(1) A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of:
(a) a serious deficiency in his ability to perform or in his creditworthiness; or
(b) his conduct in preparing to perform or in performing the contract.
(2) If the seller has already dispatched the goods before the grounds described in the preceding paragraph become evident, he may prevent the handing over of the goods to the buyer even though the buyer holds a document which entitles him to obtain them. The present paragraph relates only to the rights in the goods as between the buyer and the seller.
(3) A party suspending performance, whether before or after dispatch of the goods, must immediately give notice of the suspension to the other party and must continue with performance if the other party provides adequate assurance of his performance.
OUTLINE OF ISSUES
Reproduced with permission of UNCITRAL
71A Apparent that a party will not perform substantial part of
obligations 71A1 Grounds for suspension by other party (art. 71(1)) 71A11 Serious deficiency in ability to perform or credit-worthiness
71A12 Conduct in performing or preparing to perform contract 71B Grounds for seller's stoppage of goods in transit (art. 71(2)) 71B1 Apparent after dispatch that buyer will not pay
71B2 Seller may prevent handing over of goods although 71B21 Buyer holds document which entitles buyer to obtain goods
71B22 Above rule applies only to rights between buyer and seller
71B23 Controls whether carrier should deliver to buyer or seller 71B3 Stoppage in relation to third parties 71B31 Governed by applicable domestic law 71C Obligations of party suspending performance (art. 71(3)) 71C1 Immediately notify other party 71D Continuation of performance on receipt of adequate assurance 71D1 Adequacy of assurance
71D2 Extension of time because of suspension
71D3 Consequences of failure to provide adequate assurance 71E Other problems
DESCRIPTORS
Anticipatory breach ; Suspension of performance ; Stoppage in transit
CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES
Presented below is a composite list of Art. 71 case citations identifying UNCITRAL Digest cases and other Art. 71 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 17 December 2001 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. Netherlands 29 July 2009 Rechtbank [District Court] Arnhem (___ v. Omnibus Trading B.V.)
United States 29 May 2009 Federal District Court [New York] (Doolim Corp. v. R Doll LLC et al.) 71A1
Germany 19 May 2008 Oberlandesgericht [Appellate Court] Köln (Pesticide case) 71A1 [translation available]
Germany 27 November 2007 Bundesgerichtshof [Federal Supreme Court] 71A1 [translation available]
Netherlands 18 July 2007 Rechtbank [District Court] Utrecht (Prodema S.A. v. Michon B.V) 71C [translation available]
Switzerland 17 July 2007 Bundesgericht [Federal Supreme Court] (Kickboards, scooters case) 71A11 [translation available]
Hungary 6 June 2007 Congrád County Court (Clothing case) [translation available]
Poland 11 May 2007 Supreme Court (Shoe leather case) 71A1 [translation available]
Switzerland 2 April 2007 Kassationsgericht [Canton Supreme Court] Zürich 71A11 [translation available]
France 20 February 2007 Cour de cassation [Supreme Court] (Perfume case) 71A11 [translation available]
Switzerland 20 December 2006 Bundesgericht [Supreme Court] [translation available]
China September 2006 CIETAC Arbitration Award [CISG 2006/10] (Printing machine case) 71A [translation available]
Russia 13 April 2006 Arbitration Award 105/2005 71A [translation available]
Russia 13 February 2006 Arbitration Award 102/2005 (Equipment case) 71A1 [translation available]
Russia 20 January 2006 Arbitration Award 84/2005 [translation in process]
Austria 8 November 2005 Oberster Gerichtshof [Supreme Court] 71A1 [translation available]
Netherlands 11 October 2005 Gerechtshof [Appellate Court] 's-Hertogenbosch
Netherlands 31 August 2005 Gerechtshof [Appellate Court] Leeuwarden (Auto-Moto Styl S.R.O. v. Pedro Boat B.V.) 71A [translation available]
China 29 June 2005 Shanghai Intermediate People's Court [District Court] (Yiwu Ma Ji Import and Export Co. Ltd. v. Y&Q International Group) 71A [translation available]
China 24 February 2005 CIETAC Arbitration Award [CISG 2005/07] (Pork case) 71A [translation available]
China 24 February 2005 CIETAC Arbitration Award [CISG 2005/08] (Second pork case) 71A ; 71B ; 71C [translation available]
Ukraine 2005 Arbitration Award Case no. 48 71C1 [translation available]
Russia 12 November 2004 Arbitration Award 174/2003
Germany 6 October 2004 Oberlandesgericht [Appellate Court] Frankfurt 71A [translation available]
Germany 22 July 2004 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
Germany 20 July 2004 Oberlandesgericht [Appellate Court] Karlsruhe (Shoes case) 71A [translation available]
Russia 24 May 2004 Arbitration Award 138/2003 71A1 [translation available]
Ukraine 15 April 2004 Tribunal of International Commercial Arbitration, Ukrainian Chamber of Commerce & Trade [translation available]
Spain 5 February 2004 Audiencia Provincial [Appellate Court] Cantabria 71B
Netherlands 27 January 2004 Gerechtshof [Appellate Court] 's-Hertogenbosch
Netherlands 16 December 2003 Gerechtshof [Appellate Court] 's-Hertogenbosch
Germany 15 September 2003 Oberlandesgericht [Appellate Court] Rostock 71A12 [translation available]
Canada 21 August 2003 British Columbia Supreme Court (Mansonville v. Kurtz) 71A1
Switzerland 10 March 2003 Kantonsgericht [District Court] Appenzell Auserrhoden 71A [translation available]
ICC 2003 International Court of Arbitration, Case 11849 (Fashion products case) 71A [English text]
China 27 December 2002 CIETAC Arbitration Award [CISG 2002/29] (Medicine manufacturing equipment case) 71A1 [translation available]
Netherlands 15 October 2002 Netherlands Arbitration Institute Case No. 2319 71C [English text]
Russia 6 August 2002 Arbitration Court [Appellate Court] for Western Siberia Region (Case No. F04/2712-494/A03-2002) 71A [translation available]
Germany 21 December 2001 Landgericht [District Court] Hamburg (Natural stones case) 71A1 [translation available]
* United States 17 December 2001 U.S. District Court [Michigan] (Shuttle Packaging Systems v. Tsonakis)
Germany 29 May 2001 Landgericht [District Court] Darmstadt 71A ; 71C [translation available]
China February 2001 CIETAC Arbitration Award [CISG/2001/01] (Equipment, material and services case) [translation available]
* Germany 12 October 2000 Landgericht [District Court] Stendal 71A [translation available]
* Belgium 26 April 2000 Hof van Beroep [Appellate Court] Gent 71C [translation available]
Germany 6 April 2000 Landgericht [District Court] München 71A1 [translation available]
Spain 27 March 2000 Audiencia Provincial [Appellate Court] Navarra
ICC 2000 International Court of Arbitration, Case 8790 71A1 [English text]
* Germany 27 December 1999 Oberlandesgericht [Appellate Court] Dresden 71A1 [translation available]
Germany 28 October 1999 Oberlandesgericht [Appellate Court] Braunschweig [translation
available]
* Russia 27 July 1999 Arbitration award 302/1996 71C1 [translation available]
* ICC July 1999 International Court of Arbitration, Case 9448 [English text]
China 1 March 1999 CIETAC Arbitration Award [CISG/1999/12] (Canned mandarin oranges case) 71A1 [translation available]
ICC 1999 International Court of Arbitration, Case 8547 71A1 [English text]
* Netherlands 2 October 1998 Arrondissementsrechtbank [District Court] 's Hertogenbosch 71A [translation available]
* Germany 23 June 1998 Oberlandesgericht [Appellate Court] Hamm 71A1 ; 71C [translation available]
China 22 June 1998 Shanghai Second Intermediate People's Court [District Court] (China Yitou Group Company. v. Germany Gerhard Freyso LTD GmbH & Co.) 71A [translation available]
Russia 25 May 1998 Arbitration award 104/1997 71A1 [translation available]
* Austria 12 February 1998 Oberster Gerichtshof [Supreme Court] 71A11 [translation available]
Russia 22 January 1998 Arbitration award 102/1997 71A ; 71C [translation available]
China 16 December 1997 CIETAC Arbitration Award [CISG/1997/35] (Hot-dipped galvanized steel coils case) 71A [translation available]
* Germany 24 April 1997 Oberlandesgericht [Appellate Court] Düsseldorf 71A [translation available]
* ICC 23 January 1997 International Court of Arbitration, Case 8611 [translation available]
* Germany 8 January 1997 Oberlandesgericht [Appellate Court] Köln 71A1 [translation available]
* ICC January 1997 International Court of Arbitration, Case 8786 71A [English text]
China 18 December 1996 CIETAC Arbitration Award [CISG/1996/56] (Lentil case) 71A1 [translation available]
* ICC September 1996 International Court of Arbitration, Case 8574 71A [English text]
China 8 August 1996 CIETAC Arbitration Award [CISG/1996/36] (Diaper machine case) 71A12 [translation available]
* Switzerland 31 May 1996 Zürich Chamber of Commerce, Arbitration ZHK 273/1995
[English text]
Germany 19 April 1996 Landgericht [District Court] Aachen China 29 March 1996 CIETAC Arbitration Award [CISG/1996/16] (Natural rubber case) 71A1 [translation available]
China 27 February 1996 CIETAC Arbitration Award [CISG/1996/11] (Wool case) [translation available]
* Austria 6 February 1996 Oberster Gerichtshof [Supreme Court] [translation available]
* Hungary 5 December 1995 Budapest Arbitration award Vb 94131 71A12 [translation available]
Netherlands 30 November 1995 Arrondissementsrechtbank [District Court] Roermond
* Hungary 17 November 1995 Budapest Arbitration award Vb 94124 71A1 ; 71D3
Belarus 5 October 1995 Belarusian Chamber of Commerce and Industry International Court of Arbitration Case No. 24/13-95 (ATT v.Armco) 71A1 [translation available]
Germany 21 September 1995 Landgericht [District Court] Kassel 71A11 [translation available]
* Austria 23 May 1995 Oberlandesgericht [Appellate Court] Linz
Belgium 1 March 1995 Rechtbank van Koophandel [District Court] Hasselt 71A
* Germany 15 September 1994 Landgericht [District Court] Berlin 71A1 [translation available]
China 30 March 1994 CIETAC Arbitration Award [CISG/1994/04] (Cow's liver fungus case) 77A [translation available]
Bulgaria 24 January 1994 Bulgaria Chamber of Commerce Arbitration award 39/93 71A [translation available]
* Germany 14 January 1994 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]
* Belgium 13 November 1992 Tribunal commercial [District Court] Bruxelles 71A [translation available]
* Germany 22 September 1992 Oberlandesgericht [Appellate Court] Hamm (Frozen bacon case) [translation available]
