P. in Schlechtriem, op cit, Introduction 4.

19. See OLG Frankfurt a M, NJW 1992, 633, 635; Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 7.

20. Huber, U. in Schlechtriem, op cit, Article 45, para 10.

21. Piltz, B., Internationales Kaufrecht (1993), 5, para 253; Magnus, U. in v Staudinger, J., Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen - Wiener UN-Kaufrecht (CISG) (1994), Article 49, para 13; Huber, U. in Schlechtriem, op cit, Article 49, para 8; Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 17.

22. See below at p 53 et seq.

23. Huber, U. in Schlechtriem, op cit, Article 31, para 36; Schwenzer, I. in Schlechtriem, op cit, Article 35, para 10.

24. Eörsi, G., op cit, at p. 336.

25. The Hague I, 41 per Hakulinen (Finnish delegation).

26. At the 1977 UNCITRAL Conference Sevon (Finnish delegation) and Krispis (Greek delegation) argued in favour of a deletion of any definition, SR 4, 17, 22.

27. The fact that any attempt to define the concept of fundamental breach is difficult, if not impossible, is highlighted by the history of the provision: concerning the whole development see Eörsi, G., op cit, 337 et seq. During the ULIS period, the tendency had been to adhere to a subjective test, focusing on the question of whether the aggrieved party would still have entered into the contract, had it known of the breach at the time of the conclusion of the contract. However, this approach was subject to constant and harsh criticism for its subjectiveness. Only taking into account the aggrieved party's hypothetical behaviour, it did not do justice to the interests of both of the parties involved. Hence, in 1975, at the sixth session of the UNCITRAL Working Group, the test was replaced by a more objective test, depending on the substantial detriment suffered by the other party. Although exponents of the former subjective approach tried to push through their opinion, the objective definition was, in essence, eventually agreed upon in Vienna.

28. Eörsi, G., "A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods" 31 Am J Comp L 333 (1983), at p. 336 et seq.

29. von Caemmerer, E., op cit, 71; Enderlein, F. and Maskow, D., International Sales Law (1992), Article 25, para 3.3.; Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 2; BG, UNILEX, E.1998-18.1, p. 864.2; cf OLG Frankfurt a M, CLOUT Case No. 2, according to which the breach of the ancillary duty of preserving exclusivity constituted a fundamental breach of the contract under Article 25 of the CISG.

30. Will, M. in Bianca, C.M., and Bonell, M.J., op cit, Article 25, para 1.1.1, 1.1.2.

31. See UNCITRAL Yearbook I (1968-1970) 169, No 86; Yearbook III (1972) 47; Yearbook VI (1975) 53, No 44; 77, No 43; 95, No 67; Yearbook VIII (1977) 127, No 7. Informative and interesting in this context G Eörsi, op cit, 340, 344; M Will in C M Bianca and M J Bonell, op cit, Article 25, paras. 1, 2.

32. Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 2; cf also the view put forward by the Czechoslovakian government in YB VIII (1977) 113, no 5.

33. Treitel, G.H., Remedies for Breach of Contract: a Comparative Account (1988), No. 161; on Article 25 CISG specifically see Nicholas, B., op cit, at p. 219.

34. Kazimierska, A., 'The Remedy of Avoidance under the Vienna Convention on the International Sales of Goods', available at: <http://cisgw3.law.pace.edu/cisg/biblio/kazimierska.html> 25 September 2001.

35. Will, M. in Bianca, C.M. and Bonell, M.J., op cit, Article 25, para 2.2; Enderlein, F. and Maskow, D., op cit, Article 25, para 4.1; Official Records, at p. 295 et seq.

36. Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 11.

37. Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 3.

38. See LG Düsseldorf, 17 November 1983; Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 17.

39. Huber, U. in Schlechtriem, op cit, Article 49, para 6.

40. See OLG Düsseldorf, NJW-RR 1994, 505, according to which it is not sufficient for avoidance if the seller declares that he was unable to deliver "at the moment".

41. BGHZ 67, 359; Schlechtriem, P. in Schlechtriem, op cit, Article 25, para 7.

42. Kritzer, A.H., Guide to Practical Applications (1994) 413, No 6; Huber, U. in Schlechtriem, op cit, Article 46, paras 42 et seq, at p. 50; Schlechtriem, P., op cit, Article 25, para 20.

