[...]

CISG number

Art. 48

269. The text of article 29 as adopted by the Working Group on the International Sale of Goods is as follows:

Relationship of seller's right to cure with buyer's right to claim damages

270. The Committee decided to request the Drafting Committee to include in both article 21 and this article a reference to the fact that even though the seller cures any failure to perform his obligations the buyer still retains any right to claim damages as provided in article 55.

Paragraph (1)

Relationship of seller's right to cure with other remedies of buyer

271. The Committee considered several proposals which sought to clarify the relationship of the seller's right to remedy any failure to perform his obligations with the buyer's remedies, notably, the buyer's right to declare the contract avoided and his right to declare a reduction in the price.

272. These proposals were as follows:

273. The central issue in discussing these proposals was whether the buyer may preclude the seller from curing any failure to perform his obligations where the cure can be effected without such delay as would amount to a fundamental breach and without causing the buyer unreasonable inconvenience or unreasonable expense. This issue was discussed in the context of a defect in the goods which, in the absence of repair, was so serious as to constitute a fundamental breach but where the delay in remedying that defect would not constitute a fundamental breach and would not even cause the buyer unreasonable inconvenience or unreasonable expense.

274. One view was that the seller's right to cure should take precedence over the buyer's right to declare the contract avoided or to declare a reduction in the price. It was stated that this rule would promote the upholding of contracts and prevent the needless expense to the seller of avoidance or price reduction where the defect could be quickly cured. The buyer would be protected by the fact that the seller's right would only operate where the cure could be effected without such delay as would constitute a fundamental breach and only where the cure did not cause the buyer unreasonable inconvenience or unreasonable expense. In addition the seller would have to compensate the buyer for all expenses suffered by him because of the exercise of the seller's right to cure.

275. Under another view if the defect could be cured easily there would be no fundamental breach of the contract since the notion of fundamental breach must be considered both in the light of the defect itself and in the light of the possibility for cure. However, it was pointed out this result would not be evident to many common law jurisdictions if the words "unless the buyer has declared the contract avoided in accordance with article 30" were retained in article 29(1).

276. There was considerable opposition in the Committee to the idea that the buyer's right to declare the contract avoided could be affected by an offer to cure the defect. The seller was in breach and any possibility to cure was a privilege which depended upon the consent of the buyer who had the right to declare the contract avoided.

277. There was substantial support for the proposition that the buyer's right to declare a reduction in the price was subject to the seller's right to cure provided that the seller bore all expenses of such cure. The Committee accordingly decided to accept this principle and requested the Drafting Group to formulate appropriate language.

278. The Committee then considered the following proposals which had been submitted in the light of its deliberations:

(i) That article 29(1) read as follows:

(ii) That article 29(1) read as follows:

279. It was stated in support of both of these proposals that the buyer would not bear any expenses caused by the exercise of the seller's right to cure and since the buyer would not even suffer any "unreasonable inconvenience" it was reasonable to compel the buyer to accept the cure rather than declare the contract avoided.

280. In support of the second proposal (para. 278 (ii) above), it was stated that making the exercise of the seller's right to cure subject to not causing "any uncertainty in reimbursement by the seller of expenses advanced by the buyer" would further protect the buyer and ensure an equitable distribution of rights between the parties.

281. In opposition to these proposals, it was argued that as the seller was in breach, any right to cure should be subject to the cure not causing any expense or unreasonable inconvenience to the buyer. In addition, the proposals did not make it clear that the buyer has the right to any consequential damages in addition to expenses caused by the cure.

282. Opposition to the proposals was also based on the ground that questions of reimbursement for damages should be included among the provisions on damages rather than in a provision dealing with the seller's right to cure.

283. The second proposal (para. 278 (ii) above) was also opposed on the grounds that it was too detailed for inclusion in a Convention which dealt with general matters of principle.

284. The Committee, after considerable deliberation, decided to adopt in principle the text of the second proposal set out in paragraph 278 (ii) above.

285. A representative stated that in his view article 29(1) could not be concerned with a breach of contract in relation to the time of performance.

Paragraph (2)

286. The Committee adopted a proposal that the seller in breach bear the risk of transmission of a request to the buyer whether he would accept performance. However, the general rule in article 10 should apply to the reply of the buyer.

Paragraphs (2) and (3)

287. The Committee retained a proposal to delete the words "or, if no time is indicated, within a reasonable time" from paragraph (2) and to delete the words "or within a reasonable period of time" from paragraph (3). This decision reflected the generally accepted notion that a seller in breach who requests whether the buyer will accept performance, but does not indicate to the buyer when that performance can be expected, can draw no conclusions, nor derive any rights, from the failure of the buyer to reply.

Definition of fundamental breach

288. The Committee reconsidered the definition of fundamental breach contained in article 9 in light of the discussion on the relationship between the seller's right to cure under article 29(1) and the buyer's right to declare the contract avoided under article 30(1)(a) because of the existence of a fundamental breach of contract by the seller. This reconsideration is discussed at paragraphs 93 to 95 above.

Decision

289. The Committee adopted in principle the text set out in paragraph 278 (ii) above. It also approved in principle article 29(2) and article 29(3) with deletion of the words "or, if no time is indicated, within a reasonable time" from article 29(2) and deletion of the words "or within a reasonable period of time" from article 29(3). An additional paragraph was added to reflect the fact that the seller bears the risk in transmission of a request to the buyer whether he will accept performance. Accordingly the Committee recommends that the Commission should adopt the following text, now renumbered as article 30:

"Article 30

"(1) Unless the buyer has declared the contract avoided in accordance with article 31, 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 such delay as will amount to a fundamental breach of contract and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. The buyer retains any right to claim damages as provided for in this Convention.
"(2) If the seller requests the buyer to make known [page 45] 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 paragraph (2) of this article, that the buyer make known his decision.
"(4) A request or notice by the seller under paragraphs (2) and (3) of this article is not effective unless received by the buyer."

[...]