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1 Chapter 1 : Nayiri Boghossian ANNOTATED TEXT OF CISG Article 28 If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention. It traces the remedial framework of specific performance through Articles 46 and 62 which establish a clear right to performance. Such rights are limited through Article 28 which allows courts to continue to apply their domestic law in regard to CISG governed matters. The approaches of domestic courts towards specific performance are different; especially the difference between common law jurisdictions which allow specific performance in exceptional circumstances and civil law courts which generally regard specific performance as a primary remedy. Article 28 CISG was brought in as a compromise provision and thus clearly defeats the goal of uniformity. It is suggested that in order to promote much desired uniformity, Article 28 CISG should be interpreted in accordance with the criteria provided in Article 7. Such an interpretation will acknowledge the need to promote uniformity, the international character of the CISG and the observance of good faith in international trade. These criteria will ensure a departure from the homeward trend and promote uniformity in the availability of specific performance as remedy for contractual breach. Such an interpretation will remedy the lack of uniformity brought about by the compromise nature of the Convention. It managed to secure ratification not only of the developed western countries and the major trading states such as the United States, China and Germany but also of the various developing and socialist states. The number of common law and civil law states which are signatories is also very impressive. The different laws in various legal systems were perceived as inhibiting international trade by creating uncertainty in the applicable law and resultant lack of uniformity in the outcome of litigation from jurisdiction to jurisdiction due to variations in the legal principles in place. This goal is also laid down in Article 7 which emphasises that in the application of the Convention due regard is to be placed on the need to promote uniformity. The varied views of authors on the success of the CISG are mainly premised on how they perceive unification as opposed to harmonisation, often confusing the two. Article 7 merely states that there is a need to promote uniformity when the provisions of the Convention are interpreted. Kamba views unification as signifying "the process whereby two or more different provisions or systems are supplanted by a single provision or system, creating an identity of legal provisions or systems. He defines it as having three requirements namely: He argues that "the success of the CISG should be measured using a standard of relative uniformity or a standard of the lessening of legal impediments to trade. Little difference exists between the use of "regard is to be had" and the use of "establish", if one is to look at these phrases with a purposive eye. The use of "regard is to be had" as opposed to "regard may be had" shows the equally peremptory nature of the obligation which excludes any discretion, to the extent that it clearly points to the need to establish uniformity. Relativism is open to subjective construction and does not create any objective standard. The temptation of settling for relative uniformity which is easily attainable should thus be resisted. The logical conclusion will be to construe the CISG as requiring promotion of absolute uniformity. As a purportedly uniform law, absolute uniformity should be the benchmark against which the CISG is tested. In this regard Ferrari avoids the relative and absolute uniformity debate and submits that whatever the standard, lack of uniformity should not result in forum shopping. That on its own is undoubtedly useful as a measure of the extent of success in uniformity. However, the standard should again not be set so low as to confuse unification and harmonisation. Harmonisation is a process whereby the effects of a type of a transaction in one legal system are brought as close as possible to the effects of a similar transaction under the laws of the other countries. Laws may be different but if they are not directly opposed there is harmony. For instance if the civil law and common law countries settle that specific performance is to be available as a remedy for contractual breach but subject to the limitations of the domestic law of each state, that is a successful harmonisation. The difference between harmonisation and unification thus lies in the degree to which each tolerates variation. Harmonisation is flexible, only requiring a degree of similarity while Page 1

2 unification is absolute, requiring that the substantive law of States be the same and be applied to attain uniform results. This selfish motivation probably lied in the natural tendency that what is familiar is probably better than that what is new and strange. Key among them were the following aspects 1 In common law systems contracts require consideration to be enforced whereas the concept is not recognised in civil law countries. The drafting process thus reflects compromises on important legal concepts rather than the best legal solutions. The majority, representing nations that follow the civil-law tradition, did not suddenly realize the virtues of the common-law approach to contract and commercial transactions. Nor did the representatives of states with planned socialist economies suddenly recognize the virtues of free enterprise and the private allocation of risks by contract. And the many representatives of poorer and underdeveloped nations did not come to a new appreciation of the plight of the wealthy creditors of this world. After thirty years of hard technical negotiation by experts, worldwide agreement was reached by diplomatic compromise. The analysis will focus on the extent to which the Convention managed to overcome the differences in the various legal systems and effectively unify the area on the remedy of specific performance. Although the Convention provides for specific performance as a primary remedy