Article 83. Preservation of Other Remedies

• Text of Article 83
• Outline of issues
• Descriptors
• Coded case annotations
  -  Guide to case codes
• Case digest and analysis
     -  UNCITRAL's case law digest; and
     -  An analysis of CISG jurisprudence

TEXT OF ARTICLE 83

A buyer who has lost the right to declare the contract avoided or to require the seller to deliver substitute goods in accordance with article 82 retains all other remedies under the contract and this Convention.

OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

83A Buyer who has lost right to avoid or require substitute goods (art. 82)

83B Retains also other remedies under the contract and Convention, e.g.:

DESCRIPTORS

Avoidance

CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

Austria 23 May 2005 Oberster Gerichtshof [Supreme Court] [translation available]
 

Russia 25 July 2003 Arbitration Award No. 1/2003
 

Germany 12 March 2001 Oberlandesgericht [Appellate Court] Stuttgart [translation available]
 

* Austria 29 June 1999 Oberster Gerichtshof [Supreme Court] [translation available]

ICC March 1999 International Court of Arbitration, Case 9978
 

* Germany 21 March 1996 Hamburg Arbitration Award [translation available]
 

* Germany 11 October 1995 Landgericht [District Court] Düsseldorf [translation available]

CASE DIGEST AND ANALYSIS
-   UNCITRAL's case law digest; and
-   An analysis of CISG jurisprudence

A/CN.9/SER.C/DIGEST/CISG/83 [8 June 2004]. Reproduced with the permission of UNCITRAL.

DIGEST OF ARTICLE 83 CASE LAW

In general

1. Article 83 states that although a buyer may have lost the right to avoid the contract or to require the seller to deliver substitute goods under article 82 it retains its other remedies, whether those remedies have their origin in provisions of the contract or in the CISG itself. Decisions have devoted very little attention to article 83. The provisions of Chapter V Section V of the CISG ("Effects of avoidance"), which includes article 83,[1] have been cited in support of certain broad propositions concerning avoidance under the Convention. Thus it has been asserted that "[t]he avoidance of the contract is thus a constitutive right of the buyer, which changes the contractual relationship into a restitutional relationship (arts. 81-84 CISG)".[2] And in a decision finding that a buyer was not responsible for damage to goods that occurred while they were being transported by carrier back to the seller following the buyer's avoidance of the contract, the court asserted that "Articles 81-84 CISG contain at their core a risk distribution mechanism, which within the framework of the reversal of the contract (restitution), overrides the general provisions on the bearing of risk contained in Art. 66 et. seq. CISG".[3] In addition, an arbitral tribunal has asserted that where the contract is terminated, and damages for failure to perform are claimed under art. 74 CISG et seq., one uniform right to damages comes into existence, which can be compared to the right to damages for non-performance under the applicable domestic law and prevails over the consequences of the termination of a contract provided for in articles 81-84 CISG.[4]

2. Furthermore, in one decision, a buyer was found to have lost the right to avoid the contract both because the buyer failed to set an additional period of time for performance under article 47, and because the buyer was unable to make restitution of the goods as required by article 82; the court noted that the buyer nevertheless retained a right to damages for breach of contract (although the buyer had not sought them), but the court did not cite article 83 in support of its assertion.[5]

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. Chapter V Section V comprises Articles 81 through 84 of the CISG.

2. [GERMANY Landgericht [District Court] Düsseldorf 11 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951011g1.html>].

3. [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

4. CLOUT case No. 166 [GERMANY Hamburg Arbitration award of 21 March / 21 June 1996; available at <http://cisgw3.law.pace.edu/cases/960321g1.html> / <http://cisgw3.law.pace.edu/cases/960621g1.html>] (see full text of the decision).

5. CLOUT case No. 82 [GERMANY Oberlandesgericht [Appellate Court] Düsseldorf 10 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940210g2.html>].

Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*]

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4. Effects of Avoidance: Articles 81-84

The effects of avoidance are set forth in Articles 81, 83, and 84. [799] Avoidance of the contract releases both parties from their obligations subject to any damages attributed to them.[800] Additionally, a party who has wholly or partially performed the contract may claim restitution from the other party consisting of whatever has been paid or supplied under the contract.[801] Articles 83 and 84 also contain provisions setting forth specific [page 426] rights and liabilities of buyers and sellers. For example, if it is impossible to return the goods in the same condition in which the buyer received them, a buyer is not entitled to avoid the contract.[802] A buyer who has lost the right to declare the contract avoided or to require the seller to deliver substitute goods in accordance with Article 82 retains all other remedies set forth in the contract and under the provisions of the CISG.[803]

As discussed in the coverage of notice of non-conformity,[804] a party must declare a contract avoided in a timely fashion. This duty of timely avoidance can be implied from Article 49's language that the non-breaching party must declare avoidance "within a reasonable time."[805] A German court looked to the general principles of the CISG in fashioning the principle of timely avoidance. It held that a plaintiff's attempt to declare a contract avoided after 2 years was a violation of the principle of good faith contained in Article 7(1) CISG.[806]

Under Article 83, the loss of the right to declare the contract avoided or to require the seller to deliver substitute goods does not deprive the buyer of the right to claim damages, to require that any defects be cured, or to declare a reduction in price.[807] In addition, Article 84 states that if the seller is required to refund the price "he must also pay interest from the date on which the price was paid."[808] Despite this reference to the payment of interest, the CISG does not specify how the applicable interest rate is to be determined.[809] A Swiss court offered a reasonable answer by holding the rate of interest the seller had to pay was determined on the basis of the prevailing rate of interest at the seller's place of business.[810] [page 427]

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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.

[...]

799. CISG, supra note 4, at arts. 81, 83-84. For a general discussion of notice and avoidance, see Ericson P. Kimbel, Nachfrist Notice and Avoidance Under the CISG, 18 J.L. & Com. 301 (1999). See also Secretariat Commentary to art. 81, available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-81.html>.

800. CISG, supra note 4, at art. 81(1).

801. Id. at art. 81(2). Note that if both parties are required to make restitution, they must do concurrently. Id. A classic illustration of this situation took place when a German buyer entered into a contract with a French seller for the delivery of sunflower oil. The buyer paid a timely installment for the first delivery, yet the seller did not ship the goods. Accordingly, the seller had to refund the price paid. OLG München 7 U 1720/94, supra note 701. This was also the case in a dispute involving multiple shipments of machines. OLG Celle 20 U 76/94, supra note 481. Because the first shipment contained only half of the machines specified by the contract, and the buyer had already paid a considerable part of the contract price before the shipment, the court found that the parties mutually terminated the contract. Accordingly, it found that the buyer's repayment claim was justified under Article 81(2). Id. See also ICC Court of Arbitration no. [9978], Mar. 1999, available at [<http://cisgw3.law.pace.edu/cases/999978i1.html>] [English text] (tribunal found that the buyer was allowed to avoid the contract since non-delivery was a fundamental breach of contract and awarded restitution under Article 82, along with interest under Article 84).

802. CISG, supra note 4, at art. 82(2). See generally, OLG Koblenz 2 U 1899/89, Sept. 27, 1991 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/910927g1.html>.

803. CISG, supra note 4, at art. 83.

804. Supra Part V.B.1.

805. CISG, supra note 4, at art. 49(2).

806. OLG München 7 U 1720/94, supra note 701.

807. CISG, supra note 4, at arts. 45(a)(b), 46, 50 and 83.

808. Id. at art. 84(1). See generally OLG Celle 20 U 76/94, supra note 481. However, contrary to this provision with regard to the time of accrual of interest, an Italian court held that interest was payable from the date of avoidance of the contract. Foliopack Ag v. Daniplast S.p.A., Pretura circondariale [Court of First Instance] [PR] di Parma, sez. di Fidenza Nov. 24, 1989, 77/89 (It.), available at <http://cisgw3.law.pace.edu/cases/891124i3.html> [English translation by Hanz G. Chiappetta, translation edited by Angela Maria Romito].

809. ICC International Court of Arbitration no. 7197, supra note 745.

810. HG Zürich, HG 950347, Feb. 5, 1997 (Switz.), CLOUT Case No. 214, available at [<http://cisgw3.law.pace.edu/cases/970205s1.html>].

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