Germany 9 July 1992 Landgericht [District Court] Düsseldorf
* Germany 31 January 1991 Amtsgericht [Lower Court] Frankfurt 71B ; 71C [translation available (excerpt)]
China 1989 CIETAC Arbitration Award [CISG/1989/02] (Thai-made emulsion case) 71A ; 71C [translation available]
CASE DIGEST AND ANALYSIS
The UNCITRAL Digest of case law on the United
A/CN.9/SER.C/DIGEST/CISG/71 [8 June 2004]
[Chapter V. Provisions Common to the
Text of Article 71
SECTION I. ANTICIPATORY BREACH AND INSTALMENT CONTRACTS 1. Section 1 includes three articles. Under the first two articles, an aggrieved party may suspend its obligations (art. 71) or avoid the contract (art. 72) before the time for performance is due if the conditions of these articles are satisfied. Where the parties have entered into a contract by which the goods are to be delivered in instalments, an aggrieved party may avoid the contract with respect to a single instalment, future instalments, or the contract as a whole as provided in the third article (art.73). DIGEST OF ARTICLE 71 CASE LAW
1. Article 71 authorizes a seller or a buyer to suspend performance of its obligations
under the sales contract if it is unlikely to receive the substantial benefit of the counter-performance promised by the other party. The suspending party does not breach the
contract if the suspension is rightful.[1] If, however, the suspension is not authorized by
article 71, the suspending party will breach the contract when it fails to perform its
obligations.[2] The right to suspend exists until the time for performance is due but once the
date for performance has passed the aggrieved party must look to other remedies under the
Convention.[3] The right continues until the conditions for suspension no longer exist, there is
a right to avoid the contract, or the other party gives adequate assurance of performance in
accordance with article 71(3).[4] The Convention rules on the right to suspend displace
domestic sales law rules that permit the suspension of a party's obligation.[5] 2. The right to suspend under article 71 is to be distinguished from the right to avoid the
contract under article 72.[6] Unlike the avoidance of a contract, which terminates the
obligations of the parties (see article 81), the suspension of contractual obligations
recognizes that the contract continues but encourages mutual reassurance that both parties
will perform. The preconditions for exercise of the right to suspend and the right to avoid
differ, as do the obligations with respect to communications between the two parties. 3. The right to suspend under article 71 applies both to contracts of sale for a single
performance and to instalment contracts governed by article 73. When the preconditions of
both articles are satisfied, the aggrieved party may choose between suspending
performance and avoiding the contract with respect to future instalments under article
73(2).[7] If a party chooses to suspend performance with respect to future instalments it must
give a notice in accordance with article 71(3).[8] 4. The parties may agree, pursuant to article 6, to exclude application of article 71 or
to derogate from its provisions. One decision found that by agreeing to take back
equipment, repair it and then redeliver it promptly, the seller had implicitly agreed to
derogate from article 71 and therefore could not suspend its obligation to redeliver the
equipment because of the buyer's failure to pay past debts.[9] 5. A party is entitled to suspend its obligations under paragraph (1) of article 71[10] if it
becomes apparent that the other party will not perform a substantial part of its obligations[11]
and if the nonperformance is the result of either of the causes set out in subparagraphs (a)[12]
and (b).[13] It is not necessary that the failure amount to a fundamental breach.[14] 6. A party was found to be entitled to suspend its obligations in the following
circumstances: seller's refusal to perform with respect to certain items;[15] seller's inability to
deliver goods free of restriction imposed by seller's supplier;[16] buyer's failure to pay for the
goods;[17] buyer's nonpayment or delayed payment of the price under one or more earlier
sales contracts;[18] buyer's failure to open an effective bank guarantee.[19] A buyer's failure to
open a letter of credit gives rise to the right to avoid the contract under article 64 and the
buyer is not limited to the remedies of articles 71 and 72.[20] 7. A buyer was found not entitled to suspend its obligations in the following
circumstances: seller's nonconforming delivery of only 420 kg. out of 22,400 kg.;[21] buyer
had received partial delivery;[22] buyer had received the goods invoiced and the
nonconformity related to goods delivered under a different contract.[23] Several decisions
observe that buyer's submissions to the court failed to indicate that the seller would not
perform a substantial part of its obligations.[24] 8. A seller was found not entitled to suspend its obligations in the following
circumstances: the buyer had not paid the purchase price for two deliveries and that the
buyer had cancelled a bank payment order;[25] the seller had not established that the buyer
would be unable to take delivery or to pay for the goods notwithstanding that the goods
might not conform with health standards issued by the government in the buyer's place of
business.[26] 9. Paragraph (2) of article 71 authorizes a seller that has already dispatched the goods
to stop the handing over of the goods to the buyer. There are no reported cases applying
this paragraph[27]. 10. Paragraph (3) of article 71 requires the suspending party to give notice of the
suspension immediately[28] to the other party.[29] The paragraph does not specify what
constitutes notice. The following statements or acts have been found to be sufficient
notice: buyer's refusal to pay the costs of warehousing furniture when it had earlier agreed
to contribute to these costs;[30] a letter in which the buyer refused to accept nonconforming
items and offered to return them.[31] However, there was insufficient notice in the following
circumstances: buyer's failure to pay the price;[32] a letter with respect to defects under other
contracts.[33] 11. Paragraph (3) does not state expressly the sanction for failing to give immediate
notice of suspension. Decisions uniformly conclude that in the absence of due notice the
aggrieved party may not rely on its right to suspend performance[34]. One decision
concluded that the seller breached the contract by suspending delivery without immediately
giving notice of the suspension to the buyer and that the buyer was therefore entitled to
damages.[35] Adequate assurance of performance 12. Paragraph (3) requires a party that has suspended its performance to end its
suspension and continue to perform if the other party gives adequate assurance that it will
perform. The paragraph does not elaborate on the form and manner of this assurance and
does not state when the assurance must be given. There are no reported cases addressing
adequate assurance under this paragraph.[36] 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. [GERMANY Landgericht [District Court] Stendal 12 October 2000, available online at
<http://cisgw3.law.pace.edu/cases/001012g1.html>] (suspension not breach but a unilateral right
to modify time for performance); [ICC Court of Arbitration case No. 8786 of January 1997,
available online at <http://cisgw3.law.pace.edu/cases/988786i1.html>] (buyer would not breach
if it had exercised right to suspend). 2. CLOUT case No. 51 [GERMANY Amtsgericht [Lower Court] Frankfurt 31 January 1991,
available online at <http://cisgw3.law.pace.edu/cases/910131g1.html>] (buyer entitled to damages
because seller failed to give immediate notice that it was suspending delivery). 3. [ICC Court of Arbitration case No. 9448 of July 1999, available online at
<http://cisgw3.law.pace.edu/cases/999448i1.html>] (buyer not entitled to suspend obligation to
pay after it had taken delivery of goods even though less goods were delivered than contracted
for). 4. [GERMANY Landgericht [District Court] Stendal 12 October 2000, available online at
<http://cisgw3.law.pace.edu/cases/001012g1.html>] (suspension not breach but a unilateral right
to modify time for performance). 5. CLOUT case No. 238 [AUSTRIA Oberster Gerichtshof [Supreme Court] 12 February 1998,
available online at <http://cisgw3.law.pace.edu/cases/980212a3.html>] (see full text of decision).
6. [ICC Court of Arbitration case No. 8786 of January 1997, available online at
<http://cisgw3.law.pace.edu/cases/978786i1.html>] (buyer did not suspend obligations but
avoided contract under art. 72(1)); [ICC Court of Arbitration case No. 8574 of September 1996,
available online at <http://cisgw3.law.pace.edu/cases/968574i1.html>] (buyer's purchase of
substitute goods not a suspension of its obligations). 7. CLOUT case No. 238 [AUSTRIA Oberster Gerichtshof [Supreme Court] 12 February 1998,
available online at <http://cisgw3.law.pace.edu/cases/980212a3.html>]. 8. [RUSSIA Arbitration Award 302/1996 of 17 July 1999, available online at
<http://cisgw3.law.pace.edu/cases/990717r1.html>]. 9. CLOUT case No. 311 [GERMANY Oberlandesgericht [Appellate Court] Köln 8 January 1997,
available online at <http://cisgw3.law.pace.edu/cases/970108g1.html>] (see full text of the
decision). 10. The following decisions recognize the applicability of the Convention and the right to suspend
but fail to cite art.71; Maglificio Dalmine v. Coveres [BELGIUM Tribunal Commercial
[Commercial Court] Bruxelles 13 November 1992, available online at
<http://cisgw3.law.pace.edu/cases/921113b1.html>] (seller entitled to suspend delivery because
buyer failed to pay price under prior contract). 11. [GERMANY Oberlandesgericht [Appellate Court] Dresden 27 December 1999, available
online at <http://cisgw3.law.pace.edu/cases/991227g1.html>] (noting that there must be a mutual,
reciprocal relationship between the obligation suspended and the counter-performance). 12. The following cases cite subparagraph (a): CLOUT case No. 338 [GERMANY
Oberlandesgericht [Appellate Court] Hamm 23 June 1998, available online at
<http://cisgw3.law.pace.edu/cases/980323g1.html>]; CLOUT case No. 238 [AUSTRIA Oberster
Gerichtshof [Supreme Court] 12 February 1998, available online at
<http://cisgw3.law.pace.edu/cases/980212a3.html>; [SWITZERLAND Arbitration Award No.
