TEXT OF ARTICLE 62
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.
OUTLINE OF ISSUES
Reproduced with permission of UNCITRAL
62A Seller may compel performance of any of buyer's obligations: 62A1 Unless seller has exercised inconsistent remedy 62A11 For example, avoidance of contract (see art. 64) 62B Exceptions to remedy to compel performance 62B1 Law of forum (art. 28)
62B2 Seller's obligation to dispose of goods: arts. 85 and 88(2) DESCRIPTORS
Specific performance
CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES
Presented below is a composite list of Art. 62 cases reporting these UNCITRAL Digest cases and other Art. 62 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 15 July 2003 citation reported below. Cases are coded to the UNCITRAL Thesaurus.
English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars to the extent available. There are scholars who believe that there are circumstances in which the UNIDROIT Principles of International Commercial Contracts may be used to interpret or supplement this Article of the CISG. See match-up of this Article with counterpart provisions of the Principles and commentary on this subject. To the extent this reasoning fits, cases on the counterpart provisions of the UNIDROIT Principles may be relevant. To the extent available, such cases may be found on the Unilex website. Serbia 28 January 2009 Foreign Trade Court of Arbitration, Serbian Chamber of Commerce (Medicaments case) 62A [English text]
Slovak Republic 22 May 2008 District Court Bratislava (F.E.G.H.C v. T S.r.o.) [translation available]
Germany 14 February 2008 Oberlandesgericht [Appellate Court] Karlsruhe (Antique Jaguar sport car case) [translation available]
Slovak Republic 7 March 2008 District Court Banska Bystrica (Fruit and vegetables case) [translation available]
Germany 14 January 2008 Oberlandesgericht [Appellate Court] Köln (Shoes case)
Hungary 22 November 2007 Judicial Board of Szeged [Appellate Court] (Clothing case) [translation available]
Slovak Republic 7 November 2007 District Court Bratislava [translation available]
Germany 2 July 2007 Oberlandesgericht [Appellate Court] Köln (Cutter head case)
Hungary 6 June 2007 Congrád County Court (Clothing case) [translation available]
Ukraine 13 April 2007 Commercial Court of Donetz Region (Crucible press case) [translation available]
Russia 29 December 2006 Arbitration Award 54/2006 (Equipment case) [translation available]
Russia 15 November 2006 Arbitration Award 30/2006
Germany 23 October 2006 Landgericht [District Court] Bamberg (Plants case) [translation available]
Germany 19 October 2006 Oberlandesgericht [Appellate Court] München (Auto case) 62A [translation available]
Germany 29 September 2006 Landgericht [District Court] Hof (Twine case) [translation available]
China 20 September 2006 CIETAC Arbitration Award [CISG/2006/02] (Welding machine case) [translation available] Russia 24 July 2006 Arbitration Award 123/2005
Slovak Republic 23 June 2006 Regional Court Nitra (Raw material for women's coats case) [translation available]
China June 2006 CIETAC Arbitration Award [CISG 2006/07] (Concentrated fruit juice case) [translation available]
Switzerland 12 May 2006 Cour de justice [Appellate Court] Genève (Office furniture case) [translation available]
Russia 7 April 2006 Arbitration Award 20/2005 [translation in process]
Germany 3 April 2006 Oberlandesgericht [Appellate Court] Köln (Strawberry plants case) [translation available]
Russia 7 March 2006 Arbitration Award 37/2005 [translation in process]
Ukraine 15 February 2006 Arbitration Award (Coal case) [translation available]
Russia 13 February 2006 Arbitration Award 102/2005 [translation available]
Russia 27 January 2006 Arbitration Award 65/2004
Russia 13 January 2006 Arbitration Award 137/2004 [translation available]
Russia 27 December 2005 Arbitration Award 41/2005 [translation available]
Ukraine 19 September 2005 Arbitration Award (Iron ore case) 62A [translation available]
China 2 September 2005 CIETAC Arbitration Award [CISG 2005/17] (Freezing units case) 62A [translation available]
Russia 2 June 2005 Arbitration Award 131/2004 [translation available]
Russia 10 February 2005 Arbitration Award 133/2003 [translation available]
Russia 24 January 2005 Arbitration Award 66/2004 [translation available]
Switzerland 22 December 2004 Handelsgericht [Commercial Court] Bern (Watches case) 62A [translation available]
Ukraine 19 October 2004 Arbitration Award (Iron and steel castings case) 62A [translation available]
Germany 27 July 2004 Landgericht [District Court] Kiel (Fat for frying case) [translation available]
Russia 28 June 2004 Arbitration Award 167/2003 [translation available]
Russia 17 June 2004 Arbitration Award 186/2003 [translation available]
Germany 21 April 2004 Oberlandesgericht [Appellate Court] Düsseldorf [15 U 30/03]
Germany 21 April 2004 Oberlandesgericht [Appellate Court] Düsseldorf [15 U 222/02] [detailed abstract available]
Russia 20 April 2004 Arbitration Award 115/2003 62A [translation available]
China 9 April 2004 CIETAC Arbitration Award [CISG/2004/02] (Artworks: Italian charms case) [translation available]
Russia 19 March 2004 Arbitration Award 135/2003
Russia 12 March 2004 Arbitration Award 55/2003 [translation available]
Russia 24 February 2004 Arbitration Award 136/2003
Switzerland 19 February 2004 Bundesgericht [Supreme Court]
Russia 16 February 2004 Arbitration Award 107/2002 [translation available]
Russia 3 February 2004 Arbitration Award 71/2003 [translation available]
Russia 2 February 2004 Arbitration Award 56/2003 [translation available]
Germany 12 December 2003 Landgericht [District Court] Bielefeld [translation available]
Germany 27 October 2003 Oberlandesgericht [Appellate Court] Rostock 62A [translation available]
Switzerland 19 September 2003 Cour de Justice [Appellate Court] Genève
Russia 17 September 2003 Arbitration Award No. 24/2003 [translation available]
Germany 15 September 2003 Oberlandesgericht [Appellate Court] Rostock [translation available]
Germany 10 September 2003 Landgericht [District Court] Hamburg
Germany 15 August 2003 Landgericht [District Court] Bielefeld (Strapping machine case) [translation available]
* Germany 15 July 2003 Landgericht [District Court] Mönchengladbach [translation available]
Russia 30 May 2003 Arbitration Award No. 145/2002 [translation available]
Germany 18 March 2003 Landgericht [District Court] Giessen
Belarus 6 March 2003 Economic Court of the Gomel Region
China 17 February 2003 CIETAC Arbitration Award [CISG 2003/16] (Tire case) [translation available]
Russia 17 February 2003 Arbitration Award No. 168/2001 62A [translation available]
Belarus 3 January 2003 Supreme Economic Court
China 27 December 2002 CIETAC Arbitration Award [CISG 2002/29] (Medicine manufacturing equipment case) [translation available]
Russia 10 December 2002 Arbitration Award No. 211/2001 [translation available]
* Belgium 2 December 2002 Hof van Beroep [Appellate Court] Gent Russia 2 December 2002 Arbitration Award No. 18/2002 [translation available]
* Argentina 21 July 2002 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court] [translation available]
Russia 7 June 2002 Arbitration Award No. 116/2001 [translation available]
Russia 16 April 2002 Arbitration Award No. 222/2001 [translation available]
Russia 22 March 2002 Arbitration Award No. 225/2000 [translation available]
* Germany 27 February 2002 Landgericht [District Court] München [translation available]
Russia 22 January 2002 Arbitration Award No. 60/2001 [translation available]
China China 2002 Wuhan Intermediate People's Court [District Court] of Hubei Province (WS China Packaging Import & Export Company Hubei Office v. Russia Phoenix Company and Hubei Province Silk Import & Export Company) [translation available]
Germany 21 December 2001 Landgericht [District Court] Hamburg (Natural stones case) [translation available]
Russia 25 September 2001 Presidium of Supreme Court (Resolution No. 8508/00 [translation available]
Russia
17 July 2001 Arbitration Award No. 419/1995 [translation available]
Russia 30 May 2001 Arbitration Award No. 185/2000 [translation available]
Russia 25 May 2001 Arbitration Award No. 191/2000 [translation available]
Russia 25 January 2001 Arbitration Award No. 88/2000 [translation available]
Germany 14 December 2000 Amtsgericht [Lower Court] Hamburg-Altona
China 6 December 2000 CIETAC Arbitration Award [CISG 2000/13] (Pharmaceutical products case) 62A [translation available]
France 12 October 2000 Cour d'appel [Appellate Court] Paris
Ukraine 8 September 2000 Arbitration Award (Forming press case) [translation available]
Austria 15 June 2000 Oberlandesgericht [Appellate Court] Graz [translation available]
