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Reproduced with the permission of the author

Gaps in the CISG: In General and with Specific Emphasis on the Interpretation of the Remedial Provisions of the Convention in the Light of the General Principles of the CISG

Evelien Visser/Netherlands [*]

CHAPTER I. Introduction: Success In Drafting, Problems In Interpretation

1. Drafting the CISG

The existence and improvement of international uniform commercial law should be embraced and encouraged, as the existence of a uniform set of rules [1] governing international transactions generally contributes to the facilitation of international trade.[2] Indeed, "international uniform law is a good thing in theory: the attainment of legal certainty via well balanced subsidiary rules made for international contracts and the avoidance of weak legal relationships are among its major goals."[3] In order to become a set of "well balanced subsidiary rules,"[4] international uniform law must be drafted and implemented carefully. The drafting process of the most successful international uniform law [5] of the last decades, the 1980 United Nations Convention on the International Sale of Goods [6] [hereinafter: CISG] reflected this care. It is also essential that an international uniform law be adapted to diverse cultures. "The different needs and demands of the varied socio-economic systems and legal structures, perceptions, procedures, and cultures of the distinct legal systems of this world are a main and omnipresent consideration and [must be] capable of absorbing the unified law."[7] This concept was well achieved in the drafting process of the CISG, as during the entire process representatives from all the regions of the world were present, able to present their point of view.[8] This procedural aspect substantially decreased the chance of drafting an international uniform law that would encounter large opposition in future acceptance and ratification proceedings by States. Moreover, a successful international law must embody substantive compromises between different legal traditions. The CISG is well-known for the way in which it blends civilian and common law doctrine. Thus, today, the CISG has 52 Contracting States,[9] which constitutes a clear sign of the success of the correct drafting process from both a procedural and substantive point of view.

2. Interpretation of the CISG

Either when international uniform law is developed by international conventions [10] or model laws,[11] the application of doctrine seems to inevitably lead to certain ambiguities and uncertainties. These problems are mainly due to the fact that "international uniform law . . . lacks a common legal theory and practice upon which judges and practitioners can rely."[12] In the absence of a common tradition, one can easily be tempted to turn to domestic law. This tendency is particularly noticeable in case of gaps. The CISG has a wide range of gaps, due to the compromising drafting process. Therefore, there is certainly a need for uniform interpretation [13] in the application of the CISG, so its uniformity and predictability [14] will be maintained. However, a tension exists between the goal of uniform implementation and interpretation in the light of domestic traditions. This thesis explores this tension in the interpretation of remedies for breach of sales contracts, as today the remedial area evidently forms the largest part of the discussion surrounding the application of the CISG. The following chapters will first explore the general ways of interpretation which can be applied to the CISG, and then the way in which interpretation of the CISG affects the remedies for breach of contract by the seller,[15] the remedies for breach of contract by the buyer,[16] and the remedy of damages [17] and interest.[18] These remedies for breach of contract will be discussed here, as they are the most frequently applied provisions of the CISG in legal practice. The emphasis will be on the interpretation of the available remedies in the light of the general principles of the CISG, instead of encouraging recourse to domestic law and domestic legal principles.

CHAPTER II. Particular Problems of Gaps in the CISG

1. General

Many of the interpretative problems arise because of the existence of gaps [19] within the scope of application of the CISG.[20] Although the CISG has an extensive range of rules governing the international sale of goods, certain specific issues had to be left outside the scope of application, as no uniform rule could be found at the time of the drafting.[21] When the CISG is applied, questions with regard to these issues may arise, and thus, the answer to these questions cannot be found in the CISG. Therefore, a "gap-filling" technique [22] needs to be applied in order to find the right solution. The CISG provides the applying legal authority with one interpretive tool, which can serve to help this problem: Article 7 CISG,[23] which must be applied whenever interpretation problems of the text of the CISG arise. Article 8 CISG,[24] is the other interpretive tool within the CISG, and must be applied whenever interpretation problems of the conduct of the parties arise. The latter tool does not solve questions arising from the absence of a uniform rule in the CISG, and its use is limited to matters falling within the scope of the CISG. These two tools prevail above any other technique of interpretation as being part of the Convention. However, in the application of both articles a too easy recourse to domestic law is possible,[25] and thus a certain distance from the area of law the CISG was intended to cover can be taken. This is especially true for Article 7(2) CISG,[26] which permits recourse to domestic law: the applicable law according to the rules of private international law of the forum. Article 7(2) CISG only allows this recourse when no general principles underlying the CISG can be found in solving the matter. This provision has been critized, and has even been called "(schizophrenic(, since on the one hand, it gives the impression of an absolute rejection of internal law, but on the other hand, it establishes the application of such law, in the absence of any applicable general principle deduced from the Convention's text."[27] Nevertheless, Article 7(2) CISG guides those who work with the CISG in interpreting it. In order to keep the CISG an international uniform set of rules, recourse to domestic law should be limited only to those cases in which matters expressly excluded from the scope of the CISG occur, and to cases in which matters which cannot be solved by applying the general principles on which the CISG is based. Thus, in interpreting the CISG, one should study the general principles carefully, and refrain from solving the issue at hand to quickly with a domestic rule or principle.

2. Different Gaps

In this latter sense it is important to distinguish gaps "intra legem,"[28] gaps outside the scope of the CISG, and gaps "praeter legem,"[29] gaps within the scope of the CISG. The first need to be filled with the applicable law according to the rules of private international law of the forum.[30] The latter must be filled with the general principles underlying the CISG.[31] Accordingly, recourse to domestic law and domestic legal principles should preferably only be taken when gaps "intra legem" [32] are involved, such as in the case of Article 4(b) CISG.[33] The applying legal authority should therefore first give preference to the general principles of the CISG,[34] before qualifying an issue, intentionally or not,[35] as a gap "intra legem,"[36] and thus applying domestic law or domestic legal principles.

CHAPTER III. Interpretation of the CISG

1. General

The CISG provides for an international uniform set of substantive rules for the international sale of goods.[37] In order to keep this set of rules as uniform as possible, they need to be interpreted uniformly by the different applying legal authorities. Indeed, "any law, rule, or statute has to be applied predictably, and thus uniformly, to be effective."[38] However, in the application of the CISG this can be a true challenge due to the international character of the CISG.[39] In international fields of law, one can distinguish many different ways to interpret provisions,[40] varying from a true "gap-filling" technique [41] to the interpretation of an unclear term.[42] The question is, however, what way of interpretation should be preferred in interpreting the CISG. In answering this question, one can conclude that it does not matter what interpretation technique is used, as long as a certain goal, i.e., uniform application of the CISG, will be achieved,[43] and the mandate of Articles 7 and 8 CISG are taken into account.

2. Interpretation Techniques

2.1 Domestic Interpretation Techniques

It has been noted that "the interpreters cannot make recourse to interpretative techniques employed under domestic law as this would lead to results contrary to those desired."[44] However, the use of domestic techniques does not consequently imply that undesired results will appear. For instance, in the search for the general principles of the CISG,[45] one can apply certain domestic universally recognized techniques [46] if the desired goal, i.e., the discovery of general principles of the CISG, is carefully guarded. A quick and insufficiently structured recourse to domestic law and its principles must be avoided, not the mere use of domestic techniques.[47] Moreover, domestic techniques are necessary, as the CISG does not provide for interpretation techniques,[48] it provides only some guidelines and goals.[49]

The usefulness of domestic techniques can be shown, for instance, in the search for the meaning of Article 7(2) CISG.[50] First, if the grammatical interpretation technique [51] is used to explain Article 7(2) CISG,[52] one can conclude that all issues falling within the scope of the Convention must be interpreted in accordance with the principles underlying the CISG.[53] Second, if historical interpretation [54] is applied to the same provision, it becomes clear that recourse to domestic law and domestic principles is clearly an "ultima ratio."[55]

Thus, it has been shown that one can use domestic interpretation techniques in interpreting the CISG, when the use and development of the general principles of the CISG prevail in applying those techniques.

2.2 Law of Nations Interpretation Techniques

Besides domestic interpretation techniques another technique can be distinguished: the law of nations approach.[56] This technique is related with Articles 31 [57], 32 [58], and 33[59] of the Vienna Convention on the Law of Treaties.[60] The status of articles 31-33 of the Law of Treaties Convention has been disputed. One the one hand, it has been said that the articles represent the current customary international law, and thus should be applied although the United States is not a party to the Law of Treaties Convention.[61] "The better view, however, . . . is that articles 31 and 32, and possibly article 33, do not represent customary international law,"[62] but "[n]evertheless, it is probable that international judicial or arbitral tribunals and even many domestic courts and arbitrators -- including some in the United States -- will use articles 31-33 as points of reference, at a minimum."[63] This is evidenced by the fact that the United States Supreme Court has stated that "[i]n interpreting a treaty it is proper, of course, to refer to the record of its drafting and negotiation,"[64] and thus approving the use of preparatory work [65] for interpretation purposes.

Although there have been authors pleading against the use of the latter technique in interpreting the CISG in general,[66] stating that it could only be applied to Part IV of the CISG,[67] the application of this technique can have an additional value. Even, it can contribute to the uniformity of the CISG.[68] The application of the abovementioned technique implies that domestic courts of the Contracting States of the CISG should carefully consider earlier and foreign court decisions on the CISG,[69] so a certain practice can be discovered and established. This will eventually improve the further exploration and determination of the general principles of the CISG.[70]

2.3 In sum: Available Techniques in Interpreting the CISG

As has been shown there is not just one preferred interpretation technique to achieve uniformity. A combination of the abovementioned techniques is regarded acceptable, provided that no direct recourse to domestic law and domestic principles is taken. Indeed, "the CISG is actually a limited attempt to unify national contract law,"[71] and if domestic law and domestic principles are used immediately in the application of the CISG, i.e., if a "homeward trend" [72] emerges, "the CISG would gradually lose any relevance to international transactions, as a new disunity would encourage merchants to avoid the Convention's uncertainty,"[73] which is possible by invoking article 6 CISG.[74] Thus, uniformity cannot be achieved when the latter will occur.

In order to achieve the proper balance, the interpreting legal authority should thus take into account the interpretive rules of the CISG as embodied in Articles 7 [75] and 8[76] CISG. The main implication of this is, that regard must be had to the interpretation in the light of the general principles of the CISG,[77] so no direct recourse will be taken to domestic law or domestic legal principles. The next Chapter will examine what is understood by interpretation in the light of the general principles of the CISG, with regard to articles 7 and 8 CISG, which can shortly be defined as international interpretation.

3. International Interpretation: The Prevalence of the General Principles of the CISG

3.1 The Mandate of Article 7 CISG

"To promote uniformity of interpretation, Article 7 of the Convention itself undertakes the formidable task of guiding judges. This article is arguably the single most important provision in ensuring the future success of the Convention."[78] In applying Article 7 CISG [79] the legal authority must take into account certain considerations. The three main considerations of the general overall objectives [80] of the CISG are: the CISG's international character; the need for uniformity; and the principle of good faith between the parties.[81] These three considerations read in the light of Article 7(2) CISG [82] imply that the CISG itself is the primary source of interpretation.[83] Accordingly, in the interpretation process the following steps should be taken. First, the applying legal authority must see if the disputed matter falls within the scope of application of the CISG,[84] which also includes matters which may not be expressly solved by the CISG.[85] Second, if the matter falls within the scope of the CISG, the general principles underlying the CISG must be consulted to clarify the issue.[86] If not, as last resort recourse to domestic law and domestic legal principles can be taken.[87] It is important to note, that the applying legal authority should not twist the order of the two steps. If, by any chance, the general principles of the CISG will be examined first, it is very likely that directly recourse to domestic law and domestic legal principles will be taken, as the general principles are not always as easy to discover.[88] This must be avoided, because it jeopardizes the uniform application of the CISG.

3.2 Article 8 CISG

As opposed to Article 7 CISG,[89] which is used for the interpretation of the CISG, Article 8 CISG [90] is used for the interpretation of the behavior of the parties to the international sales contract [91] in all phases of the contract.[92] Indeed, "Article 8 is broadly applicable . . . it reaches post-contract communications and actions, many of which have legal effect and may rise significant problems of interpretation."[93] In the evaluation of the conduct of the parties under Article 8 CISG two approaches can be found.[94] First, in Article 8(1) CISG,[95] the "subjective approach" [96] is laid down, as the evaluation only takes place according to the intent of which "the other party knew or could not have been unaware."[97] In applying Article 8(2) CISG,[98] the evaluation will be done by using the "objective approach,"[99] as the reasonable person standard is embodied in the provision.[100] At first sight, there seems to be very little room for references to domestic legal features in the application of Article 8 CISG.[101] However,

"[t]he rules on interpretation of the parties' conduct or statements provide for initial consideration of the parties' subjective intent where the other party `knew or could not have been unaware' of that intent. Naturally, in a controversy, such subjective knowledge will be difficult to prove. Thus, Article 8 further provides for interpretation according to an objective standard. This objective standard requires consideration of all surrounding circumstances `including . . . usages and any subsequent conduct of the parties.' Article 9 provisions would then apply. Finally, articles 8 and 9 together make reference to usages, course of performance, course of dealing, and express terms in a manner similar to the U.C.C. Unlike the U.C.C., the CISG fails to assign a hierarchy among these elements within the objective standard; domestic courts will therefore be obliged to supply one."[102]

Therefore, "legal ethnocentricity" [103] can easily appear within the interpretation process suggested in this provision,[104] especially, as has been shown, when the applying legal authority is a US court. In order to prevent this as much as possible from happening, the applying legal authority should turn to the general principles of the CISG instead of the domestic legal features; shortly, it must turn to "international interpretation."[105]

3.3 International Interpretation

International interpretation is very closely related to the principles set forth in Article 7 CISG,[106] which are the CISG's international character; the need for uniformity; and the principle of good faith between the parties.[107] As we have seen, these imply that the CISG itself should be the main source in the interpretation process, as, for instance, "[r]eading the Convention in the light of domestic legal principles would violate the Article 7(1) requirement of having regard to its international character,"[108] and the need for uniformity. The principle of good faith between the parties will also be affected, as the parties expected the CISG to apply, and not a set of "domestic legal principles."[109] Besides this first requirement,[110] international interpretation demands that the applying legal authority "will be guided by foreign decisions in interpreting the provisions of the Convention."[111] This second requirement contains more than the mere borrowing of domestic decisions,[112] "nor does choosing the majority rule of the existing domestic opinions of the world necessarily amount to an international interpretation."[113] In sum, foreign decisions need to be consulted in order to discover explanatory reasoning on the general principles of the CISG.

When considering the two requirements of international interpretation, one can directly derive that a "special burden" [114] is placed on the judiciary: the rendered decision must be well-reasoned, and above all, reasoned in a specific manner. Indeed, "it is crucial that present decisions lay the proper foundation for future interpretations to build upon."[115] This proper foundation only exists when preference is given to the general principles underlying the CISG, by which uniform interpretation and application can be achieved in the only correct way.

3.4 Note on the General Principles Underlying the CISG

It has been said, that it is impossible to identify general principles of the CISG,[116] as no common background exists.[117] However, there are many common elements [118] and returning standards underlying the CISG.[119] Moreover, "the Convention [may] not list the general principles on which it is based, [but] it is possible to discern a number of those principles from the text of the Convention and from its legislative history."[120] The most important principles which can be derived in this way are the freedom of contract;[121] the general principles of good faith and reasonable behavior;[122] the general principle of protecting restitution, reliance, and expectation;[123] and the principle of preservation of the contract.[124] Apparently, there are a number of general principles which can be extracted in this way, "but generally there is no common understanding as far as their qualification is concerned."[125] With regard to remedial disputes, courts should be prepared to rely on the structure and emphasis of the CISG remedial scheme. This scheme places more emphasis on performance remedies than the stress on damages found in common law systems.

4. Interpretation of the CISG by US Courts

In the United States, only a few court decisions have been rendered on the CISG.[126] Unfortunately, "U.S. Courts still sometimes fail appreciate [the CISG]."[127] Among these are two interesting cases that do not contribute to the development of the general principles of the CISG,[128] i.e., Beijing Metals & Minerals Import/Export Corporation v. American Business Center, Inc.,[129] and Delchi Carrier SpA v. Rotortex Corporation.[130]

Beijing, involved an agreement between a Chinese (seller) and a US company (buyer), for the sale of weightlifting equipment. The shipments of the Chinese company did not correspond to the agreement, as they contained substantial amounts of defective and non-conforming goods. The dispute was concerned with oral modifications to the original contract, through which the parties tried to settle their dispute.[131] The Court of Appeals discarded the CISG, as the issue "more closely resemble[d] a settlement agreement, as opposed to a sale of goods,"[132] and decided the matter by applying lex fori, Texas Law.[133] However, the applied Texas rule, the parol evidence rule, is "merely a special method for determining the parties intent."[134] One may state that the issue at hand falls outside the scope of the CISG, and thus a domestic rule must be applied to solve the matter. However, the parole evidence rule is a substantive rule of law, and as the CISG has no writing requirement as to prove the existence of a sales contract, the Texas parole evidence rule, and Article 8 CISG could have been blended together here in determining the exact meaning of the oral modifications to the original contract. In sum, Article 8(3) CISG [135] provides for an equivalent method to the parole evidence rule, and thus could have been used to supplement it. However, the Court of Appeals decided not to look at the applicability of the CISG, assuming that the dispute would not be governed by it and that Article 8 CISG could not assist in any way. As the dispute originally arose from the contract of sale the Court of Appeals should, at least, have reviewed CISG for a controlling rule or principle. Although the CISG would have been in this case the "supreme [l]aw of the United States,"[136] the Court of Appeals did not seriously consider the applicability of the CISG, and thus, did not look to Article 8(3). The Court of Appeals should not have reflexively assumed that the CISG was inapplicable. "[I]t is critical to the long term success of the CISG that courts apply it from a perspective that transcends the purely domestic sales law concepts with which they are familiar."[137] This approach must also be taken in the decision on the applicability of the CISG. Unfortunately, this is not something which is easy to comply with. Non compliance, however, violates the mandate of Article 7 CISG,[138] as the approach taken here does not contribute to the development of the general principles underlying the CISG, nor contributes to the uniform interpretation of the CISG.