in the case of breach of contract in articles 46 and 62, its application could be restricted by means of art 28 CISG. Article 28 was introduced as a so-called "compromise provision", for the benefit of the common law countries where a claim for specific performance is not that easily available except in very specific and extraordinary circumstances. Article 28 provides the opportunity for the forum court to apply a discretion to the extent that the claim for specific performance could be denied if that would be the case under its domestic law. The major focus of this study will therefore be on Article The aim is to analyse the extent it measures up with the goal of uniformity and how this article should be interpreted in light of the Article 7 guidelines. The criteria to interpret the Convention as noted above are laid down in Article 7. Article 7 1 provides that: The goal is an autonomous interpretation divorced from the idiosyncrasies of domestic law. Article 7 has been hailed as probably one of the most important articles in the Convention because of its important role in guiding how the entire Convention is to be construed. It furthermore refers to the tendency of a court to confine itself to its domestic understanding of concepts without looking at the practice of other jurisdictions or the special needs and objectives of an international instrument. Thus, an interpretation complying with the individual compromise needs of States will be defeating the whole object of unification. Even where a compromise provision is present in the CISG, such as Article 28 which legitimises the continual resort to domestic law in regard to specific performance, a court still has to be guided by the autonomous nature of the CISG and the need to promote uniformity. Wherever possible, it should deviate from the demands of domestic law if they are inconsistent with the object of the Convention. Chapter Three will deal with the compromise nature of Article 28 and the influence that common law and civil law systems may have on a claim for specific performance under the CISG. Chapter Four proposes to show that there is no need to resort to domestic law but that Article 28 should be read against the background of the general goals of the Convention. Chapter Five will conclude the study by summarising the existing legal position and the approach suggested by this study. Other remedies include claiming of damages under Article 74, avoidance of contract under Article 49 and reduction of the purchase price under Article The focus of this paper will be on specific performance. The CISG provides for the right of the buyer and the seller respectively to specific performance. Article 46, relating to the right of the buyer to specific performance provides as follows: A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter. Such an inconsistent remedy is avoidance of the contract under Article 49 or the reduction of the purchase price under Article Article 25 defines fundamental breach as follows: The requirement of foreseeability seems to be premised on avoiding undue hardship to the breaching party. The buyer has a right to require the seller to repair under Article 46 3 unless that is unreasonable in the circumstances. Circumstances when it will be unreasonable might include a claim for repair which is technically not feasible or if the cost of repair exceeds the diminution in value caused by the defect. The right of the seller to require performance is provided by Article 62 which reads: The logic behind it is to impress upon the parties the importance of their obligations. The two articles are also concessions to the civil law countries which generally have a preference for performance as opposed to damages. The provisions are thus a Page 2

3 restatement of the civil law position as opposed to the common law where specific performance is ordered only in exceptional circumstances. Article 28 provides that: It excuses a court from ordering specific performance if it would not do so under domestic law in similar contracts. The Convention sought to unify the law to get rid of divergent domestic legal principles, yet Article 28 allows continuation of that scheme. It has been noted with concern that it undermines Article 46 and 62 because an aggrieved party must always fear that a court will not order performance [41] Such uncertainty is the very weakness the Convention sought to remove by establishing a single body of law. As such Article 28 is a slap in the face of the attempt to unification. The rationale behind the provision can be traced back to its drafting history. Delegates from the civil law and socialist countries were of the view that a party to a contract should be entitled to full performance by virtue of the agreement itself and that the law should not force a non breaching party to accept anything less. The effect of this wording was that it would only excuse those States which did not have a mechanism for specific performance from not ordering it. However, under the lobbying of the United States and Britain, the wording was changed to "would do so" under its own law. Common law countries did not want to depart from their system where specific performance is an exceptional remedy whereas civil law systems insisted on the availability of specific performance as a primary remedy. The compromise was thus to satisfy both sides by allowing them to safeguard their domestic law relating to performance and save the negotiations from collapse over a single issue. The key provisions that require enquiry are "judgment of specific performance, "similar contracts of sale", "under its own law" and "the court is not bound" 2. It has been argued that the temptation to resort to domestic definitions should be resisted. The phrase should thus be interpreted to mean any action that may be brought under Articles 46 and According to this interpretation a judgment of specific performance thus includes a claim for the purchase price under Article 28 and a claim by the buyer for the performance by the seller of all his obligations. This, therefore, means any right to performance under Articles 46 and 62 is subjected to