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Source: Doc. B(1) Reproduced from UNCITRAL Yearbook VIII (1977), A/32/17, pages 25-64

EXCERPT FROM ANNEX I

Report of Committee of the Whole I relating to the
draft Convention on the International Sale of Goods

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CISG
number
Art. 50

Article 31

298. The text of article 31 as adopted by the Working Group on the International Sale of Goods is as follows:

"If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may declare the price to be reduced in the same proportion as the value of the goods at the time of the conclusion of the contract has been diminished because of the nonconformity."

Relationship with seller's right to cure

299. In accordance with its decision in relation to article 29 (see para. 277 above), the Committee was agreed that the declaration of reduction of the price was subject to the seller's right to cure defects under article 29 and that, therefore, a declaration of price reduction would have no effect if the seller subsequently cured the defect pursuant to article 29.

Calculation of diminished value

300. The Committee decided to redraft the provision to make it clear that the proportion by which the price was to be reduced is the same proportion as that existing between the value that the goods actually delivered would have had at the time of the conclusion of the contract and the value that conforming goods would have had at that time.

Unilateral reduction of the price

301. The view was expressed by several representatives that article 31, like article 30, improperly granted the buyer unilateral [page 46] power to effect the remedy in question, in this case reduction of the price. It was stated that once the buyer had declared a reduction of the price, the only question which might come before a court was the propriety of the amount by which the price was reduced.

302. Under another view, a court or tribunal would also have the power to review whether the fact of a price reduction was justified because of, for example, a cure of the lack of conformity by the seller,

Decision

303. The Committee concludes that no change in substance is called for in respect of this article. It therefore recommends that the Commission should adopt the following text, now renumbered as article 32:

"Article 32

"If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may declare the price to be reduced in the same proportion as the value that the goods actually delivered would have had at the time of the conclusion of the contract 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 30 or if he is not allowed by the buyer to remedy that failure in accordance with that article, the buyer's declaration of reduction of the price is of no effect." [page 47]

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Pace Law School Institute of International Commercial Law - Last updated July 25, 2007
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