273/95, Zürich Handelskammer 31 May 1996, available online at
<http://cisgw3.law.pace.edu/cases/960551s1.html>]. 13. The following cases cite subparagraph (b): Malaysia Dairy Industries v. Dairex Holland
[NETHERLANDS Rechtbank [District Court] 's-Hertogenbosch 2 October 1998, available online
at <http://cisgw3.law.pace.edu/cases/981002n1.html>]; CLOUT case No. 164 [HUNGARY
Budapest Arbitration Award case Vb 94124 of 5 December 1995, available online at
<http://cisgw3.law.pace.edu/cases/951205h1.html>] (see full text of decision); [GERMANY
Landgericht [District Court] Berlin 15 September 1994, available online at
<http://cisgw3.law.pace.edu/cases/940915.html>]. 14. [GERMANY Landgericht [District Court] Berlin 15 September 1994, available online at
<http://cisgw3.law.pace.edu/cases/940915.html>]. But see Shuttle Packaging Systems v.
Tsonakis, [Federal] Western District of Michigan, USA, 17 December 2001, available online at
<http://cisgw3.law.pace.edu/cases/011217u1.html>] (aggrieved party must show fundamental
breach to be entitled to suspend, seller entitled to suspend non-competition clause because buyer's
failure to pay was a fundamental breach). 15. [GERMANY Landgericht [District Court] Berlin 15 September 1994, available online at
<http://cisgw3.law.pace.edu/cases/940915.html>]. 16. CLOUT case No. 338 [GERMANY Oberlandesgericht [Appellate Court] Hamm 23 June
1998, available online at <http://cisgw3.law.pace.edu/cases/980623g1.html>] (citing art. 71(1)(a));
[AUSTRIA Oberlandesgericht [Appellate Court] Linz 23 May 1995, available online at
<http://cisgw3.law.pace.edu/cases/950523a3.html>], affirmed on other grounds, CLOUT case
No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at
<http://cisgw3.law.pace.edu/cases/960206a3.html>]. 17. CLOUT case No. 164 [HUNGARY Budapest Arbitration Award case Vb 94131 of 5
December 1995, available online at <http://cisgw3.law.pace.edu/cases/951205h1.html>] (citing
art. 71(1)(b), court found seller justified in suspending its obligation to repair non-conforming goods
(see full text of the decision. See also [ICC case No. 8611 of 23 January 1997, available online
at <http://cisgw3.law.pace.edu/cases/978611i1.html>] (noting that seller's failure occurred before
it would have been entitled to suspend performance under art, 71(1)(b) because of buyer's non-payment). 18. J.P.S. BVBA v. Kabri Mode BV, BELGIUM Rechtbank van Koophandel [Commercial Court]
Hasselt 1 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950301b1.html>]
(seven month delay in payment); Maglificio Dalmine v. Coveres, BELGIUM Tribunal
Commercial [Commercial Court] Bruxelles 13 November 1992, available online at
<http://cisgw3.law.pace.edu/cases/921113b1.html>]. 19. [HUNGARY Budapest Arbitration Award case Vb/94124 of 17 November 1995, available
online at <http://cisgw3.law.pace.edu/cases/951117h1.html>] (bank guarantee opened with a date
that had already expired). 20. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996,
available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the
decision); but see [HUNGARY Budapest Arbitration Award case No. Vb 94124 of 17 November
1995, available on line at <http://cisgw3.law.pace.edu/cases/951117h1.html>] (right to suspend
under art. 71 when ineffective bank guarantee opened) 21. CLOUT case No. 227 [GERMANY Oberlandesgericht [Appellate Court] Hamm 22
September 1992, available online at <http://cisgw3.law.pace.edu/cases/920922g1.html>] (see full
text of the decision). 22. [ICC International Court of Arbitration case No. 9448 of July 1999, available online at
<http://cisgw3.law.pace.edu/cases/999448i1.html>] (buyer not entitled to suspend obligation the
pay after it had taken delivery of goods even though less goods than contracted for); CLOUT case
No. 275 [GERMANY Oberlandestgericht [Appellate Court] Düsseldorf 24 April 1997, available
online at <http://cisgw3.law.pace.edu/cases/970424g1.html>] 23. BV BA. J.P. V. S Ltd. [BELGIUM Hof van Beroep [Appellate Court] Gent 26 April 2000,
available online at <http://cisgw3.law.pace.edu/cases/000426b1.html>] 24. [GERMANY Oberlandesgericht [Appellate Court] Dresden 27 December 1999, available
online at <http://cisgw3.law.pace.edu/cases/991227g1.html>] ; [SWITZERLAND Arbitration
Award No. 273/95 Zürich Handelskammer 31 May 1996, available online at
<http://cisgw3.law.pace.edu/cases/960531s1.html>]. 25. CLOUT case No. 238 [AUSTRIA Oberster Gerichtshof [Supreme Court] 12 February 1998,
available online at <http://cisgw3.law.pace.edu/cases/980212a3.html>] (art. 71(1)(a) covers cases
where a party is subject to an insolvency proceeding or has completely ceased to pay but not
where payment is slow). 26. Malasia Dairy Industries v. Dairex Holland [NETHERLANDS Rechtbank [District Court] 's-Hertogenbosch 2 October 1998, available online at
<http://cisgw3.law.pace.edu/cases/981002n1.html>] (buyer offered to take delivery of the goods
in Free Trade zone). 27. CLOUT case No. 51 [GERMANY Amtsgericht [Lower Court] Frankfurt 31 January 1991,
available online at <http://cisgw3.law.pace.edu/cases/910131g1.html>] (unnecessary to decide
whether seller entitled to stop goods in transit because seller failed to give notice). 28. BV BA J.P. v. S Ltd. [BELGIUM Hof van Beroep [Appellate Court] Gent 26 April 2000,
available online at <http://cisgw3.law.pace.edu/cases/000426b1.html>] (notice not "immediate"
when related to deliveries made seven and fourteen months before). 29. See [ICC Court of Arbitration case No. 8611 of 23 January 1997, available online at
<http://cisgw3.law.pace.edu/cases/978611i1.html> ] (notice not necessary under circumstances
in case). 30. CLOUT case No. 338 [GERMANY Oberlandesgericht [Appellate Court] Hamm 23 June
1998, available online at <http://cisgw3.law.pace.edu/cases/980623g1.html>] 31. [GERMANY Landgericht [District Court] Berlin 15 September 1994, available online at
<http://cisgw3.law.pace.edu/cases/940915g1.html>] 32. [GERMANY Landgericht [District Court] Stendal 12 October 2000, available online at
<http://cisgw3.law.pace.edu/cases/001012g1.html>] (suspension not breach but a unilateral right
to modify time for performance). 33. BV BA J.P. v. S Ltd. [BELGIUM Hof van Bereop [Appellate Court] Gent 26 April 2000,
available online at <http://cisgw3.law.pace.edu/cases/000426b1.html>] (citing art. 73(1) for implicit
affirmation of this point). 34. [GERMANY Landgericht [District Court] Stendal 12 October 2000, available online at
<http://cisgw3.law.pace.edu/cases/001012g1.html>] (party may not rely on para. (1); [RUSSIA
Arbitration Award case No. 302/1996 of 27 July 1999, available online at
<http://cisgw3.law.pace.edu/cases/990727r1.html>]; CLOUT case No. 51 [GERMANY
Amtsgericht [Lower Court] Frankfurt 31 January 1991, available online at
<http://cisgw3.law.pace.edu/cases/910131g1.html>] (seller may not rely on right to stop goods in
transit pursuant to para. (2)). 35. CLOUT case No. 51 [GERMANY Amtsgericht [Lower Court] Frankfurt 31 January 1991,
available online at <http://cisgw3.law.pace.edu/cases/910131g1.html>]. 36. A similar reference to adequate assurance is made in art; 72(2) and cases under that provision
may be found relevant. [ICC Court of Arbitration case No. 8786 of January 1997, available
online at <http://cisgw3.law.pace.edu/cases/978786i1.html>]; CLOUT case No. 130 [GERMANY
Oberlandesgericht [Appellate Court] Düsseldorf 14 January 1994, available online at
<http://cisgw3.law.pace.edu/cases/940114g1.html>] (see full text of decision). Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*] excerpt from Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
[...] [Articles 71, 72 and 73] The CISG provisions set a high threshold before a party anticipates a breach and can suspend
performance.[687] Anticipatory breach under Articles 71, 72, and 73 can occur in various
contexts in the performance of a contract.[688] These Articles aim to provide a remedy while
keeping the contract intact. A party may suspend the performance of his obligations if it becomes
apparent that the other party will not substantially perform because of a serious deficiency in its ability
to perform, such as poor creditworthiness, or in its failure to prepare to perform.[689] If these
preconditions exist, a party can suspend performance. Alternatively, if a seller has dispatched the
goods, he may prevent the goods from being handed over to the buyer.[690] Article 72 allows
the suspending party to terminate the contract by electing the remedy of avoidance.[691] The narrowness of the preconditions for suspension of performance is designed to prevent abuse of
anticipatory breach. Another limitation on suspension of performance is that the party suspending
performance must immediately give notice of suspension to the other party.[692] "Reasonable
notice" to the other party enables the opportunity to provide adequate assurance of his performance.