Hungary 2000 Budapest Arbitration proceeding VB 99144 (Grape sticks case) [translation available]
Italy 29 December 1999 Tribunale [District Court] Pavia [translation available]
China 30 June 1999 CIETAC Arbitration Award [CISG/1999/31] (Bearings case) 62A [translation available]
China 11 June 1999 CIETAC Arbitration Award [CISG/1999/29] (Agricultural chemical products case) 62A [translation available]
Switzerland 11 June 1999 Handelsgericht [Commercial Court] Aargau 62A [translation available]
Hungary 25 May 1999 Budapest Arbitration award Vb 97142 62A
Switzerland 30 November 1998 Handelsgericht [Commercial Court] Zürich [translation available]
Russia 22 October 1998 Arbitration award 196/1997 [translation available]
Russia 6 October 1998 Arbitration award 269/1997 62A [translation available]
* Germany 29 July 1998 Landgericht [District Court] Erfurt [translation available]
Germany 24 March 1998 Landgericht [District Court] Berlin (Knitwear case) [translation available]
Russia 10 January 1998 Arbitration award 65/1997 [translation available]
Russia 29 September 1997 Arbitration award 470/1996 [translation available]
Switzerland 26 September 1997 Handelsgericht [Commercial Court] Aargau (Cutlery case) [translation available]
Germany 9 July 1997 Oberlandesgericht [Appellate Court] München [7 U 2070/97] [translation available]
Germany 9 July 1997 Oberlandesgericht [Appellate Court] Köln 62A [translation available]
Hungary 1 July 1997 Fovárosi Bíróság [Metropolitan Court] [translation available]
China 26 June 1997 CIETAC Arbitration Award [CISG/1997/17] (Monohydrate zinc sulphate case) [translation available]
Russia 11 June 1997 Arbitration award 255/1994 62A [translation available]
Germany 6 June 1997 Landgericht [District Court] Bielefeld
Switzerland 22 April 1997 Bezirksgericht [District Court] Sense
China 2 April 1997 CIETAC Arbitration Award [CISG/1997/03] (Wakame case) 62A [translation available]
Russia 25 February 1997 Arbitration award 430/1995 [translation available]
Russia 12 February 1997 Arbitration award 261/1995 62A [translation available]
ICC January 1997 International Court of Arbitration, Case 8786 [English text]
China 31 December 1996 Fujian Higher People's Court (You Li v. Gold Star) 62A [translation available]
Germany 12 December 1996 Landgericht [District Court] Bielefeld
Germany 12 November 1996 Amtsgericht [Lower Court] Koblenz 62A [translation available]
Russia 8 October 1996 Arbitration award 407/1995 [translation available]
China 30 August 1996 CIETAC Arbitration Award [CISG/1996/40] (Brake pads case) 62A [translation available]
* Germany 2 August 1996 Landgericht [District Court] Bielefeld 62A [translation available]
Switzerland 31 May 1996 Arbitration ZHK 273/1995 [Zürich Chamber of Commerce] [English text]
China 16 May 1996 CIETAC Arbitration Award [CISG/1996/24] (Cashmere sweaters case) 62A [translation available]
Netherlands 15 May 1996 Arrondissementsrechtbank [District Court] Amsterdam
China 3 April 1996 CIETAC Arbitration Award [CISG/1996/17] (Plastic bags case) 62A [translation available]
Russia 19 March 1996 Arbitration award 88/1995 [translation available]
Switzerland 11 March 1996 Tribunal Cantonal [Appellate Court] Vaud [01 93 0661]
Switzerland 11 March 1996 Tribunal Cantonal [Appellate Court] Vaud [01 93 1061] [translation available]
Russia 13 December 1995 Arbitration award 364/1994 [translation available]
Russia 1 December 1995 Arbitration award 369/1994 [translation available]
Hungary 17 November 1995 Budapest Arbitration award Vb 94124
Germany 12 October 1995 Landgericht [District Court] Trier [translation available]
Germany 21 September 1995 Landgericht [District Court] Kassel [translation available]
Germany 20 September 1995 Oberlandesgericht [Appellate Court] Nürnberg
Russia 14 September 1995 Arbitration award 317/1994
China 16 May 1995 CIETAC Arbitration Award [CISG/1995/10] (Leather bags case) 62A [translation available]
Russia 15 May 1995 Arbitration award 321/1994 [translation available]
Germany 12 May 1995 Amtsgericht [Lower Court] Alsfeld [translation available]
* Germany 31 March 1995 Oberlandesgericht [Appellate Court] Frankfurt [translation available]
* Germany 8 March 1995 Oberlandesgericht [Appellate Court] München [translation available]
Russia 3 March 1995 Arbitration award 304/1993 [commentary available]
Russia 3 March 1995 Arbitration award 309/1993
* Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] [translation available]
Russia 17 November 1994 Arbitration award 493/1993
Germany 2 August 1994 Landgericht [District Court] München
Germany 14 June 1994 Amtsgericht [Lower Court] Nordhorn [translation available]
Russia 12 April 1994 Arbitration award 243/1993 62A
Germany 24 January 1994 Kammergericht [Appellate Court] Berlin 62A [translation available]
Germany 1 December 1993 Landgericht [District Court] Hanover
Germany 5 November 1993 Landgericht [District Court] Hamburg
Germany 17 September 1993 Oberlandesgericht [Appellate Court] Koblenz [translation available]
Mexico 4 May 1993 Compromex Arbitration award 62A [translation available]
Germany 22 September 1992 Oberlandesgericht [Appellate Court] Hamm (Frozen bacon case) [translation available]
* ICC 1992 International Court of Arbitration, Case 7197
The UNCITRAL Digest of case law on the United
A/CN.9/SER.C/DIGEST/CISG/62 [8 June 2004]. Reproduced with the permission of UNCITRAL.
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. DIGEST OF ARTICLE 62 CASE LAW
The right to require specific performance 1. This provision entitles the seller to require the buyer to perform its obligations, a remedy generally recognised in civil law systems, whereas common law systems only allow for specific performance in limited circumstances.[1] 2. This provision is designed to assist sellers who have a particular interest in the
performance by the buyer, in particular the obligation to take delivery of the goods. However,
illustrations of recourse to this remedy in case law, involving the hypothesis that a buyer refuses
to take delivery, are rare.[2] Illustrations of the application of article 62 to the payment of the purchase price, on the other hand, are numerous.[3] Limitations of the right to require specific performance 3. The right to require performance does, however, have two kinds of limitations. One emerges clearly from the wording of the provision: the seller is deprived of this right if it has
resorted to a remedy which is inconsistent with the seller insisting upon the specific
performance, as in the case where it had declared the contract avoided (art. 64) or fixed an
additional period of time for performance (art. 63). The second limitation is related to the
application of article 28. Thus, the competent judge is not bound to order specific performance
on behalf of the seller as required under article 62 if the judge would not do so under its
domestic law in respect of similar contracts. FOOTNOTES
* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.
[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.] 1. On this problem, see the compromise established by article 28.
2. For a general statement, see
CLOUT case No. 133
[GERMANY Oberlandesgericht [Appellate Court] München 8 February 1995, available online at <http://cisgw3.law.pace.edu/cases/950208g1.html>] (see full text of the decision).
3. See
[GERMANY Landgericht [District Court] Mönchengladbach 15 July 2003, available online at <http://cisgw3.law.pace.edu/cases/030715g1.html>];
[BELGIUM Beroep [Appellate Court] Gent 2 December 2002, available online at <http://cisgw3.law.pace.edu/cases/021202b1.html>];
[ARGENTINA Cámara Nacional de los Apelaciones en lo Comercial [Appellate Court] 21 July 2002, available online at <http://cisgw3.law.pace.edu/cases/020721a1.html>];
[GERMANY Landgericht [District Court] München 27 February 2002, available online at <http://cisgw3.law.pace.edu/cases/020227g1.html>];
CLOUT case No. 344
[GERMANY Landgericht [District Court] Erfurt 29 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980729g1.html>];
CLOUT case No. 273
[GERMANY Oberlandesgericht [Appellate Court] München 9 July 1997, available online at <http://cisgw3.law.pace.edu/cases/970709g1.html>];
CLOUT case No. 376
[GERMANY Landgericht [District Court] Bielefeld 2 August 1996; available at <http://cisgw3.law.pace.edu/cases/960802g1.html>];
CLOUT case No. 135
[GERMANY Oberlandesgericht [Appellate Court] Frankfurt 31 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950331g1.html>];
CLOUT case No. 134
[GERMANY Oberlandesgericht [Appellate Court] München 8 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950308g1.html>];
CLOUT case No. 104 [ICC International Court of Arbitration, case No.
7197 of 1992; available at <http://cisgw3.law.pace.edu/cases/927197i1.html>].