The Delchi Carrier [139] case constitutes an even more apparent violation of Article 7 CISG.[140] Here, a dispute arose between Rotortex, a New York corporation (seller) and Delchi Carrier, an Italian manufacturer of air conditioners (buyer), who earlier concluded a contract of sale of air conditioner compressors. However, the first shipment of compressors did not conform to the sample model, as the cooling power and energy consumption were significantly different. As the dispute could not be solved through negotiations, Delchi sued for breach of contract and the failure to deliver goods conforming to the contract. The two main interpretive provisions in this case were Article 25,[141] and Article 74 CISG.[142] The Court of Appeals referred to Article 7 CISG by mentioning that "we look at its language and to the "general principles" upon which it is based,"[143] because "there is virtually no case law under the Convention."[144] In the application of Article 25 CISG the Court of Appeals complied with its promise, as it decided that Delchi was substantially deprived of what it was entitled to expect from the contract, thus interpreting the issue in accordance with the general principles underlying the CISG. The only problem which can be noticed in relation to Article 7 CISG is, that the Court of Appeals also referred to legal U.S. authorities to come to this conclusion.[145] In the application of Article 74 CISG the Court of Appeals acted different. The Court stated that "[t]he CISG requires that damages be limited by the familiar principle of foreseeability established in Hadley v. Baxendale, 156 Eng.Rep. 145 (1854)."[146] The Court did not comply with the mandate of Article 7 CISG, as it interpreted Article 74 CISG immediately with domestic standards, even though the issue here cannot be identified as a gap intra legem. Moreover, the foreseeability factor of Hadley v. Baxendale is substantially different from the one in Article 74 CISG; it has a very different origin and meaning.[147] Therefore, even although the foreseeability factor of Article 74 CISG seems to render a certain amount of interpretive freedom, the principles of Hadley v. Baxendale cannot contribute to correct interpretation of Article 74 CISG, as, first, it is prohibited in Article 7 CISG, and second, the underlying principles of Hadley v. Baxendale and Article 74 CISG do not correspond. The Court of Appeals concluded that the foreseeability factor of Article 74 CISG, and Hadley v. Baxendale was fulfilled, as it was objectively foreseeable that Delchi would take orders from air conditioners based on the number of compressors Rotortex had promised to supply. The problem is not with the outcome of the case, but in the danger that the court's opinion will cause Hadley v. Baxendale to be considered as explaining Article 74 CISG.

In sum, interpreting the CISG in accordance with the mandate of Article 7 CISG means that "non-U.S. principles and interpretations developed by the other Contracting States" [148] are taken into account. Courts should refrain from using domestic features in interpreting the CISG, as domestic features inevitably bring along an amount of legal baggage and restrictions which usually do not correspond and cannot be found in the text of the CISG. Therefore, courts should stick to the text of the Convention and its underlying principles. By not complying with this mandate, the US courts mentioned "missed an important opportunity to engage in an "international" dialogue with references to foreign decisions and commentaries, civil law principles and the international legislative history of the Convention itself."[149] These cases show "how critical it is for commercial lawyers [and applying legal authorities] to be familiar with the Convention."[150] After reviewing these two cases, it becomes evident, that the international uniform interpretation of the CISG depends on "the efforts and intelligence of the lawyers, judges and commentators charged with understanding and applying CISG."[151] It is certainly not something which is easy to achieve. In order to give some guidance in this complex matter, the remedies for breach of contract provided for by the CISG will be discussed in the light of international uniform interpretation in the following chapters.

CHAPTER IV. Remedies for Breach of Contract by the Seller

1. General

The drafting process of the CISG reflected a number of compromising clauses which have been adapted by consensus.[152] These compromises inevitably lead to some unclear provisions which give little guidance as to their application.[153] As has been stated, the general principles underlying the CISG must be consulted to give guidance in such matters.[154] As "[i]ssues relating to the remedial provisions of the Convention will no doubt be the focus of a large part of the discussion and deliberation surrounding application of the Convention,"[155] the mentioned complexity will especially appear in this area.

Under the CISG, the buyer [156] is provided with different kinds of remedies.[157] It is true that Article 45 [158] seems to suggest a choice between the different remedies. However, avoidance of the sales contract is restricted to cases in which a fundamental breach occurs, and to cases where the seller has not properly performed after the buyer granted a Nachfrist period. Moreover, direct damages based on recovering the market price are primarily available under Articles 75 and 76 CISG. Thus, direct damages are firstly available if the breach is fundamental or the buyer elects to declare the contract avoided. Therefore, the buyer cannot choose entirely free between the different remedies listed in Article 45 CISG.

In Article 45 CISG the available substantial performance and avoidance remedies for the buyer are laid down;[159] referring to, for instance, Article 46,[160] and 50 CISG,[161] the performance remedies, and the avoidance remedy in Article 49 CISG.[162] In general, the performance remedies available under the CISG give "a right to compel the exchange of goods for price,"[163] and the avoidance remedy gives "a right to restitution and damages measured by resale or market price."[164] The effects of the latter are listed in Articles 81-84 CISG, and it generally comes down to the fact that both parties are freed from their contractual obligations,[165] and are put in a similar position as they would have been had the breach not occurred.[166] Indeed, "[t]he primary purpose of rendering remedies for contractual breaches under many legal systems is to place the non-breaching party in as good a position as he would have been had the contract been fully performed."[167]

2. Remedies for Breach of Contract by the Seller

2.1 Require Specific Performance

Article 46(1) CISG [168] allows the buyer to require specific performance if the seller is in breach of contract, and the buyer may along with this remedy "fix an additional period of time of reasonable length for performance by the seller for its obligation."[169] The remedy for specific performance is one of the performance remedies which are provided for in the CISG, as it does not free the parties from their contractual obligations.

Article 46(1) CISG gives the buyer "the choice of the right to specific performance or the right to other remedies such as damages, or a combination of the two, as long as they are not "inconsistent with" the requiring of specific performance."[170] It has been disputed what remedies are to be considered as "inconsistent with" [171] requiring specific performance.[172] The basic inconsistent remedy is regarded to be avoidance [173] under Article 49[174] or 51(2) CISG.[175] The other remedy which is generally considered to be inconsistent [176] with the request for specific performance is the reduction of price under Article 50 CISG.[177] However, the latter seems to have the same character as a claim for damages under Article 74 CISG,[178] which can be allowed in combination with requiring for specific performance.[179] Indeed, "if the seller fails to deliver, a buyer who elects not to avoid the contract and who seeks specific performance under Article 46(1) CISG, can also claim damages under Article 74 for losses caused by the delay in receiving the goods, provided that the losses were foreseeable when the contract was formed."[180] Although the remedy under Article 50 CISG also provides for a reimbursement for the loss the caused by the breach of contract, i.e., it constitutes a certain financial gain,[181] it is a substitute for failure to deliver or delivery of non-conforming goods,[182] whereas the remedy under Article 74 CISG primarily provides for consequential financial losses caused by the non-conformity or non-delivery of the goods.[183] Therefore, the remedy of Article 50 CISG cannot be combined with requiring for specific performance under Article 46(1) CISG, as the first is clearly inconsistent with the latter.

Specific performance based on Article 46(1) CISG may also be limited by Article 28 CISG.[184] Article 28 CISG specifically preserves domestic law, i.e., lex fori, "regarding the availability of specific performance,"[185] as the applying court "is not bound to enter a judgement for specific performance unless it would do so under its own law in respect of similar contracts of sale not governed by this Convention."[186] This provision is one of the compromises in the drafting process of the CISG,[187] such as Article 7(2) CISG,[188] as it is considered to be "a compromise solution to the divergent common law and civil law perceptions of the proper role of specific performance in some contracts, a solution that ensures that common law courts will not have to abandon their traditional position."[189] Traditionally, common law courts reasoned that damages were an adequate remedy for the aggrieved buyer, as they would enable the buyer to purchase substitute goods.[190] Therefore, a request for specific performance would not be rendered, unless the goods were considered to be "unique, or not otherwise available in the marketplace."[191] Civil law courts, however, traditionally had another approach to the remedy for specific performance.[192] The remedy is seen as an extension of the contract; "the sanctity of contract is regarded as . . . implying the claim for performance."[193] In order to avoid any problems with future ratifying States, a compromise was adopted in the form of Article 28 CISG.[194] It has been stated that "since the rules of specific performance differ widely even among civil law jurisdictions, the results of such an action will depend on the geographical location of the court before which the action is being brought. This seems regrettable even if it is unavoidable."[195] Although, a request for specific performance may indeed be highly influenced by the lex fori,[196] it seems that in legal practice little divergence will arise.[197] Indeed, "[t]he perceived differences in application of this remedy are steadily becoming less pronounced. In the United States, there is a growing trend to increase the use of equitable remedies, while in civil-law countries, courts have shown some reluctance to liberally apply this form of relief."[198] Therefore, it can be concluded that in legal practice [199] the impact of domestic legal features on the discussion of a request for specific performance under Article 46(1) and 28 CISG is not as deep as firstly expected.[200] This is mainly due to the fact that in legal practice there is not really a strict line between common law and civil law solutions on specific performance.[201]

Article 28 CISG nevertheless leaves considerable discretion [202] to the forum. It is therefore essential, having in mind the correct base for uniform international interpretation of the CISG,[203] that the forum does not refer to the standards of specific performance in its own domestic system [204] when applying Article 46(1) CISG. Article 46(1) CISG should be interpreted and applied in accordance with the general principles on which the CISG is based, and not with domestic rules and principles. Article 28 CISG merely provides for discretion for the forum when its own rules would not allow such an award. In discussing a request for specific performance the rules of Article 28 CISG and Article 46(1) CISG should be discussed separate, and should not interact. The mandate of Article 7 CISG, [205] which mainly focuses on the interpretation of the text of the Convention in the light of the general principles of the CISG, even allows us to take a step further. The mandate actually orders a legal authority applying Article 28 CISG to give preference to the performance remedy provided for in Article 46(1). As the legal authority "is not bound to enter a judgment for specific performance,"[206] it still has the discretion to award specific performance when it concludes that that remedy is required by the structure of the Convention or is otherwise appropriate in the commercial situation. Moreover, as throughout the CISG emphasis is laid on the performance remedies,[207] the legal authority in applying Article 28 CISG should refrain itself from using the discretion to let domestic law prevail above the remedies provided for in the CISG. In sum, read in the light of Article 7, Article 28 CISG loses its rigid and compromising character. Accordingly, the applying legal authority is ordered to use its discretion freely, but wisely.

2.2 Remedies in Case of Lack of Conformity

When a breach of contract is caused by the seller, the buyer has the choice between two closely linked remedies: he can require for delivery of substitute goods,[208] or he can require the seller for repair of the lack of conformity.[209] Both remedies fall within the earlier established category of performance remedies,[210] as the parties will not be freed from their contractual obligation by the invocation of either remedies.[211] Also, the two remedies can only be invoked when there is an actual lack of conformity in the goods.[212]

Under the CISG, goods do not conform with the contract when "(1) they are not fit for ordinary use; or (2) they are not fit for the particular use by the buyer which the seller knew or should reasonable have known of; or (3) they do not possess the quality of samples; or (4) they are not properly packaged in a manner usual for such goods."[213] Accordingly, under Article 36 CISG [214] a seller may even be held liable for a non-conformity constituting a breach of contract when "a breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose, for some particular purpose or will retain specified qualities or characteristics" [215] occurs. Moreover, a breach of contract caused by non-conformity of the goods can even arise after the risk of loss passes to the buyer.[216] Apart from the seller's broad liability, the buyer has to take certain steps before he can invoke the two remedies.[217] As soon as the goods arrive, the buyer must examine them "within as short a period as is practicable in the circumstances,"[218] and accordingly, give notice to the seller within a reasonable period of time.[219] If the buyer does not do so, its failure will not cause a breach of contract,[220] but the buyer loses "all remedies that might be based on the non-conformity, including the right to damages, specific performance, avoidance and reduction of price."[221]

As the two remedies are systematically scheduled under article 46 CISG, Kastely has argued that they can be considered as equivalent to the remedy of specific performance in Article 46(1) CISG.[222] The question arises whether the remedies here are accordingly bound by the limitation of Article 28 CISG.[223] According to Honnold, "Articles 46(2) and (3) should be regarded as lex specialis qualifying the general provisions of Article 28."[224] The remedies provided for in Article 46(2) and 46(3) CISG do not put the forum into the same position as the remedy provided for in Article 46(1) CISG does. Articles 46(2) and 46(3) CISG grant the buyer specific rights under the Convention, which the forum should acknowledge, apart from their domestic view on whether specific performance as meant in Article 46(1) CISG should be rendered. Therefore, the remedies provided for in Article 46(2) and 46(3) are not limited by Article 28 CISG. Honnold's view should be preferred, as it reflects the remedial structure of the CISG. Since direct damages under Articles 75 and 76 are primarily available to a buyer in case of contract avoidance, a court must be prepared to give the buyer the remedy of delivery of substitute goods under Article 46(2) or the remedy of repair under Article 46(3). The other option would be for the court to award damages based on the buyer obtaining repair elsewhere when the seller fails to repair.

In the next two sections the application of the non-conformity requirement will be discussed in the light of the separate remedies.

2.2.1 Require Delivery of Substitute Goods

Under Article 46(2) CISG [225] the buyer may require delivery of substitute goods. Buyer's request for substitute goods must be made within a reasonable period of time,[226] and "the seller does not have unlimited time to deliver such substitute goods."[227]

Apart from the requirement that there must be a lack of conformity, there must also be a fundamental breach as meant in Article 25 CISG [228] to allow buyer to require substitute goods.[229] Thus, this cannot be required "in case of minor defects."[230] In other words, "[w]hen the non-conformity is unimportant, compelling a second delivery may impose burdens that are out of proportion to the buyer's needs; hence this remedy is available "only when the lack of conformity constitutes a fundamental breach of contract."[231] The language of Article 25 CISG shows overlap with the concept of fundamental breach as found in English law,[232] which has a very different meaning than in Article 25 CISG.[233] As we have seen before, the mandate of Article 7 CISG [234] "supports the notions that interpretations based on domestic law should be avoided."[235] Therefore, one should be aware of this difference when having an English legal background. Article 25 CISG has two main components: "[t]he first is the detriment/expectation component and the second is the foreseeability component."[236]

The first component is applied to determine the fundamental character of the breach, whereas the second is use for the defense to limit the liability for the fundamental breach.[237] A breach is considered to be fundamental when it results in such a detriment that the other party is substantially deprived of what he is entitled to expect under the contract.[238] Factors which can help in the determination of the fundamental character of the breach are, for instance, "the monetary value of the contract, the monetary harm caused by the breach, or the extent to which the breach interferes with other activities of the injured party."[239] The expectation element has a more objective character, and it must be derived from the "circumstances surrounding the contractual relationship of the parties,"[240] these circumstances include both monetary and non-monetary interests.[241]

The second component of Article 25 CISG, the foreseeability factor,[242] contributes to the objectivity of the test of Article 25 CISG,[243] as it is submitted to the "reasonable person" standard.[244]

Thus, if all the elements of Article 25 CISG have been fulfilled, the buyer can request the seller for substitute goods,[245] if not, the buyer can only request repair,[246] which will be discussed in the next section.

2.2.2 Require Repair of the Lack of Conformity

Article 46(3) CISG [247] again presents a remedy for the buyer when the seller delivers goods that do not conform with the contract;[248] the buyer can require the seller to repair the lack of conformity.[249] The buyer thus has the choice between requiring delivery of substitute goods and repair,[250] when a fundamental breach of contract occurs.[251] The seller has the obligation to repair when requested by the buyer,[252] and accordingly, is responsible for the costs involved with the repair.[253] A request for repair may however be considered unreasonable, when, for instance, the relation between the costs of the repair and the price of the goods involved are disproportional.[254] The language of the provision of this remedy is expressly made flexible, in order to prevent unreasonable events.[255] Apart from being unreasonable, the request can also be impossible, such as in the case of agricultural products.[256] In these cases,[257] the buyer can still reduce the price under Article 50 CISG,[258] and request consequential damages as meant in Article 74 CISG.[259]

In deciding on the remedies provided for in Articles 46(2) and (3) CISG, the applying legal authority should take certain elements into consideration. Even though some issues, such as reasonable period of time, or fundamental breach, resemble domestic features, it should abstain itself from domestic habits in interpreting those issues. The issues at hand do not fall within the category of issues excluded from the scope of the CISG, i.e., the gaps intra legem. Therefore, recourse to domestic law and domestic legal principles is prohibited by Article 7(2) CISG. As the ultimate qualification of the issues at hand here is gaps praeter legem, interpretation should occur in accordance with the principles underlying the CISG, especially the ones referred to in the last two sections of this Chapter.

2.3 Avoidance of the Sales Contract

Apart from the remedies being discussed until now, the remedy provided for in Article 49 CISG [260] is the avoidance remedy for the buyer.[261] Generally, there are two grounds [262] to avoid the contract under Article 49 CISG.