The final context in which the CISG addresses common obligations of [page 411] buyers and sellers
for anticipatory breach is Article 73. Article 73 provides the threshold for fundamental breach in the
context of installment contracts.[696] If one party's failure to perform any of his obligations
constitutes a fundamental breach of contract with respect to that installment, the other party may
declare the contract avoided only with respect to that installment.[697] However, if the failure
to perform with respect to one installment gives the non-breaching party reasonable grounds to
believe that the breaching party will not deliver a future installment, the anticipation of future
breaches equates to a fundamental breach allowing the non-breaching party to declare the contract
avoided.[698] The issues of fundamental breach as they pertain to installment contracts will be
explored more fully below in Part VI.B.2. [page 412] [...] 2. Anticipatory Breach, Adequate Assurance, and Installment Contracts: Articles 71-73 and the Importance of Notice The concept of fundamental breach is also a determining factor in the context of anticipatory breach.
The CISG affords both buyers and sellers the right to suspend or avoid a contract due to a
fundamental breach under Articles 71-73.[717] If a fundamental breach occurs or is likely to
occur, the non-breaching party may seek to suspend performance under Article 71 or to avoid the
contract under Article 72. Although there is no bright-line standard for determining the degree of
certainty needed to anticipate fundamental breach, there should be a very high degree of probability
that the breach will occur.[718] [page 415] The installment contract requires a more complicated analysis. A breach of an installment must be
analyzed to determine if the breach is to be considered fundamental within the installment and the
contract as a whole. Article 73(1) implies that as a general rule, a breach of an installment
performance gives the other party the right to declare the contract avoided only with respect to the
installment.[719] If, however, it is determined to be fundamental to the whole, then the non-breaching party may avoid obligations in connection with future deliveries.[720] A stronger case
for fundamental breach is made when there are a series of defective installment performances. This
occurred in the Spanish case of T. SA v. E.[721] Here, the seller delivered three installments four
and eight weeks past the agreed upon dates, causing disruption to the buyer's production process.
The court ruled that avoidance was proper and canceled the remaining installments due under the
contract.[722] In addition to fundamental breach, a second issue that often arises in connection with anticipatory
breach is the sufficiency of notice. In many instances, notice is improperly made or given too late.
It should be noted that consistent with Article 27, if any notice is made by "means appropriate in the
circumstances," a delay or error in the transmission of the communication or its failure to arrive does
not deprive that party of the right to rely on the communication.[723] Under Article 71, a party
suspending performance must "immediately" give notice of the suspension to the other party.
[724] Such notice is to be given as soon as the party makes the decision to suspend performance.
[725] For example, simply failing to pay the purchase price does not replace the notification that
payment of the purchase price is being suspended until the other party properly fulfills the contract
or [page 416] provides adequate assurance. The importance of notice is a general theme found throughout the CISG.[726] It is particularly
evident in Article 71(2). Failure to give proper notice under Article 71(2) results in the revocation
of an otherwise reasonable suspension of performance. A German court held that reasonable doubts
about the buyer's creditworthiness were not sufficient to overcome the seller's failure to give notice
pursuant to Article 71(3).[727] The court reasoned that if the seller wanted to exercise his right
of suspension, he was obligated to inform the buyer about any doubts regarding her creditworthiness
or ability to perform her duties and liabilities under the sales contract. Inasmuch as the seller did not
demonstrate that he gave any such notice and information to the buyer, he was not permitted to
suspend performance. Hence, notification is an absolutely necessary prerequisite for exercising the
right of suspension for anticipatory breach.[728] Proper notice must also be given for a party to avail itself of the avoidance provisions in Article 72,
except that the standard is slightly different.[729] Under Article 72, the party intending to declare
the contract avoided must give "reasonable notice" to the other party to allow that party the
opportunity to provide adequate assurance of performance.[730] The substance of the notice is
just as important as the timing; notice must be given prior to the date of performance.[731] After
the parties have performed the contract, neither party is entitled to declare the contract avoided under Article 72. [page 417] [...] FOOTNOTES * For a subsequent text on this subject by these authors, see Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer & Marisa Pagnattaro, "International Sales Law: A Critical Analysis of CISG Jurisprudence", Cambridge University Press (2005) 241 p. [...] 687. Jelena Vilus, Provisions Common to the Obligations of the Seller and the Buyer, in International Sale of Goods; Dubrovnik Lectures, supra note 512 [available at <http://cisgw3.law.pace.edu/cisg/biblio/vilus.html>]. 688. See generally, Seig Eiselen, Remarks on the Manner in Which the UNIDROIT Principles
of International Commercial Contracts may be Used to Interpret or Supplement Articles 71 and 72
of the CISG (Sept. 2002) available at <http://cisgw3.law.pace.edu/cisg/principles/uni71,72.html> (using
the UNIDROIT principles as an aid to the interpretation of Articles 71-71 of the CISG); Seig
Eiselen, Remarks on the Manner In Which The Principles of European Contact Law May Be Used
to Interpret or Supplement Articles 71 and 72 of the CISG (Sept. 2002) available at
<http://cisgw3.law.pace.edu/cisg/text/peclcomp71,72.html> (using the European Union legal principles
as an aid to the interpretation of Articles 71-71 of the CISG). 689. CISG, supra note 4, at arts. 71(1)(a) and (b). 690. Id. at art. 71(2). 691. Id. at art. 72. 692. Id. at art. 71(3). 693. Id. at art. 72(2). 694. Id. at art. 71(3). 695. Id. 696. Id. at art. 73. 697. Id. at art. 73(1). 698. Id. at art. 73(2). As is the case in other instances of avoidance, however, notice must be
provided to the other party within a reasonable time. Id. Note that a buyer who declares the contract
avoided in respect to any delivery may, at the same time, declare it avoided in respect to deliveries
already made or of future deliveries if, by reason of interdependence, those deliveries could not be
used for the purpose contemplated by the parties at the time of the conclusion of the contract. Id. at
art. 73(3). [...] 717. CISG supra note 4, at arts. 71-73. See Shuttle Packaging Sys., LLC, 2001 WL 34046276. 718. LG Berlin 99 O 123/92, Sept. 30, 1992 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/920930g1.html>. The chance of a breach should be "clear" or
obvious to anyone. In German, the standard is defined by the words "it is clear" or offensichtlich.
Id. For example, in a German case, a seller delivered the goods to a third-party's warehouse; after
the third-party declared bankruptcy and the goods disappeared, the seller attempted to collect the
alleged outstanding purchase price from the buyer. The court held that the buyer was not obligated
to pay the purchase price, because the seller did not prove that the goods were lost after the risk
passed to the buyer. OLG Hamm 19 U 127/97, Jun. 23, 1998, supra note 544. Parties are generally
allowed to avoid a contract under similar circumstances under Article 72. For example, a buyer was
entitled to terminate a contract concerning non-delivered goods where the seller only made a partial
delivery after the price of the goods rose significantly. Arbitration Court attached to the Hungarian
Chamber of Commerce and Industry, Vb/97142, May 25, 1999 (Hung.), CLOUT Case No. 265,
available at [<http://cisgw3.law.pace.edu/cases/990525h1.html>]. In another case, a seller was
entitled to avoid a contract after the buyer failed to settle other bills with the seller. The buyer
ordered 140 pairs of winter shoes from the seller; after the shoes were manufactured, seller demanded
security for the sales price as the buyer still had other unsettled bills with the seller. Because the
buyer did not pay and did not furnish security, the court held that the seller had the right to avoid the
contract. OLG Düsseldorf 17 U 146/93, Jan. 14, 1994 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/940114g1.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen]. 719. CISG, supra note 4, at art. 73(1). See, e.g., Schiedsgericht der Hamburger
freundschaftlichen Arbitrage [Arbitral Award], Dec. 29, 1998 (F.R.G.), CLOUT Case No. 293,
available at [<http://cisgw3.law.pace.edu/cases/981229g1.html>] [English translation by Todd Fox, translation edited by Dr. Loukas Mistelis]. 720. S.A.R.L. Bri Production "Bonaventure" v. Société Pan Africa Export, supra note 713. 721. T. SA v. E., Audiencia Provincial [Appellate Court] de Barcelona, sección 16a, Nov. 3,
1997 (Spain), CLOUT Case No. 246, available at
[<http://cisgw3.law.pace.edu/cases/971103s4.html>]. 722. Id. In order to protect the right of avoidance, the avoiding party must give "reasonable
notice" that a fundamental breach will occur with respect to future installments. CISG, supra note
4, at art. 73(2). See generally HG Zürich, HG 930634, Nov. 30, 1998, supra note 339. 723. CISG, supra note 4, at art. 27; See LG Stendal 22 S 234/94, Oct. 12, 2000 (F.R.G.),
available at <http://cisgw3.law.pace.edu/cases/001012g1.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen]. 724. CISG, supra note 4, at art. 71(3). 725. This was particularly true in a case in which the parties agreed upon a modification of the
contract by reducing the purchase price. LG Stendal 22 S 234/94, Oct. 12, 2000, supra note 723. 726. See, e.g., CISG, supra note 4, at arts. 18(3), 19(2), 21, 26, 27, 39, 43(1), 46(2), 47(1), 48,
63(2), 65(2), 71(3), 72(2), 73(2), 79(4), and 88(1). 727. AG Frankfurt 32 C 1074/90-41, Jan. 31, 1991, supra note 618. 728. Id. See generally Hof van Beroep Gent, 1997/AR/2235, Apr. 26, 2000 (Belg.), available at <http://cisgw3.law.pace.edu/cases/000426b1.html> [English translation by Benoit Samyn, translation edited by Sieg Eiselen]; Netherlands Arbitration Institute 2319, Oct. 15,
2002. 729. CISG, supra note 4, at art. 72. 730. Id. at art. 72(2). The plain language of Article 72 reveals that a party needs to "simply
allege (1) that the defendant intended to breach the contract before the contract's performance date
and (2) that such breach was fundamental." Magellan Int'l Corp. v. Salzgitter Handel GmbH, 76
F.Supp.2d 919, 925-26 (N.D. Ill. 1999). 731. See generally BGH VIII ZR 18/94, Feb. 15, 1995, supra note 654. One way that
reasonable notice is given is when goods are examined upon receipt and a message is promptly faxed
noting the non-conformity. See generally HO Helsinki, S 96/1215, Jun. 30, 1998 (Fin.), available at
