Cite as Will, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 347-358. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision
(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 remedy which is inconsistent with performance by the seller.
(3) A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph, that the buyer make known his decision.
(4) A request or notice by the seller under paragraph (2) or (3) of this article is not effective unless received by the buyer.
1. History of the provision
1.1. - Article 48 contains the seller's right to cure, available not before the date of delivery (see Article 37) but thereafter. «Cure» in this context means that the seller may perform any of the acts mentioned in Article 37 and that, in addition, he may deliver when delivery is overdue. Conditions, exercise and effects of that right upon both parties are set out in detail.
1.2. - The right to cure is not new in international trade and had been recognized, in some form or other, by national legislations of several countries (Switzerland, Sweden, United States [page 347] and Czechoslovakia, among others), before it was taken up by the 1956 Draft and appeared in ULIS as Article 44(1). However, paragraphs (2) to (4) of the present article; dealing with the good faith obligations of the buyer, while the seller attempts to cure, are a novelty of the Convention. These provisions first appeared during the Commission's preparatory work (see Yearbook, IV (1973), 70) and, after some remodelling, were taken over in the UNCITRAL Draft Convention. Proposals to delete them as being superfluous were rejected at the Vienna Conference (see Official Records, II, 352-353).
1.3. - The Vienna Conference did, however, make one change that might draw the attention of practitioners and scholars alike. It not only deleted the opening phrase «[u]nless the buyer has declared the contract avoided ...», but replaced it by the enigmatic cross-reference «[s]ubject to Article 49 ... ». This touches the relationship of cure and avoidance. Under ULIS and in the preparatory works avoidance by the buyer prevailed over the seller's right to cure. This is clearly reflected by the «unless» clause. Shortly before the UNCITRAL Draft Convention came out, doubts emerged as to whether this construction could still be regarded as balancing the interests of both parties (see Yearbook, VIII (1977), 154), since the buyer's right to avoid the contract, as compared to that under ULIS, had been enlarged considerably (see commentary on Article 49, infra, § 1.2.1.). Under these circumstances some feared that the seller's right to cure might be frustrated; others disagreed and preferred maintaining the priority of avoidance despite its wider scope (see Official Records, II, 341-344; 351-352).
Since opinions remained divided, the present cross-reference to Article 49 was adopted to embrace both of the conflicting provisions (see Official Records, I, 115). The relationship of cure and avoidance thus remains open to interpretation (see Official Records, II, 352).
2. Meaning and purpose of the provision
2.1. - While paragraph (1) establishes the principle of the seller's right to remedy, at his expense and even after the [page 348] delivery date, any failure to perform any of his obligations («right to cure»), paragraphs (2) to (4) extend this right somewhat further to certain instances where the buyer's cooperation is necessary.
2.1.1. - The so-called right to cure is one of the most difficult points to handle in the Convention and gives rise to problems concerning its scope as well as its application.
18.104.22.168. - The seller's right to cure depends on two conditions: that the buyer has not rightfully avoided the contract and that he will not suffer unreasonable inconvenience.
22.214.171.124.1. - The condition of non-avoidance raises the fundamental issue of whether avoidance or cure should prevail. This question cannot be answered with certainty, since the words «subject to Article 49» are no clearer than the former «unless» clause which they replaced. The relationship between Article 48 and 49 remains unsettled. Here the interests of buyers and sellers clash so strongly that it seems almost impossible to find a proper balance. In fact, the issue has long been one of the most controversial in international sales law.
An example discussed at the Vienna Conference illustrates the controversy: Seller delivers a machine in time and the machine, once installed at the Buyer's factory, fails to work, so that a fundamental breach situation arises (Article 25). The question is how to interpret «subject to Article 49».
The construction most favourable to Buyer would be to let him avoid the contract immediately under Article 49(1)(a) without paying the slightest attention to Seller's ability and willingness to replace or repair the machine, even if that ability and willingness have been expressly confirmed, as under Article 49(3). The seller's right to cure would thus cease to exist at the very moment the buyer declared the contract avoided. By deciding the fate of the contract the buyer equally determines the seller's right to cure. Such a solution can hardly be tenable. It would put the seller at the buyer's mercy and allow the buyer to speculate without observing his duty to mitigate losses (Article 77).
The construction most favourable to Seller would be to prevent Buyer from avoiding the contract whenever cure is not [page 349] clearly excluded (as for example it would be in cases of perishable goods, bankruptcy, embargo, etc.). The buyer would be prevented from avoiding the contract until the seller makes known that he is not able or willing to cure, or until his offer to replace or repair the machine can no longer reasonably be expected to be in force. What is the consequence? The buyer finds himself completely paralysed. He has to wait and see and lose time before he can take any new action. He has to go out of his way, making efforts to investigate whether he is likely to have a real chance of receiving an offer to cure. He is put at the mercy of a distant seller who may or may not be communicative or cooperative. Such an interpretation would not sufficiently take into account the necessities of international trade or the obligation to observe good faith (Article 7).