First, there must be "failure by the seller to perform any of his obligations under the contract or this Convention [which] amounts to a fundamental breach of contract."[263] As we have seen before,[264] Article 25 CISG guides the concept of fundamental breach of contract. In sum, a breach of contract is fundamental when the other party is substantially deprived of what he was entitled to expect from the contract.[265] "The framing of this text was based on the conclusion that international contracts usually are of a complexity and importance to the parties that avoidance should not be made available for trivial departures that may readily be redressed by damages."[266]

The other ground to avoid the contract exists when the buyer has set an additional period of time for performance,[267] a Nachfrist,[268] and that period has expired in case of non-delivery.[269] Note, that "[a] delay during the Nachfrist can turn the original delay into a fundamental breach; but this is a consequence of the expiry of time limits and not of the setting of the Nachfrist."[270]

According to Article 26 CISG [271] the contract is not avoided automatically when a fundamental breach of contract occurs; the buyer must explicitly declare the avoidance.[272] Moreover, "[t]he declaration is unilateral, [and] does not permit conditions and cannot be revoked. It becomes effective ex nunc."[273]

When the seller has delivered the goods, the buyer loses his right to invoke the remedy provided for in Article 49(1) unless he acts in accordance with Article 49(2).[274] Article 49(2)(a) CISG [275] allows the buyer to declare the contract avoided after late delivery by the seller,[276] but only when this is done "within a reasonable time after [the buyer] has become aware" [277] of the delivery. "A reasonable time in this case more or less means immediately."[278] Article 49(2)(b) CISG [279] distinguishes two other cases in which the buyer can still avoid the contract: in case of "late delivery", and "any breach other than late delivery." It must be noted with regard to the latter, that "[a]ny other breach always needs to be a fundamental breach of contract."[280]

It is evident that many of the issues imbedded in the avoidance rules of the CISG need to be furtherly explored and determined than has been done today. Although in many domestic systems the avoidance question has been replied to in "unusual technicality and uncertainty" [281] the CISG provides for a relatively simple set of rules. There is a need to guard this set by using international uniform interpretation.[282] This requires that, as the issues raised fall within the scope of the Convention, they need to be interpreted in accordance with the general principles underlying the Convention. In the issue of avoidance, the most substantial principle to be taken into consideration is the prohibition to declare the contract avoided in case of trivial departures which can be redressed by damages. Only in similar cases as the ones referred to in this section should avoidance be allowed.

2.4 Reduction of the Price

The last remedy for the buyer to be discussed in this Chapter, is the possibility for the buyer to reduce the price when the goods do not conform with the contract.[283] This remedy is laid down in Article 50 CISG.[284] Like the avoidance remedy,[285] the price is also reduced by a simple unilateral declaration of the buyer.[286] Honnold maintains that "[t]he price-reduction formula . . . plays an important role only when the seller is not liable for the non-conformity. This combination of circumstances is rare."[287] In S.V. Braun, Inc. v. Alitalia-Linee Aeree Italiane, SpA,[288] the court stated that "[t]he Vienna Convention may permit a proportionate reduction in price for non-conforming goods, but Braun has stipulated here that the goods delivered to Nikex were conforming. Accordingly, Nikex had no legal justification for withholding payment."[289]

"[T]he price reduction remedy of CISG operates in a fashion that cannot be justified by any of the remedial principles recognized in US contract law. In other words, Article 50 is not designed to protect the expectation interest, the reliance interest, or the restitution interest."[290] This could have formed problems for the US court in the application of Article 50 CISG. However, the court took a distance from its legal background, and applied Article 50 CISG in accordance with the general principles underlying the Convention.[291] The most significant general principle here is that "Article 50 puts an aggrieved buyer in the position she would have been in had she purchased the goods actually delivered rather than the ones promised -- assuming she would have made the same relative bargain for the delivered goods."[292]

CHAPTER V. Remedies for Breach of Contract by the Buyer

1. General

The remedies for breach of contract by the buyer are listed in Article 61 CISG.[293] Here, a general overview of the available remedies for the seller is given. The remedies discussed in this Chapter are the seller's right to require performance as set down in Article 62 CISG,[294] and the seller's right to avoid the contract laid down in Article 64 CISG.[295] The overview Article 61 CISG gives, however, "is not exhaustive."[296] It lacks, for instance, "the right to interest even though it is of special relevance to the seller."[297] In the following Chapter the seller's right to request performance and the seller's right to declare the contract avoided will be discussed.

2. Remedies for Breach of Contract by the Buyer

2.1. Request for the Payment of the Price

The seller's right to require the buyer to pay the price[298] is in fact a right to require specific performance.[299] It is the equivalent of the buyer's remedy to require specific performance as provided for in Article 46(1) CISG.[300] Indeed, "[w]hen a buyer refuses to receive the goods the seller's action under Article 62 to require the buyer "to pay the price" and "take delivery" resembles a buyer's action under Article 46."[301] Article 62 CISG is not as broadly arranged as Article 46 CISG, as the buyer has, as a natural consequence of the sales contract, fewer obligations than the seller.[302] Article 62 CISG[303] briefly discusses the seller's right to require payment of the price and taking delivery. Again,[304] "[t]he concept of pacta sunt servanda likely is responsible for the use of the language that mirrors the broad language of Article 46."[305]

The seller is to a certain extent limited in using the remedy provided for in Article 62 CISG, as it cannot be combined with another inconsistent remedy.[306] Unlike the similar requirement in Article 46 CISG,[307] here only one inconsistent remedy can be found:[308] avoidance of the contract by the seller.[309]

The remedy provided for in Article 62 CISG,[310] like Article 46(1) CISG [311] is also limited by another factor. According to Honnold both remedies "are subject to the concession to domestic law provided by Article 28."[312] As we have seen before,[313] "a court is not bound to enter a judgement for specific performance unless the court would do so under its own law."[314] A request for specific performance in the form of Article 62 CISG will mostly cause problems when requested before a common law court.[315] Under common law, payment of the price could only be requested under very strict circumstances.[316] However, there are trends in US courts to "increase the use of equitable remedies."[317] It has also been stated that "the difference between enforced performance in common law and civil law is more theoretical than practical."[318] Therefore, one can assume that Article 62 CISG will only be limited to a certain extent by Article 28 CISG. Moreover, as the applying legal authority is not bound to take its domestic rules on specific performance in consideration under Article 28 CISG, and the Article 7(2) CISG does not allow an insufficient structured recourse to domestic law, Article 28 should be used with extreme hesitance.

2.2. Avoidance of the Sales Contract

The seller can declare the sales contract avoided under Article 64(1)(a) CISG,[319] when the breach of contract amounts to a fundamental breach of contract as meant in Article 25 CISG.[320] The other ground, laid down in Article 64(1(b) CISG,[321] on which the seller can declare the contract avoided, occurs when the buyer does not pay the price or take delivery of the goods within the additional period of time, also referred to as Nachfrist,[322] which can be fixed by the seller according to Article 63 CISG.[323] The latter provision, however, leaves room for the seller, in case of "a sharp increase in the value of the goods . . . to try to escape from the contract by sending the buyer a Nachfrist notice fixing a short, final period for taking delivery."[324] When such an act occurs, the applying legal authority should, in accordance with the mandate of Article 7 CISG,[325] decide whether the "additional period of time"[326] is indeed "reasonable in length,"[327] and moreover, set in good faith.[328] In sum, in no case is the seller allowed to speculate at the buyer's expense in using the remedy provided for in Article 64 (1)(b) CISG.

The seller may lose the right to declare the contract avoided when the buyer has paid the price.[329] However, Article 64(2) CISG [330] provides for several exceptions to this basic rule. As "getting paid is usually the seller's principal concern" [331] it seems very awkward that the seller still feels the need to declare the contract avoided. Thus, there must be certain exceptional factors which will lead to a fundamental breach of contract. These can be, for instance, "the buyer's unexcused failure to obtain an import license or by a failure to comply with obligations to establish a distributorship and develop a program for promoting sale of goods."[332] Again, the applying legal authority should be very reluctant to allow avoidance under these circumstances, as it may easily conflict with "the Convention's general policy against the avoidance of the contract on insubstantial grounds."[333] As we have seen before,[334] the general principles underlying the CISG should be given preference at all times,[335] and although in avoidance cases the homeward step [336] may not occur as quickly, the mandate of Article 7 [337] must be kept in mind in evaluating the circumstances and applying Article 64 CISG.[338]

CHAPTER VI. Joint Remedies

1. General

The following Chapter discusses the interpretive issues in remedies available for both the buyer and the seller. These can be identified as the possibility of obtaining consequential damages from the breaching party under Article 74 CISG,[339] and the entitlement to interest, under Article 78 CISG.[340] The first "does not limit recovery to the buyer,"[341] as Article 74 refers to a breach of contract "by one party,"[342] the second, although consisting of similar language,[343] seems to be just of special relevance to the seller.[344]

3. Joint Remedies

2.1 Consequential Damages

Article 74 CISG [345] is based on the principle of full compensation.[346] "The principle of full compensation includes both the effective loss, i.e., a reduction in the fortune of the party in loss (damnum emergens), and the loss in profit (lucrum cessans)."[347] It has been asserted that the only limitation in this sense is the exclusion of punitive damages from the scope of Article 74 CISG.[348] Indeed, "[t]he practice of awarding punitive damages is in conflict with the CISG and severely undermines America's commitment to uniformity and certainty in the law."[349]

Article 74 is also essentially limited by the fact that the injured party is only entitled to damages which were foreseeable for the breaching party at the time of the conclusion of the contract.[350] Although some commentators [351] have made reference to the frequently discussed [352] common law case Hadley v. Baxendale,[353] the foreseeability factor of Article 74 cannot be identified with the foreseeability factor provided for in Hadley v. Baxendale.[354] "Probably the best evaluation of [this] case is that it sets down [both] a principle and a rule."[355] The first, the principle, reflects that "it is not always wise to make the defaulting promisor pay for all the damage which follows as a consequence of his breach."[356] The Hadley court required specific disclosure of the consequences of the breach to be made to the breacher in order for consequential damages to be recovered. Moreover, the Hadley court used a restrictive view of foreseeability to shield the defendant from the plaintiff's lost profits claim. Where Article 74 CISG only requires, the Hadley rule demands that lost profits be foreseen as damages to be a probable, and not a possible consequence of the breach of contract. Hadley restricts lost profits claims in commercial cases to situations where special disclosure had been made. Under the CISG damages would be available whenever they are reasonably contemplated in the light of the commercial character of the parties. Thus, "[u]nder Article 74 of the [CISG], damage is [simply] classified as either foreseeable or not foreseeable."[357]

In applying Article 74 CISG legal authorities should first of all, refrain from using domestic legal principles in interpreting the foreseeability factor of Article 74 CISG, thus acting in accordance with the mandate of Article 7 CISG.[358] Moreover, the hereforementioned shows that even if the legal authority with a common law background decides to violate the mandate, it cannot use the rules laid down in Hadley v. Baxendale [359] to interpret Article 74 CISG, as they do not share a common basis.

2.2 Interest

Article 78 CISG [360] entitles a party who has not received a sum, which is in arrears, interest on it.[361] The right provided for in Article 78 CISG is separate from the right to damages as provided for in Article 74 CISG, as it is put in a different section of the Convention.[362] This was done as "[i]n some legal systems compensation for lost interest is regarded as an aspect of damage-assessment,"[363] and the drafters of the CISG wanted "to establish a general rule that would be free from vagaries of domestic law."[364]

Although Article 78 CISG expressly provides for a right to interest, it is not mentioned which interest rate should be applied.[365] This matter is governed by the interpretive rules of Article 7 CISG, as the interpretive problem arises from the Convention itself.[366] As we have seen before,[367] in applying Article 7 CISG, one should first see if the disputed matter, here the applicable interest rate, falls within the scope of the CISG. It is a matter not expressly solved, but governed by the CISG,[368] and moreover, general principles underlying the rule can be discovered.[369] These can be identified as the CISG's general principle of full and fair compensation, also referred to as "a standard that is designed to place the aggrieved party in as good a position as if the other party had properly performed the contract."[370] This does not give one standard solution as to which interest rate should be applied, but it indicates the right direction.[371] It has been stated that the issue raised should be solved by applying the rate of the law applicable according to the rules of private international law of the forum.[372] However, this violates the principle of full and fair compensation and expectation, as this will lead to the application of another interest rate than the law of, for instance, the creditor. It cannot be determined beforehand which interest rate should be applied, as each case is influenced by different circumstances. This can lead to either the application of the interest rate of the creditor,[373] the point of accrual,[374] the currency for payment,[375] or the place of payment.[376] Indeed, parties can always determine the interest rate applicable in accordance with Article 6 CISG. This would avoid the difficult issue of determing what should be the correct applicable rate. However, in case the parties refrain from adding such a clause to the sales contract, the court has a difficult task of determining it. It can be said that it does not matter what rate applies, as it applies to both parties equally. Nevertheless, when considering the general principle of full and above all fair compensation it is incorrect to over-compensate the creditor by applying, for instance, an evidently too high interest rate.[377] In achieving uniformity, the most important goal is the establishment correct base of interpretation, thus giving preference to the general principles underlying the CISG, and complying with the mandate of Article 7. Moreover, the applying legal authority should refrain from identifying an issue to quickly as a gap intra legem,[378] thus solving the issue by using domestic law, domestic legal principles, and domestic rules of private international law.

CHAPTER VII. Conclusion

In drafting the CISG compromises were unavoidable, as it was intended to blend civilian and common law doctrine. The necessity for compromises causes a practical problem: there is no common legal theory available. One is therefore tempted to turn to domestic law and domestic legal principles. Uniform interpretation should be used as means to solve this problem. The CISG gives some guidance in this complex matter, guidance as provided for in Articles 7 and 8 CISG. The latter is only applied when interpretive problems with regard to the behavior of parties is concerned. Article 7 CISG specifically deals with how the text of the Convention should be interpreted. Article 7(2) CISG indicates that the CISG is the primary source of interpretation, and that only when issues are expressly excluded from the scope of the CISG, or no general principles on which the CISG is based to solve the matter can be found, recourse to domestic law, i.e., the law applicable according to the rules of private international law, is permitted. Basically, everything within the scope of the CISG should be interpreted in accordance with the general principles underlying the CISG. In interpreting the remedial provisions of the CISG the emphasis should be on the latter method. One should even refrain from encouraging applying legal authorities to seek recourse to domestic law and domestic legal principles. As the CISG thus is the main source of interpretation, one should also be guided by foreign decisions in developing the general principles. This does not mean, however, that foreign decisions can just be borrowed, or that a certain majority rule should be adapted. In fact, a special burden is placed on the judiciary, to issue well reasoned decisions, which can function as a proper foundation for future interpretations. This proper foundation can only be achieved, when preference is given to the general principles underlying the CISG.

The remedies listed in Article 46(1) and 62 CISG, are to a certain extent limited by Article 28 CISG.[379] As the mandate of Article 7 CISG obligates the applying legal authority here to give preference to the principles underlying the remedial provisions. Therefore, one should be very hesitant to have a decision be influenced by domestic law. Moreover, Article 28 CISG leaves discretion for the court to grant specific performance. Thus, the court is certainly not bound to give preference to domestic features in its decision, and should not, in order to comply with the mandate of Article 7 CISG. In sum, in the light of Article 7 CISG, Article 28 CISG loses its rigid character.

Avoidance of the sales contract should only be allowed when there is a severe breach of contract. It is actually the ultimate remedy in the CISG, and should not be allowed easily.

As far as consequential damages under Article 74 CISG are concerned, the forseeability factor of this provision cannot be identified with the common law case Hadley v. Baxendale.[380] First of all, in applying the CISG, courts should not mix domestic rules and principles with the rules laid down in the CISG. Second, in this particular case there is a practical impossibility to do so, as the Hadley rule differs essentially with the rule underlying Article 74 CISG.[381]

Overall, the aim of the CISG is to give preference to the performance remedies. This is shown, for example, by the fact that direct damages based on market differentials can primarily be obtained in avoidance cases, according to Articles 75 and 76 CISG.


FOOTNOTES

* LL.M Thesis, University of Georgia School of Law. Pace Essay submission, June 1998.

1. Besides uniform law, one can find harmonized law in the field of international commercial law. For a discussion on the harmonization of law see H. Patrick Glenn, Harmonization of law, foreign law and private international law, 1 EUROPEAN REVIEW OF PRIVATE LAW 47, 47 (1993), where the author states that "it is argued that harmonization blurs the distinction between foreign and domestic law; that the presumption of conflict amongst domestic laws can no longer be sustained; and that current rules and principles governing the use of foreign law should therefore be re-examined, to reflect the harmonization process." This thesis will, however, only cover the divergence and problems in uniform law.

2. See Franco Ferrari, Specific Topics of the CISG in the Light Judicial Application and Scholary Writing, 15 J.L. & COM. 1, 4 (1995), stating, that "national borders are "[a]n obstacle to economic relationships which constantly increase amoung citizens of different countries; an obstacle above all for the enterprises that are involved in international commerce and that acquire primary resources or distribute goods in different countries which all have different law."(footnote omitted)

3. Frank Diedrich, Maintaining Uniformity in International Uniform Law via Autonomous Interpretation: Software Contracts and the CISG, 8 PACE INT'L L. REV. 303, 303 (1996).

4. Id.

5. See Kevin Bell, The Sphere of Application of the Vienna Convention on Contracts for the International Sale of Goods, 8 PACE INT'L L. REV. 237, 237 (1996), where the author expresses the success of the Convention by stating that "it has been called a "quantum leap," a "new legal lingua franca," a "milestone," a "triumph of comparative legal work" and "arguably the greatest achievement aimed at harmonizing private commercial law." Even critics regard the CISG as "monumental."(footnotes omitted) See also Ronald Brand & Harry M. Flechtner, Arbitration and Contract Formation in International Trade: First Interpretations of the UN Sales Convention, 12 J.L. & COM. 239, 239 (1993).