Article The definition of such similar contracts is however not provided in the Convention. The question which may arise is whether these similar contracts are necessarily international sales or simply sales of a similar subject nature. Similar contracts of sale not governed by the Convention might be contracts for the sale of goods between parties whose places of business are in the same country or contracts for the sale of goods between parties in non-contracting States. Walt suggests that similar contracts should be limited to international sales. It is unclear whether this phrase refers only to the domestic contract law rules of the forum or also to the choice of law rules of private international law. If the phrase is construed to include the choice of law rules, then the issue of specific performance may be governed by a law which is inconsistent with the domestic law of the forum. The effect of that would be to resurrect difficult choice of law issues in many international disputes and make the availability of specific performance more uncertain. Article 28 is based on a substantially similar provision in the Sales Convention. The Special Commission that prepared the draft in responding to comments by governments emphasised that the draft referred to the lex fori. The debate behind Article 28 centered on the need to protect those systems which did not have a mechanism to enforce orders of specific performance and secondly to allow those legal systems that regard specific performance as an exceptional remedy to continue to do so. It would be absurd to construe Article 28 as making it discretionary for a court to grant specific performance if it would not do so in similar domestic contracts but to require it to apply the law of some state that may require performance if choice of law rules point to application of such law. Such an interpretation would defeat the objective of Article 28; hence "its own law" should be confined to the domestic law of the forum. It thus leaves the domestic court with the discretion to decide whether it should grant specific performance notwithstanding the restrictive nature of its domestic law or not. These questions can only be answered after first looking at the domestic law approaches of different jurisdictions. Page 3

4 Chapter 2 : United Nations Convention on Contracts for the International Sale of Goods - Wikipedia Therefore, article 26 [draft counterpart of CISG article 28] provides that a court is not bound to enter a judgement providing for specific performance unless the court could do so under its own law in respect of similar contracts of sale not governed by this Convention, e.g., domestic contracts of sale. History of Negotiations International trade has substantially increased in recent decades and is no longer dominated by only a few of the most developed countries. The divergences in concepts, legal techniques and procedures that exist among those systems are reflected in the rules that govern the transactions. These differences in legal systems have created obstacles to international trade and often cause conflicts in international transactions. Moreover, having received training within their own national systems, jurists are often completely unaware of the differences of concepts and terminologies that exist between their own legal system and a foreign system. The ignorance about foreign systems often contributes to misunderstandings and difficulties in preliminary contract negotiations. Even if both parties use the same terminology they may still face these obstacles because often some of the same legal terms have different meanings in different systems. As a result, conflicts occur and parties only have recourse to litigation - a process that causes losses in money and time for the parties involved. And what made reaching unified rules even more difficult was the opinion of participating delegates that their own legal system was superior to other systems, and the expectation that concepts and techniques of their domestic law would be embodied in the CISG. Each category raised a problem different from the other. Debates in Civil law and Common law The CISG represents a compromise between the civil law and common law systems, sometimes reflecting concepts that are unique to one system and not the other. These were matters in which the views differed greatly since both notions are foreign to the common law system. In certain provisions, the rules of common law prevailed, while in others, the rules of civil law. East-West Debate The debate between the "eastern bloc" and "western bloc" countries can be characterized as a debate between rigidity and flexibility. Socialist countries wanted to ensure security and foreseeability while western systems opted for flexibility in contractual relations. For western countries, trade usage ensured flexibility, something upon which eastern countries placed little importance. One last issue that raised controversy between eastern and western bloc nations was the form of acceptance. Socialist systems require that acceptance be identical to the offer for the contract to be validly formed, more commonly referred to as the "mirror image rule. North-South Debate The difference in the levels of development and in the nature of economic activity between developed and developing countries gave rise to many conflicts during the negotiations. Though the views were very diverse, the solution adopted was always a compromise and not a solution to which all parties gave full consent. The fact that negotiators were from different legal backgrounds made it necessary to draft the CISG in terms that are comprehensible to all parties. The need for clarity also arose from the fact that the CISG is addressed not only to jurists, but also to businessmen. The other remedies available for the buyer include avoidance, which can be exercised in case of fundamental breach, and damages or price reduction, which are used in cases where there is no performance, even after the fixing of additional time. These provisions deal with suspension of a contract, avoidance before the date of performance, damages and exemptions. The sale of goods, and international trade in general, is a field in which a uniform law can be reached because of similarity in the way business transactions are conducted throughout the world. The CISG provisions regarding specific performance, however, have been the target of much debate and negotiation. Therefore, the provisions governing specific performance are examined in this article to highlight differences in concepts and techniques between legal systems and to demonstrate how a compromise was reached in the creation of the CISG. In fact, a compromise was reached in this matter, as was the case in other provisions of the CISG. According to Article 28, a court is not bound to grant specific performance unless it would do so under its own law in respect of similar contracts not governed by the CISG. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter. The buyer, for example, has the right to fix an additional time for performance. Recourse to Inconsistent Remedies The right to require specific performance is subject to the condition of having no recourse to other remedies that are Page 4

5 inconsistent with it. Paragraphs 2 and 3: Compelling Delivery of Substitute Goods or Repair Paragraph 2 of Article 46 gives the buyer the right to require the delivery of substitute goods when the goods delivered are not in conformity [] with the contract, and this non-conformity constitutes a fundamental breach. This remedy is limited by the conditions of the breach. Additionally, notice of a breach must be given within a reasonable time. The buyer can require repair if it is reasonable to do so. As provided in paragraphs 2 and 3, the notice of non-conformity must be given within the time limit provided for in the CISG. It is important for the buyer to receive the goods within a certain period of time,[page 21] otherwise the receipt of the goods will have no meaning for him. As for the seller, he is protected from the constant threat of claims. This view reflects the civil law approach, which considers a contract as the primary law governing the relation between the parties. Rationale and Assessment of Article 46 The CISG provides a right to require performance, although specific performance is not the primary remedy adopted by all legal systems. And while there has been opposition to this provision, the CISG nevertheless provides the right to require specific performance. Thus, each party is entitled to receive exactly what he contracted for. Moreover, substitute goods only may be available for an unreasonable price or may not be available within the required time limit. In fact, this is exactly why a buyer will turn to the international market to procure the needed goods. These two difficulties are especially true with buyers from planned economies and developing countries where the availability of goods is limited and where access to other parts of the world is not easy. Interaction with the outside world is hindered by the underdevelopment of communication systems and by restrictions imposed by governments. Considering these factors, one will find specific performance beneficial in international sales. Additionally, it is arguable that the interests of developing countries should be offered greater protection in international conventions. After all, the purpose of international conventions is to promote the welfare of countries through cooperation and common efforts. Developing countries need extra assistance from other countries, and therefore, in every international [page 23] convention, the situation of developing countries should be given this due consideration. This in turn will reduce the number of bad faith breaches. Rationale of Article 62 The rationale behind Article 62 is the same as Article In certain domestic systems, the right to compel payment of the price when the buyer has accepted the goods is presented as a right to collect a debt. This right to collect, however, does not fall under the rules regulating specific performance. Another difference between domestic systems and the CISG is that certain domestic legal systems provide that the seller cannot force the buyer to accept the goods unless he is unable to resell them after reasonable effort. Assessing Article 62 The right of the seller to enforce performance eliminates the expense and delay of seeking another buyer or negotiating a substitute transaction. This is an especially important right in cases where the goods have reached the destination port and the buyer refuses to take delivery. Specific performance, in such cases, is not entirely fair because the buyer is not responsible for changes in conditions of the marketplace, which are often unpredictable, even for a prudent businessman. This is especially true in countries where the economy is strictly regulated [page 25] by a government that issues regulations limiting the price of selling to consumers, thus reducing the profit margin for the party who has already made an international contract. Other regulations that may reduce the profits are ones that increase the tariffs imposed on imported goods. In these circumstances, it is unjust to compel the buyer to take delivery or pay the price. The common law approach to specific performance is also based on a theory of economic efficiency. Meaning of Article 28 Article 28 reads as follows: Therefore, an examination of this provision must start with examination of terms that are ambiguous. Phrases like "its own law," "similar contract of sale not governed by this Convention,"and "specific performance," are terms that have different connotations depending on whether they are read by a common law or a civil law jurist. The purpose of Article 28 is to permit a court to preserve its own domestic law on specific performance and not force it to order specific performance when it is not available under that legal system. This will eliminate the ability of the court to preserve its own national laws that do not grant specific performance. In so doing, the purpose of Article 28 will not be attained. Assessing Article 28 The purpose of the CISG is to create a uniform law for international sales and ensure that countries apply the same rules to similar cases. Article 28 is therefore inconsistent with the aim of the CISG because it allows the application of different rules depending on the law of the forum, [] thus, impeding unification. This will be done in the following chapter of this Page 5