<http://cisgw3.law.pace.edu/cases/980630f5.html> [English translation by Jarno Vanto]. [...] Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence
CASE
ANNOTATED COMPARATIVES
Remarks on the manner in which the UNIDROIT
Sieg Eiselen [*]
a. Article 71, 72 and 73 of the CISG deal with the situation where it becomes apparent
or clear that one of the parties to an agreement will or may not perform a substantial part of
its obligations in terms of the agreement.[1] The object of Article 72 is to provide the innocent
party with a remedy in cases where it is clear that the other party will not perform at all or
will commit another fundamental breach.[2] This remedy based on the Anglo-American
doctrine of anticipatory breach allows the innocent party to avoid the contract when the
breach occurs without having to wait until performance becomes due.[3] Whereas Art 72 is
aimed at the phenomenon of anticipatory breach of contract, i.e. a breach of contract that
takes place before the performance is due by the party in breach, Article 71 has a wider
scope in that it deals with anticipatory breach as well as incomplete performance.[4] The
remedies in Article 71 is aimed at keeping the contract intact, whereas the remedies in Article
72 is aimed at avoiding the contract.[5] Article 73 provides for anticipatory breach installment
contracts. It is for that reason that these articles contain different requirements for the
exercising of the respective remedies.[6]
b. The UNIDROIT Principles is similarly structured in Articles 7.3.3 and 7.3.4. Article
7.3.3 makes provision for a party to terminate the agreement where it is clear that there will
be a fundamental non-performance by the other party. There is no requirement to give
notice as is the case with Article 72 of the CISG. If a party is uncertain as to whether there
will be a fundamental breach or not, but has a reasonable suspicion that it may occur, that
party is, in terms of Article 7.3.4, entitled to demand an adequate assurance from the other
party that the latter will perform. Failure to provide an adequate assurance is a ground in
terms of Article 7.3.4 to terminate the agreement. There is therefore, quite a close
connection between the provisions of Article 7.3.3 and 7.3.4. As will be shown below, this
is not necessarily the case with the very similar Article 72 and Article 71 of the CISG.
c. There are a number of interpretational issues in respect of Article 72 on which there
is a divergence of opinion. Commentators differ on the exact interpretation and meaning
of the meaning of the words "it is clear" (Article 72(1)) and "it becomes apparent"
(Article 71(1))[7] and whether there is any difference in the meaning or the standards to be
applied.[8] They also differ on whether the giving of notice of termination is an essential
requirement to become entitled to the remedy or whether it is only necessary in
circumstances where objectively speaking the other party would have been able to give an
adequate assurance.[9] Lastly there is also a difference of opinion on whether a failure to
give an adequate assurance on demand under Article 71(1) automatically entitles a party
to avoid the contract under Article 72.[10] The construction and provisions of Article 7.3.3
and 7.3.4 of the UNIDROIT Principles may be helpful in solving these issues.
d. In certain circumstances, a party may be entitled to rely on either Article 71 or 72.[11]
If an anticipatory breach occurs, the innocent party may want to enforce specific
performance in which case it would make use of its right to suspend performance under
Article 71 rather than to avoid the contract under Article 72 even if it is entitled to do so.
However, in the case of part performance a party may apparently only rely on Article 51
in conjunction with Article 45 where Article 51 applies or on Article 71 (if it wants to
enforce full performance) or Article 49 (if wants to avoid the contract), but not on Article
72. Article 72 is therefore a remedy that is only to be used in true circumstances of
anticipatory breach and not where an actual breach has already taken place.[12] However
where the contract consists of a series of performances (installments, for instance,
delivery of a certain number of goods on a monthly basis), a serious deficiency in quality
of the first installment, entitles the innocent party to exercise its rights under section 73
and avoid the contract.[13]
e. At first blush there seems to be a slight difference between the provisions of Article
72(1) of the CISG and Article 7.3.3 of the UNIDROIT Principles. In Article 72(1), it is
required that it must be clear that the counter party will commit a fundamental breach.
Article 7.3.3 of the UNIDROIT Principles is apparently more widely formulated in that it
only requires that it must be clear that a fundamental non-performance will take place. This
difference is more apparent than real. Under the CISG, any fundamental non-performance
is regarded as a breach of contract, whether the performance was possible or not.[14] Thus
where substantial performance becomes impossible, even if such impossibility results from
circumstances beyond the control of the obligor, non-performance or mal-performance is still
regarded as a breach.[15] This is also the approach followed in the UNIDROIT Principles.
f. The most difficult aspect of interpreting Article 72 (and Article 71 for that matter), is
to establish what measure of certainty is required that a fundamental breach will occur.[16]
Article 7.3.3 of the UNIDROIT Principles is, unfortunately, of no assistance in this regard
as it uses exactly the same terminology as Article 72. In a 1992 German decision, the
Landgericht [District Court] Berlin [17] has given the best judicial exposition of the standards
required under Article 72. It defined the words "it is clear" ("offensichtlich") in terms of the
probabilities that a fundamental breach will be committed. It stated that a very high degree
of probability is required,[18] but that this did not mean a probability almost reaching
certainty.[19]
g. Both the CISG and the UNIDROIT Principles require a clear indication of a
fundamental non-performance, i.e. that it must be clear that there will be a fundamental non-performance.[20] The terminology used is very similar and the UNIDROIT Principles therefore
sheds little light on what measure should be used to determine whether "it is clear". Under
commentators there is a difference of opinion on whether "it is clear" (in Article 72) has the
same meaning as "it becomes apparent" (in Article 71).[21] The majority opinion seems to be
that Article 72 requires a higher standard of prospective certainty than Article 71 mainly due
to the more drastic nature of the remedy under Article 72, namely avoidance.[22] Suspension
as provided for in Article 71 is less drastic in that it is only a temporary remedy, especially
if the contract is to be avoided without giving notice to the counter party.[23]
h. This approach also seems to be supported by the case law.[24] This approach is also
supported by the provisions of Articles 7.3.3 and 7.3.4 of the UNIDROIT Principles , where
there is a clearly formulated difference in the requirements. In terms of Article 7.3.3 it is
required that it must be clear that there will be a fundamental non-performance, whereas in
terms of Article 7.3.4 there need only be a reasonable belief on the part of the innocent party
that there will be a fundamental non-performance.
i. If there is any doubt on whether, due to the conduct of the other party or the prevailing
circumstances, there is an anticipatory breach objectively speaking, a party should rather
exercise the right to suspend performance under Article 71 CISG and require an adequate
assurance from the other party than issue a notice of avoidance under Article 72(2).[25] It is
the safer option because the giving of a notice of avoidance in terms of Article 72(2) under
circumstances where it is not warranted may in itself constitute an anticipatory breach
entitling the other party to avoid the contract.[26]
j. There is a difference of opinion between commentators on whether a failure or a
refusal to produce adequate security where it has been demanded is in itself a fundamental
breach or whether it may only be a clear indication that the other party will commit a
fundamental breach.[27] Article 7.3.4 UNIDROIT Principles may be of assistance in
interpreting the interplay between Articles 72 and 71 as Article 7.3.4 UNIDROIT Principles
makes express provision for the innocent party to demand an adequate assurance where it
reasonably suspects that there will be a fundamental non-performance. In terms of Article
7.3.4 it is clearly stipulated that a failure to provide this assurance within a reasonable period
of time, entitles the other party to terminate (avoid) the agreement. Whether this is possible
in the light of the drafting history of the CISG, is debatable.[28]
k. The CISG takes a more lenient approach to anticipatory breach than the UNIDROIT
Principles in that it obliges the innocent party, when time allows, to notify the other party if
it intends avoiding the contract, except where the other party has clearly declared its
intention not to perform.[29] The object of the notification is to enable the other party to
provide adequate assurance that it will perform. There are different opinions on whether the
obligation to give notice is a condition precedent for the valid exercising of the right to
avoid.[30] It is submitted that in interpreting the duty to inform, a Court should follow a
stricter approach towards the necessity to inform if regard is had to the approach followed
under the UNIDROIT Principles.[31] If there is doubt on whether the innocent party should
have informed or not, the Court ought to rule in favour of the innocent party, i.e. that there
was no duty to inform. In terms of Article 7.3.3 of the UNIDROIT Principles, a party is not
obliged to inform the other party, but may as a precaution require an adequate assurance of
due performance, failing which that party is entitled to terminate the agreement.
l. Where it is apparent that notice will be totally ineffective in that it is impossible for the
obligor to prevent the eventual breach, is there still a formal obligation to notify? It is
submitted that this is a situation where the innocent party is not required to notify the other
party.[32] The object of the notice requirement is to enable the other party to provide adequate
assurance of his performance. If that has become impossible, then the necessity to give
notice must surely fall away. There is, however, also a strong contrary view on this issue.[33]
m. In the literature there is a controversy on whether the requirement of "reasonableness"
only refers to the notice or whether it also has a reference to the duty to give notice. The
controversy, however, is mainly amongst German writers due to an inaccurate translation
into the (unofficial) German text.[34]
FOOTNOTES
* Professor of Private Law, Faculty of Law, University of South Africa; Advocate of the
High Court of South Africa
A match-ups of CISG Articles 71 and 72 with Articles 7.3.3 [Anticipatory non-performance] and 7.3.4 [Adequate assurance of due performance] of the UNIDROIT Principles of International Commercial Contracts are available:
<http://cisgw3.law.pace.edu/cisg/principles/uni71,72.html>.
