Go to Database Directory || Go to Legislative History Search Form

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

[...]

CISG
number
Art. 77

Article 59

501. The text of article 59, as adopted by the Working Group on the International Sale of Goods, is as follows:

"The party who relies on a breach of contract must adopt such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to adopt such measures, the party in breach may claim a reduction in the damages in the amount which should have been mitigated." [page 60]

Right to recover the price

502. The Committee considered a proposal that the second sentence of article 59 read as follows (the proposed additional words are in italics):

"If he fails to adopt such measures, the party in breach may claim a reduction in the damages, including any claim for the price, in the amount which should have been mitigated."

503. In support of this proposal it was stated if the seller was in breach, the buyer's duty to mitigate the damages might encompass the purchase of substitute goods. However, under the present text of article 59 it would appear that if the buyer was in breach, the seller could maintain an action for the price even if he could have sold the goods elsewhere. The proposal was designed to ensure that in such cases the seller's right of recovery would be limited to the amount recoverable under article 57.

504. However, there was considerable opposition to this proposal which was considered to permit a defaulting buyer to prevent payment of the purchase price by showing that the seller could have sold goods elsewhere. This would destroy the distinction between an action for the price and an action for damages, a distinction which was fundamental in many legal systems. The price was agreed upon by the parties and if the contract was still in existence, the seller must have the right to sue for the price. There was no duty on the seller to seek, or accept, from a third party a price lower than that agreed upon with the buyer even if he might then recover the difference from the buyer.

505. The Committee, after deliberation, decided not to retain the proposal extending the principle of mitigation to actions for the price.

Duty to notify

506. The Committee did not retain a proposal that article 59 specifically provide that part of the duty to mitigate should be that the injured party give notice of the breach to the party in breach, within a reasonable time of its occurrence.

Decision

507. The Committee concludes that no change of substance is called for in respect of article 59. It therefore recommends that the Commission should adopt the following text:

"Article 59

"The party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount which should have been mitigated." [page 61]

[...]

Go to entire text of Report of the 1977 UNCITRAL Committee of the Whole I relating to draft Convention on International Sale of Goods
Pace Law School Institute of International Commercial Law - Last updated July 27, 2007
Comments/Contributions