6 article. Meaning of the Term Specific Performance A. Introduction Using the term "specific performance" in the CISG gives rise to a certain ambiguity as to its precise meaning. This uncertainty is not due to unclear language but due to a divergence of concepts between legal systems. Unfortunately, the drafters of the CISG did not always state the clear intention of every provision in the Convention. Therefore, clarification of the meaning of the term specific performance requires a comparative analysis of what the term connotes in various legal systems to reveal the intentions of the drafters. The meaning of the term specific performance to a common law jurist is different from the meaning it has for one from a civil law system. Specific Performance in Common law: The Uniform Commercial Code UCC When granting specific performance in common law, the court orders the defendant to do specifically what he promised. Moreover, there are no rules of execution at the expense of the debtor, as is found in civil law systems. Another difference is that an order of specific performance in a civil law system may include any number of obligations, including the transfer of property or the requirement to perform a certain act. Conversely, an order for the buyer to pay the price does not fall within the realm of specific performance in common law systems. The rules relating to specific performance in the UCC are provided in section Paragraph 1 of this section gives the buyer the right to specific performance when the goods are unique. This act of a third party - usually a sheriff - is not considered specific performance because the right to replevin is based on a property right and not on a contractual right. It is not enough to establish uniform rules and incorporate them in an international convention. In order to achieve uniformity in rules among Contracting States, it is necessary to apply the provisions of the CISG in a uniform way. To achieve this uniformity of application, it is necessary that parties to the CISG interpret the rules in the same manner. The drafters of the CISG were aware of the importance of this issue. This is why rules and general principles for interpretation were included in the CISG. However, as the number of countries that participate in a convention rises, the issue of interpretation become increasingly problematic. It is therefore necessary to examine the provisions regarding interpretation in the CISG to determine the meaning of specific performance. Preparatory materials deal with each article of the CISG and give important information about each provision regarding its purpose and rationale. Article 28 of the CISG, which limits any right to performance when it is derived from the law of the forum, applies to both Article 46 and Article Therefore, specific performance in the CISG includes any order compelling either party to perform contractual obligations. This article gives the buyer the right to claim repair when the goods are not in conformance with the contract. This shows that repair is one method to obtain specific performance and is contrary to its character under the common law. When the non-conformity of goods does not amount to fundamental breach and repair is not reasonable, the buyer has the right to damages or price reduction, but has no right for performance at the expense of the debtor. Page 6

7 Chapter 3 : Electronic Library on International Commercial Law and the CISG Article 28 requires that a court (or arbitral tribunal) which is asked to 'require performance' under the Convention engage in a 2-step process. First, it must determine whether the remedial rules in Chapters II or III of Part III themselves would make specific performance available to the injured party in the particular case. Drafting the CISG The existence and improvement of international uniform commercial law should be embraced and encouraged, as the existence of a uniform set of rules [1] governing international transactions generally contributes to the facilitation of international trade. The drafting process of the most successful international uniform law [5] of the last decades, the United Nations Convention on the International Sale of Goods [6] [hereinafter: CISG] reflected this care. It is also essential that an international uniform law be adapted to diverse cultures. Moreover, a successful international law must embody substantive compromises between different legal traditions. The CISG is well-known for the way in which it blends civilian and common law doctrine. Thus, today, the CISG has 52 Contracting States, [9] which constitutes a clear sign of the success of the correct drafting process from both a procedural and substantive point of view. Interpretation of the CISG Either when international uniform law is developed by international conventions [10] or model laws, [11] the application of doctrine seems to inevitably lead to certain ambiguities and uncertainties. These problems are mainly due to the fact that "international uniform law. This tendency is particularly noticeable in case of gaps. The CISG has a wide range of gaps, due to the compromising drafting process. Therefore, there is certainly a need for uniform interpretation [13] in the application of the CISG, so its uniformity and predictability [14] will be maintained. However, a tension exists between the goal of uniform implementation and interpretation in the light of domestic traditions. This thesis explores this tension in the interpretation of remedies for breach of sales contracts, as today the remedial area evidently forms the largest part of the discussion surrounding the application of the CISG. The following chapters will first explore the general ways of interpretation which can be applied to the CISG, and then the way in which interpretation of the CISG affects the remedies for breach of contract by the seller, [15] the