John Felemegas [*]
In Part III Sale of Goods, the Convention provides and regulates the respective
obligations and rights of the parties to an international sales contract governed by the
CISG, including the remedies available to a party for breach by the other party of the
latter's corresponding obligations (duties) arising under the Convention.[1] In Chapter II Obligations of the Seller (Art. 30), Sections I Delivery of the Goods
and Handing Over of Documents (Arts. 31 - 34) and II Conformity of the Goods
and Third Part Claims (Arts. 35 - 44), the Convention sets forth the seller's
obligations to the buyer. The buyer's remedies for seller's breach of these obligations
are set forth in Section III Remedies for Breach of Contract by the Seller (Arts. 45
- 52). In an exercise of structural, as well as substantive, equality between the parties to the
contract, in Chapter III, Obligations of the Buyer (Art. 53), Sections I Payment of
the Price (Arts. 54 - 59) and II Taking Delivery (Art. 60), the Convention sets forth
the buyer's obligations to the seller. The seller's remedies for buyer's breach of the
latter's corresponding obligations are set forth in Section III Remedies for Breach of
Contract by Buyer (Arts. 61 - 65). The present analysis focuses on the right of a party to require the other party to
perform the latter's obligations to the former pursuant to the Convention's provisions
(CISG Arts. 28, 46 and 62). Under the regime of the UNIDROIT Principles, the counterpart provisions regarding
the right of a party to require performance by the other party are set forth in Chapter
7 Non-Performance, Section 2 Right to Performance (Arts. 7.2.1, 7.2.2, 7.2.3,
7.2.4 and 7.2.5). II. CISG Art. 28: Specific performance and the rules of the forum The legislative history of and subsequent commentary on CISG Art. 28 reveal the
purpose of the provision, its scope and the reason for its inclusion in the Convention
as well as the compromises (semantic, substantive and political) that it contains.[2] The practical effect of CISG Art. 28 is to restrict in some cases an aggrieved party's
general right,[3] which is granted pursuant to CISG Arts. 46 (buyer's right)[4] and Art. 62
(seller's right)[5] to require specific performance[6] of the other party's obligation after
a breach of contract by the latter.[7] Although the regime of the Convention's remedies includes these general rules (CISG
Arts. 46 and 62) that a party in breach may be compelled to perform his obligations,
thus establishing the primacy of the remedy of specific performance under the
Convention, it does not specify and instead leaves to the domestic law of the forum
any procedural measures necessary to enforce the remedies available under the
Convention. The inclusion of CISG Art. 28 in the text of the Convention, carving out an exception
from the general right of an obligee to require specific performance by a defaulting
obligor,[8] is seen as constituting a necessary compromise[9] in order to recognize the
historically divergent approaches in doctrine and civil procedure to requiring
performance[10] under different legal systems - this view is shared among many
commentators of the CISG.[11] Thus, CISG Art. 28 provides that, if one party is entitled to require performance of an
obligation by the other party (i.e., in accordance with CISG Arts. 46 and 62): Essentially, CISG Art. 28 may be applied to determine the question whether an obligee can obtain
the aid of a court to enforce the obligation of a defaulting obligor to perform the contract. Generally
speaking, courts in legal systems which as a matter of doctrine and judicial procedure grant orders
of specific performance should not be affected by the application of CISG Art. 28. On the other
hand, the provision has more practical significance in jurisdictions which do not grant certain forms
of specific performance.[12] Thus, pursuant to CISG Art. 28, a court belonging to the latter category (e.g., common law
system) is not bound[13] to require specific performance of the breaching party's obligations under
a contract governed by the Convention unless it would[14]do so under its own law[15] in respect of
domestic contracts of sale.[16] Effectively, if the law of the forum would not grant specific
performance in a domestic contract of sale (i.e., in accordance with domestic law of contract), the
court is not bound to enter a judgment of specific performance in respect of the particular
international contract of sale under the Convention.[17] It has been said that CISG Art. 28 has a potential for mischief because "parties will be encouraged
to forum-shop for a national court system that will or will not grant specific performance".[18]
However, the degree of practical importance of this provision has been questioned by several other
commentators, mainly because the right to require specific performance is rarely asserted in
international trade.[19] It also seems that the legislative history of the Convention supports the latter
body of opinion.[20] The UNIDROIT Principles contain no counterpart provision to CISG Art. 28. In their Definitions
section, Art. 1.10, the Principles, however, provide a definition of a word also contained in CISG
Article 28: "court".[21] The Official Commentary on the Principles also states that, and explains the
reason why, the term "court" covers arbitral tribunals as well as courts.[22] The definition of "court" contained in the Principles may arguably serve to answer a relevant
question regarding the interpretation of the same word (i.e., "court") contained in CISG Art. 28,
so that the reference to that word in the Convention be similarly interpreted as being inclusive of
arbitral tribunals.[23] III. CISG Art. 46: Buyer's right to require specific performance CISG Art. 46 provides the general rule on the buyer's right to require performance by the seller
of his contractual obligations. The buyer may invoke this rule when the seller has failed to perform
any [24] of his obligations [25] under the Convention [26] and the contract.[27] CISG Art. 46 also provides, however, specific restrictions[28] on the invocation of the right to
compel specific performance. The first restriction is set for the in CISG Art. 46(1) which provides that the buyer's right to specific
performance is subject to the buyer not having resorted to another remedy which is inconsistent
with the requirement that the seller in breach perform his obligations, e.g., declaring the contract
avoided pursuant to CISG Art. 49(1).[29] Furthermore, in the case where the seller has delivered goods that do not conform with the
contract, thus breaching his obligations under CISG Arts. 35, 41 or 42,[30] the Convention provides
the buyer with the right to require substitute goods (Art. 46(2)) or the repair[31] of non-conforming
goods (Art. 46(3)). The exercise of this right is circumscribed in the following manner:
Nations Convention on the International Sale of Goods [*]
ARTICLE 62
ANNOTATED COMPARATIVES
- UNIDROIT Principles
February 2005
Art. 46(3) provides that the buyer may require[36] the seller to remedy the lack of conformity (which does not need to constitute fundamental breach) by repair[37] unless this is unreasonable[38] having regard to all the circumstances.[39]
IV. CISG Art. 62: Seller's right to require specific performance
CISG Art. 62 sets forth the general rule on the seller's right to require the buyer to perform his obligations under the Convention [40] and the contract [41] - a parallel rule to the one set forth in CISG Art. 46, which was discussed in Section III, supra.
CISG Art. 62 provides that the seller may require [42] the buyer to pay the price[43] for the goods,[44] take delivery of the goods[45] and perform his other obligations.[46]
The buyer may conceivably default in his obligations either after he has received and retains the goods[47] or by refusing to receive the goods.[48] In any case, a proviso, similar to the one contained in CISG Art. 46(1),[49] is also incorporated in and limits[50] the application of CISG Art. 62; i.e., the party's right to specific performance by the other party of his obligations is subject to the obligee not having resorted to another remedy (e.g., declaration of avoidance) which is inconsistent[51] with the requirement that the obligor in default perform.[52]
V. UNIDROIT Principles Arts. 7.2.1 - 7.2.5: Right to performance
Under the regime of the UNIDROIT Principles (UP) the provisions regarding the right of a party to require performance by the other party are set forth in Chapter 7 Non-Performance, Section 2 Right to Performance (Arts. 7.2.1, 7.2.2, 7.2.3, 7.2.4 and 7.2.5).
The rules regarding the right of the obligee to require performance by the obligor under the UNIDROIT Principles, unlike the rules of the Convention, make a clear distinction between performance of monetary and non-monetary obligations.
1. UP Art. 7.2.1: Performance of monetary obligation
UP Art. 7.2.1 provides the general rule of the UNIDROIT Principles that where a party who is obliged to pay money under a contractual obligation does not do so, the other party may require payment.[53] This rule, which gives an aggrieved party the right to require the party in default to perform his monetary obligations under the contract, should be applicable, for instance, to the payment of the price for the goods under a sales contract.
The principle of contractual performance of the parties' (monetary) obligations, on which this rule is based, is also generally recognized in the Convention[54] as well as specifically embodied in CISG Art. 62 which sets forth the seller's right to require buyer to pay the price for the goods.[55]
2. UP Art. 7.2.2: Performance of non-monetary obligation
UP Art. 7.2.2 provides the general rule of the Principles that where a party who owes a non-monetary obligation does not perform, the obligee may require performance of that obligation.[56] This rule again reflects the general approach of the counterpart provisions of the Convention.
In stark contrast to the Convention (CISG Art. 28), however, the Principles do not treat specific performance as a discretionary remedy which is dependant on domestic law and the rules of the forum.[57] Under UP Art. 7.2.2, specific performance of a non-monetary obligation must be granted to an aggrieved obligee, unless one the specific exceptions enumerated in paras. (a) - (e) of the said article applies:
It is arguable that the basis of the stated exceptions is provided by the application of the general principle - also recognized in the Convention - of reasonableness to the various contexts in which UP Art. 7.2.2 (a) - (e) is applicable.
3. UP Art. 7.2.5: Change of remedy
UP Art. 7.2.5 provides that aggrieved party may abandon the remedy of requiring performance of a non-monetary obligation and opt instead for another remedy or remedies.[63]
UP Art. 7.2.5(1) provides that an aggrieved obligee who has required and who has not received performance within a period fixed (or otherwise within a reasonable) period of time[64] may invoke any other remedy.[65]
UP Art. 7.2.5(2) further provides that the aggrieved obligee may invoke any other remedy where the decision of a court for performance of a non-monetary obligation cannot be enforced.[66]
4. UP Art. 7.2.3: Repair and replacement of defective performance
UP Art. 7.2.3, similarly to CISG Art. 46(3), expressly provides that the obligee's right to require the obligor to remedy his defective performance includes, in appropriate cases,[67] the right to require repair, replacement,[68] or other cure.[69]
5. UP Art. 7.2.4: Judicial penalty
UP Art. 7.2.4 sets forth a provision to which there is no counterpart in the Convention; i.e., a judicially imposed sanction to ensure compliance with judgments ordering the performance of contractual obligations.[70]
UP Art. 7.2.4(1), in contradistinction to the provisions of the Convention, provides that a court[71] orders a party to perform, it may[72] also direct that party to pay a penalty if it does not comply with the order.[73]
UP Art. 7.2.4(2) makes clear that payment[74] of the judicial penalty to the aggrieved party[75] does not exclude any claim for damages,[76] but it is subject to the mandatory rules of the lex fori.[77]
The comparison between provisions of the Convention regarding the right to specific performance and the counterpart provisions of the UNIDROIT Principles has revealed similarities and differences between the two instruments.
As a starting point, both the Convention and the UNIDROIT Principles adopt the principle of contractual performance of the parties' obligations, which is embodied in counterpart rules regarding the right of the obligee to require specific performance by the obligor.
There are however, several distinctions, structural and substantive, between the counterpart provisions of the two instruments.
Under the regime of the UNIDROIT Principles, the provisions regulating the right of a party to require performance by the other party do not follow the distinctive structure adopted in the Convention's counterpart provisions - the latter instrument makes separate, albeit similarly balanced between themselves, provisions for a seller and a buyer in an international sales contract governed by the Convention.
On the other hand, the rules regarding the right of the obligee to require performance by the obligor under the UNIDROIT Principles, unlike the rules of the Convention, form what is arguably a more detailed and coherent set of regulations and they make a clear distinction between performance of monetary and non-monetary obligations.
In stark contrast to the Convention, the Principles do not treat specific performance as a discretionary remedy which is dependant on domestic law and the rules of the forum, but the Principles expressly provide several exceptions to the general rule on the obligee's right to require performance of non-monetary obligations. These exceptions are based on specific manifestations of the general principle of unreasonableness - which is also a general principle on which the Convention is based.
Furthermore, the Principles include a provision to which there is no counterpart in the Convention; i.e., a judicially imposed sanction (judicial penalty) to ensure compliance with judgments ordering the performance of contractual obligations.
