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2008 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods

Digest of Article 51 case law [reproduced with permission of UNCITRAL] [*]

[Text of article
Overview
Prerequisites
Remedies for partial non-performance
Avoidance of the entire contract (art. 51(2))]

Article 51

(1) If the seller delivers only a part of the goods or if only a part of the goods delivered is in conformity with the contract, articles 46 to 50 apply in respect of the part which is missing or which does not conform.
(2) The buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of the contract.

OVERVIEW

1. Article 51 deals with partial non-delivery and delivery of partially non-conforming goods. The general rule is that the buyer's remedies can be applied to that part of the contract that was not performed. The rest of the contract can remain unimpaired. In particular the entire contract cannot be declared avoided unless the partial nonperformance amounts to a fundamental breach of the entire contract.[1]

Prerequisites

2. Article 51 presupposes that the seller has breached the contract either by delivering fewer goods than contracted for or by delivering goods that, in part, do not conform with the contract under article 35.[2] the application of article 51 requires that the delivered goods consist of separable parts, e.g., some tons of cucumber,[3] a shipment of tiles,[4] textiles,[5] quantities of stainless steel wire,[6] scaffold fittings [7] or even a complete automatic assembly line for batteries for which the contracted spare parts were missing.[8] In case of a defective piece of machinery, article 51 has been found to apply when the piece forms an independent part of the contracted-for goods.[9]

3. The availability of remedies pursuant to article 51 presupposes that the buyer has given notice of the lack of conformity as required by article 39.[10] This notice requirement applies in cases where the seller has delivered only a part of the goods.[11]

Remedies for partial non-performance

4. With regard to a non-conforming part of delivered goods, article 50 provides that the buyer is entitled to any of the remedies referred to in articles 46-50. The requirements for these provisions to apply must, however, be satisfied in each case. Thus if the buyer wants to declare avoidance with regard to a part of delivered goods that do not conform with the contract then the lack of quality must constitute a fundamental breach -- i.e., the non-conforming goods must be of no reasonable use to the buyer.[12] On the other hand, the fixing of an additional period of time for the delivery of conforming goods cannot help establish a right of avoidance because article 49(1)(b) applies only in case of non-delivery, but not in case of delivery of defective goods.[13] Partial delay in delivery does not generally constitute a fundamental partial breach of contract, and therefore does not entitle the buyer to avoid the part of the contract relating to the delayed portion. The buyer may, however, fix an additional period of time for delivery of the missing part, and may declare the contract partially avoided when delivery is not effected during the period so fixed (article 49(1)(b)). Partial non-delivery by the contractual delivery date amounts to a fundamental breach with regard to the missing part only if the buyer has a special interest in delivery exactly on time, and if the seller could foresee that the buyer would prefer non-delivery instead of late delivery.[14]

5. Article 51(1) refers only to the remedies provided for in articles 46-50. This does not mean that the remedy of damages, which is authorized in article 45(1)(b), is excluded. On the contrary, this remedy remains unimpaired and can be exercised in addition to or instead of the remedies referred to in article 51(1). Even if the buyer has lost its right to declare a part of the contract avoided because of lapse of time, it may still claim damages under article 74.[15]

Avoidance of the entire contract (article 51(2))

6. As provided in article 51(2), in case of partial non-delivery or partial non-conforming delivery the buyer can avoid the entire contract only if the seller's breach constitutes a fundamental breach of the entire contract. Thus to justify avoidance of the whole contract the partial breach must deprive the buyer of the main benefit of the whole contract (article 25). Such an effect from a partial breach, however, is the exception rather than the rule.[16]


NOTES

* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.UNCITRAL.org/pdf/english/clout/CISG_second_edition.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:

   -    To enhance access to contents by computer search engines, we present in html rather than pdf;
 
   -    To facilitate direct focus on aspects of the Digests of most immediate interest, we inserted linked tables of contents at the outset of most presentations;
 
   -    To support UNCITRAL's recommendation to read more on the cases reported in the Digests, we provide mouse-click access to (i) CLOUT abstracts published by UNCITRAL (and to UNILEX case abstracts and other case abstracts); and also (ii) to full-text English translations of cases with links to original texts of cases, where available, in [bracketed citations] that we have added to UNCITRAL's footnotes; and
 
   -    To enable researchers to themselves keep the case citations provided in the Digests constantly current, we have created a series of tandem documents, UNCITRAL Digest Cases + Added Cases. The new cases and other cases that are cited in these updates are coded in accordance with UNCITRAL's Thesaurus.

In addition, this presentation introduces each section of the UNCITRAL Digest with a Google search button. This is to help you access doctrine (relevant material from the over 1,200 commentaries, monographs and books on the CISG and related subjects that we present on this database) as well as the texts of the cases that UNCITRAL cites in its Digests and that we present in our updates to UNCITRAL's Digests.

1. [ICC International Court of Arbitration, Award 7660 of 23 August 1994 (Battery machinery case)] (see full text of the decision).

2. Article 35, however, also covers delivery of a smaller quantity of goods than that contracted for.

3. [GERMANY Oberlandesgericht Düsseldorf 8 January 1993 (Tinned cucumbers case)].

4. [GERMANY Landgericht Baden-Baden 14 August 1991 (Wall tiles case)].

5. [GERMANY Oberlandesgericht Düsseldorf 10 February 1994 (Fabrics case)].

6. [GERMANY Bundesgerichtshof 25 June 1997 (Stainless steel wire case)].

7. [ICC International Court of Arbitration, Award 7531 of 1994 (Scaffold fittings case)].

8. [ICC International Court of Arbitration, Award 7660 of 23 August 1994 (Battery machinery case)].

9. Id.

10. [GERMANY Oberlandesgericht Düsseldorf 8 January 1993 (Tinned cucumbers case)]; [GERMANY Landgericht Baden-Baden 14 August 1991 (Wall tiles case)].

11. [GERMANY Oberlandesgericht Düsseldorf 8 January 1993 (Tinned cucumbers case)].

12. See [GERMANY Bundesgerichtshof 25 June 1997 (Stainless steel wire case)] (parts of delivered steel wire were sub-standard and therefore not useable for the buyer's purposes) (see full text of the decision); for details compare the Digest for article 49, footnotes 16, 17.

13. See the Digest for article 49, footnote 21.

14. [GERMANY Oberlandesgericht Düsseldorf 24 April 1997 (Shoes case)].

15. [GERMANY Oberlandesgericht Düsseldorf 10 February 1994 (Fabrics case)]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Award 251/1993 of 23 November 1994 (Seasonal goods case)].

16. [ICC International Court of Arbitration, Award 7660 of 23 August 1994 (Battery machinery case)].


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