remedies for breach of contract by the buyer, [16] and the remedy of damages [17] and interest. The emphasis will be on the interpretation of the available remedies in the light of the general principles of the CISG, instead of encouraging recourse to domestic law and domestic legal principles. General Many of the interpretative problems arise because of the existence of gaps [19] within the scope of application of the CISG. Therefore, a "gap-filling" technique [22] needs to be applied in order to find the right solution. The CISG provides the applying legal authority with one interpretive tool, which can serve to help this problem: Article 8 CISG, [24] is the other interpretive tool within the CISG, and must be applied whenever interpretation problems of the conduct of the parties arise. The latter tool does not solve questions arising from the absence of a uniform rule in the CISG, and its use is limited to matters falling within the scope of the CISG. These two tools prevail above any other technique of interpretation as being part of the Convention. However, in the application of both articles a too easy recourse to domestic law is possible, [25] and thus a certain distance from the area of law the CISG was intended to cover can be taken. In order to keep the CISG an international uniform set of rules, recourse to domestic law should be limited only to those cases in which matters expressly excluded from the scope of the CISG occur, and to cases in which matters which cannot be solved by applying the general principles on which the CISG is based. Thus, in interpreting the CISG, one should study the general principles carefully, and refrain from solving the issue at hand to quickly with a domestic rule or principle. Different Gaps In this latter sense it is important to distinguish gaps "intra legem," [28] gaps outside the scope of the CISG, and gaps "praeter legem," [29] gaps within the scope of the CISG. The first need to be filled with the applicable law according to the rules of private international law of the forum. Interpretation of the CISG 1. General The CISG provides for an international uniform set of substantive rules for the international sale of goods. Indeed, "any law, rule, or statute has to be applied predictably, and thus uniformly, to be effective. In answering this question, one can conclude that it does not matter what interpretation technique is used, as long as a certain goal, i. For instance, in the search for the general principles of the CISG, [45] one can apply certain domestic universally Page 7

8 recognized techniques [46] if the desired goal, i. A quick and insufficiently structured recourse to domestic law and its principles must be avoided, not the mere use of domestic techniques. One the one hand, it has been said that the articles represent the current customary international law, and thus should be applied although the United States is not a party to the Law of Treaties Convention. Although there have been authors pleading against the use of the latter technique in interpreting the CISG in general, [66] stating that it could only be applied to Part IV of the CISG, [67] the application of this technique can have an additional value. Even, it can contribute to the uniformity of the CISG. This will eventually improve the further exploration and determination of the general principles of the CISG. Available Techniques in Interpreting the CISG As has been shown there is not just one preferred interpretation technique to achieve uniformity. A combination of the abovementioned techniques is regarded acceptable, provided that no direct recourse to domestic law and domestic principles is taken. Indeed, "the CISG is actually a limited attempt to unify national contract law," [71] and if domestic law and domestic principles are used immediately in the application of the CISG, i. In order to achieve the proper balance, the interpreting legal authority should thus take into account the interpretive rules of the CISG as embodied in Articles 7 [75] and 8 [76] CISG. The main implication of this is, that regard must be had to the interpretation in the light of the general principles of the CISG, [77] so no direct recourse will be taken to domestic law or domestic legal principles. The next Chapter will examine what is understood by interpretation in the light of the general principles of the CISG, with regard to articles 7 and 8 CISG, which can shortly be defined as international interpretation. This article is arguably the single most important provision in ensuring the future success of the Convention. The three main considerations of the general overall objectives [80] of the CISG are: First, the applying legal authority must see if the disputed matter falls within the scope of application of the CISG, [84] which also includes matters which may not be expressly solved by the CISG. If, by any chance, the general principles of the CISG will be examined first, it is very likely that directly recourse to domestic law and domestic legal principles will be taken, as the general principles are not always as easy to discover. Naturally, in a controversy, such subjective knowledge will be difficult to prove. Thus, Article 8 further provides for interpretation according to an objective standard. Finally, articles 8 and 9 together make reference to usages, course of performance, course of dealing, and express terms in a manner similar to the U. In order to prevent this as much as possible from happening, the applying legal authority should turn to the general principles of the CISG instead of the domestic legal features; shortly, it must turn to "international interpretation. The principle of good faith between the parties will also be affected, as the parties expected the CISG to apply, and not a set of "domestic legal principles. When considering the two requirements of international interpretation, one can directly derive that a "special burden" [] is placed on the judiciary: Indeed, "it is crucial that present decisions lay the proper foundation for future interpretations to build upon. This scheme places more emphasis on performance remedies than the stress on damages