FOOTNOTES
* Doctorate in Law; Fellow, Pace Law School Institute of International Commercial Law; Lecturer, Faculty of Law, University of Technology, Sydney.
1. The Convention further provides in Part III supplementary rules on remedies that are applicable to both parties, see Chapter V Provisions Common to the Obligations of the Seller and of the Buyer, Sections I Anticipatory Breach and Instalment Contracts (Arts. 71 - 73), II Damages (Arts. 74 - 77), III Interest (Art. 78), IV Exemptions (Arts. 79 -80), V Effects of Avoidance (Arts. 81 - 84) and VI Preservation of the Goods (Arts. 85 - 88).
2. In preparing the Vienna Convention, the drafters of CISG Art. 28 generally followed its predecessor [Art. VII(1) of the 1964 Hague Convention, and Art. 16 of the Uniform Law on the International Sale of Goods (ULIS)]. See the Text of Secretariat Commentary on Art. 26 of the 1978 Draft [draft counterpart of CISG Art. 28], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-28.html#sec>. See also Bergsten E.E., Subsequent Commentary on CISG Art. 28, Les Ventes 1nternationales de Marchandises (Problèmes juridiques d' actualité)", Paris Economica 1981, pp. 11-14; available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-28.html#sub>.
3. See Enderlein F. & Maskow D., International Sales Law, Oceana (1992), p. 122; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>:
Enderlein & Maskow, ibid., also note that there possibly exist in the Convention further, albeit indirect, restrictions of the right to specific performance, relating to the application of CISG Arts. 88(2) and 77.
Honnold J.O., Uniform Law for International Sales, Kluwer Law International, 3rd ed. (1999), at 225, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/honnold.html>, notes that CISG Art. 28 permits deviation only from the rules of the Convention that require performance of a party's obligations and does not affect the Convention's restrictions on specific performance.
4. CISG Art. 46(1) reads: "The buyer may require performance by the seller of his obligations [...]." See further analysis, Section III, infra.
5. CISG Art. 62 reads: "The seller may require the buyer to pay the price, take delivery or perform his other obligations [...]." See further analysis, Section IV, infra.
6. CISG Art. 28 may in certain cases restrict the obligee's right to require specific performance from the obligor, but it does not affect other remedies available under the Convention (e.g., avoidance (CISG Arts. 49 and 64), damages (Arts. 74-76), etc.).
The UNCITRAL Digest of Case Law on CISG Art. 28, (A/CN.9/SER.C/DIGEST/CISG/28 [8 June 2004]), available online at <http://cisgw3.law.pace.edu/cisg/text/anno-art-28.html#ucd>, provides the following definition of specific performance:
7. See Honnold (1999), op. cit., at 218, where the author commences his analysis of the right to require performance in the following terms:
8. The right of an obligee to require specific performance by the defaulting obligor of his contractual obligations is said to reflect a principle which has emanated from civil law theory. See Dawson J.P., "Specific Performance in France and Germany", 57 Michigan Law Review (1959) 495; Treitel G.H., Remedies for Breach of Contract - A Comparative Account, Oxford: Clarendon (1988), Ch. III.
Note, however, that although the principle of specific performance is embedded in civil law theory, the frequency of invocation and enforcement of the remedy of specific performance in practice must not be overestimated. See Henrik Lando, "The Myth of Specific Performance in Civil Law Countries" (April 2004), American Law & Economics Association Annual Meetings. American Law & Economics Association 14th Annual Meeting. Working Paper 15; available online at <http://law.bepress.com/alea/14th/art15>. In that paper, the author argues that when breach involves the non-performance of an action, i.e. when performance cannot be ensured by the handing over of an existing good, specific performance is largely a myth in the three civil law countries Denmark, France and Germany. The paper provides evidence which suggests that a claim for specific performance of an action is, roughly speaking, not enforced in Denmark, weakly enforced in France, and though enforced in Germany, only rarely sought. According to the evidence presented in that paper, it is concluded that specific performance is largely irrelevant as a remedy for the non-performance of an action in civil law countries. Furthermore, the paper argues that the non-use of specific performance can be ascribed to the costs and difficulties of forcing the breaching party to perform an action.
9. See, UNCITRAL Digest on CISG Art. 28, op. cit.:
10. "Specific performance" in common law parlance. In common law systems, specific performance is granted only when alternative remedies (e.g., damages) are not adequate. See, e.g., Piliounis P., "The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?", Cambridge University (September 1999), Section 4, available online at <http://cisgw3.law.pace.edu/cisg/biblio/piliounis.html>, where the author summarizes the traditional English law approach in the following succinct manner:
11. For relevant commentary on point, see Honnold (1999), op. cit., at pp. 219-220, and further references provided therein.
See also Enderlein & Maskow, op. cit., at 120-121:
12. In order to illustrate the point, commentators usually refer to the divergences between common law and civil law doctrine and procedure: the enforcement of specific performance is extensive in civil law systems in order to uphold the pacta sunt servanda principle, whereas in common law systems it is more limited because damages are seen as the primary remedy for breach of contract; see Huber U., in Schlechtriem (ed.) Commentary on the UN Convention on the International Sale of Goods, Clarendon Press, Oxford, 1998, p. 199. See also Schlechtriem P., Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods, Manz: Vienna (1986), at 62; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem.html>, where the author states:
For a detailed examination of the remedy of specific performance under the CISG, accompanied by a
comparative analysis of the remedy in the French Civil Code (representative of civil law systems) and the
U.S. Uniform Commercial Code (representative of common law systems), see Boghossian N., "A
Comparative Study of Specific Performance Provisions in the United Nations
Convention on Contracts for the International Sale of Goods", Pace Review of the Convention on
Contracts for the International Sale of Goods, Kluwer (1999-2000) 3-78; also available online at
<http://cisgw3.law.pace.edu/cisg/biblio/boghossian.html>.
See also Honnold (1999), op. cit., 225-228; Enderlein & Maskow, op .cit.
13. The expression "not bound" does not limit any rights to specific performance that may ensue from the proper application of the Convention's provisions. See Enderlein & Maskow, op. cit., at 122, where the authors states that a court "can grant a right to specific performance in such events where it would normally not do so" [emphasis added].
See also Honnold (1999), op. cit., at 224-225, where the author states that the expression in question
It has been further suggested that the proper application of CISG Art. 28 has an impact on many legal systems (civil law as well as common law systems), by generally ameliorating the effect of the Convention's rules requiring specific performance. See Honnold (1999), op. cit., at 228, where the author concludes his analysis of CISG Art. 28 with the following remarks:
See also Bergsten, Subsequent Commentary on CISG Art. 28, op. cit.:
The balance between Article 28 on the one hand and Articles 46 and 62 on the other is not, therefore, a compromise only between the civil law recognition of the principle that a party has the right to require the other party to perform the contract and the common law restriction on that right. It is also a recognition that in many legal systems the courts will use discretion in enforcing the right and that such discretion is to be preserved by the Convention."
14. At the Vienna Diplomatic Conference, a single but significant change was made to the text of the provision restricting the right to require performance. CISG Art. 28 reads "unless the court would do so under its own law . . ." rather than "unless the court could do so" that was written in the 1978 UNCITRAL Draft Text of the Convention. The purpose and political nature of the drafting compromise in the text of the provision have been documented and discussed widely. See Enderlein & Maskow, op. cit., at 123:
See also Schlechtriem (1986), op. cit., at 62, where the author has commented that the effect of the particular change in the wording of CISG Art. 28 was to restrict "the possibilities of a judgment compelling specific performance."
15. The reference by the rule in CISG Art. 28 to a national court's "own law" leads to the important question whether the language of the provision invokes the domestic lex fori on specific performance or instead the proper law of the contract applicable by virtue of the rules of private international law. The answer to that question, however, has created little controversy; see Honnold (1999), op .cit., at 223-225.
See also Enderlein & Maskow, op. cit., at 122:
For supporting commentary, see Schlechtriem (1986), op. cit., at 62-63, who cautions, however, against too readily resorting to the lex fori outside the particular remedial context created in CISG Art. 28 regarding specific performance:
16. See Kritzer A.H., Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, Kluwer, (1988), pp. 217-218, where the author offers the following comparison of the buyer's right to require performance by the seller under the Convention to the counterpart provisions granting buyer the right to compel performance under the U.S. Uniform Commercial Code:
Regarding the seller's right to require performance by the buyer, under the Convention and the UCC, see Kritzer, ibid., at 218-219.