A more convincing solution lies somewhere in between these two extremes, holding both the buyer's and the seller's interests at a fair balance. «Will the seller cure?» asks the buyer. The answer to this question has been suggested to be of guidance in the search for a fair solution and indeed it is. But it cannot be emphasized strongly enough that everything depends on the addressee.
If the question were to be addressed to the seller, any uncertainty and its consequences would be at the risk of the asking buyer, until the answer arrives. The buyer must not «hastily» declare the contract avoided «where cure is feasible and where an offer of cure can be expected»; so he is practically denied the right of avoidance «until one [who?] knows the answer to this question: Will the seller cure?» (HONNOLD, Uniform Law, 312). True, the buyer is not completely paralysed, nor entirely at the seller's mercy. He may liberate himself not only where the cure is a priori excluded, but also where the cure remains uncertain, that is, where an offer to cure cannot at that point be expected. The «can be expected» test, however, fails to indicate the degree of such expectations, nor does it reveal whether -- and if so, how actively -- the buyer has to explore their true value. To prove or disprove the existence of so vague a notion appears discouragingly difficult.
But even if one assumes all those difficulties overcome and every doubt removed: from the moment in which an offer to cure can be expected the buyer loses his freedom of action, and is [page 350] doomed to wait as long as those expectations remain. Should they turn out to be erroneous, the buyer, victim already of a fundamental breach of contract, will have lost still more time and opportunities to procure conforming goods. It is doubtful whether it is really fair to load the burden of all that uncertainty and vain expectation upon the buyer.
Part of the burden can be shifted to the seller if one conceives that same question, «Will the seller cure?», as one which the buyer addresses to himself and answers immediately, whenever he considers avoiding the contract. When at that moment a positive answer can be given on the basis of actual knowledge (good experience with the seller, an ad hoc commitment, the underlying general conditions of sale) and only then may the buyer be expected to refrain from avoiding for a while. In this situation, all he need await is the cure, not merely an offer to cure. Again, cure may turn out to be a vain hope. Undoubtedly, uncertainty and erroneous expectations can never be completely eliminated, they can only be limited and their burden distributed as fairly as possible between buyer and seller. To make this distribution in the manner suggested here seems a fairer solution for two reasons. First, the buyer who has already suffered the seller's fundamental breach of contract should not, in addition, be burdened with the entire range of uncertainties as to the same seller's ability and willingness to cure. The buyer already bears sufficient risk that the cure may be prolonged or even unsuccessful. Accordingly the party obliged to cure should bear the uncertainty about whether the cure will be allowed. Second, leaving the answer to the buyer reduces litigation. When the buyer's decision is based on knowledge stemming from prior experience with the seller, on a special notice or on the general conditions of the contract -- all objective elements -- this will give rise to much less conflict and can more easily be proved than more or less subjective expectations as to a forthcoming offer to cure.
A solution along the lines suggested here serves both parties. It frees the buyer and saves him time as long as it seems reasonable for him not to expect offers to cure. Where, however, serious efforts to cure are in sight, the seller will be protected against premature or arbitrary avoidance of the contract. Some extra effort of communication on his part may be needed [page 351] beforehand, especially when he is a newcomer to the business, but that appears to be neither unusual nor unfair in international trade.
Regardless of the construction favoured, a conceptual difficulty remains with regard to the relationship between the notion of fundamental breach and the right to cure: is any fundamental breach necessarily excluded as soon as and as long as the seller may remedy? Or does the right to cure merely suspend an existing right of the buyer to avoid for a fundamental breach? Since the question is a theoretical one which has no bearing upon the proper balancing of interests in practice, it will be discussed later (see § 3.2., infra).
126.96.36.199.2. - The seller's right to cure depends on a second condition. Namely, the seller must be able to cure without causing the buyer unreasonable inconvenience. The wording of Article 48(1) seems to suggest three different conditions (delay, inconvenience, and uncertainty of reimbursement), but in fact inconvenience is the only condition. Delay and uncertainty of reimbursement are but the two most common examples of inconvenience to the buyer.
Unreasonable inconvenience is a catchall notion below the level of fundamental breach. To consult legal dictionaries for the precise meaning of «inconvenience» is a futile exercise. The term is novel in the legal language of most countries. And the adjective «unreasonable» does not really add precision to the concept, though it is said to introduce an objective element in the light of Article 7 of the Convention. What constitutes «unreasonable inconvenience» cannot be finally determined in general terms. It varies from case to case, depending on the circumstances.