The match-ups are accompanied by Official UNIDROIT Comments on these provisions describing and illustrating the manner in which they are to be applied.
1.
1 Leser HG & Hornung R in Schlechtriem PH & Bacher K Kommentar zum Einheitlichen UN
Kaufrecht 3rd ed (2000 München) Art 71 Rn 1; Art 72 Rn 1, Art 73 Rn 1; Magnus U in
Martinek M (ed) J von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit
Einführungsgesetz und Nebengesetze: Wiener UN-Kaufrecht (1999 Berlin) Art 71 Rn 1,
Art 72 Rn 1, Art 73 Rn 1; Burkhart F Interpretatives Zusammenwirken von CISG und
UNIDROIT Principles (2000 Baden-Baden) 194; Schnyder AK and Straub RM in Honsell
H Kommentar zum UN Kaufrecht (1997 Berlin) Art 71 Rn 1, Art 72 Rn 1, Art 73 Rn 1;
Witz W, Salger HC & Lorenz M Internationales Einheitliches Kaufrecht (2000 Heidelberg)
Art 71 Rn 1, Art 72 Rn 1 & 2, Art 73 Rn 1; Kritzer AH Guide to the Practical Applications
of the United Nations Convention on Contracts for the International Sale of Goods (1989
Deventer) 465-467; Honnold JO Uniform Law for International Sales 3rd ed (1999 The
Hague) para 395 at p 437.
2. Enderlein F & Maskow D International Sales Law - United Nations Conven;tion on
Contracts for the International Sale of Goods (1992 New York)
<http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html> para 1 at p 291.
3. Witz/Salger/Lorenz Art 72 Rn 2.
4. Staudinger/Magnus Art 71 Rn 34.
5. Staudinger/Magnus Art 71 Rn 1; Art 72 Rn 1.
6. See Schlechtriem Uniform Sales Law - The UN-Convention on Contracts for the
International Sale of Goods (Vienna 1986) 389 et seq.
(http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem-72.html); Staudinger/Magnus Art 72 Rn 8 &
9; Flechtner HM 8 Journal of Law and Commerce (1988) 53-108 at
<http://cisgw3.law.pace.edu/cisg/text/flecht71,72.html>. Initial efforts to combine the articles
during the drafting process was intentionally rejected. See Enderlein/Maskow p 284 Note 1 & 2,
p 291 N 1; Honsell/Schnyder/Straub Art 72 Rn 10. See also Kee C. Comparative Editorial
Remarks to Articles 51 & 73 at <http://cisgw3.law.pace.edu/cisg/text/peclcomp51.html>.
7. Enderlein/Maskow p 286 Note 2; Honsell/Schnyder/Straub Art 71 Rn 24-26, Art 72 Rn 25;
Staudinger/Magnus Art 71 Rn 18. Honnold p 429 para 388 remarks that these provisions were
consciously so drafted and that this difference in terminology is also found in the French and
Spanish versions of the CISG.
8. Enderlein p 286 Note 2; Honnold para 388 at p 429.
9. Enderlein p 293 Note 6; Honsell/Schnyder/Straub Art 72 Rn 35 & 36.
10. Enderlein/Maskow p 290 Note 1.
11. Enderlein/Maskow p 286 Note 3; Schlechtriem Art 72 Rn 9.
12. Honsell/Schnyder/Straub Art 72 Rn 15; Germany 18 November 1993 Oberlandesgericht
[Appellate Court] Düsseldorf <http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 15
February 1995 Bundesgerichtshof [Federal Supreme Court]
<http://cisgw3.law.pace.edu/cases/950215g1.html]>.
13. This is to be distinguished from the situation where only 1,000 pairs of shoes have been
delivered instead of 2,000 on the date of performance. In this instance, the correct remedies
are either Article 51 and Article 45 or Article 71 and not Article 72. See Witz/Salger/Lorenz Art
71 Rn 1; Art 73 Rn 1; Honsell/Schnyder/Straub Art 72 Rn 15; Austria 10 December 1997 Vienna
Arbitration proceeding S 2/97 <http://cisgw3.law.pace.edu/cases/971210a3.html>; Germany 18
November 1993 Oberlandesgericht [Appellate Court] Düsseldorf
<http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 15 February 1995
Bundesgerichtshof [Federal Supreme Court]
<http://cisgw3.law.pace.edu/cases/950215g1.html>.
14. Schlechtriem/Stoll Art 79 Rn 6; Honsell/Schnyder/Straub Art 71 Rn 29, Art 72 Rn 19.
15. Honsell/Schnyder/Straub Art 72 Rn 18.
16. Staudinger/Magnus Art 72 Rn 7; Honnold p 439 para 397; Honsell/Schnyder/Straub Art
72 Rn 26-28; Australia 17 November 2000 Supreme Court of Queensland (Downs
Investments v. Perwaja Steel) <http://cisgw3.law.pace.edu/cases/001117a2.html>.
17. Germany 30 September 1992 Landgericht [District Court] Berlin at
<http://cisgw3.law.pace.edu/cases/920930g1.html>.
18. In the words of the court, "einer sehr hohen naheliegender Wahrscheinlichkeit".
19. In the words of the court, "eine an Sicherheit grenzende Wahrscheinlichkeit". See also
Germany 18 November 1993 Oberlandesgericht [Appellate Court] Düsseldorf
<http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 28 April 1993 Landgericht
[District Court] Krefeld <http://cisgw3.law.pace.edu/cases/930428g1.html>; Australia 17
November 2000 Supreme Court of Queensland (Downs Investments v. Perwaja Steel)
<http://cisgw3.law.pace.edu/cases/001117a2.html>.
20. See Schlechtriem Uniform Sales Law - The UN-Convention on Contracts for the
International Sale of Goods (Vienna 1986) 389 et seq.
(http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem-72.html); Staudinger/Magnus Art
72 Rn 8, 9 & 18; Flechtner HM 8 Journal of Law and Commerce (1988) 53-108 at
http://www.cisg.law.pace.edu/cisg/text/flecht71,72.html.
21. Enderlein/Maskow p 291 Note 1; Honsell/Schnyder/Straub Art 72 Rn 20-24;
Witz/Salger/Lorenz Art 72 Rn 7; Staudinger/Magnus Art 72 Rn 8 & 9.
22. Honsell/Schnyder/Straub Art 72 Rn 23-25 indicates that this is the proper interpretation
when due regard is had to the history and drafting of these articles. See also
Staudinger/Magnus Art 72 Rn 9; Salger 7 Lorenz Art 72 Rn 8.
23. Staudinger/Magnus Art 72 Rn 9-11.
24. The clearest example where this has been applied has been ICC Arbitration Case No.
8786 of January 1997 <http://cisgw3.law.pace.edu/cases/978786i1.html> where one party
declared that it would not perform by the date agreed due to a delay. Under the
circumstances the delay was a fundamental breach and it was held that it was not
necessary to give notice to the other party. See also Austria 10 December 1997 Vienna
Arbitration proceeding S 2/97 <http://cisgw3.law.pace.edu/cases/971210a3.html>. In
Switzerland 20 February 1997 Zivilgericht [District Court] Saane
<http://cisgw3.law.pace.edu/cases/970220s1.html> and Switzerland 31 May 1996 Zürich
Arbitration proceeding <http://cisgw3.law.pace.edu/cases/960531s1.html> reliance on
Article 72 was rejected due to a lack of evidence that there was an intention to repudiate;
it was not clear.
25. Enderlein/Maskow p 292 Note 3.
26. Commentary of the Secretariat Comment 2, Document A/CONF.975 p 53 as reprinted in
Honnold J, Documentary History of the Uniform Law for International Sales (Deventer 1989) and
at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-72.html>; Enderlein/Maskow p 291
Note 1; Germany 21 September 1995 Landgericht [District Court] Kassel
<http://cisgw3.law.pace.edu/cases/950921g1.html>.
27. Secretariat Commentary 2 p 53; Enderlein/Maskow p 290 Note 10;
Honsell/Schnyder/Straub Art 71 Rn 51; Staudinger/Magnus Art 71 Rn 52; Honnold Art 71
Rn 394.
28. See the Secretariat Commentary 2 p 53.
29. Honsell/Schnyder/Straub Art 72 Rn 34 & 35.
30. Honsell/Schnyder/Straub Art 72 Rn 35 & 36. Witz/Salger/Lorenz is of the opinion that the
failure to give notice does not affect the effectiveness of the avoidance. However, see the
decision to the contrary in ICC Arbitration Case No. 8574 of September 1996
<http://cisgw3.law.pace.edu/cases/968574i1.html>.
31. For a contrary opinion, see Honsell/Schnyder/Straub Art 72 Rn 41 & 42.
32. Enderlein/Maskow p 293 Note 6; Witz/Salger/Lorenz Art 72 Rn 15; Staudinger/Magnus
Art 72 Rn 22; Schlechtriem Art 72 Rn 16 & 17; Honsell/Schnyder/Straub Art 72 Rn 45;
ICC Arbitration Case No. 8574 of September 1996
<http://cisgw3.law.pace.edu/cases/968574i1.html>.