17. For relevant case law, see
| - | Argentina 21 July 2002 Appellate Court (Cervecería y Malteria Paysandú S.A. v. Cervecería Argentina S.A.); case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/020721a1.html>. In this case a Uruguayan seller commenced proceedings against an Argentinian buyer for payment of the purchase price of the goods (malted barley). The appellate court, confirming the lower court's decision, found that CISG was applicable as the Argentinian rules of private international law led to the application of Argentinian law as the governing law of the contract, and then to the Convention by virtue of CISG Art. 1(1)(b). The court found that as the goods had been correctly delivered, the seller had complied with his obligations and that the buyer was therefore obliged to pay the agreed price. The court also held that according to Argentinian law, which was applicable in the case at hand, the alleged lack of conformity could only be ascertained according to a specific procedure of arbitration and expertise. As the buyer had not initiated such a procedure, its defenses based on the alleged lack of conformity had to be rejected. Thus, the court concluded that the seller was entitled to require payment of the purchase price, pursuant to CISG Arts. 28, 53, 59, 61 and 62 (as well as interest, pursuant to CISG Art. 78). |
| - | United States 7 December 1999 Federal District Court [Illinois] (Magellan International v. Salzgitter Handel), presentation available at <http://cisgw3.law.pace.edu/cases/991207u1.html>. This court stated that the remedy of specific performance sought by the buyer in this case is generally available under the Convention (CISG Art. 46(1)), with the exception that a court is not bound to enter judgment for specific performance unless it would do so under its own law of contracts (CISG Art. 28). In this case, it was held that the U.S. Uniform Commercial Code was applicable and in accordance with UCC 2-716(1) (pursuant to which, specific performance may be granted when the buyer proves the difficulty of obtaining similar goods on the market), the court upheld the buyer's claim for specific performance. |
| - | Switzerland 31 May 1996 Zürich Arbitration proceeding, presentation available online at
<http://cisgw3.law.pace.edu/cases/960531s1.html>. This case concerned multi-party litigation and
the CISG: the buyer was a group of companies operating aluminum casting works in Argentina and
Hungary, and the seller was a Russian firm which produced raw aluminium (the "goods"). When
the seller's new owners stopped all deliveries of raw aluminum to buyers, the buyers commenced
proceedings in various fora, including this arbitral tribunal. The tribunal, dealing with the buyers'
request for specific performance, stated: 349. Apart from that the Arbitral Tribunal fails to see how specific performance could be an appropriate remedy for [buyers] in this case. They can hardly expect to be able, under the New York Convention or otherwise, to have an award enforced in Russia providing the [seller] must specifically perform its obligations under the various contracts for the next eight or ten years, producing the aluminum and delivering it to [buyers]." 350. "The Arbitral Tribunal will accordingly grant [buyers'] 'alternative' request for relief in the form of damages." [The Tribunal ultimately awarded buyers damages in an amount in excess of US $19 million.] |
18. Kastely A.H., "Unification and Community: A Rhetorical Analysis of the Convention", 8 Northwestern Journal of International Law and Business (1988) 574-622, at 615, including supporting references to Gonzalez O., "Remedies Under the U.N. Convention for the International Sale of Goods", 2 Int'l Tax & Bus. Law (1984) 79-100 at 96-97 (1984) and Grigera Naón H., "The U.N. Convention on Contracts for the International Sale of Goods", in: Horn/Schmitthoff ed., The Transnational Law of International Commercial Transactions: Studies in Transnational Economic Law, Deventer: Kluwer (1982) vol. 2, 89-124, at 107.
19. See Schlechtriem (1986), op. cit., at 62:
See also Enderlein & Maskow, op. cit., at 121:
See also Bergsten, op. cit., where the author explains:
See also Henrik Lando, op. cit., where the author argues that specific performance is largely irrelevant as a remedy for the non-performance of an action in civil law countries and, furthermore, that the non-use of specific performance can be ascribed to the costs and difficulties of forcing the breaching party to perform an action.
20. See the legislative history of the Convention, which contains a 1972 Secretary-General report stating the following:
21. Art. 1.10 - Definitions of the UNIDROIT Principles reads:
22. See Official Comments on Art. 1.10 of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni28.html#official>:
23. Further support for such inclusive interpretation of the word "court" is found in the Text of Secretariat Commentary on the Articles of the 1978 Draft.
See Secretariat Commentary on Art. 42 of the 1978 Draft [draft counterpart of CISG Art. 46], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-46.html>:
See also Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-62.html>:
24. See the Text of Secretariat Commentary on Art. 42 of the 1978 Draft [draft counterpart of CISG Art. 46]. Paragraphs (1) and (2) of Art. 42 of the 1978 Draft and CISG Art. 46 are virtually identical. A paragraph (3) was added to CISG Art. 46 at the 1980 Vienna Diplomatic Conference, in order to make express reference to the buyer's right to repair of non-conforming goods. See match-up of CISG Art. 46 with Art. 42 of the 1978 Draft, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-46.html>, which validates the relevancy of the Secretariat Commentary on CISG Art. 46.
For case law holding that pursuant to CISG Art. 46(1) to buyer may require performance of any due obligation, see the following cases (NB. in these cases the buyers, however, resorted to other remedies, such as damages and avoidance):
| - | ICC Arbitration Case No. 8786 of January 1997; case presentation available at <http://cisgw3.law.pace.edu/cases/978786i1.html> (case concerned late delivery) |
| - | Egypt Arbitration Award of 3 October 1995 (Cairo Chamber of Commerce and Industry); case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/951003e1.html> (case concerned extension of bank guaranty; making express reference to Art. 45 CISG, the arbitrator held that the seller had breached its contractual duties by refusing to extend the bank guarantee in favour of the buyer) |
| - | Germany 17 September 1991 Oberlandesgericht [Appellate Court] Frankfurt case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/910917g1.html> (case concerned seller's breach of exclusive sales agreement with buyer) |
The legislative history of the Convention reveals that Professor Farnsworth (U.S.A delegate at the Vienna Diplomatic Conference) proposed that the seller should "be permitted to determine the manner in which he intended to remedy his failure to perform." This proposal was rejected. See OR 352, paras. 31-35 [OR = Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna 10 March 1980, A/CONF. 97/19].
25. For a detailed analysis of the seller's obligations under the Convention, see Schlechtriem P., "The Seller's Obligations Under the United Nations Convention on Contracts for the International Sale of Goods", in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 6, pp. 6-1 to 6-35; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem10.html>.
26. Regarding the obligations of the seller under the Convention, see the text of the Convention, Chapter II Obligations of the Seller (Art. 30), Sections I Delivery of the Goods and Handing Over of Documents (Arts. 31 - 34) and II Conformity of the Goods and Third Part Claims (Arts. 35 - 44). The buyer's remedies for seller's breach of these obligations are set forth in Section III Remedies for Breach of Contract by the Seller (Arts. 45 - 52).
27. See CISG Art. 6 [The contract and the Convention (primacy of the contract)]:
See also the Text of Secretariat Commentary on Art. 5 of the 1978 Draft [draft counterpart of CISG Art. 6], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-06.html>:
The text of CISG article 6 and Art. 5 of the 1978 Draft are identical. The Secretariat Commentary on Art. 5 of the 1978 Draft should therefore be relevant to the interpretation of CISG Art. 6; see match-up of CISG Art. 6 with Art. 5 of the 1978 Draft, at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-06.html>.
28. Note that CISG Art. 46 must be read in conjunction with CISG Art. 28; see Section II, supra. See also Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-62.html>, Comment 6, supra.
In addition to such limitations as may be present under the lex fori (CISG Art. 28) and which are contained in CISG Art. 46, the buyer's right to require specific performance may be subject to additional restrictions that ensue from the application of CISG Arts. 7, 9(1), 77, 85, 86, and 88(2). See Kritzer, op. cit., at 351-352, and accompanying references therein.
29. The remedies of specific performance and avoidance are inconsistent with each other. See CISG Art. 81(1) [Effect of avoidance], which provides the following:
Similarly, a buyer's declaration of a reduction of the price under CISG Art. 50 is inconsistent with the
remedy of specific performance. See the Text of Secretariat Commentary on Art. 42 of the 1978 Draft
[draft counterpart of CISG Art. 46], Comment 7.
On the contrary, an action for damages for breach of contract (CISG Art. 74) is not inconsistent with a request for specific performance. See the Secretariat Commentary:
30. See Enderlein and Maskow, op. cit., at 178:
31. The reference to "repair" in paragraph (3) of Article 46 was added at the Diplomatic Conference. See Kritzer, op. cit., at 347, where the author comments:
See also Conference relevant colloquy: OR 335-337, paras. 11-45 [OR = Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna 10 March - 11 April 1980, A/CONF. 97/19].
Cf. Under the U.S. Uniform Commercial Code substitute goods or repair are not normally available to an aggrieved buyer unless volunteered by the seller, e.g. in an attempt to cure non-conforming goods under UCC 2-508. See Flechtner H., "Remedies under the New International Sales Convention", 8 J.L. & Com. (1988) 58, n.27, available online at <http://cisgw3.law.pace.edu/cisg/biblio/flecht.html> where the author comments that, under the UCC
32. Note that the buyer who requires substitute goods under this provision must comply with CISG Art. 82 regarding restitution of the goods he received. See the Secretariat Commentary on CISG Art. 46:
Cf. Enderlein & Maskow, op. cit., at 179, where the authors make the following comment:
33. The reason for such restriction to specific performance is made clear in the Secretariat Commentary:
34. For the definition of fundamental breach, see CISG Art. 25: A fundamental breach with regard to non-conformity of the goods occurs when the delivery of the defective goods substantially deprives the buyer of what the buyer is entitled to expect under the contract. For an analysis of the concept of fundamental breach and its application under the Convention, see Koch R., "The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods", in Pace ed., Review of the Convention on Contracts for the International Sale of Goods, 1998, Kluwer Law International (1999) 177 - 354; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/koch.html>.
A fundamental breach under CISG Art. 46(2) has to be determined in the same way as under article 49 and in accordance with the general definition given in CISG Art. 25.