found in common law systems. Courts still sometimes fail appreciate [the CISG]. American Business Center, Inc. The shipments of the Chinese company did not correspond to the agreement, as they contained substantial amounts of defective and non-conforming goods. The dispute was concerned with oral modifications to the original contract, through which the parties tried to settle their dispute. However, the parole evidence rule is a substantive rule of law, and as the CISG has no writing requirement as to prove the existence of a sales contract, the Texas parole evidence rule, and Article 8 CISG could have been blended together here in determining the exact meaning of the oral modifications to the original contract. In sum, Article 8 3 CISG [] provides for an equivalent method to the parole evidence rule, and thus could have been used to supplement it. As the dispute originally arose from the contract of sale the Court of Appeals should, at least, have reviewed CISG for a controlling rule or principle. Unfortunately, this is not something which is easy to comply with. Non compliance, however, violates the mandate of Article 7 CISG, [] as the approach taken here does not contribute to the development of the general principles underlying the CISG, nor contributes to the uniform interpretation of the CISG. However, the first shipment of compressors did not conform to the sample model, as the cooling power and energy consumption were significantly different. As the dispute could not be solved through negotiations, Delchi sued for breach of contract and the failure to deliver goods conforming to the contract. The Court stated that "[t]he CISG requires that damages be limited Page 8

9 by the familiar principle of foreseeability established in Hadley v. Moreover, the foreseeability factor of Hadley v. Baxendale is substantially different from the one in Article 74 CISG; it has a very different origin and meaning. Baxendale was fulfilled, as it was objectively foreseeable that Delchi would take orders from air conditioners based on the number of compressors Rotortex had promised to supply. Courts should refrain from using domestic features in interpreting the CISG, as domestic features inevitably bring along an amount of legal baggage and restrictions which usually do not correspond and cannot be found in the text of the CISG. Therefore, courts should stick to the text of the Convention and its underlying principles. By not complying with this mandate, the US courts mentioned "missed an important opportunity to engage in an "international" dialogue with references to foreign decisions and commentaries, civil law principles and the international legislative history of the Convention itself. In order to give some guidance in this complex matter, the remedies for breach of contract provided for by the CISG will be discussed in the light of international uniform interpretation in the following chapters. Remedies for Breach of Contract by the Seller 1. General The drafting process of the CISG reflected a number of compromising clauses which have been adapted by consensus. Under the CISG, the buyer [] is provided with different kinds of remedies. However, avoidance of the sales contract is restricted to cases in which a fundamental breach occurs, and to cases where the seller has not properly performed after the buyer granted a Nachfrist period. Moreover, direct damages based on recovering the market price are primarily available under Articles 75 and 76 CISG. Thus, direct damages are firstly available if the breach is fundamental or the buyer elects to declare the contract avoided. Therefore, the buyer cannot choose entirely free between the different remedies listed in Article 45 CISG. Remedies for Breach of Contract by the Seller 2. Article 46 1 CISG gives the buyer "the choice of the right to specific performance or the right to other remedies such as damages, or a combination of the two, as long as they are not "inconsistent with" the requiring of specific performance. This seems regrettable even if it is unavoidable. In the United States, there is a growing trend to increase the use of equitable remedies, while in civil-law countries, courts have shown some reluctance to liberally apply this form of relief. It is therefore essential, having in mind the correct base for uniform international interpretation of the CISG, [] that the forum does not refer to the standards of specific performance in its own domestic system [] when applying Article 46 1 CISG. Article 46 1 CISG should be interpreted and applied in accordance with the general principles on which the CISG is based, and not with domestic rules and principles. Article 28 CISG merely provides for discretion for the forum when its own rules would not allow such an award. The mandate of Article 7 CISG, [] which mainly focuses on the interpretation of the text of the Convention in the light of the general principles of the CISG, even allows us to take a step further. The mandate actually orders a legal authority applying Article 28 CISG to give preference to the performance remedy provided for in Article As the legal authority "is not bound to enter a judgment for specific performance," [] it still has the discretion to award specific performance when it concludes that that remedy is required by the structure of the Convention or is otherwise appropriate in the commercial situation. Moreover, as throughout the CISG emphasis is laid on the performance remedies, [] the legal authority in applying Article 28 CISG should refrain itself from using the discretion to let domestic law prevail above the remedies provided for in the CISG. Accordingly, the applying legal authority is ordered to use its discretion freely, but wisely. Moreover, a breach of contract caused by non-conformity of the goods can even arise after the risk of loss passes to the buyer. Articles 46 2 and 46 3 CISG grant the buyer specific rights under the Convention, which the forum should acknowledge, apart from their domestic view on whether specific performance as meant in Article 46 1 CISG should be rendered. Since direct damages under Articles 75 and 76 are primarily available to a buyer in case of contract avoidance, a court must be prepared to give the buyer the remedy of delivery of substitute goods under Article 46 2 or the remedy of repair under Article The other option would be for the court to award damages based on the buyer obtaining repair elsewhere when the seller fails to repair. In the next two sections the application of the non-conformity requirement will be discussed in the light of the separate remedies. Article 25 CISG has two main components: Page 9