33. See Honsell/Schnyder/Straub Art 72 Rn 36; Schlechtriem /Leser/Hornung Art 72 Rn 13 et
seq.; Germany 9 July 1992 Landgericht [District Court] Düsseldorf
<http://cisgw3.law.pace.edu/cases/920709g1.html>.
34. See Honsell/Schnyder/Straub Art 72 Rn 45; Staudinger/Magnus Art 72 Rn 21.
PECL COMPARATIVE
Case annotated remarks on the manner in which the
Principles Sieg Eiselen [*]
a. Article 71, 72 and 73 of the CISG deal with the situation where it becomes apparent
or clear that one of the parties to an agreement will or may not perform a substantial part of
its obligations in terms of the agreement.[1] The object of Article 72 is to provide the innocent
party with a remedy in cases where it is clear that the other party will not perform at all or
will commit another fundamental breach.[2] This remedy based on the Anglo-American
doctrine of anticipatory breach allows the innocent party to avoid the contract when the
breach occurs without having to wait until performance becomes due.[3] Whereas Article 72
is aimed at the phenomenon of anticipatory breach of contract, i.e. a breach of contract that
takes place before the performance is due by the party in breach, Article 71 has a wider
scope in that it deals with anticipatory breach as well as incomplete performance.[4] The
remedies in Article 71 are aimed at keeping the contract in tact, whereas the remedies in
Article 72 is aimed at avoiding the contract.[5] Article 73 provides for anticipatory breach in
instalment contracts. It is for that reason that these articles contain different requirements
for the exercising of the respective remedies.[6] b. The PECL is similarly structured in Articles 9:304 and 8:105. Article 9:304 makes
provision for a party to terminate the agreement where it is clear that there will be a
fundamental non-performance by the other party. There is no requirement to give notice as
is the case with Article 72 of the CISG. If a party is uncertain as to whether there will be a
fundamental breach or not, but has a reasonable belief that it may occur, that party is, in
terms of Article 8:105, entitled to demand an adequate assurance from the other party that
the latter will perform and it may withhold its own performance as long as such reasonable
belief continues. Failure to provide an adequate assurance is a ground in terms of Article
8:105 to terminate the agreement. There is therefore, quite a close connection between the
provisions of Articles 9:304 and 8:105. As will be shown below, this is not necessarily the
case with the very similar Article 72 and Article 71 of the CISG. c. There are a number of interpretational issues in respect of Article 72 on which there
is a divergence of opinion. Commentators differ on the exact interpretation and meaning
of the meaning of the words "it is clear" (Article 72(1)) and "it becomes apparent"
(Article 71(1))[7] and whether there is any difference in the meaning or the standards to be
applied.[8] They also differ on whether the giving of notice of termination is an essential
requirement to become entitled to the remedy or whether it is only necessary in
circumstances where objectively speaking the other party would have been able to give an
adequate assurance.[9] Lastly there is also a difference of opinion on whether a failure to
give an adequate assurance on demand under Article 71(1) automatically entitles a party
to avoid the contract under Article 72.[10] The construction and provisions of Articles
9:304 and 8:105 of the PECL may be helpful in solving these issues. d. In certain circumstances, a party may be entitled to rely on either Article 71 or 72.[11]
If an anticipatory breach occurs, the innocent party may want to enforce specific
performance in which case it would make use of its right to suspend performance under
Article 71 rather than to avoid the contract under Article 72 even if it is entitled to do so.
However, in the case of part performance a party may apparently only rely on Article 51
in conjunction with Article 45 where Article 51 applies or on Article 71 (if it wants to
enforce full performance) or Article 49 (if wants to avoid the contract), but not on Article
72. Article 72 is therefore a remedy that is only to be used in true circumstances of
anticipatory breach and not where an actual breach has already taken place.[12] However
where the contract consists of a series of performances (installments, for instance,
delivery of a certain number of goods on a monthly basis), a serious deficiency in quality
of the first consignment, entitles the innocent party to exercise its rights under Article 73
and avoid the contract.[13] e. The most difficult aspect of interpreting Article 72 (and Article 71 for that matter), is
to establish what measure of certainty is required that a fundamental breach will occur.[14]
Article 9:304 of the PECL is, unfortunately, of no assistance in this regard as it uses exactly
the same terminology as Article 72. The court in the 1992 German case Landgericht
[District Court] Berlin [15] has given the best judicial exposition of the standards required under
Article 72. It defined the words "it is clear" ("offensichtlich") in terms of the probabilities
that a fundamental breach will be committed. It stated that a very high degree of probability
is required,[16] but that this did not mean a probability almost reaching certainty.[17] f. Both the CISG and the PECL require a clear indication of a fundamental non-performance, i.e., that it must be clear that there will be a fundamental non-performance.[18]
The terminology used is very similar and the PECL therefore sheds little light on what
measure should be used to determine whether "it is clear". Under commentators there is a
difference of opinion on whether "it is clear" (in Article 72) has the same meaning as 'it
becomes apparent' (in Article 71).[19] The majority opinion seems to be that Article 72
requires a higher standard of prospective certainty than Article 71 mainly due to the more
drastic nature of the remedy under Article 72, namely avoidance.[20] Suspension as provided
for in Article 71 is less drastic in that it is only a temporary remedy, especially if the contract
is to be avoided without giving notice to the counter party.[21] g. This approach also seems to be supported by the case law.[22] This approach is also
supported by the provisions of Article 9:304 and 8:105 of the PECL, where there is a clearly
formulated difference in the requirements. In terms of Article 9:304, it is required that it
must be clear that there will be a fundamental non-performance, whereas in terms of Article
8:105 there need only be a reasonable belief on the part of the innocent party that there will
be a fundamental non-performance. h. If there is any doubt on whether, due to the conduct of the other party or the
prevailing circumstances, there is an anticipatory breach objectively speaking, a party should
rather exercise the right to suspend performance under Article 71 CISG and require an
adequate assurance from the other party than issue a notice of avoidance under Article
72(2).[23] It is the safer option because the giving of a notice of avoidance in terms of Article
72(2) under circumstances where it is not warranted may in itself constitute an anticipatory
breach entitling the other party to avoid the contract.[24] i. There is a difference of opinion between commentators on whether a failure or a
refusal to produce adequate security where it has been demanded is in itself a fundamental
breach or whether it may only be a clear indication that the other party will commit a
fundamental breach.[25] Article 8:105 PECL may be of assistance in interpreting the interplay
between Article 72 and 71 as Article 8:105 PECL makes express provision for the innocent
party to demand an adequate assurance where it reasonably suspects that there will be a
fundamental non-performance. In terms of Article 8:105, it is clearly stipulated that a failure
to provide this assurance within a reasonable period of time, entitles the other party to
terminate (avoid) the agreement. Whether this is possible in the light of the drafting history
of the CISG, is debatable.[26] j.. The CISG takes a more lenient approach to anticipatory breach than the PECL in that
it obliges the innocent party, when time allows, to notify the other party if it intends avoiding
the contract, except where the other party has clearly declared its intention not to perform.[27]
The object of the notification is to enable the other party to provide adequate assurance that
it will perform. There are different opinions on whether the obligation to give notice is a
condition precedent for the valid exercising of the right to avoid.[28] It is submitted that in
interpreting the duty to inform, a court should follow a stricter approach towards the
necessity to inform if regard is had to the approach followed under the PECL.[29] If there is
doubt on whether the innocent party should have informed or not, the court ought to rule
in favor of the innocent party, i.e., that there was no duty to inform. In terms of Article
9:304 of the PECL a party is not obliged to inform the other party, but may as a precaution
require an adequate assurance of due performance, failing which that party is entitled to
terminate the agreement. k. Where it is apparent that notice will be totally ineffective in that it is impossible for the
obligor to prevent the eventual breach, is there still a formal obligation to notify? It is
submitted that this is a situation where the innocent party is not required to notify the other
party.[30] The object of the notice requirement is to enable the other party to provide adequate
assurance of his performance. If that has become impossible, then the necessity to give
notice must surely fall away. There is however also a strong contrary view on this issue.[31] l. In the literature there is a controversy on whether the requirement of "reasonableness"
only refers to the notice or whether it also has a reference to the duty to give notice.[32] The
controversy, however, is mainly amongst German writers due to an inaccurate translation
into the (unofficial) German text. FOOTNOTES
* Professor of Private Law, Faculty of Law, University of South Africa; Advocate of the
High Court of South Africa.
A match-ups of CISG Articles 71 and 72 with Articles 8:105 [Assurance of performance] and 9:304 [Anticipatory non-performance] of the Principles of European Contract Law are available: <http://cisgw3.law.pace.edu/cisg/text/peclcomp71,72.html>.
The match-ups are accompanied by:
1. Leser HG & Hornung R in Schlechtriem PH & Bacher K Kommentar zum Einheitlichen UN
Kaufrecht 3rd ed (2000 München) Art 71 Rn 1; Art 72 Rn 1, Art 73 Rn 1; Magnus U in
Martinek M (ed) J von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit
Einführungsgesetz und Nebengesetze: Wiener UN-Kaufrecht (1999 Berlin) Art 71 Rn 1,
Art 72 Rn 1, Art 73 Rn 1; Burkhart F Interpretatives Zusammenwirken von CISG und
UNIDROIT Principles (2000 Baden-Baden) 194; Schnyder AK and Straub RM in Honsell
H Kommentar zum UN Kaufrecht (1997 Berlin) Art 71 Rn 1, Art 72 Rn 1, Art 73 Rn 1;
Witz W, Salger HC & Lorenz M Internationales Einheitliches Kaufrecht (2000 Heidelberg)
Art 71 Rn 1, Art 72 Rn 1 & 2, Art 73 Rn 1; Kritzer AH Guide to the Practical Applications
of the United Nations Convention on Contracts for the International Sale of Goods (1989
Deventer) 465-467; Honnold JO Uniform Law for International Sales 3rd ed (1999 The
Hague) para 395 at p 437.