6. United Nations Convention on Contracts for the International Sale of Goods, April 11, 1980, Fed. Reg. 6262 (1987) 15 U.S.C.A. app. At 29 (West supp. 1989), reprinted in I.L.M. 668 (1980). See JOHN HONNOLD, DOCUMENTARY HISTORY OF THE UNIFORM LAW FOR INTERNATIONAL SALES, THE STUDIES, DELIBERATIONS AND DECISIONS THAT LED TO THE 1980 UN CONVENTION WITH INTRODUCTIONS AND EXPLANATIONS (1989), providing the reader with an extensive report of the Diplomatic Conference and elaborations on the formation of the articles of the CISG. See also UNITED NATIONS CONFERENCE ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, OFFICIAL RECORDS: DOCUMENTS OF THE CONFERENCE AND SUMMARY RECORDS ON THE PLENARY MEETINGS AND OF THE MEETINGS OF THE MAIN COMMITEES (Vienna, 10 March-11 April 1980)(United Nations ed., 1981), in which the proceedings and the results of the Diplomatic Conference are reprinted. For an overview of pulications on CISG, see Peter Winship, The U.N. Sales Convention: A Bibliography of English-Language Publications, 28 INT'L LAW. 401 (1994). See also Axel Flessner & Thomas Kadner, CISG? Zur Suche nach einer Abkürzung FÜR das Wiener Übereinkommen über Verträge über den internationalen Warenkauf vom 11. April 1980, ZEITSCHRIFT FÜR EUROPäïSCHES PRIVATRECHT 347, 347 (1995), for the discussion of the search for an appropriate title for the CISG.

7. V. Susanne Cook, Note, The Need for Uniform Interpretation of the 1980 United Nations Convention on Contracts for the International Sale of Goods, 50 U. PITT. L. REV. 197, 202 (1988) (footnote omitted)

8. See Cook, supra note 7, at 202, stating that "UNCITRAL carefully assured world-wide representation at all stages of the Convention's development by allocating its permanent seats among the regions of the world." See also Timothy N. Tuggey, Note, The 1980 United Nations Convention on Contracts for the International Sale of Goods: Will a Homeward Trend Emerge?, 21 TEX. INT'L L.J. 540, 555 (1986), expressing the value of the CISG as following: "The Convention, moreover, represents the type of compromise that may occur without the higher level of political intensity common to other pressing, and more controversial, international issues. If the greatest difficulty in unification is the political dimension, then the CISG should be viewed as a necessary first step in a larger process. For this reason alone, the CISG is worth saving."

9. For an overview, see MICHAEL R. WILL, INTERNATIONAL SALES LAW UNDER THE CISG, THE UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (1980), THE FIRST 464 OR SO DECISIONS 9-11(1998).

10. For a discussion of the unification of law through international conventions, see René David, Chapter 5, The International Unification of Private Law, in INTERNATIONAL ENCYCLOPEDIA OF COMPARATIVE LAW VOL. II, THE LEGAL SYSTEMS OF THE WORLD, THEIR COMPARISON AND UNIFICATION 3, 80 (René David et al. eds., 1971) stating, that "international conventions . . . are capable of great flexibility."

11. See David, supra note 10, at 81. Model laws, as opposed to international conventions, are not favored when it comes to the unification of law: "The model law method has an obvious weakness, which is that it is virtually of theoretical value only. It is to be feared that the states will abstain from giving effects to recommendations framed by experts, even when they have appointed them: many model laws end up in the waste-paper basket."(emphasis added) Therefore, preference should be given to international conventions in order to avoid problems caused by different national approaches.

12. Diedrich, supra note 3, at 303. See also Frank Diedrich, Anwendbarkeit des Wiener Kaufrechts auf Softwareüberlassungsvertrage, Zugleich ein Beitrag zur Methode autonomer Auslegung von Internationalen Einheitsrecht, RECHT DER INTERNATIONALEN WIRTSCHAFT 25, 25 (1993), where the author emphasizes that uniform law must be predictable to parties to whom it will apply, by stating that "nur mit feststehenden Gesetzesregeln können die Vertragsparteien die Rechtsfolgen und Risiken bei unvorhergesehenen negativen Abweichungen vom vorgestellten Vertragsablauf abschätzen und in ihre Berechnungen mitaufnehmen."

13. See Franco Ferrari, Uniform Interpretation of the 1980 Uniform Sales Law, 24 GA. J. INT'L & COMP. L. 183, 199-202 (1994), discussing the interpretation of the CISG.

14. The United States, however, tried to improve the predictability of international uniform sales law by making an Article 95 CISG reservation to the CISG. See Harold S. Burman, International Conflict of Laws, The 1994 Inter-American Convention on the Law Applicable to International Contracts, and Trends for the 1990s, 28 VA. J. TRANSNAT'L L. 367, 384 (1995), who states that the United States responded in this way so "it would not apply this new rule -- Article 1(1)(b) CISG --"(emphasis added), and this was decided because "the principal concern of many U.S. import-export and finance interests was to achieve "commercial predictability." Id. But see V. Susanne Cook, The U.N. Convention for the International Sale of Goods: A Mandate to Abandon Legal Ethnocentricity, 16 J.L. & COM. 257, 263 (1997), where is clearly pointed out that "U.S. Courts are in a position to develop a method of interpretation under the Convention that provides predictable results to the business community." Accordingly, one can state that (United States) Courts are the preferred legal entity who should achieve and maintain the predictability of the Convention. See also Cook, supra note 7, at 198, who emphasizes with regard to the CISG that "[i]ts overall success and utility will be measured and evaluated by the extent to which it succeeds in advancing its ultimate objectives: the promotion of uniformity in interpretation and predictability in conflict resolution of international sales transactions."

15. The remedies for breach of contract by the seller are listed in Articles 45-52 CISG.

16. The remedies for breach of contract by the buyer are listed in Articles 61-65 CISG.

17. The remedy to claim damages is regulated in Articles 74-77 CISG.

18. The remedy to claim interest is listed in Article 78 CISG.

19. See Franco Ferrari, Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention, 24 GA.J. INT'L & COM. L. 467, 471 (1995). See also Susie A. Malloy, Note, The Inter-American Convention on the Law Applicable to International Contracts: Another Piece of the Puzzle of the Law Applicable to International Contracts, 19 FORDHAM INT'L L.J. 662, 670 (1995), pointing out similarities in the CISG and the UCC in this field by stating that "the CISG and the UCC are not complete and exclusive sets of rules."

20. See Bell, supra note 5, at 244-258, discussing the scope of application of the CISG. See also Ferrari, supra note 2, at 50-64, discussing the sphere of application ratione materiae, and at 68-80, discussing the issues which are excluded from the scope of application of the Convention.

21. For instance, Article 4 CISG reads "This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this Convention, it is not concerned with . . . (b) the effect which the contract may have on the property of the goods sold." Thus, the transfer of property is expressly excluded from the scope of application of the CISG. During the drafting of the Convention, it was stated that "in some legal systems property passes at the time of the conclusion of the contract. In other legal systems property passes at some later time, such as the time at which the goods are delivered to the buyer. It was not regarded possible to unify the rule on this point, nor was it regarded necessary to do so, since rules are provided by this Convention for several questions linked, at least in certain legal systems, to the passing of property." Honnold, supra note 6, at 407.

22. An example of a gap-filling technique is suggested by Alejandro Garro, The Gap-Filling Role of the UNIDROIT Principles in International Sales Law: Some Comments on the Interplay between the Principles and the CISG, 69 TUL. L. REV. 1149 (1995). See also Frank Diedrich, Lückenfüllung im Internationalen Einheitsrecht, Möglichkeiten und Grenzen richterlicher Rechtsfortbildung im Wiener Kaufrecht, RECHT DER INTERNATIONALEN WIRTSCHAFT 353 (1995).

23. Article 7 CISG reads: "(1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance in good faith in international trade. (2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."

24. Article 8 CISG reads: "(1) For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what the intent was. (2) If the preceding paragraph is not applicable, statements made by and other conduct of a party are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances. (3) In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties."

For a discussion on Article 8 CISG in relation to Article 9 CISG, see Volker H. Holl & Oliver Ke(ler, "Selbstgeschaffenes Recht der Wirtschaft," und Einheitsrecht - Die Stellung der Handelsbräuche und Gepflogenheiten im Wiener UN-Kaufrecht, RECHT DER INTERNATIONALEN WIRTSCHAFT 457 (1995).

25. See, for instance, Article 7(2) CISG, supra note 23, and infra Chapter III, sections 3.1 and 3.2.

26. Id.

27. Thomás Vázquez Lepinette, The Interpretation of the 1980 Vienna Convention on International Sales, DIRITTO DEL COMMERCIO INTERNAZIONALE 377, 394 (1995).(footnotes omitted) Cf. JOHN O. HONNOLD, UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED NATIONS CONVENTION 147 (2d ed., 1991), stating that "The Convention's goal "to promote uniformity" should bar the use of purely local definitions and concepts in construing the international text." See also E. Allan Farnsworth, Duties of Good Faith and Fair Dealing under the UNIDROIT Principles, Relevant International Conventions, and National Laws, 3 TUL J. INT'L & COMP. L. 47, 55 (1995), stating the provision has been described as "a "strange arrangement," "an awkward compromise," "a rather peculiar provision," and, perhaps ironically, "a statesmanlike compromise."(footnotes omitted)

28. Ferrari, supra note 19, at 471-72. Cf. Diedrich, supra note 22, at 353, distinguishing "offensichtliche Regelungslücken," which are "ausdrücklich vom Regelungsbereich ausgeschlossen." Id.

29. Id. See also Ferrari, supra note 13, at 215-21, discussing the relation between Article 7(2) CISG and gaps "praeter legem." Cf. Diedrich, supra note 22, at 354, distinguishing "versteckte Regelungslücken, Fragen innerhalb des Regelungsbereich, die der "Internationale Gesetzgeber" trotz eines tatsächlich bestehenden Regelungsbedarfs übersehen und ungewollt ungeregelt gelassen hat." Diedrich does not distinguish gaps "praeter legem" in the exact same way as Ferrari.

30. See Article 7(2) CISG, supra note 23. See Ferrari, supra note 19, at 475-76.

31. See Article 7(2) CISG, supra note 23. See Ferrari, supra note 19, at 476.

32. Ferrari, supra note 19, at 471-72.

33. See text accompanying note 21.

34. For affirmation, see Phanesh Koneru, The International Interpretation of the UN Convention on Contracts for the International Sale of Goods: An Approach based on General Principles, 6 MINN. J. GLOBAL TRADE 105, 106 (1997) stating "Article 7(2) requires that the text of the Convention itself should be the primary source of interpretation. If the text does not expressly address an issue, the next step is to consult the `general principles on which the Convention is based." See also Diedrich, supra note 22, at 355, stating that "eine autonome Lückenfüllung nach den allgemeinen Grundsätzen des Wiener Kaufrecht absolute priorität vor einem Rückgriff auf die kollisionsrechtlichen Regeln der lex fori genie(t."(footnote omitted) Cf. Richard Happ, Anwendbarkeit völkerrechtlicher Auslegungmethoden auf das UN-Kaufrecht, RECHT DER INTERNATIONALEN WIRTSCHAFT 376, 377 (1997), where the author has a similar opinion: "der Lehre wird FÜR eine autonome Auslegung des CISG plädiert, wobei nicht nur die Begriffe autonom ausgelegt werden, d.h. ohne Rückgriff auf nationalen Rechtstraditionen, sondern auch die Methodik aus der CISG selbst folgen soll."(footnote omitted)

35. See, for unintentional qualification of gaps "intra legem," Delchi Carrier, SpA v. Rotortex Corp., 71 F.3d 1024, 1029 (2d Cir. 1995), where the court stated with regard to Article 74 CISG that the "CISG requires that damages be limited by the familiar principle of foreseeability established in Hadley v. Baxendale, 156 Eng.Rep. 145 (1854)." By referring to a common law case, the court does not use the general principles of the CISG to solve the matter, and thus does not qualify Article 74 as a gap "praeter legem", but unintentionally as a gap "intra legem." Note, that this qualification is not exact, as the court does not come to this conclusion by applying the rules of private international law. For comments on this case see Cook, supra note 14; and infra Chapter III, section 4.

36. Ferrari, supra note 19, at 471-72.

37. See Peter Winship, Changing Contract Practices in the Light of the United Nations Sales Convention: A Guide for Practicioners, 29 INT'L LAW. 525, 526 (1995), describing shortly the scope of the CISG.

38. Cook, supra note 7, at 213.

39. See Vivian Grosswald Curran, Book Review, The Interpretative Challenge to Uniformity, 15 J.L. & COM. 175, 176 (1995), discussing features related to the international character of the CISG which causes a challenging situation. For instance, "the difficulties of linguistic translation merge with those of different legal traditions, cultures and practices, such that concepts as basic as those of "trial" or of "contract" can have different meanings and significances at their most fundamental levels in the various legal and linguistic communities of the CISG Contracting States." Id. See also Ferrari, supra note 13, at 198, where it is emphasized that "interpretative problems can arise in relation to national legal systems as well, but such problems are much more prevalent when it comes to the determination of the precise meaning of a law which, like the 1980 Vienna Sales Convention, has been drafted on an international level."

40. See Diedrich, supra note 22, at 356-357, listing and discussing grammatical interpretation, historical interpretation, comparative interpretation, and classic comparative interpretation. See also Happ, supra note 34, discussing the interpretation technique of the law of nations and applying it to the CISG, and Farnsworth, supra note 27, applying good faith and fair dealing principles in interpreting international uniform law.

41. Garro, supra note 22, at 1149.

42. Note, however, that this not the same as "gap-filling" in case of gaps "praeter legem."

43. See Happ, supra note 34, at 379, stating "[d]ie Frage, welche Auslegungmethoden anzuwenden sind, ist eigentlich sekundär. Vom Ziel des internationalen Einheitrechts, nämlich der Einheitlichkeit der Anwendung, her primär ist die Frage, welcher Auslegungsmethode geeigneter ist, dieses Ziel zu erreichen."

44. Ferrari, supra note 13, at 202.(footnote omitted)

45. Article 7(2) CISG, supra note 23.

46. See Diedrich, supra note 22, at 356-358, discussing the use of domestic interpretation techniques in relation to Article 7(2) CISG.

47. But see Happ, supra note 34, at 377, emphasizing that domestic techniques should not be used as "[d]er Rückgriff aus nationale Auslegungsmethoden könnte zu unterschiedlichen Ergebnissen in verschiedenen Ländern führen." Note, however, that the author does not focus on a uniform goal in the application of domestic methods.

48. See Happ, supra note 34, at 376, stating that "das CISG selbst keine Auslegungsmethoden regelt. In Art. 7 Abs. 1 CISG ist nur festgelegt, daß bei der Auslegung des Übereinkommens "[...] sein internationaler Charakter und die Notwendigkeit . . . seine einheitliche Anwendung und die Wahrung des guten Glaubens im internationalen Handel zu fördern," berücksichtigt werden müssen."

49. Id. See Article 7 CISG, supra note 23, and Article 8 CISG, supra note 24.

50. Article 7(2) CISG, supra note 23.

51. See Diedrich, supra note 22, at 356, referring to "grammatikalischen Auslegung."

52. Article 7(2) CISG, supra note 23.

53. See Diedrich, supra note 22, at 356, stating that "[a]llerdings lie(e sich aufgrund einer streng grammatikalischen Auslegung vertreten, da( Art. 7 Abs. 2 CISG - und damit eine autonome Lückenfüllung - nur FÜR die im Wiener Kaufrecht geregelten Bereiche gelten, weil allein unabsichtige, versteckte Lücken ausfüllungsfähig sind, nicht jedoch beabsichtigte, offensichtliche Regelungslücken."

54. Id, at 356, referring to "[h]istorische Interpretation."

55. Id, at 356, where is also stated that "[a]us den traveaux préparatoires ist somit zu folgern, da( die Prinzipen des Haager Einheitskaufrechts zur Lückenfüllung (Art. 2, 17 EKG) eine blo( marginale Vorbildfunktion hatten und die Staatenvertreter eine praxisnahe autonome Lückenfüllung favorisierten sowie den Rückgriff aus das unvereinheitlichte IPR des Forums allenfalls als "ultima ratio" ansahen."

56. See Happ, supra note 34, at 378, applying the "völkerrechtlicher Auslegungsregeln" to the CISG.

57. Article 31 of the Vienna Convention on the Law of Treaties reads: "(1) A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. (2) The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. (3) There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of it provisions; (b) any subsequent practices in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relation between the parties. (4) A special meaning shall be given to a term if it is established that the parties so intended."

58. Article 32 of the Vienna Convention on the Law of Treaties reads: "Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of Article 31, or to determine the meaning when the interpretation according to Article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is absurd or unreasonable."

59. Article 33 of the Vienna Convention on the Law of Treaties reads: "(1) When a treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the treaty provides or the parties agrees that, in case of divergence, a particular text shall prevail. (2) A version of a treaty in a language other than one of those in which the text was authenticated shall be considered an authentic text only if the treaty so provides or the parties so agree. (3) The terms of the treaty are presumed to have the same meaning in each authentic text. (4) Except where a particular text prevails in accordance with paragraph 1, when a comparison of the authentic texts discloses a difference of meaning which the application of articles 31 and 32 does not remove, the meaning which best reconciles the text, having regard to the object and purpose of the treaty, shall be adopted."