See the UNCITRAL Digest of case law on CISG Art. 46 (A/CN.9/SER.C/DIGEST/CISG/46 [8 June 2004]), available online at <http://cisgw3.law.pace.edu/cisg/text/anno-art-46.html#ucd>, which makes the remarks quoted below (with accompanying references to corresponding case law):
| - | Germany 3 April 1996 Bundesgerichtshof [Supreme Court]; CLOUT case No. 171; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/960403g1.html> (case concerned the sale of cobalt sulphate with specific technical qualities; the delivered cobalt was of a lower quality than that agreed to under the contracts; in determining whether the non conformity was fundamental (CISG Art. 25), the court held that it is decisive whether the buyer can still make use of the goods or resell them in the usual commercial relationships without incurring any unreasonable difficulties; the fact that the buyer might be forced to resell the goods at a lower price is not to be considered in itself an unreasonable difficulty) |
| - | Switzerland 28 October 1998 Bundesgericht [Supreme Court];CLOUT case No. 248; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/981028s1.html> (in this case, the delivery of frozen meat which was too fat and too wet and therefore according to expert opinion worth ¼ less than meat of the contracted quality was considered not to constitute a fundamental breach of contract since the buyer had the opportunity to resell the meat at a lower price or to process it otherwise) |
Para 13, ibid.: "On the contrary, if the non-conforming goods cannot be used or resold with reasonable effort this constitutes a fundamental breach"; see
| - | France 23 January 1996 Cour de Cassation [Supreme Court] (Sacovini/M Marrazza v. Les fils de Henri Ramel); CLOUT case No. 150; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/960123f1.html> (case concerned artificially sweetened wine) |
| - | Germany 18 January 1994 Oberlandesgericht [Appellate Court] Frankfurt; CLOUT case No. 79; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/940118g1.html> (case concerned shoes with fissures in leather) |
| - | Germany 5 April 1995 Landgericht [District Court] Landshut; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950405g1> (case concerned T-shirts which shrink by about 10 - 15 % (two sizes) after first washing) |
Para 13, ibid.: "The same is true where the goods suffer from a serious defect -- although they may still be used to some extent"; see
| - | Austria 1 July 1994 Oberlandesgericht [Appellate Court] Innsbruck; CLOUT case No. 107; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/940701a3.html> (case concerned garden flowers (daisies) which should flourish the whole summer but did so only for a minor part of it) |
Para 13, ibid.: "[O]r where the goods have major defects and the buyer needs the goods for manufacture"; see
| - | United States 6 December 1995 Federal Appellate Court [2nd Circuit] (Delchi Carrier v. Rotorex); CLOUT case No. 138; case presentation available at <http://cisgw3.law.pace.edu/cases/951206u1.html> (case concerned lower cooling capacity and higher power consumption than contracted of compressors delivered for the manufacture of air conditioners) |
| - | France 23 January 1996 Cour de Cassation [Supreme Court] (Sacovini/M Marrazza v. Les fils de Henri Ramel); CLOUT case No. 150; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/960123f1.html> (case concerned artificially sweetened wine) |
| - | France 26 May 1999 Cour de Cassation [Supreme Court] (Schreiber v. Thermo Dynamique); CLOUT case No. 315; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/990526f1.html> (case concerned metal sheets absolutely unfit for the foreseen kind of manufacture by the buyer's sub-buyer) |
Para 13, ibid.: "The same solution has been reached where the non-conformity of the goods resulted from added substances the addition of which was illegal both in the country of the seller and the buyer"; see
| - | France 23 January 1996 Cour de Cassation [Supreme Court] (Sacovini/M Marrazza v. Les fils de Henri Ramel) (case concerned artificially sweetened wine which is forbidden under EU-law and national laws); |
| - | Germany 12 October 1995 Landgericht [District Court] Trier; CLOUT case No. 170; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/951012g1.html> (case concerned bottles of artificially sweetened wine which were seized and destroyed by German authorities in the buyer's country) |
See also UNCITRAL Digest of case law on CISG Art. 46, op. cit.:
| - | Switzerland 26 April 1995 Handelsgericht [Commercial Court] Zürich; CLOUT case No. 196; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950426s1.html> (case concerned leak in saltwater isolation tank; the court held that the buyer had lost its right to declare the contract avoided under CISG Art. 49 because the buyer had failed to notify the seller about the lack of conformity of the goods in a timely fashion (CISG Art. 39 and 49(2)(b)(i)); the court also mentioned that the seller's failure to perform its obligation was probably not a fundamental breach as the damage concerned was easily repairable; however, since the buyer had lost its right under CISG Art. 49(2)(b)(i), the court did not address this question fully) |
Para 14, ibid.: "At least when the seller offers and effects speedy repair without any inconvenience to the buyer courts will not find that a breach is fundamental. This is in line with seller right to cure as provided for in article 48 of the Convention"; see
| - | France 26 April 1995 Cour d'appel [Appellate Court] Grenoble (Marques Roque Joachim v. Manin Rivière); CLOUT case No. 152; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950426f2.html> (case concerned the sale of a second hand portable warehouse shed; a certain quantity of the goods were not fit for the particular purpose of reassembly; since that defect related to only part of the warehouse and concerned metal elements which could be repaired, it did not constitute a fundamental breach such as to deprive the buyer of what he was entitled to expect under the contract) |
| - | Germany 31 January 1997 Oberlandesgericht [Appellate Court] Koblenz; CLOUT case No. 282; case presentation available at <http://cisgw3.law.pace.edu/cases/970131g1.html> (case concerned the quantity of the goods (acrylic blankets); since the seller had made an offer to deliver new goods, which was refused by the buyer, the lack of quality did not amount to a fundamental breach of contract (CISG Art. 25); in considering a breach to be fundamental, account has to be taken not only of the gravity of the defect, but also of the willingness of the party in breach to provide substitute goods without causing unreasonable inconvenience to the other party (CISG Art. 48(1)); thus, in this case, even a serious lack of quality was said not to constitute a fundamental breach as the seller had offered to furnish additional blankets (CISG Art. 49(1)); therefore, not only was the buyer not entitled to damages as it had rejected the seller's offer for new delivery without justification (CISG Art. 80) but buyer had also lost its right to reduce the price (CISG Art. 50)) |
35. In that case, the buyer must request substitute goods either in conjunction with a notice of non-conformity (CISG Arts. 39 and 43) or within a reasonable time thereafter (CISG Art. 46(2)).
In other words, the buyer forfeits his right by failure to give the required notice. The buyer is also entitled to set an additional period of time for performance in accordance with CISG Art. 47.
See also Enderlein & Maskow, op. cit., at 180, where the authors note:
36. Also in that case, the buyer must make the request for repair either in conjunction with a notice of non-conformity (CISG Arts. 39 and 43) or within a reasonable time thereafter (CISG Art. 46(3)). In other words, the buyer forfeits his right by failure to give the required notice. The buyer is also entitled to set an additional period of time for performance in accordance with CISG Art. 47.
37. In the case where the non-conformity of the goods is insubstantial, a request to repair is less onerous and more efficient than delivery of substitute goods. Note that the buyer's right to remedy the lack of conformity of the goods may be exercised in various ways. See the Secretariat Commentary on CISG Art. 46, op. cit.:
See also Enderlein & Maskow, op. cit., at 180, where the authors opine that the seller has an obligation to bear all costs involved in the repair of non-conforming goods: "Cure includes delivery of spare parts, and substitution of parts as well as repair itself." The authors, ibid., further note: "If there is a third party right or claim in respect of the goods, the cure may be such that the seller buys a patent or a license, or redeems a pledge or other right in title."
38. See Honnold (1999), op. cit., at 309, where the author informs that at the Diplomatic Conference it was noted that "some minor repairs could be made more readily by the buyer, particularly when the seller's facilities for repair are in a foreign country. The statutory language was designed to encourage a reasonable and flexible approach to such cases."
See also Kritzer, op. cit., at 348, where the author explains that the proviso of reasonableness in CISG Art. 46(3) was "so phrased to allow the courts to take into account the relative practicality of repairs for both buyer and seller" [references omitted and emphasis added].
See also Enderlein & Maskow, op. cit., at 180-181, where the authors comment:
It must also be noted that, in addition to being specifically mentioned in CISG Art. 46(3), reasonableness is a general principle of the Convention. For further views of commentators (Vilus, Schlechtriem, van der Velden, Maskow, Bonell and Honnold) on references to reasonableness in the CISG, go to <http://cisgw3.law.pace.edu/cisg/text/reason.html#view>.
39. For commentary and relevant case law on the buyer's right to require repair of non-conforming goods, see UNCITRAL Digest of case law on CISG Art. 46, op. cit.:
| - | France 29 January 1998 Cour d'appel [Appellate Court] Versailles (Giustina International v. Perfect Circle Europe); CLOUT case No. 225; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/980129f1.html> (case concerned defects in high tech equipment; the court noted that the buyer, when reporting the defects, had requested their rectification and had thus complied with the requirements set out in CISG Art. 46; with regard to the reasonable time for exercising the right of avoidance (CISG Art. 49), the court noted that the buyer had not failed to comply with that provision by suing the seller after giving notice of its intention to have the contract avoided, since the buyer had reasonably endeavoured to maintain the contract in force and the seller had requested additional periods of time, which were granted by the buyer (CISG Art. 47)) |
Para 18. "It is necessary that the goods are reparable so that the defect can be cured by repair. A request for repair would, however, be unreasonable if, e.g., the buyer could easily repair the goods himself. But the seller remains liable for any costs of such repair"; see
| - | Germany 9 June 1995 Oberlandesgericht [Appellate Court] Hamm; CLOUT case No. 125; case presentation including English translation available at http://cisgw3.law.pace.edu/cases/950609g1.html> (the court held that seller had to bear the costs incurred by buyer in installing the substitute window panes delivered by the seller) |
Para 19. "Repair is effectively executed when after repair the goods can be used as agreed"; see
| - | France 26 April 1995 Cour d'appel [Appellate Court] Grenoble (Marques Roque Joachim v. Manin Rivière); CLOUT case No. 152; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950426f2.html> (case concerned the sale of a second hand portable warehouse shed) |
Para 19, ibid.: "If the repaired goods subsequently become defective the buyer must give notice of the defects"; see
| - | Germany 9 November 1994 Landgericht [District Court] Oldenburg; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/941109g1.html> (the court opined that a failed repair represents another non- performance of the contract, so that the exercise of remedies of the buyer for breach of contract by the seller requires another notice) |
Para 19, ibid.: "It has been held that as to this notice the period of time of article 39 applies"; see:
| - | Germany 9 November 1994 Landgericht [District Court] Oldenburg |
Para 19, ibid.: "However, the request for repair can be notified within a reasonable time thereafter"; see
| - | France 29 January 1998 Cour d'appel [Appellate Court] Versailles (Giustina International v. Perfect Circle Europe); CLOUT case No. 225; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/980129f1.html> (case concerned defects in high tech equipment; the buyer, in conjunction with the notices of non-conformity, had required the seller to remedy the defects, in compliance with CISG Art. 46(3) CISG; the buyer granted to the seller an additional period of time for performance of its obligations as a result of the seller's announcement that it intended to repair the machines; in the opinion of the Court, having regard to the difficulties involved in the repairs, the additional period of time was of reasonable length and therefore satisfied the requirements of CISG Art. 47(1)) |
Para 19, ibid.: "A first notice within two weeks, a second notice after a month and further notices after six and eleven months have been regarded as notices within a reasonable time"; see
| - | France 29 January 1998 Cour d'appel [Appellate Court] Versailles (Giustina International v. Perfect Circle Europe); supra |
40. Regarding the obligations of the buyer under the Convention, see the text of the Convention, Chapter III, Obligations of the Buyer (Art. 53), Sections I Payment of the Price (Arts. 54 - 59) and II Taking Delivery (Art. 60). The seller's remedies for buyer's breach of the latter's corresponding obligations are set forth in the Convention Section III Remedies for Breach of Contract by Buyer (Arts. 61 - 65).