The first prominent example is unreasonable delay. The seller must be able to cure without unreasonable delay. There are three kinds of delay caused by curing: a delay which constitutes a fundamental breach of contract and is dealt with by Article 49(1)(a); a delay which does not amount to a fundamental breach but still appears unreasonable; and finally a delay which is not unreasonable. Only the last opens the way for the right to cure. Again, unreasonableness depends on the circumstances of each case, including the nature of the goods and their intended use. [page 352]
The second prominent example concerns expenses. Unlike Article 44(1) of ULIS and Article 35 of this Convention («unreasonable expense»), the text refers to uncertainty of reimbursement by the seller of expenses advanced by the buyer. The amount of the expense is not considered. However small the amount, what counts is the uncertainty of its recovery. Whether the uncertainty needs to be qualified, that is, whether it must constitute unreasonable uncertainty, cannot be determined from the wording. The Secretariat's Commentary seems to favour such qualification (Official Records, I, 40), but without attempting any justification. The question needs no answer if one takes this as a mere example of unreasonable inconvenience. The test would seem not to be whether there is unreasonable uncertainty but rather whether the uncertainty creates unreasonable inconvenience.
The uncertainty concerns not only the danger of bankruptcy or insolvency, but also any serious doubt as to the ability or even the willingness of the seller to reimburse expenditures when due. The seller must be able to cure without giving rise to any uncertainty in this respect.
188.8.131.52. - If all conditions are fulfilled, how the seller will exercise his right to cure depends on the type of his failure to perform and on the nature of the goods. Usually he will cure by repairing or replacing deficient goods or by delivering missing quantities. Whether the latter can be regarded as «cure» seems to be a theoretical question without practical implications.
Repair and replacement should be considered to remedy the seller's failure only when they fundamentally satisfy the buyer as being conforming in the sense of Article 35. Slight variations must be tolerated within the framework of a reasonable and flexible approach as used under Article 46.
Where the goods do not, or not all of them, arrive in time, may the delay in delivery be cured, and if so, how? True, time that has passed cannot be recalled (HONNOLD, Uniform Law, 310). But, the question here is not one of «curing a delay», which indeed is impossible. What has to be cured, and certainly can, is the non-performance of the obligation to deliver. Where the delivery date is not essential and therefore no fundamental breach exists, belated delivery effectively and wholly remedies the grievance. [page 353]
2.2. - Where the conditions of paragraph (1) are not met, paragraphs (2) to (4) open a second door for the seller willing to cure. Their underlying idea is that the buyer deserves protection only when he is cooperative and gives the seller a fair chance. The seller thus may offer cure, indicating dates and, if the buyer fails to react, perform within the time he indicated; the silent buyer will be barred from invoking either unreasonable delay or inconvenience and may not avoid the contract nor reduce the price he must accept performance.
This presupposes certain conditions at both ends of the communication line.
2.2.1. - The seller must send to the buyer either a request (paragraph (2)) or a notice (paragraph (3)), both of which are effective only if received by the buyer (paragraph (4)). A request must contain two elements: (a) the question whether the buyer is willing to accept late performance, and (b) a specified period of time. But such request may and often will be replaced by a simple notice announcing late performance within a specified period of time; the notice is deemed to carry the inquiry as to the buyer's willingness.
Either request or notice are ineffective unless received by the buyer (see Article 24). This is one of the exceptions to the dispatch principle as laid down in Article 27, involving a communication by the party in breach of contract. The risk of error, delay or loss should not be an additional burden on the aggrieved party.
Any doubt as to the length of time must be resolved under the rule of paragraph (1). This is, cure can be considered a valid remedy only if it comes «without unreasonable delay». This sets the maximum limit. The minimum limit would have to include the time necessary for communicating forth and back with the buyer.
2.2.2. - Silence on the part of the buyer is the second condition. The buyer must have failed to respond to the request within a reasonable time. Of course, affirmatively accepting late performance would serve the same function.
«Respond» means that he dispatched his reply by appropriate means of communication. In contrast to the seller's [page 354] notice, this communication need not reach the addressee to be effective (see Article 27).
«Reasonable», as always, depends on the circumstances. But the ultimate limit is beyond any doubt. The seller must be given enough leeway to perform within the time he himself has indicated. Where the period of time fixed is very short, the buyer has to decide quickly if instead of accepting late performance he prefers to resort to one of his remedies. This is true to the extent that the buyer depends on the seller's time indication. The seller may reduce the buyer's time of reaction to a minimum by fixing a minimal amount of time for late performance and the exchange of messages. But that does not seem to be unjust or against the spirit of the Convention. In fact, it forces buyers to react as quickly as possible and thereby keep sellers' losses down. Where the buyer reacts too slowly, cure is not an unfair penalty because it serves to maintain the contract, one of the Convention's objectives.