Note, however, that this Article is mainly applicable when the different linguistic versions of the CISG (Official versions: Arabic, Chinese, English, French, Russian or Spanish) conflict. See THE CONVENTION FOR THE INTERNATIONAL SALE OF GOODS: A HANDBOOK OF BASIC MATERIALS 10 (2d ed., Daniel Barstow Magraw & Reed R. Kathrin eds., 1990).[hereinafter: HANDBOOK]

60. U.N. Doc. A/Conf. 39/27, (1969), 63 A.J.I.L. 875 (1969), 8 I.L.M. 679 (1969). Done at Vienna on May 23, 1969; entered into force on January 27, 1980. [hereinafter: Law of Treaties Convention]

61. See M. AKEHURST, A MODERN INTRODUCTION TO INTERNATIONAL LAW 121 (1984). See also HANDBOOK, supra note 59, at 7.

62. HANDBOOK, supra note 59, at 7.(footnote omitted) Accord RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES §325, Comment a. [hereinafter: Restatement (Third)]

63. HANDBOOK, supra note 59, at 8.(footnote omitted)

64. Air France v. Sacks, 470 U.S. 392, 400 (1985). See HANDBOOK, supra note 59, at 10. Accord Chan v. Korean Airlines 490 U.S. 122, 122-123 (1989), where is stated with regard to the Warsaw Convention that "the Convention's drafting history might be consulted to elucidate a text that is ambiguous."

65. Article 32 of the Law of Treaties Convention, supra note 58.

66. See Happ, supra note 34, at 378. The presented counter-arguments practically all state that the law of nations approach cannot be applied to treaties such as the CISG, which nature is to unify a certain field of law: "[a]lle diese Argumente . . . lassen sich auf die Grundüberzeugung zurückführen, völkerrechtliche Auslegungmethoden seien auf multilaterale, rechtsvereinheitlichende Verträge wie das CISG nicht anwendbar."

67. See Happ, supra note 34, at 378, stating that "[a]uf die zivilrechtlichen Vorschriften (Teil I-III CISG) seien autonome Auslegungsmethoden anzuwenden, auf die völkerrechtlichen Vorschriften (Teil IV CISG) entsprechend völkerrechtliche Auslegungsmethoden."(footnote omitted) See Volken, infra note 69, at 38, stating that part IV of the CISG "[is] without a doubt to be interpreted according to the principles of public international law, i.e., according to Articles 31-33 of the Vienna Convention on the Law of Treaties of 1969."(footnote omitted) See also Honnold, supra note 27, at 159 where is stated that "[i]n sum, rules of interpretation of the 1969 Vienna Treaty are pertinent to the obligations under the 1980 Sales Convention that the Contracting States undertake to each other, but are not pertinent to the rules relating to the mutual obligations of the parties to the contract of sale."

68. See Happ, supra note 34, at 379, where is concluded that "[d]ie völkergewohnheitsrechtlichen Auslegungsregeln sind daher auch auf multilaterale rechtsvereinheitlichende Verträge wie das CISG an zu wenden."(footnote omitted)

69. Id, at 380. By applying this technique, first, it becomes clear what the current state practice is with regard to the CISG. Second, the principle "pacta sunt servanda" will be met, as uniform application of the CISG in all Member States will be achieved. Accord Ferrari, supra note 13, at 204, choosing for a similar solution by stating "that uniformity can only be attained if the interpreter in interpreting the provisions has regard to the practice of the other Contracting States. The interpreter must consider what "others have already done."(footnote omitted). See also Paul Volken, The Vienna Convention: Scope, Interpretation and Gap-Filling, in INTERNATIONAL SALE OF GOODS: DUBROVNIK LECTURES 19, 41-42 (Paul Volken & Petar [Sinvcircumflex]arcevic eds., 1986)[hereinafter: DUBROVNIK LECTURES], stating that "[i]n order to achieve uniform application of the Convention . . . the courts of one country should be able to consult the judicial decisions of another country."

70. And, thus meet the goal of Article 7(1) CISG, supra note 23: "regard is to be had to its international character and the need to promote uniformity in its application."

71. Tuggey, supra note 8, at 542.

72. Id, at 540. See also Honnold, supra note 6, at 1, stating that "[t]he Convention, faute de mieux, will often be applied by tribunals (judges or arbitrators) who will be intimately familiar only with their own domestic law. These tribunals, regardless of their merit, will be subject to a natural tendency to read the international rules in the light of legal ideas that have been imbedded at the core of their intellectual information. The mind sees what the mind has means of seeing."

73. Tuggey , supra note 8, at 555.

74. Article 6 CISG reads: "The parties may exclude the application of this Convention or, subject to Article 12, derogate from or vary the effect of any of its provisions."

75. Article 7 CISG, supra note 23.

76. Article 8 CISG, supra note 24.

77. See Article 7(2) CISG, supra note 23.

78. Koneru, supra note 34, at 106.

79. Article 7 CISG, supra note 23.

80. See id, where overall objectives are said to be the bringing of uniformity and the promotion of the observance of good faith in international trade. With regard to the latter, see FRITZ ENDERLEIN & DIETRICH MASKOW, INTERNATIONAL SALES LAW 56-57 (1992).

81. See HENRY GABRIEL, PRACTITIONER'S GUIDE TO THE CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG) AND THE UNIFORM COMMERCIAL CODE (UCC) 27 (1994).

82. Article 7(2) CISG, supra note 23 reads: "Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based, or in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."

83. See Koneru, supra note 34, at 106.

84. See Honnold, supra note 27, at 155-56.

85. "[I]t seems appropriate to conclude that the general principle embracing these situations is authorized by Article 7(2)." Honnold, supra note 27, at 156.

86. Accord Koneru, supra note 34, at 115, stating that "Article 7(2) of CISG requires courts to consult the general principles of the Convention before they apply domestic law."

87. Id.

88. See Honnold, supra note 6, at 68, where is stated with regard to the general principles of the ULIS that "the Law did not specify or indicate the general principles on which it [is] based; such a reference would lead to uncertainty and possibly to a Court's use of its own national rules on the assumption that these were the general principles underlying the Uniform Law."

89. Article 7 CISG, supra note 23.

90. Article 8 CISG, supra note 24.

91. "Here the Convention distinguishes between two levels of interpretation: Art. 7 concerns the interpretation of the rules of contract law contained in the Convention itself, and Art. 8 the interpretation of specific statements or the conduct of the individual parties to a transaction." Volken, supra note 69, at 39. See also Honnold, supra note 27, at 162, where is said that "Article 7 dealt with interpretation of the Convention; the present Article deals with the interpretation of the statements and conduct of the parties."

92. See ENDERLEIN & MASKOW, supra note 80, at 61, stating that Article 8 "does not only refer to offer and acceptance . . . and other acts done before the conclusion of the contract...but also to acts which are committed during the realization and with the objective of terminating the contract."

93. Honnold, supra note 27, at 163.(footnote omitted)

94. See GABRIEL, supra note 81, at 30-31; Honnold, supra note 27, at 164-65.

95. Article 8(1), supra note 24 reads: "For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what the intent was."

96. Honnold, supra note 27, at 164.

97. Article 8(1) CISG, supra note 24.

98. Article 8(2) CISG, supra note 24, reads: "If the preceding paragraph is not applicable, statements made by and other conduct of a party are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances."

99. Honnold, supra note 27, at 165.

100. See Article 8(2) CISG, supra note 24. The reasonable person standard can also be found in Article 25 CISG, which reads: "A breach of contract committed by one of the parties 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."(emphasis added)

101. Article 8 CISG, supra note 24.

102. Tuggey, supra note 8, at 545-46.(footnotes omitted)

103. Cook, supra note 14, at 257.

104. This also occurs with regard to Article 9 CISG. Cf. Holl & Keßler, supra note 24, at 458, stating that "[h]ier könnte gerade nicht von einer einheiltichen Auslegung unbestimmter Rechtsbegriffe durch eine übereinstimmende Rechtsprechung ausgegangen werden, da diese den verschiedenen nationalen Gerichten überlassen wurde, deren Entscheidungen in der Praxis jedoch kaum gegenseitige Bindungswirkungen entfalten." Instead of using national legal principles, the UNIDROIT Principles can also be used in relation to Article 8 CISG, see Garro, supra note 22, at 1070-72.

105. For a discussion on the concept of "international interpretation," see, e.g., Diedrich, supra note 3, at 337-38; Koneru, supra note 34, at 107-10; and Amy H. Kastely, The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention, 63 WASH. L. REV. 607 (1988).

106. Article 7 CISG, supra note 23.

107. See GABRIEL, supra note 81, at 27.

108. Koneru, supra note 34, at 107.

109. Id. See Bundesgerichthof , VIII. Zivilsenat, 3 April 1996, VIII 51/95, where the court expressly rejected the use of domestic principles (here: German legal principles) by stating that "insofern underscheidet sich das CISG vom Deutschen Recht, dessen Vorschriften und spezielle Prinzipen bei der Auslegung des UN-Kaufrechts grundsätzlich unandwendbar sind (Art. 7 CISG)."(emphasis added) An abstract of this court decision can be found in NEUE JURISTISCHE WOCHENZEITSCHRIFT 2364 (1996).

110. Article 7(2) CISG, supra note 23. See also Koneru supra note 34, at 116, stating with regard to this provision that its "purpose is to provide the judge with some guidance rather than `to leave the matter in complete uncertainty,' which would result in judges being `free to apply national law whenever a question [was] not expressly settled by the Uniform Law.' Otherwise, it would be a invitation to disregard [the Convention] for those who would wish to avoid its application."(footnotes omitted)

111. Cook, supra note 7, at 198. See also Honnold, supra note 6, at 54, stating that with regard to ULIS "in interpreting the Uniform Law one should consider the interpretations placed on it by other countries."

112. Accord Koneru, supra note 34, at 108, stating that "giving an international interpretation does not mean merely choosing a domestic interpretation from another country."

113. Id. Koneru refers with regard to this issue to Arbitral Award 7331 (Yugo. V. Italy), ICC Ct. Arb. (1994), 6 ICC INT'L CT. ARB. BULL. 73 (1995), where the "arbitrator applied the `common standard.' This approach equates the international interpretation with the majority rule among the domestic interpretations of the world and takes a narrow view of the international scope of the Convention. It fails to recognize that the Convention is not limited to those three countries whose law was considered, but rather it applies to all contracting states."

114. Koneru, supra note 34, at 109.

115. Id.

116. Besides the general principles underlying the CISG, one can also distinguish the General Principles of European Contract Law, and the UNIDROIT principles. For the first, see Ulrich Drobnig, General Principles of European Contract Law, in DUBROVNIK LECTURES, supra note 69, at 305-333. For the latter in relation to the CISG, see Garro, supra note 22; in relation to international commercial arbitration, see Alejandro M. Garro, The Contribution of the UNIDROIT Principles to the Advancement of International Commercial Arbitration, 3 TUL. J. INT'L & COMP. L. 93 (1995). For the scope of application of the UNIDROIT Principles, see Maria del Pilar Perales Viscasillas, UNIDROIT Principles of International Commercial Contracts: Sphere of Application and General Provisions, 13 ARIZ. J. INT'L & COMP. L. 381 (1996).

117. See Honnold, supra note 6, at 20, where is stated with regard to the ULIS, the predecessor of the CISG, that "it is difficult or impossible to identify such general principles particularly due to the fact that ULIS has no domestic legal background." The same can be said with regard to the CISG, which in comparison to the ULIS, also has no domestic legal background.

118. Id, stating in relation to the ULIS that "the provisions of the Uniform Law reflect common elements arrived at as a result of negotiation among numerous delegations."

119. See, for instance, Koneru, supra note 34, at 140, referring to the general standard of reasonableness, which is incorporated in the CISG in many provisions: "arts. 16(b) (reasonable reliance); 18(2), 33(c), 39(1), 43(1), 46(2), 46(3), 47(1), 48(2), 49(2), 63(1), 64(2)(b), 65(1), 65(2), 73(2), 75, 79(4) (reasonable time); 34, 37, 86(2) (unreasonable inconvenience or expense); 88(1) (unreasonable delay); 76(2) (reasonable substitute); 75 (reasonable manner); 79(1) (reasonable expectations); 85 (reasonable steps); 88(2) (reasonable measures to sell); 72 (reasonable time for notice); 35(2)(b) (unreasonable reliance); 38(3) (reasonable opportunity for examination); 88(2) (unreasonable expense); 8(2), 25 (reasonable person); 48(1) (unreasonable delay, inconvenience, or expense); 44 (reasonable excuse); 72(2), 88(1) (reasonable notice); 77, 86(1) (reasonable steps in the circumstances); 85, 86(1), 87, 88(2), 88(3) (reasonable expenses)."

120. Koneru, supra note 34, at 116.(footnote omitted)

121. See Koneru, supra note 34, at 117; Kazuaki Sono, The Vienna Sales Convention: History and Perspective 1, 7, in DUBROVNIK LECTURES, supra note 69.

122. See Koneru, supra note 34, at 120.

123. Id.

124. Id, at 121, calling this "[t]he ultimate unifying general principle of the Convention."

125. Ferrari, supra note 13, at 226.

126. See, for instance, Harry M. Flechtner, More U.S. Decisions on the U.N. Sales Convention: Scope, Parol, Evidence, "Validity" and Reduction of Price under Article 50, 14 J.L. & COM. 153, 153 (1995), listing the early U.S. court decisions. Other decisions are, e.g., Helen Kaminski PTY. LTD., v. Marketing Australian Products, INC., 1997 WL 414137 (S.D.N.Y.); Filanto, SpA., v. Chilewich International Corp., 789 F.Supp. 1229 (S.D.N.Y. 1992); GPL Treatment, LTD., v. Louisiana-Pacific Corporation, 133 Or.App. 633, 894 P.2d 470 (1995).

127. Id, at 154.

128. See Article 7 CISG, supra note 23; supra Chapter III, section 3.1.

129. Beijing Metals & Minerals Import/Export Corporation v. American Business Center, Inc., 993 F.2d 1178 (5th Cir. 1993). For comments on this case, see Flechtner, supra note 126.

130. Delchi Carrier SpA v. Rotortex Corporation, 71 F.3d 1024 (2d. Cir. 1995). For comments on this case, see Cook, supra note 14.

131. 993 F.2d, supra note 129, at 1180. The Chinese company agreed on a payment schedule with the US company earlier, and "orally agreed to two other items: it would ship goods to compensate for non conforming and defective goods and shortages and would begin making new shipments." Id.

132. 993 F.2d, supra note 129, at 1183. The Court of Appeals also implied the CISG does not apply, as "[w]e need not resolve this choice of law issue, because our discussion is limited to application of the parol evidence rule." Id, at 1182.

133. Id.

134. Flechtner, supra note 126, at 158.

135. See Article 8(3) CISG, supra note 24.

136. Peter Winship, Domesticating International Commercial Law: Revising U.C.C. in the Light of the United Nations Sales Convention, 37 LOY. L. REV. 43, 43 (1991).

137. Flechtner, supra note 126, at 176. Recently, two new cases have been issued in the United States and elegantly discuss the supplementing value of Article 8 CISG to the parole evidence rule. See the editorial remarks by Albert H. Kritzer at on the rulings of the 11th Circuit Court of Appeals, 29 June 1998, and a District Court, 6 April 1998.

138. See Article 7 CISG, supra note 23. In this case especially the requirement that "regard is to be had to [the] international character" of the CISG was violated.

139. Delchi Carrier SpA v. Rotortex Corporation, 71 F.3d 1024 (2d. Cir. 1995).

140. See Article 7 CISG, supra note 23.

141. See Article 25 CISG, supra note 100. For a discussion of Article 25 CISG, see infra Chapter IV, section 2.2.1.

142. Article 74 CISG reads: "Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract."

143. 71 F.3d, supra note 139, at 1028. The Court referred here explicitly to Article 7 CISG.

144. Id.

145. 71 F.3d, supra note 139, at 1028-29. The Court stated "[i]n granting summary judgment, the district court held that "[t]here appears to be no question that [Delchi] did not substantially receive that which [it] was entitled to expect" and that "any reasonable person could foresee that shipping non conforming goods to a buyer would result in the buyer not receiving that which he expected and was entitled to receive." Because the cooling and energy consumption of an air conditioner compressor are important determinants of the product's value, the district court's conclusion that Rotortex was liable for a fundamental breach of contract under the Convention was proper." See also Cook, supra note 14, at 261.

146. 71 F.3d, supra note 139, at 1029.

147. See infra Chapter VI, section 2.1.

148. Cook, supra note 14, at 261. Note, that Hadley v. Baxendale is an English case, but of fundamental value in common law cultures, such as the United States.

149. Id, at 262. For a discussion of the difference between the foreseeability element in Hadley v. Baxendale, and Article 74 CISG, see Chapter VI, section 2.1.

150. Harry M. Flechtner, Another CISG Case in the U.S. Courts: Pitfalls for the Practitioner and the Potential for Regionalized Interpretations, 15 J.L. & COM 127, 127 (1995), stating this with regard to GPL Treatment, LTD. v. Louisiana-Pacific Corporation, 894 P.2d 470 (1995).

151. Flechtner, supra note 150, at 138.

152. See Steven Walt, For Specific Performance under the United Nations Sales Convention, 26 TEX. INT'L L.J. 211, 211 (1991), stating that in general, "[a] uniform statutory scheme acceptable to a number of nations requires compromises and consensus." See also Honnold, supra note 27, at 48.

153. See Walt, supra note 152, at 212.

154. The mandate of Article 7 CISG requires such guidance, see text accompanying Chapter III, section 3.1.

155. Kastely, supra note 105, at 651.

156. The remedies available for the seller for breach of contract by the buyer will be discussed in the next chapter.

157. See Harry M. Flechtner, Remedies under the New International Sales Convention: The Perspective from Article 2 of the U.C.C., 8 J.L. & COM 53, 68 (1988), where is stated, that the aggrieved party "has the option to choose either avoidance or performance and thus the power to elect between the two distinct remedial schemes available under the Convention." For another comparison between the remedies of the CISG and the UCC, see GABRIEL, supra note 81, at 130-49, 175-97, and 230-38.