41. See CISG Art. 6, which establishes the primacy of the contractual provisions over the Convention.
42. The seller's right to require performance of the other party's obligations are subject to the concession to domestic law provided by CISG Art. 28; see Section II, supra. See also Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], Comment 6.
The same restriction applies to the corresponding remedy available to the buyer; see Sections II and III, supra.
43. Regarding the limitation imposed by CISG Art. 28 on CISG Art. 62, Farnsworth opines that the former does not apply to compel payment of the price under the latter. See Farnsworth E.A., "Damages and Specific Relief", 27 American Journal of Comparative Law (1979) 247-253; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/farns.html>. Ibid., at 249-250:
Cf. Honnold (1999), op. cit., at 381 - 382:
See also Schlechtriem (1986), op. cit., at p. 84, n. 333a:
For a detailed analysis of the issue, see Ziegel J.S., "The Remedial Provisions in the Vienna Sales Convention: Some Common Law Perspectives", in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 9, pp. 9-1 to 9-43; also available at <http://cisgw3.law.pace.edu/cisg/biblio/ziegel6.html>.
44. For relevant case law regarding the requirement to pay the price, see the UNCITRAL Digest of case law on CISG Art. 62 (A/CN.9/SER.C/DIGEST/CISG/62 [8 June 2004]); also available at <http://cisgw3.law.pace.edu/cisg/text/anno-art-62.html#ucd>. There are numerous cases on point, see e.g.:
| - | Germany 21 April 2004 Oberlandesgericht [Appellate Court] Düsseldorf; case presentation available at <http://cisgw3.law.pace.edu/cases/040421g2.html> (court upheld seller's claim for the payment of the price, in accordance with CISG Arts. 53 and 62) |
| - | Switzerland 19 February 2004 Bundesgericht [Supreme Court]; case presentation available at <http://cisgw3.law.pace.edu/cases/040219s1.html> (court held that buyer was thus obliged to pay, in accordance with CISG Art. 53, and the seller entitled to seek payment in accordance with CISG Art. 62) |
| - | Germany 27 October 2003 Oberlandesgericht [Appellate Court] Rostock; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/031027g1.html> (court held that, under CISG Art. 53, the buyer must pay the price for the goods as required by the contract and the Convention, and, accordingly, the seller may require the buyer to pay the price under CISG Art. 62) |
| - | Russia 17 September 2003 Arbitration proceeding 24/2003; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/030917r1.html> (The tribunal granted the seller's claim for payment for goods delivered, in accordance with CISG Arts. 53, 54, 61 and 62, as well as annual interest for the delay in payment, pursuant to CISG Art. 78) |
| - | Germany 15 July 2003 Landgericht [District Court] Mönchengladbach; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/030715g1.html> (case concerned buyer's refusal to pay price, but court awarded the seller the purchase price in accordance with CISG Arts. 53 and 62) |
| - | Belgium 2 December 2002 Hof van Beroep [Appellate Court] Gent; case presentation available at <http://cisgw3.law.pace.edu/cases/021202b1.html> (court ruled on the obligations of buyer to take receipt of goods and pay the price pursuant to CISG Arts. 53 and 62) |
| - | Argentina 21 July 2002 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court] Buenos
Aires (Cervecería y Malteria Paysandú S.A. v. Cervecería Argentina S.A.); case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/020721a1.html> (court concluded that the seller was entitled payment of the price plus interest, according to CISG Arts. 28, 53, 59, 61, 62 and 78) |
| - | Germany 27 February 2002 Landgericht [District Court] München; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/020227g1.html> (court upheld seller's claim for payment of the price pursuant to CISG Arts. 53 and 62, but also allowed a reduction of 30% in the purchase price for defects in the goods) |
| - | Germany 29 July 1998 Landgericht [District Court] Erfurt; CLOUT case No. 344; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/980729g1.html> (court held that the seller was entitled to recover the price under CISG Art. 62, plus interest under CISG Art. 78 CISG) |
| - | Germany 9 July 1997 Oberlandesgericht [Appellate Court] München; CLOUT case No. 273; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/970709g1.html> (court found that the seller's claim for the full purchase price was justified in accordance with CISG Arts. 53 and 62) |
| - | Germany 2 August 1996 Landgericht [District Court] Bielefeld; CLOUT case No. 376; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/960802g1.html> (court ordered buyer (i) to fulfil his obligation under the contract which was considered duly formed, and pay seller, in accordance with CISG Art. 62, the remainder of the purchase price; (ii) to reimburse seller for costs incurred due to bounced checks, in accordance with CISG Art. 61, and (iii) to pay interest on the purchase price, in accordance with CISG Art. 78) |
| - | Germany 8 March 1995 Oberlandesgericht [Appellate Court] München; CLOUT case No. 134; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950308g1.html> (it was held that a contract for 3,000 tons of electrolyte nickel/copper cathodes for approx. US $17 million had been effectively concluded between the parties and that the seller's claim for payment was justified under CISG Arts. 53 and 62) |
| - | ICC Arbitration Case No. 7197 of 1992; CLOUT case No. 104; case presentation available at
<http://cisgw3.law.pace.edu/cases/927197i1.html> (in this case the tribunal:
|
45. There is hardly any case law on the seller's right to require buyer to take delivery of the goods. For a general statement regarding inter alia buyer's refusal to take delivery, see Germany 8 February 1995 Oberlandesgericht [Appellate Court] München; CLOUT case No. 133; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950208g1.html> (case concerned contract for the sale of eleven cars).
46. For an explanatory note on the expression "[buyer's] other obligations", see the Text of the Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62]:
47. In that case, Art. 62 should apply in a straight-forward manner. See the Text of the Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-62.html>:
CISG article 62 and 1978 Draft Art. 58 are identical except for the reference to "this requirement" rather than "such requirement"; see match-up of CISG Art. 62 with Art. 58 of the 1978 Draft, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-62.html>. The Secretariat Commentary on Art. 58 of the 1978 Draft should therefore be relevant to the interpretation of CISG Art. 62.
Enforcing the buyer's obligation to pay the price resembles an action to collect a debt and it may give seller the right to recover the goods under CISG Art. 81(2). See Honnold, (1999), op. cit., 378 - 379.
Cf. U.S.A. Uniform Commercial Code 2-709 Action for the Price. Section 2-709(1)(a), which provides for recovery of the price when goods have been accepted by buyer.
48. In that case, the seller's right to compel the consummation of the transaction including receipt of the goods may not be so straight-forward. When the seller remains in possession of the goods other provisions of the Convention (CISG Arts. 85 - 88, provisions regarding preservation of the goods) may further restrict his right to compel the buyer to take delivery and pay the price. See Honnold, (1999), op. cit., 379 - 383.
Cf. U.S.A. Uniform Commercial Code Section 2-709(1)(b), which provides that a seller in possession of the goods may recover the price from the buyer when the seller is unable after reasonable efforts to resell the goods at a reasonable price.
49. See Section III, supra.
50. Further possible limitations on the remedy CISG Art. 62 provides seller to require performance of the buyer's obligations have been identified in relation to other provisions of her Convention (Arts. 7, 77, 78 and 79); see Kritzer, op. cit., 422.
Regarding the application of CISG Art. 79 [Impediment excusing a party from damages] and Art. 78 [Interest on sum in arrears], see Sevón L., "Obligations of the Buyer under the UN Convention on Contracts for the International Sale of Goods", in Sarcevic P. & Voken P. eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1986), Ch. 6, 203-238, also available at <http://cisgw3.law.pace.edu/cisg/biblio/sevon1.html>, at 224, where the author states:
Regarding CISG Art. 77 [Mitigation of damages], which provides that "a party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss", see Secretariat Commentary on Art. 73 of the 1978 Draft [draft counterpart of CISG Art. 77], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-77.html>.
Nor are principles of mitigation said to apply to an action by the buyer for specific performance under CISG Art. 46. The Secretariat Commentary on article 42 [draft counterpart of CISG Article 46(1) and (2)], op. cit., states:
Also, mitigation principles do not appear to require the injured party to choose the remedy which would be least expensive to the party in breach. A qualification to this conclusion could, however, apply to choice of damages remedies, i.e., as between Art. 75 and Art. 76 [provisions regarding the measurement of damages when contract has been avoided]. Language contained in the 1976 Draft of these articles that permitted the injured party to choose the damages remedy most beneficial to himself was changed. UNCITRAL Yearbook VIII, A/CN.9/SER.A/1977, pp. 161 and 59-60, paras. 472 and 489. Prior to that change, there was a Secretariat Commentary which stated that this was permissible. UNCITRAL Yearbook VII, A/CN.9/SER.A/1976, p. 137. However, with that change, this portion of that Secretariat Commentary was deleted.