2.2.3. - The right to cure, as long as it exists, bars the buyer from exercising his remedies. He «may not, during that period of time, resort to any remedy which is inconsistent with performance by the seller». Inconsistent remedies, as in Article 46(1), are avoidance and price reduction (see Article 50, second sentence).
3. Problems concerning the provision
3.1. - There are two problems concerning this provision which may be discussed here. The first problem, raised already at the Vienna Conference (see Official Records, II, 344, 352), is not purely theoretical. It concerns how to solve the conflict when the buyer requires substitute goods under Article 46(2) and the seller offers repair under Article 48.
To let the buyer prevail would be too simple an answer. Again, the seller's interests too have to be taken into account. But should they prevail?
3.1.1. - If the seller can meet the buyer's expectations to the same degree by repairing as well as by delivering substitute [page 355] goods, then the decisive consideration will be costs. In choosing his remedy the buyer must observe the duty to mitigate losses (Article 77). Consequently, as long as the costs, on either side, of disposing of the goods delivered and replacing them are higher than those of repair, the buyer cannot claim substitute goods. He will have to bear the inconvenience of repair, even considerable inconvenience, if it is not unreasonable (see Official Records, II, 334).
3.1.2. - The buyer's choice seems even more reduced when using a systematic approach. Requiring substitute goods presupposes a fundamental breach, just as does avoiding. But, avoidance is barred by an offer to cure. Is the claim for substitute goods equally barred by an offer to cure? One should think so, since by using either one of the remedies the buyer triggers off similar economic consequences for the seller. Hence the same legal consequences should apply. It would be inconsistent, if an offer to cure suspended one remedy and not the other.
In the last analysis it looks as if it is the seller who, by offering or not offering repair, makes the final decision as to how the buyer will realize his right to performance. Buyers will thus have to put up with a favor reparationis.
Should the reverse situation occur, the buyer requiring repair while the seller insists on delivering substitute goods, the conflict may well have to be solved in favorem substitutionis. The key lies in Article 46(3), allowing the buyer to request repair until and unless repair proves unreasonable under the circumstances. A serious offer to cure by replacing the non-conforming goods already delivered is a circumstance which would render the buyer's request unreasonable.
3.2. - The second problem, probably of little practical consequence, was identified within UNCITRAL (see Yearbook, VIII (1977), 31-32), but no longer discussed at the Vienna Conference. It concerns the relationship between the right to cure and the notion of fundamental breach. Specifically, does an offer to cure prevent a breach from being fundamental?
3.2.1. - It has been suggested that the question of whether a breach is fundamental should be decided in the light of all the [page 356] circumstances including the effect of a rightful offer to cure (see HONNOLD, Uniform Law, 214-312). If this construction were correct, it would render meaningless the buyer's right to require substitute goods under Article 46(2). For as soon as «cure is feasible and ... an offer of cure can be expected, one cannot conclude that the breach is "fundamental"» (HONNOLD, Uniform Law, 312; but see 301: «buyer may require the seller to "repair" even when the breach is not fundamental»). Accordingly the buyer will be barred not only from avoiding the contract under Article 49(1)(a), which makes sense, but will be barred also from requiring performance by replacement under Article 46(2). The latter makes less sense, since the right to claim substitute goods would be restricted to the few situations where repair is impossible. Such a reduction was certainly not in the mind of the drafters, who had originally dedicated all of Article 46 to the right to require substitute goods (see Secretariat's Commentary, Official Records, I, 38-39; see also Official Records, II, 332-333).
3.2.2. - Another argument against this approach is that it would contribute to the further weakening of the notion of fundamental breach. The element to be taken into consideration is not very precise: is it a rightful offer received, which suddenly converts an otherwise fundamental breach into a non-fundamental one? Is it reliable news of an offer which was dispatched? Is it a mere expectancy?
The lack of precision leads to burdening the buyer even more. The buyer already bears the risk of evaluating the degree of non-conformity. Suppose that yesterday he concluded that a certain breach was fundamental; today he is awaiting the seller's offer to cure -- the very breach has changed its nature and become a non-fundamental one; and if tomorrow all hope vanishes -- the breach is automatically re-converted into a fundamental breach. Fundamental -- non-fundamental -- from day to day does not allow for any legal certainty in international transactions.
Is there any need to resort to so unconvincing a construction in order to achieve the goal pursued, namely to protect the seller's right to cure? The same goal is just as well achieved when the fundamental breach is determined by lack of conformity [page 357] only (without having regard to cure), and the existing right to avoid is merely suspended when a rightful offer to cure arrives. The same theory of a remedy merely suspended should apply under Article 46(2). [page 358]