158. Article 45 CISG reads: "(1) If the seller fails to perform any of his obligations under the contract or this Convention, the buyer may: (a) exercise the rights provided in Articles 46 to 52; (b) claim damages as provided in 74 to 77. (2) The buyer is not deprived of any right he may have to claim damages by exercising his right to other remedies. (3) No period of grace may be granted to the seller by a court or arbitral tribunal when the buyer resorts to a remedy for breach of contract."

159. See ENDERLEIN & MASKOW, supra note 80, at 174-76.

160. Article 46 CISG reads: "(1) The buyer may require performance by the seller of his obligation unless the buyer has resorted to a remedy which is inconsistent with this requirement. (2) If the goods do not conform with the contract, the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under Article 39 or within a reasonable time thereafter. (3) If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard all the circumstances. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter."

161. Article 50 CISG reads: "If the goods do not conform with the contract and whether or not the price has already been paid the buyer may reduce the price in the same proportion as the value that conforming goods actually delivered had at that time. However, if the seller remedies any failure to perform his obligations in accordance with article 37 or article 48 or if the buyer refuses to accept performance by the seller in accordance with those articles, the buyer may not reduce the price."

162. Article 49 CISG reads: "(1) The buyer may declare the contract avoided: (a) if the failure by the seller to perform any of its obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with paragraph (1) of Article 47 or declares that he will not deliver within the period so fixed. (2) However, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so: (a) in respect of late delivery, within a reasonable period of time after he has become aware that delivery has been made; (b) in respect of any breach other than late delivery, within a reasonable time: (i) after he knew or ought to have known the breach; (ii) after the expiration of any additional time fixed by the buyer in accordance with paragraph (1) of Article 47, or after the seller has declared that he will not perform his obligations within such an additional period; or (iii) after the expiration of any additional period of time indicated by the seller in accordance with paragraph (1) of Article 48, or after the buyer has declared that he will not accept performance."

163. Flechtner, supra note 157, at 68.

164. Id.

165. "Avoidance of the contract releases both parties from their obligations under it." Article 81(1) CISG. See also Honnold, supra note 27, at 361.

166. This implies that damages and interest must be paid to equalize occurred losses. See, e.g., Articles 83 and 84 CISG.

167. Jianming Shen, The Remedy of Requiring Performance under the CISG and the Relevance of Domestic Rules, 13 ARIZ. J. INT'L & COMP. L. 253, 255 (1996).

168. Article 46(1), supra note 160 reads: "The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement." For a comparative analysis, see John Fitzgerald, Recent Developments Related to the CISG, CISG, Specific Performance, and the Civil Law of Louisiana and Québec, 16 J.L. & COM 291 (1997). See also Eric. C. Schneider, The Seller's Right to Cure under the Uniform Commercial Code and the United Nations Convention on Contracts for the International Sale of Goods, 7 ARIZ. J. INT'L & COMP. L. 69, 78-79 (1989).

169. Article 47(1) CISG reads: "The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations. See Schneider, supra note 168, at 78-79.

170. Shen, supra note 167, at 261.(footnote omitted)

171. Article 46(1) CISG, supra note 160.

172. See, e.g., John M. Catalano, Comment, More Fiction than Fact: The Perceived Differences in the Application of Specific Performance under the United Nations Convention on Contracts for the International Sale of Goods, 71 TUL L. REV. 1807, 1810 (1997); Kastely, supra note 105, at 616-17; Flechtner, supra note 157, at 106; Walt, supra note 152, at 214; Honnold, supra note 27, at 361-62.

173. See Honnold, supra note 27, at 361; Fritz Enderlein, Rights and Obligations of the Seller under the UN Convention on Contracts for the International Sale of Goods, in DUBROVNIK LECTURES, supra note 69, at 189; ENDERLEIN & MASKOW, supra note 80, at 178.

174. Article 49 CISG supra note 162. "The basic inconsistency between these remedies is made explicit in Article 81 . . . Avoidance "releases both parties from their obligations under [the contract] subject to any damages that may be due." Honnold, supra note 27, at 361. Accord ENDERLEIN & MASKOW, supra note 80, at 178.

175. Article 51 CISG reads: "(1) If the seller delivers only a part of the goods or if only a part of the delivered is in conformity with the contract, articles 46 to 50 apply in respect of the part which is missing or which does not conform. (2) The buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of contract."

176. See Walt, supra note 152, at 214; Catalano supra note 172, at 1810; Kastely, supra note 105, at 616-17.

177. Article 50, supra note 161.

178. Article 74 CISG, supra note 142.

179. See Flechtner, supra note 157, at 106.

180. Flechtner, supra note 157, at 106.

181. The financial gain is the reduction of the purchase price as meant in Article 50 CISG. See Kastely, supra note 105, at 617; Catalano, supra note 172, at 1810; Walt, supra note 152, at 214. See also Honnnold, supra note 27, at 395, where the author refers to the Roman Law "actio quanti minoris" which is strongly related to the remedy of Article 50.

182. This can clearly be derived form the text of Article 50 CISG which states that "the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time." See also Honnold, supra note 6, at 689-90.

183. See Flechtner, supra note 157, at 106, stating that "aggrieved buyer [can] recover consequential damages" under Article 74 CISG.

184. Article 28 CISG reads: "If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention." See Olga Gonzalez, Remedies under the U.N. Convention for the International Sales of Goods, 2 INT'L TAX & BUS. LAW. 79, 96 (1984).

185. Kastely, supra note 105, at 625.

186. Article 28, supra note 184. See Kastely, supra note 105, at 625; Walt, supra note 152, at 218; Catalano, supra note 172, at 1813; Gonzalez, supra note 184, at 97.

187. See e.g., ENDERLEIN & MASKOW, supra note 80, at 120.

188. See text accompanying note 27.

189. Shen, supra note 167, at 258.(footnote omitted) See Gonzalez, supra note 184, at 97.

190. See Kastely, supra note 105, at 627-28; Shen, supra note 167, at 278-80.

191. Catalano, supra note 172, at 1817.(footnote omitted)

192. See Shen, supra note 167, at 280-82.

193. Catalano, supra note 172, at 1816.(footnote omitted)

194. Cf. Honnold, supra note 27, at 277.

195. Jacob S. Ziegel, The Remedial Provisions in the Vienna Sales Convention: Some Common Law Perspectives, in INTERNATIONAL SALES: THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 9-1, 9-11 (Nina M. Galston & Hans Smit eds., 1984). See Catalano, supra note 172, at 1815.

196. See Article 28 CISG, supra note 184. See also text accompanying supra notes 185-86.

197. See Catalano, supra note 172, at 1831-34. He states that "[t]he much-touted disparity between common-law and civil-law uses of specific performance disappears at the practical level, "moreover, "the difference between enforced performance in common law and civil law is more theoretical than practical." Id, at 1832.(footnotes omitted)

198. Catalano, supra note 172, at 1832.(footnotes omitted) See Gonzalez, supra note 184, at 99.

199. See Catalano, supra note 172, at 1833, stating that commercial practice also leads to the same conclusion. See also Gonzalez, supra note 184, at 99-100. This less than expected influence of domestic law on a request for specific performance can also be shown by the fact that very little court decisions have been given on Articles 28 and 46(1) CISG, see WILL, supra note 9, at 15-164.

200. See, for instance, Kastely, supra note 105, at 627.

201. For a similar conclusion, see Catalano, supra note 172, at 1834; Gonzalez, supra note 184, at 99-100.

202. For a discussion on the broad discretion of the forum, see Shen, supra note 167, at 267-72.

203. Thus having in mind the mandate of Article 7 CISG, supra note 23, that "regard is to be had to its international character and to the need to promote uniformity in its application."

204. See, in general, Kastely, supra note 105, at 634.

205. See text accompanying Chapter III, section 3.1.

206. Article 28 CISG, supra note 184.

207. This is shown, for instance, by the fact that direct damages can only be obtained in case of avoidance, see infra Chapter VII, Conclusion, where briefly Articles 75 and 76 CISG are discussed.

208. This remedy is embodied in Article 46(2) CISG, supra note 160 which reads: "If the goods do not conform with the contract the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under article 39 or within a reasonable time thereafter."

209. This remedy is embodied in Article 46(3) CISG, supra note 160 which reads: "If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter."

210. See supra Chapter IV, section 1.

211. Cf. ENDERLEIN & MASKOW, supra note 80, at 177, in discussing Article 46 CISG in general stating that "this Article stipulates the right of the buyer to performance of a contract, i.e. is an expression of the maxim pacta sunt servanda."

212. See Honnold, supra note 27, at 362-64.

213. Schneider, supra note 168, at 77.(footnote omitted) The author here refers to Article 35(2) CISG which reads: "Except where the parties have agreed otherwise, the goods do not conform with the contract unless they: (a) are fit for the purpose for which the goods of the same description would ordinarily be used; (b) are fit for any other particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller's skill and judgment; (c) possess the qualities of goods which the seller has held out to the buyer as a sample or a model; (d) are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods." See also Marques Roque Joachim v. La Sarl Holding Manin Rivière, Cour d'Appèl de Grenoble, Chambre Commerciale, RG 93/4879, 26 April 1995, reprinted in UNILEX, where the court stated that the lack of conformtiy of the delivered goods occurred, as the goods delivered were not fit for a particular purpose made known to the seller (referring to Article 35(2)(b) CISG). See Will, supra note 9, at 121.

214. Article 36 CISG reads: "(1) the seller is liable in accordance with the contract and this Convention for any lack of conformity which exists at the time when the risk passed to the buyer, even though the lack of conformity becomes apparent only after that time. (2) The seller is also liable for any lack of conformity which occurs after the time indicated in the preceding paragraph and which is due to a breach of any of its obligations, including a breach of any guarantee that for a period of time the goods remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or characteristics."

215. See Article 36(2) CISG, supra note 212. See also Gonzalez, supra note 168, at 88.

216. See Article 36(1) CISG. See Gonzalez, supra note 168, at 88.

217. See Schneider, supra note 168, at 79-80.

218. See Article 38 CISG. See Schneider, supra note 168, at 79.

219. See, for this and further requirements in relation to this issue ENDERLEIN & MASKOW, supra note 80, at 154-58. See also Landgericht Oldenburg, 12O 674/93, 9 November 1994, reprinted in UNILEX, where the court stated that if after unsuccessful repair of the goods by the seller (Article 46(3) CISG) the goods are still defective and constitute a lack of conformity, a new notice of the buyer is needed before any other remedies can be invoked. See Will, supra note 9, at 103; Amtsgericht Nordhorn, 3C 75/94, 14 June 1994, reprinted in UNILEX, where the court stated that the return of defective goods to the seller amounts to a valid notice for the lack of conformity. See Will, supra note 9, at 93.

220. See ENDERLEIN & MASKOW, supra note 80, at 154.

221. Schneider, supra note 168, at 79, referring to Article 39(1) CISG. (footnote omitted). Note, that there are two exceptions to this requirement, Article 40 and 44 CISG. Id, at 80. Also, the buyer has a maximum a two year period to notify the seller of the nature of the non conformity, see Article 39(2) CISG. Id.

222. See, for instance, Kastely, supra note 105, at 635-36.

223. See Article 28 CISG, supra note 184.

224. Honnold, supra note 27, at 366. It is not clear that Honnold's position as to the impact of Article 28 CISG on these buyer's remedies is consistent with his position on the relationship of Article 28 CISG to the seller's action for the price. See infra text to note 321. See also Kastely, supra note 105, at 635-36, stating that these remedies fall within the Article 28 as remedies to require performance of any obligation of the other party." Even if one may decide that the remedies provided for in Article 46(2) and 46(3) CISG are bound by Article 28, one should keep the limiting effect of this provision, caused by the influence of Article 7 CISG in mind. See supra Chapter IV, section 2.1.

225. Article 46(2) CISG, supra note 160.

226. See ENDERLEIN & MASKOW, supra note 80, at 179; Article 46(2) CISG, supra note 160. Cf. Schneider, supra note 168, at 82.

227. ENDERLEIN & MASKOW, supra note 80, at 179.

228. Article 25 CISG, supra note 100.

229. See Honnold supra note 27, at 363; ENDERLEIN & MASKOW, supra note 80, at 179; Schneider, supra note 168, at 82-83.

230. ENDERLEIN & MASKOW, supra note 80, at 179. This was, however, possible in the 1964 Hague Sales Conventions. Id. See also Marques Roque Joachim v. La Sarl Holding Manin Rivière, Cour d'appèl de Grenoble, Chambre Commerciale, RG 93/4879, 26 April 1995, reprinted in UNILEX, where the court stated that the occurring defect did not amount to a fundamental breach of contract as the lack of conformity only appeared to a part of the hangar, and the seller had been able to repair the defective elements. Therefore, the buyer was not deprived of what he was entitled to expect under the contract. See Will, supra note 9, at 121.

231. Honnold, supra note 27, at 363. But see Oberlandesgericht Hamm, 11U 19/94, 9 June 1995, reprinted in UNILEX, where the court stated that when the goods are non-conforming to the contract the buyer has the right to either require or delivery of goods substituting the defective ones (46(2) CISG), or to require repair of the defective goods by the seller (46(3) CISG). Note, that this decision must be criticized for not establishing a fundamental breach in the sense of Article 25 CISG before allowing the remedy of Article 46(2) CISG. See Will, supra note 9, at 125.

232. See Honnold, supra note 27, at 254.

233. Id, stating that in English law it "was developed to deal with a very different problem - the effect of a contract provisions restricting the buyer's rights when good are defective."

234. See text accompanying Chapter III, section 3.1.

235. Andrew Babiak, Comment, Defining "Fundamental Breach" under the United Nations Convention on Contracts for the International Sale of Goods, 6 TEMP. INT'L & COMP. L.J. 113, 117 (1992).

236. Id, at 118.

237. See id.

238. See Article 25 CISG, supra note 100. See also Honnold, supra note 27, at 254-55. CF. ENDERLEIN & MASKOW, supra note 80, at 112, stating that "the detriment itself is characterized by three aspects: In the end, and that is the decisive element in our view, there has to be a relevant detriment to the aggrieved party (3.1); it has to be fundamental (3.2); and proportionate to the expectations justified under the contract (3.3)."

239. Babiak, supra note 235, at 119-20, where the author also states that what the injured party was entitled to expect is directly related to these factors.

240. Id, at 120.

241. See id.

242. See id, at 118.

243. See id, at 121.

244. See Article 25 CISG, supra note 100, in which is stated that "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."

245. See ENDERLEIN & MASKOW, supra note 80, at 179, where is stated that "[t]his is in line with Article 49 according to which avoidance of a contract (at first) can only be requested if a fundamental breach of contract is committed."

246. See ENDERLEIN & MASKOW, supra note 80, at 180.

247. Article 46(3) CISG, supra note 160.

248. See Honnold, supra note 27, at 362.

249. This is different from the seller's right to cure under Article 48 CISG which reads: "(1) Subject to Article 49, the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the buyer retains any right to claim damages as provided for in this Convention. (2) If the seller requests the buyer to make known whether he will accept performance and the buyer does not comply with the request within a reasonable time, the seller may perform within the time indicated in his request. The buyer may not, during that period of time, resort to any other remedy which is inconsistent to any remedy which is inconsistent with performance by the seller. (3) A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph that the buyer make known hid decision. (4) A request or notice by the seller under paragraph (2) or (3) of this article is not effective unless received by the buyer." For a discussion of the seller's right to cure, see, for instance, Schneider, supra note 168, at 75-78; Gonzalez, supra note 168, at 89-90. See also ENDERLEIN & MASKOW, supra note 80, at 179, stating that "[e]ven when the buyer is not allowed to claim substitute goods, it is not excluded that in the event of non-conformity, the seller decides to deliver substitute goods if this is more favorable to him." Of course, parties can according to Article 6 CISG change the course of Article 46(3). See, for instance, Amtsgericht Cloppenburg, 14 April 1993, 2C 425/92, which stated that "[d]ieser Artikel besagt über Ort und Zeit etwaiger Nachbesserungsarbeiten nichts. Selbst wenn man grundsätzlich davon auszugehen hat, daß er der Verkäufer die Sprache reparieren muß, wo sie sich gemäß dem Vertrag befindet . . . so kann zwischen der Parteien eine andere Absprache getroffen werden. Dies ist hier geschehen." For an abstract of this court decision, see DIRITTO DEL COMMERCIO INTERNAZIONALE 449 (1995).

250. See ENDERLEIN & MASKOW, supra note 80, at 179. See also Honnold, supra note 27, at 364, stating that "the buyer's right to "require the seller to remedy the lack of conformity is slightly stronger than the buyer's right under paragraph (2) to require "delivery of substitute goods." See also Hungarian Chamber of Commerce, Court of Arbitration, VB/94131, 5 December 1995, reprinted in UNILEX, where the court stated that with regard to the remedy of Article 46(3) CISG, the buyer is not obliged to request it, Article 46(3) CISG provides for an optional remedy. See Will, supra note 9, at 135.

251. Note, that "[e]ven if repair is not possible, the defect does not automatically turn into a fundamental breach of contract." ENDERLEIN & MASKOW, supra note 80, at 180. For a discussion on the issue of fundamental breach, see supra Chapter IV, section 2.2.1; Babiak, supra note 235.

252. See id, at 180.

253. Id. See also Oberlandesgericht Hamm, 11U 191/94, 9 June 1995, reprinted in UNILEX, where the court stated that even expenses incurred by the buyer to substitute or repair must be reimbursed by the seller. Thus, the seller has to bear the costs for substitution or repair of non-conforming goods. Therefore, the buyer had the right to reimbursement of the installation expenses. See Will, supra note 9, at 125.