43. OLG Düsseldorf, NJW-RR 1994, 505, 506.

44. Huber, U. in Schlechtriem, op cit, Article 49, para 19.

45. Huber, U. in Schlechtriem, op cit, Article 30, para 5.

46. See Webster's New Encyclopaedic Dictionary; Oxford Advanced Learner's Dictionary of Current English.

47. Herber, R. and Czerwenka, B., Internationales Kaufrecht (1991), Article 49, para 8; Ziegler, U., Leistungsstörungsrecht nach dem UN-Kaufrecht (1995), at p. 166.

48. Enderlein, F. and Maskow, D., op cit, Article 47, para 4; Herber, R. and Czerwenka, B., op cit, Article 47, para 3; Piltz, B., op cit, 5; para 233.

49. Enderlein, F. and Maskow, D., op cit, Article 47, para 4; Piltz, B., op cit, 5, para 234; cf also Official Records (1981) 338, No. 70, 72.

50. Huber, U. in Schlechtriem, op cit, Article 47, para 7.

51. Huber, U. in Schlechtriem, op cit, Article 47, para 6.

52. See Secretariat's Commentary on the Draft Convention on Contracts for the International Sale of Goods (1981) Official Records, 39, Article 43, No. 7; Honnold, J.O., op cit, para 289; Will, M. in Bianca, C.M. and Bonell, M.J. op cit, Article 47; para 2.1.3.1; Herber, R. and Czerwenka, B., op cit, Article 47, para 3.

53. Herber, R. and Czerwenka, B., op cit, Article 47, para 3; Piltz, B., op cit, 5 para 233; but see Enderlein, F. and Maskow, D., op cit, Article 47, para 4. >

54. Honsell, H., "Die Vertragsverletzung des Verkäufers nach dem Wiener Kaufrecht" SJZ 1992, 345, 352; Huber, U. in Schlechtriem, op cit, Article 47, para P.

55. Will, M. in Bianca, C.M. and Bonell, M.J., op cit, Article 47, para 2.1.3.2.

56. Huber, U. in Schlechtriem, op cit, Article 47, para 9.

57. Herber, R. and Czerwenka, B., op cit, Article 47, para 4; Piltz, B., op cit, 5, para 235; Magnus U. in v Staudinger, J., op cit, Article 47, para 20.

58. Huber, U. in Schlechtriem, op cit, Article 49, para 21.

59. See Secretariat's Commentary on the Draft Convention on Contracts for the International Sale of Goods (1981) Official Records, at p. 39.

60. Enderlein, F. and Maskow, D., op cit, Article 49, para 6; see also Honnold, J.O., op cit, para 319 et seq.

61. Herber, R. and Czerwenka, B., op cit, Article 49, para 14; Neumayer, K.H. and Ming, C., Convention de Vienne sur les contrats de vente internationale de marchandises - Commentaire (1993), Article 49, para 7; Magnus, U in v Staudinger, J., op cit, Article 49, para 30; Piltz, B., op cit, 5, para 276.

62. Huber, U. in Schlechtriem, op cit, Article 49, para 38.

63. Enderlein, F. and Maskow, D., op cit, Article 49, para 7.

64. Piltz, B., op cit, 5, para 282; Herber, R. and Czerwenka, B., op cit, Article 49, para 15; see also OLG Frankfurt a M, RIW 1991, 950, 951. But see Enderlein, F. and Maskow, D., op cit, Article 49, para 7 who do not distinguish between Article 49(2)(a) and (b).

65. Huber, U. in Schlechtriem, op cit, Article 49, para 49.

66. Huber, U. in Schlechtriem, op cit, Article 49, para 61.

67. Huber, U. in Schlechtriem, op cit, Article 49, para 62.

68. Leser, H.G., in Schlechriem, op cit, Article 26, para 10; but see Enderlein F., and Maskow, D. op cit, Article 26, para 1.2; Herber, R. and Czerwenka, B., op cit, Article 26, para 3; Piltz, B., op cit, 5, para 272.

69. Date-Bah, S.K., in Bianca, C.M. and Bonell, M.J., op cit, Article 26, para 2.4; Leser, H.G. in Schlechtriem, op cit, Article 26, para 6.

70. BGHZ 74, 193, 204; OLG Hamburg, 30 December 1980 (which case/where published?); Herber, R. and Czerwenka, B., op cit, Article 49, para 11; Magnus, U. in v Staudinger, J., op cit, Article 49, para 26; Huber, U. in Schlechtriem, op cit, Article 49, para 31.

71. See Oldenburg, A.G., IPRax 1991, at pp. 336, 338.

72. Zamir, E., "Toward a General Concept of Conformity in the Performance of Contracts", (1991) Louisiana Law Review 4, at p. 17 n 38.