51. The remedies of specific performance and avoidance are inconsistent with each other. See CISG Art. 81(1) [Effect of avoidance], which provides the following:
See also the Text of Secretariat Commentary on CISG Art. 62, op. cit.:
The seller is also deprived of the right to specific performance if he has fixed an additional period of time for performance (CISG Art. 63). See the UNCITRAL Digest of case law on CISG Art. 62, op. cit., para 3.
Cf. Sevón, op. cit., at 223, where the author states:
On the contrary, an action for damages for breach of contract (CISG Art. 74) is not inconsistent with a request for specific performance. See the Secretariat Commentary:
52. For the purposes of CISG Art. 62, obligee denotes seller and obligor denotes buyer.
53. This rule is said to "reflect a generally accepted principle that payment of money which is due under a contractual obligation can always be demanded and, if the demand is not met, enforced by legal action before a court." See Official Comment on UP Art. 7.2.1. The Official Commentary on UNIDROIT Principles, available online both at <http://cisgw3.law.pace.edu/cisg/principles/uni46.html#official> and <http://cisgw3.law.pace.edu/cisg/principles/uni62.html#official>.
The Official Commentary also makes clear that, in exceptional circumstances, "the right to require payment of the price of the goods or services to be delivered or rendered may be excluded. This is in particular the case where a usage [UP. Art. 1.8] requires a seller to resell goods which are neither accepted nor paid for by the buyer" [emphasis added]. Ibid.
54. See Section III, supra.
55. See Section IV, supra.
56. See Official Comments on UP Art. 7.2.2, op. cit.:
"In accordance with the general principle of the binding character of the contract (see Art. 1.3), each party should as a rule be entitled to require performance by the other party not only of monetary, but also of non-monetary obligations, assumed by that party. While this is not controversial in civil law countries, common law systems allow enforcement of non-monetary obligations only in special circumstances.
Following the basic approach of CISG (Art. 46) this article adopts the principle of specific performance, subject to certain qualifications.
The principle is particularly important with respect to contracts other than sales contracts. Unlike the obligation to deliver something, contractual obligations to do something or to abstain from doing something can often be performed only by the other contracting party itself. In such cases the only way of obtaining performance from a party who is unwilling to perform is by enforcement."
57. See Official Comments on UP Art. 7.2.2, op. cit.:
"While CISG provides that 'a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by [the] Convention' (Art. 28), under the Principles specific performance is not a discretionary remedy, i.e. a court must order performance, unless one of the exceptions laid down in the present article applies."
58. See Official Comments on UP Art. 7.2.2, op. cit.:
a. Impossibility. "A performance which is impossible in law or in fact, cannot be required (sub-para. (a)). However, impossibility does not nullify a contract: other remedies may be available to the aggrieved party. See Arts. 3.3 and 7.1.7(4).
The refusal of a public permission which is required under the applicable domestic law and which affects the validity of the contract renders the contract void (see Art. 6.1.17(1)), with the consequence that the problem of enforceability of the performance cannot arise. When however the refusal merely renders the performance impossible without affecting the validity of the contract (see Art. 6.1.17(2)), sub-para. (a) of this article applies and performance cannot be required."
Cf. CISG Art. 4(a), which provides that, except as otherwise expressly provided in the Convention, the CISG is "not concerned with the validity of the contract or of any of its provisions or of any usage".
59. See Official Comments on UP Art. 7.2.2, op. cit.:
b. Unreasonable burden. "In exceptional cases, particularly when there has been a drastic change of circumstances after the conclusion of a contract, performance, although still possible, may have become so onerous that it would run counter to the general principle of good faith and fair dealing (Art. 1.7) to require it." See also Illustration 1, ibid.
60. See Official Comments on UP Art. 7.2.2, op. cit.:
c. Replacement transaction. "Many goods and services are of a standard kind, i.e. the same goods or services are offered by many suppliers. If a contract for such staple goods or standard services is not performed, most customers will not wish to waste time and effort extracting the contractual performance from the other party. Instead, they will go into the market, obtain substitute goods or services and claim damages for non-performance. In view of this economic reality sub-para. (c) excludes specific performance whenever the party entitled to performance may reasonably obtain performance from another source. That party may terminate the contract and conclude a replacement transaction. See Art. 7.4.5. The word 'reasonably' indicates that the mere fact that the same performance can be obtained from another source is not in itself sufficient, since the aggrieved party could not in certain circumstances reasonably be expected to have recourse to an alternative supplier." See also Illustration 2, ibid.
61. See Official Comments on UP Art. 7.2.2, op. cit.:
d. Performance of an exclusively personal character. "Where a performance has an exclusively personal character, enforcement would interfere with the personal freedom of the obligor. Moreover, enforcement of a performance often impairs its quality. The supervision of a very personal performance may also give rise to insuperable practical difficulties, as is shown by the experience of countries which have saddled their courts with this kind of responsibility. For all these reasons, sub-para. (d) excludes enforcement of performance of an exclusively personal character. The precise scope of this exception depends essentially upon the meaning of the phrase 'exclusively personal character'. The modern tendency is to confine this concept to performances of a unique character. The exception does not apply to obligations undertaken by a company. Nor are ordinary activities of a lawyer, a surgeon or an engineer covered by the phrase for they can be performed by other persons with the same training and experience. A performance is of an exclusively personal character if it is not delegable and requires individual skills of an artistic or scientific nature or if it involves a confidential and personal relationship. The performance of obligations to abstain from doing something does not fall under sub-para. (d)." See also Illustrations 3 and 4, ibid.
62. See Official Comments on UP Art. 7.2.2, op. cit.:
e. Request within reasonable time. "Performance of a contract often requires special preparation and efforts by the obligor. If the time for performance has passed but the obligee has failed to demand performance within a reasonable time, the obligor may be entitled to assume that the obligee will not insist upon performance. If the obligee were to be allowed to leave the obligor in a state of uncertainty as to whether performance will be required, the risk might arise of the obligee's speculating unfairly, to the detriment of the obligor, upon a favourable development of the market. For these reasons sub-para. (e) excludes the right to performance if it is not required within a reasonable time after the obligee has become, or ought to have become, aware of the non-performance. For a similar rule concerning the loss of the right to terminate the contract, see Art. 7.3.2(2)."
63. See Official Comments on UP Art. 7.2.5, op. cit.:
64. See Official Comments on UP Art. 7.2.5, op. cit.:
65. See Official Comments on UP Art. 7.2.5, op. cit.:
66. See Official Comments on UP Art. 7.2.5, op. cit.:
67. For limitations, which are based on the concept of reasonableness and are placed on the right to require cure of defective performance, see Official Comments on UP Art. 7.2.3, op. cit.:
68. See Official Comments on UP Art. 7.2.3, op. cit.:
Comment 2. Cure of defective performance. "Under the Principles cure denotes the right both of the non-performing party to correct its performance (Art. 7.1.4) and of the aggrieved party to require such correction by the non-performing party. The present article deals with the latter right. The article expressly mentions two specific examples of cure, namely repair and replacement. Repairing defective goods (or making good an insufficient service) is the most common case and replacement of a defective performance is also frequent. The right to require repair or replacement may also exist with respect to the payment of money, for instance in case of an insufficient payment or of a payment in the wrong currency or to an account different from that agreed upon by the parties."
69. For an explanation of other forms of cure, see Official Comments on UP Art. 7.2.3, op. cit.:
70. The Convention does not provide penalties for non-compliance, nor does it make provision for judicial penalties. See relevant case law regarding contractual penalties, the validity and enforcement of which is left to the gap-filling performed by the applicable domestic law (in accordance with CISG Art. 7(2)):
| - | ICC Arbitration Case No. 7197 of 1992; CLOUT case No. 104; case presentation available at <http://cisgw3.law.pace.edu/cases/927197i1.html> (in this case the tribunal, applying Austrian law pursuant to CISG Art. 7(2), ruled that the exercise of the seller's right to demand compensation was not contrary to the penalty clause contained in the contract) |
| - | Russia 5 June 2003 Arbitration proceeding 2/2002; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/030605r1.html> (the tribunal found that pursuant to CISG Art. 53, the buyer must pay the sum in arrears sought by the seller for the goods delivered; the tribunal also stated that as any issues not settled in the CISG had to be governed by Russian domestic law (CISG Art. 7(2)), the seller could recover the payment of contractual penalties for the delay by buyer in payment of the price, in accordance with the Russian Federation Civil Code) |
| - | Russia 4 April 1997 Arbitration proceeding 387/1995; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/970404r1.html> (in this case, there existed a contractual provision that a fine shall be paid for any delay in payment; however, the tribunal took into account a confidential agreement signed by the parties, in accordance with which the period of time within which the payment was to be made was extended to 120 days and thus it ruled that the seller's claim of penalties for the delay in payment buyer could not sustained) |
71. See Official Comments on UP Art. 7.2.4, op. cit.:
72. See Official Comments on UP Art. 7.2.4, op. cit.:
73. See Official Comments on UP Art. 7.2.4, op. cit.:
74. See Official Comments on UP Art. 7.2.4, op. cit.:
75. See Official Comments on UP Art. 7.2.4, op. cit.:
76. See Official Comments on UP Art. 7.2.4, op. cit.:
77. See Official Comments on UP Art. 7.2.4, op. cit.:
Comment 7. Recognition and enforcement of decisions imposing penalties. "Attention must be drawn to the problems of recognition and enforcement, in countries other than the forum State, of judicial decisions and of arbitral awards imposing penalties. Special rules on this matter are sometimes to be found in national law and to some extent in international treaties."
Pace Law School
Institute of International Commercial Law - Last updated September 14, 2009