254. See ENDERLEIN & MASKOW, supra note 80, at 180. Other reasons can be "if the seller is a dealer who does not have the means for repair . . . or if the buyer himself can repair goods at lesser cost." Id.

255. See Honnold, supra note 6, at 553-54.

256. Id, at 181.

257. Id.

258. See Article 50 CISG, supra note 161.

259. See Article 74 CISG, supra note 142.

260. See Article 49 CISG, supra note 162.

261. See Flechtner, supra note 157, at 68; supra Chapter IV, section 1.

262. See Honnold, supra note 27, at 383; ENDERLEIN & MASKOW, supra note 80, at 189.

263. Article 49(1)(a) CISG, supra note 162. See Honnold, supra note 27, at 383; ENDERLEIN & MASKOW, supra note 80, at 190.

264. See supra Chapter IV, section 2.2.1.

265. See Article 25 CISG, supra note 100. See Honnold, supra note 27, at 383; ENDERLEIN & MASKOW, supra note 80, at 191-92. The delivery of an aliud does not necessary lead to a fundamental breach of contract as meant in Article 25 CISG. See, for instance, Bundesgerichthof, VIII. Zivilsenat, VIII ZR 51/95, 3 April 1996 which stated that "[e]ine aliud Lieferung stellt deshalb, jedenfälls regelmäßig, keine Nichtlieferung, sondern eine - wenn auch Mangelhafte - Lieferung dar . . . [D]ie Beklagte [hat] nicht die gelieferte Futtermittlequalität, sondern Technische Qualität, d.h. Ware ohne Fließmittel zusatz [bestellt]. Diese Abweichung ist aber nicht so erheblich, daß die Lieferung nicht nur als vertragswirdig, sondern als überhaupt nicht geschehen zu behandeln wäre." For an abstract of this case, see RECHT DER INTERNATIONALEN WIRTSCHAFT 594-97 (1996). Accord Oberlandesgericht Hamburg, 5U 224/93, 14 December 1994, reprinted in UNILEX, which stated that "[e]ine etwaige Falschlieferung seitens der Klägerin würde sich auch nicht angesichts des von der Beklagten erhobenen Arglistvorwurfes als wesentliche Vertragsverletzung darstellen." For similar conclusions, see Bundesgerichthof VIII. Zivilsenat, VIII ZR 159/94, 3 March 1995, in Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) 129, 75, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 463-64 (1995); Oberlandesgericht Düsseldorf, 6U 119/93, 10 April 1994, reprinted in UNILEX; Oberlandesgericht Frankfurt am Main, 13U 51/93, 20 April 1994, reprinted in UNILEX; Oberlandesgericht Frankfurt am Main, 5U 15/93, 18 January 1994, reprinted in UNILEX; Oberlandesgericht Frankfurt am Main, 5U 164/90, 17 September 1991, reprinted in UNILEX. In qualifying the facts, a fundamental breach may be found, when the seller knew at the time of the conclusion of the contract that late delivery (due to special circumstances) would lead to an unacceptable situation for the buyer. See Oberlandesgericht Hamburg, I. Zivilsenat, 1U 167/95, 28 February 1997, reprinted in UNILEX, which stated that "[z]war ist in einer Verzögerung der Lieferung nicht generell eine wesentliche Vertragsverletzung zu sehen, sondern nur dann, wenn FÜR den Verkäufer bei Vertragschluß erkennbar, die genau Einhaltung des Liefertermins FÜR den Kaufer von besonderem Interesse ist." Oberlandesgericht Koblenz, 2U 31/96, 31 January 1997, reprinted in UNILEX, decided that also the non fulfillment of a contractual side obligation can lead to a fundamental breach as meant in Article 25 CISG. The court stated in fact that "[z]war kan der Käufer gemäß Art. 49 Abs. 1a CISG Vertragsaufhebung des Vertrags verlangen, wenn die Nichterfüllung einer Vertragspflicht eine wesentliche Vertragsverletzung darstellt, was auch bei Verletzung einer Nebenpflicht wie einer Ausschließlichtkeitabrede der Fall sein kann." Other interesting decisions on this issue are Handelsgericht des Kantons Zürich, HG 950347, 5 February 1997, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 75-77 (1998); Oberlandesgericht Oldenburg, 11U 64/94, 1 February 1995, reprinted in UNILEX (the court found a fundamental breach, but did not give a clear reasoning); Handelsgericht des Kantons Zürich HG 920670, 26 April 1995, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 53 (1996); Amtsgericht Nordhorn, 3C 75/94, 14 June 1994, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 626-28 (1996)(the court found that special circumstances can more easy lead to a fundamental breach; Pretura di Parma - Fidenza, 77/89, 24 November 1989, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 441-42 (1995).

266. Honnold, supra note 27, at 384.

267. The additional period of time must be fixed in accordance with Article 47(1) CISG, infra note; Chapter V, section 2.2. See ENDERLEIN & MASKOW, supra note 80, at 193; Honnold, supra note 27, at 384-85. See Schiedsgericht der Handelskammer Hamburg, 21 March 1996, where no actual Nachfrist was fixed, and thus the contract could not be avoided under Article 49(1)(b) CISG, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 142-43 (1996). Accord by Oberlandesgericht Frankfurt am Main, 5U 15/93, 18 January 1994, reprinted in UNILEX, where the court stated that "[s]oweit die Beklagte vorgebracht hat, die Schuhe seien nicht termingericht angeliefert worden, steht ihr schon deshalb kein Recht zur Aufhebung des Vertrags zu, weil nicht dargelegt ist, daß die Klägerin eine ihrgestezte Nachfrist hat verstreichen lassen (Art. 49 Abs. 1, 47 Abs. 1 CISG)."; Oberlandesgericht Hamburg, 1U 167/95, 28 February 1997, reprinted in UNILEX; Oberlandesgericht Hamburg, 5U 224/93, 14 December 1994, reprinted in UNILEX (the court specified here that the remedy of Article 49(1)(b) CISG can only be invoked in case of non-delivery); Handelsgericht des Kantons Zürich, HG 950347, 5 February 1997, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 75-77 (1998). When the seller cannot possibly deliver the goods anymore, (for instance, if the seller sold to goods to another person) the contract may be avoided without a Nachfrist period, see Oberlandesgericht Celle, 20U 76/94, 24 May 1995, reprinted in UNILEX, where the court stated that "[d]enn im Eingeständnis der anderweitigen Veräußerung liegt die Anzeige, daß die Beklagte jetzt ihre Lieferpflicht überhaupt nicht mehr erfüllen kann. Eine solche Anzeige berechtigt den Kläger zur Vertragsaufhebung auch ohne vorherige Nachfristsetzung."

268. ENDERLEIN & MASKOW, supra note 80, at 193; Honnold, supra note 27, at 386. See Article 47 CISG.

269. See Article 49(1)(b) CISG, supra note 162. See also ENDERLEIN & MASKOW, supra note 80, at 190.

270. ENDERLEIN & MASKOW, supra note 80, at 193, referring to Schlechtriem and Beinert.

271. Article 26 CISG reads: "A declaration of avoidance of the contract is effective only if made by notice to the other party." See, for instance, Federal Court of Australia, South Australia District, Adelaide, 28 April 1995, 1995 Federal Court Reports (Australia) 216-40; Oberster Gerichtshof, 10 Ob 518/95, 6 February 1996, abstract in ZEITSCHRIFT FÜR RECHTSVERGLEICHUNG 218-54 (1996); Bundesgerichthof, VIII. Zivilsenat, VIII ZR 306/95, 4 December 1996, abstract in NEUE JURISTISCHE WOCHENSCHRIFT RECHTSPRECHUNGS-REPORT ZIVILRECHT 690 (1997). It must be clear from the wording of the declaration that the contract is declared avoided. See Oberlandesgericht Frankfurt am Main, 5U 164/90, 17 September 1991, reprinted in UNILEX, where is stated that "[d]em Fernschreiben der Beklagten vom 7.3.1993 kommt die Wirkung einer Erklärung der Vertragaufhebung zu, weil die Beklagte der Zedentin darin unmißverständlich mitgeteilt hat, daß sie die Schuhkollektion nunmehr mit einer anderen italienischen Hersteller fertigen lassen werde und sie die mit der Zedentin begonnene Zusammenarbeit ab sofort beenden werden."; Amtsgericht Zweibrücken, 1C 216/92, 14 October 1992, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 445-46 (1995), where the court stated that "[d]er Käufer muß vielmehr eindeutig erklären, daß er Vertragsaufhebung will. Die Vertragsaufhebung wird durch einseitige Gestaltungserklärung ausgeübt." See also Landgericht Frankfurt am Main, 3/11 O 3/91, 16 September 1991, abstract in RECHT DER INTERNATIONALEN WIRTSCHAFT 952-54 (1991), where the court found that no such meaning could be given to the declaration, by stating that "[d]ie Beklagte hat die Aufhebung des Vertrages nicht wirksam erklärt."

272. See ENDERLEIN & MASKOW, supra note 80, at 191.

273. ENDERLEIN & MASKOW, supra note 80, at 191.

274. See Article 49(2) CISG, supra note 162.

275. See Article 49(2)(a) CISG, supra note 162, which reads: "(2) However, in cases where the seller has delivered the goods, the buyer looses the right to declare the contract avoided unless he does so: (a) in respect of late delivery, within a reasonable time."

276. See Honnold, supra note 27, at 386-87; ENDERLEIN & MASKOW, supra note 80, at 193.

277. Article 49(2)(a) CISG, supra note 162.

278. ENDERLEIN & MASKOW, supra note 80, at 193.

279. See Article 49(2)(b) CISG, supra note 162, which reads: "(2) However, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so: (b) in respect of any breach other than late delivery, within a reasonable period of time: (i) after he knew or ought to have known of the breach; (ii) after the expiration of any additional period of time fixed by the buyer in accordance with paragraph (1) of Article 47, or after the seller has declared that he will not perform his obligations within such an additional period; or (iii) after the expiration of any additional period of time indicated by the seller in accordance with paragraph (2) of Article 48, or after the buyer has declared that he will not accept performance."

280. ENDERLEIN & MASKOW, supra note 80, at 194.

281. Honnold, supra note 27, at 380.

282. See supra Chapter III, section 3.

283. See ENDERLEIN & MASKOW, supra note 80, at 195.

284. See Article 50 CISG, supra note 162, which reads: "If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time. However, if the seller remedies any failure to perform his obligations in accordance with article 37 or article 48 or if the buyer refuses to accept performance by the seller in accordance with those articles, the buyer may not reduce the price." See also Oberlandesgericht Koblenz, II. Zivilsenat, 2U 31/96, 31 January 1997, reprinted in UNILEX, where all requirements of Article 50(2) CISG were met, and the remedy of Article 50 CISG could not be invoked by the buyer. The court specifically stated, that "[b]ei dieser Sach - und Rechtslage kann die Beklagte sich auch nicht auf ein Recht zur Minderung wegen Mangelhaftigkeit der Ware gemäß Art. 50 Satz 1 CISG berufen. Nach Satz 2 dieses Artikels ist ihr nämlich das Recht auf Herabsetzung des Kaufpreises versagt, wenn sie sich als Käufer weigert, Erfüllung durch den Verkäufer nach Art. 48 CISG anzunehmen. Das hat die Beklagte - wie bereits ausgeFÜRt - getan." But see Landgericht Aachen, 41O 198/89, 3 April 1989, abtract in RECHT DER INTERNATIONALEN WIRTSCHAFT 491 (1990); Landgericht Oldenburg, 12O 2028/93, 15 February 1995, abstract in DIRITTO DEL COMMERIO INERNAZIONALE 644-45 (1996), where the court allowed the remedy of Article 50 CISG. Some courts even give a detailed description how to calculate the price-reduction, see Amtsgericht Nordhorn, 3C 75/94, 14 June 1994, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 626-28 (1996); Pretore della guirisprudenza di Locarno-Campagna, 6252, 27 April 1992, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 853 (1994).

285. See ENDERLEIN & MASKOW, supra note 80, at 191.

286. Id, at 196.

287. Honnold, supra note 27, at 393.

288. 1994 WL 121680 (S.D.N.Y. Apr. 6, 1994). See Flechtner, supra note 126, at 169-76.

289. 1994 WL 121680, at 5. See Flechtner, supra note 126, at 170.

290. Flechtner, supra note 126, at 172. However, one could state that Article 50 can be seen as serving a function similar to § 2-717 of the UCC. It confirms the self-help right of the buyer to deduct damages from the price, even when no fundamental breach has occurred. However, this right only arises when the goods are non-conforming. Flechtner, supra note 126 at 172, also refers to § 2-717 of the UCC, and states that "[t]here is nothing in CISG equivalent to § 2-717 of the U.C.C., which permits a buyer to set off its damages before paying the contract price." This is true, as the right to set-off reflected in § 2-717 of the UCC allows for the reduction of the price by the buyer to compensate damages in general; Article 50 CISG only allows a proportional reduction of price for non-conforming goods. Thus, the basis of § 2-717 and Article 50 CISG are substantially different as the remedy provided for in Article 50 CISG is limited to only a proportional reduction of price. See also Honnold, supra note 27, at 395-96.

291. Thus in accordance with Article 7(2) CISG. See supra Chapter III, section 3.1.

292. Flechtner, supra note 126, at 174.

293. Article 61 CISG reads: "(1) If the buyer fails to perform any of his obligations under the contract or this Convention, the seller may: (a) exercise the rights provided in articles 62 to 65; (b) claim damages as provided in articles 74 to 77. (2) The seller is not deprived of any right he may have to claim damages by exercising his right to other remedies. (3) No period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract."

294. Article 62 CISG reads: "The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement."

295. Article 64 CISG reads: "(1) The seller may declare the contract avoided: "(a) if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) if the buyer does not, within the additional period of time fixed by the seller in accordance with paragraph (1) of Article 63, perform his obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed. (2) However, in cases where the buyer has paid the price, the seller loses the right to declare the contract avoided unless he does so: (a) in respect of late performance by the buyer, before the seller has become aware the performance has been rendered; or (b) in respect of any breach other than performance by the buyer, within a reasonable time: (i) after the seller knew or ought to have known of the breach; or (ii) after the expiration of any additional period of time fixed by the seller in accordance paragraph (1) of Article 63, or after the buyer has declared that he will not perform his obligations within such an additional period."

296. ENDERLEIN & MASKOW, supra note 80, at 234.

297. Id. See infra Chapter VI, section 2.2.

298. See Article 62 CISG, supra note 294. Only a few cases can be found on this issue. See, for instance, Oberlandesgericht München, VIII. Zivilsenat, 7U 2070/97, 9 July 1997, reprinted in UNILEX; Amtsgericht Alsfeld, 31C 534/94, 12 May 1995, reprinted in UNILEX, abstract in NEUE JURISTISCHE WOCHENSCHRIFT RECHTSPRECHUNGS-REPORT ZIVILRECHT 120-21 (1996); Oberlandesgericht München, VII. Zivilsenat, 7U 5460/94, 8 March 1995, reprinted in UNILEX; Amtsgericht Nordhorn, 3C 75/94, 14 June 1994, reprinted in UNILEX.

299. See ENDERLEIN & MASKOW, supra note 80, at 235.

300. See Honnold, supra note 27, at 434, stating that "[m]uch of the discussion under Article 46 . . . will be relevant here although the commercial settings are different." The same cannot be said with regard to § 2-704 of the UCC.

301. Honnold, supra note 27, at 435. Note, that "[w]hen the buyer has received and accepted the goods, Article 62 of the Convention will apply with full force: 'The seller may require the buyer to pay the price . . .' But when the seller is in possession of the goods, other provisions of the Convention may bear on the question whether the seller may force the buyer to 'take delivery' and 'pay the price.'"Id, at 437.

302. See Fitzgerald, supra note 168, at 296-97.

303. See Article 62, supra note 294.

304. See supra Chapter IV, section 2.2; ENDERLEIN & MASKOW, supra note 80, at 177.

305. Fitzgerald, supra note 168, at 297.

306. See Article 62 CISG, supra note 294, which reads that "[t]he seller may require the buyer to pay the price . . . unless the seller has reported to a remedy which is inconsistent with this requirement." See also Kastely, supra note 105, at 617-18; Catalano, supra note 172, at 1810.

307. See Article 46 CISG, supra note 160, which reads that "[t]he buyer may require performance . . . unless the buyer has resorted to a remedy which is inconsistent with this requirement." See supra Chapter IV, section 2.1.

308. See Fitzgerald, supra note 168, at 297, where the author also distinguishes another inconsistent remedy, the Nachfrist avoidance procedure as laid down in Article 63 CISG, however, this remedy is only inconsistent as long as the Nachfrist lasts. See also ENDERLEIN & MASKOW, supra note 80, at 236.

309. See Article 64 CISG, supra note 295; infra Chapter V, section 2.2.

310. See Article 62 CISG, supra note 294.

311. See Article 46(1) CISG, supra note 160.

312. Honnold, supra note 27, at 435.

313. See supra Chapter IV, section 2.1.

314. Article 28 CISG, supra note 184.

315. See ENDERLEIN & MASKOW, supra note 80, at 235; Honnold, supra note 27, at 437, emphasizes that "[l]egal systems that stem from English law do not refer to an action to recover the full price from the buyer as "specific performance"; this terminology is normally reserved for orders that resemble the decrees that were traditionally issued by courts of equity - decrees that could be enforced by various penalties, including imprisonment for contempt of court. Requiring a seller to deliver goods (Art. 46) would be described as requiring "specific performance." But see Alan Farnsworth, Damages and Specific Relief, 27 AM.J. COMP. L. 249-50 (1979), who stated that the words "judgement for specific performance" which are used in [Article 28] suggest that [Article 28] "does not apply to a suit in which the seller tenders the goods to the recalcitrant buyer and claims the price. Such a suit [in common law jurisdictions], traditionally one at law rather than equity, is not commonly thought of as one for `specific performance' even though it gives the seller relief that might accurately be described as `specific'." (with special thanks to Prof. Albert H. Kritzer)

316. See ENDERLEIN & MASKOW, supra note 80, at 235.

317. Gonzalez, supra note 184, at 99. See Catalano, supra note 172, at 1832. See also § 2-709 of the UCC. Indeed, § 2-709 of the UCC now specifies that the seller can recover the price whenever the goods have been accepted by the buyer or when the seller is unable to resell the goods identified to the sales contract.