73. Honnold, J.O., op cit, Article 49, para 301.

74. Burrows, J.F., Finn, J. and Todd, S.M.D., Law of Contract in New Zealand (1997), Ch 17 at pp. 552 and 589.

75. Lawson, R.G., The Law of Sale and Hire Purchase in New Zealand (1973), 3. The 1893 Act has now been replaced by the Sale of Goods Act 1979. However, this Act did not result in major changes to the English sales law. Instead it was designed to consolidate the various amendments that had been made between 1893 and 1979: Furmston, M., Sale & Supply of Goods (1994) 2.

76. [1980] 2 NZLR 519, especially 525.

77. (1987) 1 NZBLC 102,784. It should be noted that the Sale of Goods Act 1908 does not apply to consumer contracts since the Consumer Guarantees Act contains special regulations applying to these. However, this is irrelevant to the research at hand since the CISG does not apply to consumer contracts either.

78. Burrows, J.F., Finn, J. and Todd, S.M.D., op cit, Ch 17, at p. 551.

79. See Sale of Goods Act 1908, s 13(2).

80. Wallis, Son & Wells v Pratt & Haynes [1910] 2 KB 1003, 1012 (CA), approved [1911] AC 394; [1911] WN 117; [1911-13] All ER Rep 989.

81. See Sale of Goods Act 1908, s 12(1) and (2).

82. See Piliounis, P.A., op cit, 23 et seq.

83. See Hawes, C., The Laws of New Zealand - Sale of Goods (1995), para 82 referring to Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26, 69 et seq.; [1962] 1 All ER 474 (CA).

84. This is also emphasised by Hawes, C., op cit, para 375 n 3.

85. See Bunge Corp v Tradax Export SA [1981] 2 All ER 513, 540 (HL); see also Cie Commerciale Sucres et Denrées v C Czarnikow Ltd [1990] 3 All ER 641 (HL).

86. Huber, U., in Schlechtriem, op cit, Article 49, para 5.

87. Hawes, C., op cit, para 92.

88. See Sale of Goods Act 1908, s. 15.

89. Sale of Goods Act 1908, s 16 (a); Burns v John Chambers & Son Ltd [1921] NZLR 916; Gibbons and Paterson Ltd v Waterhouse Manufacturing Co Ltd [1946] NZLR 122; Finch Motors Ltd v Quin (No 2) [1980] 2 NZLR 519, 523 et seq.

90. See Sale of Goods Act 1908, s. 32(1) and (2).

91. [1921] 2 KB 519.

92. Re Moore & Co and Landauer & Co [1921] 2 KB 519.

93. New Zealand Law Commission, Report No. 23, op cit, para 60.

94. For instance, the English legislation, which is designed for the protection of consumers is considerably influenced by European Community law.

95. Lee, R.G., op cit, at p. 147.

96. New Zealand Law Commission, Report No. 23, op cit, para 26.

97. New Zealand Law Commission, Report No. 23, op cit, para 23.

98. New Zealand Law Commission, Report No. 23, op cit, para 115.

99. Piliounis, P.A., op cit, at p. 22.

100. See above p 14 et seq.

101. See Piliounis, P.A., op cit, at p. 20 n 79; Zeigel, J.S. and Samson, C., Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods (July 1981), excerpt reprinted in Pace CISG Database; Payzu Ltd v Saunders 2 KB 581 (1919).

102. Piliounis, P.A., op cit, at p. 25 et seq.

103. Charles Rickards v Oppenhaim 1 KB 616, 624 (1950) per Denning LJ (CA).

104. See also Piliounis, P.A., op cit, 27, especially n 114.

105. This is also pointed out by the New Zealand Law Commission, Report No. 23, op cit, para 96 et seq., 98.

106. Forte, A., op cit, 51, 53.

107. New Zealand Law Commission, Report No. 23, op cit, para 25.

108. Forte, A., op cit, 62 et seq.; Fothergill v Monarch Airlines Ltd [1981] AC 251; Sidhu v British Airways plc [1997] 1 All ER 192; see also Gatoil Int'l Inc v Arkwright-Boston Mfrs Mut Marine Ins Co 1985 SC (HL).

109. See Pepper (Inspector of Taxes) v Hart [1993] AC 593; cf also R v National Ins Comm'r [1972] AC 944, 1005 per Lord Diplock; Forte, A., op cit, 63.

110. Lee, R.G., op cit, at p. 146.

111. Sono, K. op cit, at p. 7.


Pace Law School Institute of International Commercial Law - Last updated July 9, 2004
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