2. Enderlein F & Maskow D International Sales Law - United Nations Convention on
Contractsfor the International Sale of Goods (1992 New York)
<http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html> para 1 at p 291.
3. Witz/Salger/Lorenz Art 72 Rn 2.
4. Staudinger/Magnus Art 71 Rn 34.
5. Staudinger/Magnus Art 71 Rn 1; Art 72 Rn 1.
6. See Schlechtriem Uniform Sales Law - The UN-Convention on Contracts for the
International Sale of Goods (Vienna 1986) 389 et seq.
<http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem-72.html>; Staudinger/Magnus Art 72 Rn 8
& 9; Flechtner HM 8 Journal of Law and Commerce (1988) 53-108 at
<http://cisgw3.law.pace.edu/cisg/text/flecht71,72.html>. Initial efforts to combine the articles
during the drafting process were intentionally rejected. See Enderlein/Maskow p 284 Note 1 & 2,
p 291 N 1; Honsell/Schnyder/Straub Art 72 Rn 10.
7. Enderlein/Maskow p 286 Note 2; Honsell/Schnyder/Straub Art 71 Rn 24-26, Art 72 Rn 25;
Staudinger/Magnus Art 71 Rn 18. Honnold p 429 para 388 remarks that these provisions were
consciously so drafted and that this difference in terminology is also found in the French and
Spanish versions of the CISG. See also Kee C Comparative Editorial Remarks to Articles 51 &
73 at <http://cisgw3.law.pace.edu/cisg/text/peclcomp51.html>. 8. Enderlein p 286 Note 2; Honnold para 388 at p 429.
9. Enderlein p 293 Note 6; Honsell/Schnyder/Straub Art 72 Rn 35 & 36.
10. Enderlein/Maskow p 290 Note 1.
11. Enderlein/Maskow p 286 Note 3; Schlechtriem Art 72 Rn 9.
12. Honsell/Schnyder/Straub Art 72 Rn 15; Germany 18 November 1993 Oberlandesgericht
[Appellate Court] Düsseldorf <http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 15
February 1995 Bundesgerichtshof [Federal Supreme Court]
<http://cisgw3.law.pace.edu/cases/950215g1.html]>.
13. This is to be distinguished from the situation where only 1,000 pairs of shoes have been
delivered instead of 2,000 on the date of performance. In this instance the correct remedies are
either Article 51 and Article 45 or Article 71 and not Article 72. See Witz/Salger/Lorenz Art 71
Rn 1; Art 73 Rn 1; Honsell/Schnyder/Straub Art 72 Rn 15; Austria 10 December 1997 Vienna
Arbitration proceeding S 2/97 <http://cisgw3.law.pace.edu/cases/971210a3.html>; Germany 18
November 1993 Oberlandesgericht [Appellate Court] Düsseldorf.
<http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 15 February 1995
Bundesgerichtshof [Federal Supreme Court]
<http://cisgw3.law.pace.edu/cases/950215g1.html]>.
15.
14. Staudinger/Magnus Art 72 Rn 7; Honnold p 439 para 397; Honsell/Schnyder/Straub Art
72 Rn 26-28; Australia 17 November 2000 Supreme Court of Queensland (Downs
Investments v. Perwaja Steel) <http://cisgw3.law.pace.edu/cases/001117a2.html>.
15. Germany 30 September 1992 Landgericht [District Court] Berlin
<http://cisgw3.law.pace.edu/cases/920930g1.html>.
16. In the words of the court, "einer sehr hohen naheliegender Wahrscheinlichkeit."
17. In the words of the court, "eine an Sicherheit grenzende Wahrscheinlichkeit." See also
Germany 18 November 1993 Oberlandesgericht [Appellate Court] Düsseldorf
<http://cisgw3.law.pace.edu/cases/931118g1.html>; Germany 28 April 1993 Landgericht
[District Court] Krefeld <http://cisgw3.law.pace.edu/cases/930428g1.html>; Australia 17
November 2000 Supreme Court of Queensland (Downs Investments v. Perwaja Steel)
<http://cisgw3.law.pace.edu/cases/001117a2.html>.
18. See Schlechtriem Uniform Sales Law - The UN-Convention on Contracts for the
International Sale of Goods (Vienna 1986) 389 et seq.
<http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem-72.html>; Staudinger/Magnus Art
72 Rn 8, 9 & 18; Flechtner HM 8 Journal of Law and Commerce (1988) 53-108 at
<http://cisgw3.law.pace.edu/cisg/text/flecht71,72.html>.
19. Enderlein/Maskow p 291 Note 1; Honsell/Schnyder/Straub Art 72 Rn 20-24;
Witz/Salger/Lorenz Art 72 Rn 7; Staudinger/Magnus Art 72 Rn 8 & 9.
20. Honsell/Schnyder/Straub Art 72 Rn 23-25 indicates that this is the proper interpretation
when due regard is had to the history and drafting of these articles. See also
Staudinger/Magnus Art 72 Rn 9; Salger 7 Lorenz Art 72 Rn 8.
21. Staudinger/Magnus Art 72 Rn 9-11.
22. The clearest example where this has been applied has been ICC Arbitration Case No.
8786 of January 1997 <http://cisgw3.law.pace.edu/cases/978786i1.html> where one party
declared that it would not perform by the date agreed due to a delay. Under the
circumstances the delay was a fundamental breach and it was held that it was not
necessary to give notice to the other party. See also Austria 10 December 1997 Vienna
Arbitration proceeding S 2/97 <http://cisgw3.law.pace.edu/cases/971210a3.html>. In
Switzerland 20 February 1997 Zivilgericht [District Court] Saane
<http://cisgw3.law.pace.edu/cases/970220s1.html> and Switzerland 31 May 1996 Zürich
Arbitration proceeding http://cisgw3.law.pace.edu/cases/960531s1.html reliance on
Article 72 was rejected due to a lack of evidence that there was an intention to repudiate;
it was not clear.
23. Enderlein/Maskow p 292 Note 3.
24. Commentary of the Secretariat, Comment 2, Document A/CONF.975 p 53 as reported in
Honnold Documentary History of the Uniform Law for International Sales (Deventer 1989) and at
<http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-72.html>; Enderlein/Maskow p 291 Note
1; Germany 21 September 1995 Landgericht [District Court] Kassel
<http://cisgw3.law.pace.edu/cases/950921g1.html>.
25. Secretariat Commentary 2 p 53; Enderlein/Maskow p 290 Note 10;
Honsell/Schnyder/Straub Art 71 Rn 51; Staudinger/Magnus Art 71 Rn 52; Honnold Art 71
Rn 394.
26. See Secretariat Commentary 2 p 53.
27. Honsell/Schnyder/Straub Art 72 Rn 34 & 35.
28. Honsell/Schnyder/Straub Art 72 Rn 35 & 36. Witz/Salger/Lorenz is of the opinion that the
failure to give notice does not affect the effectiveness of the avoidance. However, see the
decision to the contrary in ICC Arbitration Case No. 8574 of September 1996
<http://cisgw3.law.pace.edu/cases/968574i1.html>.
29. For a contrary opinion, see Honsell/Schnyder/Straub Art 72 Rn 41 & 42.
30. Enderlein/Maskow p 293 Note 6; Witz/Salger/Lorenz Art 72 Rn 15; Staudinger/Magnus
Art 72 Rn 22; Schlechtriem Art 72 Rn 16 & 17; Honsell/Schnyder/Straub Art 72 Rn 45;
ICC Arbitration Case No. 8574 of September 1996
<http://cisgw3.law.pace.edu/cases/968574i1.html>.
31. See Honsell/Schnyder/Straub Art 72 Rn 36; Schlechtriem /Leser/Hornung Art 72 Rn 13 et
seq; Germany 9 July 1992 Landgericht [District Court] Düsseldorf
<http://cisgw3.law.pace.edu/cases/920709g1.html>.
32. The controversy is mainly amongst German writers due to an inaccurate translation into
the (unofficial) German text. See Honsell/Schnyder/Straub Art 72 Rn 45; Staudinger/Magnus Art
72 Rn 21.
Austria
3
Hungary
2
Russian Federation
1
Belgium
2
ICC
4
Switzerland
1
Germany
9
Netherlands
1
United States
1
TOTAL:
24
- UNCITRAL's case law digest; and
- An analysis of CISG jurisprudence
Nations Convention on the International Sale of Goods [*]
Reproduced with the permission of UNCITRAL
Obligations of the Seller and the Buyer
Section 1. Anticipatory Breach and
Instalment Contracts
Digest of Article 71 case law
- Preconditions of suspension
- Stoppage in transit
- Notice of suspension
- Adequate assurance of performance]
ANALYSIS OF CISG CASE LAW
The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence
Virginia Maurer and Marisa Pagnattaro
- UNIDROIT Principles
- PECL comparative
Principles of International Commercial Contracts may be
used to interpret or supplement Articles 71 and 72 of the CISG
September 2002
of European Contract Law may be used to
interpret
or supplement Articles 71 and 72 of the CISG
September 2002
-
Comments on these provisions authored by the European
Commission describing and illustrating the manner in which provisions are to be
applied; and
-
Notes that compare these PECL provisions with continental and
common law domestic rules, doctrine and jurisprudence.
Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
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