318. Catalano, supra note 172, at 1832.

319. See Article 64(1)(a) CISG, supra note 295. Note, that the remedy provided for in this article is very similar to the one provided for in Article 49 CISG, supra note 162.

320. See Article 25 CISG, supra note 100. Many cases have appeared on the issue of fundamental breach of contract with regard to Article 64 CISG. See, for instance, ICC International Court of Arbitration, 7585/1992, reprinted in UNILEX, abstract in JOURNAL DU DROIT INTERNATIONAL 1015-20 (1995); Oberster Gerichtshof, 6 Ob 187/97, 11 September 1997, abstract in ZEITSCHRIFT FÜR RECHTSVERGLEICHUNG 245 (1997); Bundesgerichthof, VIII. Zivilsenat, VIII ZR 306/95, 4 December 1996, reprinted in UNILEX, abstract in NEUE JURISTISCHE WOCHENSCHRIFT RECHTSPRECHUNGS-REPORT ZIVILRECHT 690 (1997); Landgericht Bielefeld, 15O 201/90, 18 January 1991, reprinted in UNILEX; Landgericht Kassel, 11O 4261/94, 21 September 1995, reprinted in UNILEX; Handelsgericht des Kantons Aargau, 26 September 1997, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 78-80 (1998).

321. See Article 64(1)(b) CISG, supra note 295, which reads "(1) The seller may declare the contract avoided: (b) if the buyer does not, within the additional period of time fixed by the seller in accordance with paragraph (1) of Article 63, perform his obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed."

322. See Honnold, supra note 27, at 354-55; ENDERLEIN & MASKOW, supra note 80, at 245.

323. Article 63 CISG reads: "(1) The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations. (2) Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort to any remedy for breach of contract. However, the seller is not deprived thereby of any right he may have to claim damages for delay in performance."

324. Honnold, supra note 27, at 444.

325. Here, specifically, the time period is considered to be reasonable when good faith is being observed. See Article 7(1) CISG, supra note 23; Honnold, supra note 27, at 444.

326. Article 63(1) CISG, supra note 323.

327. Id.

328. See text accompanying note 325.

329. See Article 64(2) CISG, supra note 295.

330. See Article 64(2)(a)(b) CISG, supra note 295, which reads "(2) However, in cases where the buyer has paid the price, the seller loses the right to declare the contract avoided unless he does so: (a) in respect of late performance of the buyer, before the seller has become aware that performance has been rendered; or (b) in respect of any breach other than late performance by the buyer, within a reasonable time: (i) after the seller knew or ought to have known of the breach; or (ii) after the expiration of any additional period of time fixed the seller in accordance with paragraph (1) of article 63, or after the buyer has declared that he will not perform his obligations within such an additional period."

331. Honnold, supra note 27, at 444.

332. Id. Another exceptional factor can be the non satisfaction of an earlier contract, which allows for a future contract to be declared avoided within a reasonable period of time. See Cour d'appèl de Grenoble, 93/3275, 22 February 1995, reprinted in UNILEX, abstract in JOURNAL DU DROIT INTERNATIONAL 632 (1995), where the court stated that "attendu qu'en l'absence d'exécution satisfaissante du premier contrat, la société BRI PRODUCTION était fondée à rompre les relations contractuelles pour les opérations suivantes assorties des mêmes obligations . . . Que l'article 73, alinéa 2, de la convention de Vienne autorise en effet, dans les contrats à livraisons successives, une partie victim d'une contravention essentielle pour une livraison qui a de sérieuses raisons de penser que la méconnaissance des obligations se reproduira, de déclarer le contrat résolu pour l'avenir, si elle le fait dans un délai raissonable; que la réaction de BRI PRODUCTION, sans être brutale, a été faite dans un délai permettant à PAN AFRICAN de trouver un fournisseur de remplacement." Less extraordinary, but also applicable in this sense, is that the seller can declare the contract avoided when the buyer has not taken delivery of a large part of the order. See, Oberlandesgericht Hamm, 19U 97/91, 22 September 1992, reprinted in UNILEX, which stated that "[h]ierzu war sie nach Artikel 64 Abs. 1a berechtigt, denn die Nichtabnahme von mehr als der Hälfte der Gekauften Ware (116,6 von 200t) stellt eine wesentliche Vertragsverletzung dar."

333. Id.

334. See supra Chapter III, section 3.

335. See Koneru, supra note 34, at 115.

336. See Tuggey, supra note 8, at 542.

337. See supra Chapter III, section 3.1.

338. See supra Chapter III, section 3.3.

339. See Article 74 CISG, supra note 142, which reads: "Damages for breach of contract by one party consist of a sum equal to the loss, including the loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract." In this Chapter Articles 75-77 CISG will, for practical reasons, not be discussed.

340. See Article 78 CISG, which reads: "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under Article 74."

341. Arthur G. Murphey, Jr., Consequential Damages in Contracts for the International Sale of Goods and the Legacy of Hadley, 23 GEO. WASH. J. INT'L L.& ECON. 415, 455 (1989).

342. Article 74 CISG, supra note 142.

343. See Article 78 CISG, supra note 339, where is stated that "the other party" is entitled to interest.

344. See ENDERLEIN & MASKOW, supra note 80, at 234; infra Chapter V, section 2.1.

345. See Article 74 CISG, supra note 142. See e.g. Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft, SCH. 4366, 15 June 1994, reprinted in UNILEX, abstract in RECHT DER INTERNATIONALEN WIRTSCHAFT 590-91 (1995); Bundesgerichthof, VIII. Zivilsenat, VIII ZR 300/96, 25 June 1997, reprinted in UNILEX, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 85-86 (1998); Oberlandesgericht Düsseldorf, VI. Zivilsenat, 6U 152/95, 11 July 1996, reprinted in UNILEX, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 843 (1996)(the damage here consisted of interest which was charged on a loan, rendered to compensate the non payment of the purchase price); Oberlandesgericht Köln, XXII. Zivilsenat, 22U 4/96, 21 May 1996, reprinted in UNILEX; Oberlandesgericht München, VII. Zivilsenat, 7U 3771/97, 28 January 1998, citation to decision in RECHT DER INTERNATIONALEN WIRTSCHAFT 559-60 (1998); Landgericht Göttingen, III. Kammer FÜR Handelsachen, 3O 100/92, 19 November 1992, reprinted in UNILEX, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 446-47 (1995).

346. See JOPEPH M. LOOKOFSKY, CONSEQUENTIAL DAMAGES IN COMPARATIVE CONTEXT 268 (1989); ENDERLEIN & MASKOW, supra note 80, at 299. In case law the issue of full compensation has been specified further; it includes lost profits, see Schiedsgericht der Handelskammer Hamburg, 21 March 1996, reprinted in UNILEX, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 142-43 (1996); Amtsgericht Nordhorn, 3C 75/94, 14 June 1994, reprinted in UNILEX, abstract in DIRITTTO DEL COMMERCIO INTERNAZIONALE 626-28 (1996); it may include the attorney's fee, see Langericht Berlin, 99O 123/92, 30 September 1992, reprinted in UNILEX, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 444-45 (1995); Oberlandesgericht Düsseldorf, 17U 146/93, 14 January 1994, reprinted in UNILEX, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 454-55 (1995)(in this case also the loss caused by the devaluation of currency is discussed); Landgericht Berlin, 103O 70/92, 16 October 1992, unpublished; in general, it does not include the compensation of the collection costs of the amount due; see Oberlandesgericht Düsseldorf, 6U 32/93, 10 February 1994, reprinted in UNILEX, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 454-55 (1995); Landgericht Frankfurt am Main, 3/11 O 3/91, 16 September 1991, reprinted in Unilex, abstract in J.L & Com. 230-32 (1995), SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 662-63 (1993), and DIRITTO DEL COMMERCIO INTERNAZIONALE 635-36 (1992).

347. ENDERLEIN & MASKOW, supra note 80, at 299.

348. See Amy A. Kirby, Punitive Damages in Contract Actions: The Tension Between the United Nations Convention on Contracts for the International Sale of Goods and U.S. Law, 16 J.L.& COM. 215, 231 (1997); ENDERLEIN & MASKOW, supra note 80, at 299.

349. Kirby, supra note 348, at 231.

350. See Article 74 CISG, supra note 142; ENDERLEIN & MASKOW, supra note 80, at 300; Honnold, supra note 27, at 505. There are a few cases on the foreseeability element of Article 74 CISG; see e.g. Schiedsgericht der Handelskammer Hamburg 21 March 1996, reprinted in UNILEX, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 142-43 (1996); Delchi Carrier SpA v. Rotortex, 71 F.3d 1024 (2d. Cir. 1995).

351. See ENDERLEIN & MASKOW, supra note 80, at 301; Honnold, supra note 27, at 505-06. Also a US court has made reference to Hadley v. Baxendale, see supra Chapter III, section 4, where Delchi Carrier SpA v. Rotortex Corporation, 71 F.3d 1024 (2d Cir., 1995) is discussed.

352. For a discussion of this case in the light of the CISG, see Murphey, supra note 341; Franco Ferrari, Comparative Ruminations on the Foreseeability of Damages in Contract Law, 53 LA.L. REV. 1257 (1993).

353. Hadley v. Baxendale, 156 Eng. Rep. 145 (1854).

354. Id.

355. Murphey, supra note 341, at 430.

356. Id, citing Fuller and Perdue.

357. Murphey, supra note 341, at 434.

358. See supra Chapter III, section 3.1.

359. Hadley v. Baxendale, 156 Eng. Rep. 145 (1854).

360. See Article 78 CISG, supra note 339 reads: "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under Article 74."

361. See Honnold, supra note 27, at 504, where is stated that "Article 78 provides generally for interest on any "sum that is in arrears" from either party."

362. This cannot only be derived from the text of Article 78 CISG. See Honnold, supra note 27, at 524.

363. Honnold, supra note 27, at 524.

364. Id, at 525.

365. For a discussion of this problem, see Ferrari, supra note 19, at 472-78; Koneru, supra note 34, at 123-38.

366. See Volken, supra note 69, at 39.

367. See supra Chapter III, section 3.1.

368. See Koneru, supra note 34, at 123.

369. See Honnold, supra note 27, at 525, where the author also states that this "seems consistent with Article 7(2)`s invitation to settle unsolved questions "in conformity with the general principles" of the Convention."

370. Honnold, supra note 27, at 503. See e.g. Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien, SCH 4366, 15 June 1994, reprinted in UNILEX, which stated that, as "the interest rate was a matter governed but not expressly settled by CISG, it should be settled in conformity with the general principles on which the CISG is based (Art. 7(2) CISG). Referring to Arts. 78 and 74 CISG, the abitrator found that full compensation was one of the general principles underlying the CISG. It was also found that in relation between merchants it was expected that the seller, due to the delayed payment, would resort to bank credit at the interest rate commonly practiced in its own country with respect to the curency of payment . . . The arbitrator observed that the application of Art. 7.4.9 of the UNIDROIT Principles of International Commercial Law would lead to the same result. The interest rate awarded was the average prime rate in the seller's country (Austria) with respect to currencies of payment. (US Dollars & German DM)."(text from CLOUT abstract No. 93). The principle of full, and especially fair compensation was very well applied by Schiedsgericht der ungarischen Industrie- und Handelskammer Budapest, VB/94131, 5 December 1995, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 13-15 (1997). The arbitration court decided to apply the interest rate of the law of the debtor, as the same interest rate of the creditor (Hungarian) was unreasonably high (inflation rate was 20% and rising). The court stated that "dass es keine Sinne mache und ungerecht wäre, eine in der Währung eines Staates ausgedrückte Summe nach den Vorschriften eines anderen Staates zu verzinsen, wenn der eine der beiden Staaten ein Hartwährungsstaat sei und im anderen eine grosse Inflation herrsche. Im vorliegenden Fall traf dies mit einer Inflationsrate von durchschnitlich 3 Prozent Österreich und einer solchen von über 20 Prozent in Ungarn zu."

371. See Honnold, supra note 27, at 526, stating that "[t]he mandate of Article 7(1) to construe the Convention to promote "uniformity in its application requires us to seek a principle governing the scope of Article 78 that can be considered as a basis for uniform application of the Convention."

372. See Ferrari, supra note 19, at 477. See e.g. Oberlandesgericht Düsseldorf, 6U 119/93, 10 February 1994, reprinted in UNILEX, abstract in DIRITTO DEL COMMERCIO INTERNAZIONALE 230 (1995), where the court stated that "Art. 78 bestimmt, daß der Verkäufer Anspruch auf Zinsen hat, wenn der Käufer es versäumt, den Kaufpreis zu zahlen. Die Höhe des Zinssatzes ist dagegen nicht geregelt. Sie richtet sich nach dem jeweilige nationalen Recht, das durch die Kollisionsnormen bestimmt wird." (eventually German law was declared applicable to the contract, and accordingly, the correct German rate was applied.) Accord, Oberlandesgericht Düsseldorf, 6U 32/93, 10 February 1994, reprinted in UNILEX, abstracts in DIRITTO DEL COMMERCIO INTERNAZIONALE 454-55 (1995), RECHT DER INTERNATIONALEN WIRTSCHAFT 53-55 (1995); Oberlandesgericht Frankfurt am Main, 13U 51/93, 20 April 1994, reprinted in UNILEX, abstracts in DIRITTO DEL COMMERCIO INTERNAZIONALE 232 (1995), RECHT DER INTERNATIONALEN WIRTSCHAFT 593-95 (1994); Oberlandesgericht Koblenz, II. Zivilsenat, 2U 31/96, 31 January 1997, reprinted in UNILEX; Oberlandesgericht Rostock, I. Zivilsenat, 1U 247/94, 27 July 1995, reprinted in UNILEX; Landgericht München I, 10 HKO 32750/94, 20 March 1995, reprinted in UNILEX, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 47 (1996)(cited as 20 March 1994); Landgericht Saarbrücken, 9O 40884/89, 23 March 1992, reprinted in UNILEX; Amtsgericht Alsfeld, 31C 534/94, 12 May 1995, reprinted in UNILEX, abstract in NEUE JURISTISCHE WOCHENSCHRIFT RECHTSPRECHUNGS-REPORT ZIVILRECHT 120-21 (1996).

373. See Hans Stoll, Inhalt und Grenzen der Schadenersatzpflicht Sowie Befreiung von der Haftung im UN-Kaufrecht im Vergleich zu EKG und BGB, in EINHEITLICHES KAUFRECHT UND NATIONALES OBLIGATIONENRECHT 257, 279-80 (Peter Schlechtriem ed., 1987); Ferrari, supra note 19, at 476. See also Landgericht Stuttgart, 31 KfH O97/89, 31 August 1989, reprinted in UNILEX, abstracts in UNIFORM LAW REVIEW 853-54 (1989-2), 14 J.L. & COM 225-26 (1995), SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 658-59 (1993)(cited as 6 September 1989), DIRITTO DEL COMMERCIO INTERNAZIONALE 634-35 (1992), which stated that "[d]ie Zinshöhe ist allerdings nicht festgesetzt und in Einzielheiten umstritten. Es ist angebracht auf das nationale Recht des Gäubigers zurückzugreifen, zumal sich die Folgen der Nichterfüllung der Zahlungspflichtung dort auswirken und der Kaufpreis in italienischer Währung zu entrichten war. Demgemäß hat der Schuldner auch das Risiko zu tragen, eine in fremder Währung zu zahlende Geldschuld nach den dortigen Sätzen zu verzinsen."

374. See Koneru, supra note 34, at 134-36.

375. Id, at 136-37. See, for instance, Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft -- Wien, SCH 4366, 15 June 1994, reprinted in UNILEX, abstract in CLOUT No. 94, where the court stated that the applicable rate was detrmined to be "the average prime rate in the buyer's country (Germany) with respect to the currency of payment (US Dollars)."; ICC, International Court of Arbitration, 6653/1993, reprinted in UNILEX, abstract in CLOUT no. 103, which stated that the interest rate should be identified with the "rate . . . commonly applied to Eurodollar settlements between operators in international trade, i.e., the one year London International Bank Offered Rate (LIBOR)."

376. Id, at 137-38.

377. See the abritration award briefly discussed in note 370, Schiedsgericht der ungarischen Industrie- und Handelskammer Budapest, VB/94131, 5 December 1995, abstract in SCHWEIZERISCHE ZEITSCHRIFT FÜR INTERNATIONALES UND EUROPÄISCHES RECHT 13-15 (1997). This is also is accordance with the thought that punitive damages cannot be awarded under Article 74 CISG. See, briefly, Kirby, supra note 348.

378. See supra Chapter II, section 2.

379. The other performance remedies for breach of contract by the seller, listed in Articles 46(2) and 46(3) CISG are not limited by Article 28 CISG. See Honnold, supra note 27, at 365-66. It was intended to grant specific rights to the buyer by drafting those provisions, and they do not put the forum in the same position as Article 46(1) or 62 CISG does.

380. Hadley v. Baxendale, 156 Eng. Rep. 145 (1854).

381. See Chapter VI, section 2.1.


Pace Law School Institute of International Commercial Law - Last updated September 24, 1998
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