10 Chapter 4 : CISG - breach of contract and remedies - Law essays - Essay Sauce Free Student Essay Exam Article 28, however, merely provides that the court "is not bound" to adopt the solution of its national law regarding specific performance in the context of an international sale of goods governed by the Convention. Unification of Sales Laws: Gap Filling and Unification: Transplantation of laws 9. Conclusion Acknowledgment Chapter 1 Chapter 2 A. Uniformity of laws I. The 20th century the century of internationalization II. Uniform legislation just the first level towards unification of laws B. Harmonization or Unification I. Distinguishing between unification and harmonization II. Which one to prefer? Uniform words not to ensure uniform results? Unbound discretion of domestic courts in interpreting uniform law? Uniformity or domestic competition? Tensions between international legal order and various domestic systems B. Eliminating municipal divergences C. Interpreting uniform law D. Predictability and choice of law E. Domestic law and international business aspirations I. The Mechanism of Gap Filling I. A German trilogy of cases Chapter 5 A. Conflict of laws III. Conclusion Chapter 6 A. Specific Performance and the Rules of the Forum B. Domestic Rules of Specific Performance C. Article 28 and procedural law E. Article 28 and the conflict of laws rules I. Article 28 as a mere option III. Article 28 designed for common law courts F. Conclusion Chapter 7 A. Gaps and exclusions B. Concurrent contract and product liability claims C. Set-off and article 4 E. The question of validity G. The question of mistake H. Mistake the conceptual framework I. Mistake an analysis I. Mistakes in expression II. Mistakes in Motive J. Conclusion Chapter 8 A. Transplantation of Uniform International Law Facts or fiction? Unification and Transplantation III. The UCC concepts of article 2 B. Conclusion Chapter 9 A. Where are we now? Uniformity Critical Comments D. The Problem of Interpretation E. Article 7 and the mandate of uniform interpretation F. The Problem of Internationality II. Page 10

11 Chapter 5 : Admire Takawira The purpose of this paper was to analyse the effect of Article 28 of the CISG on the availability of the remedy of specific performance under the CISG. Further to that, to evaluate the extent to which Article 28 accords with the goals of the Convention, namely unification, and lastly, to suggest an interpretation which would be best suited to. The CISG always requires two parties, namely a buyer and a seller. It is obvious those two parties have to fulfill certain obligations. Deriving from article 53 CISG the buyer is obliged to pay the price and to take the delivery of goods as required by the contract. When the situation occurs whereby one party cannot fulfill its obligations towards another party, there is committed a breach of contract. However the CISG has laid down some rules to deal with such a violation. When the buyer commits a breach of his obligations, the CISG made up some remedies available for the infested seller. We can derive from the reading of article 61 CISG the possibilities where the seller can rely on in case of a breach of contract by the buyer. If the buyer fails to perform any of his stipulated obligations under the contract, the seller may exercise the rights provided in articles 62 to 65 or claim damages as provided in articles 74 to In the hypothesis whereby the seller commits a breach of contract, the buyer can also rely on some remedies. Those remedies are laid down in article 45 to 52 CISG. In this research paper I will discuss one specific remedy: The questions I will be answering through this paper are dealing with the meaning and limitations of the right to require performance. The right to require performance The CISG prescribes the right to require performance to the both parties of the contract: According to article 46 CISG, the buyer has the right to claim performance when the seller does not fulfill his obligations. The CISG provides a similar right to the seller. In aforementioned article is stated that: From the above underlined words we can derive that the buyer loses his right to claim performance of the seller when he chooses a reduction of price or an avoidance of the contract. Besides the provision to require performance, article 46 CISG is also dealing with situations of fundamental and non-fundamental breaches. Article 46 CISG takes two types of breach into consideration, namely non-conformity and non-delivery. In the case of a lack of conformity, article 46 2 and 46 3 CISG will be applicable. We have to make a distinction whether the breach is fundamental or non-fundamental. If we are dealing with a fundamental breach the buyer can rely on 1. The second form of performance, right to require the delivery of substitute goods, is laid down in article 46 2 CISG. For the applicability of this article three requirements has to be fulfilled: When the foregoing conditions are met, the buyer can rely on the right to require the delivery of substitute goods. When the breach is not fundamental, the buyer has to rely on article 46 3 CISG: Before the buyer can rely on article 46 3 CISG he has to fulfill some conditions. These conditions are more or less the same as those stated in article 46 2 CISG. However when there is a lack of conformity, the following has to be taken into consideration. In the situation where is opted for the delivery of substitute goods, the seller has the possibility to deliver substitute goods when it is more favorable for him. When the foregoing occurs, the buyer will not have the option to require substitute goods. Note, the foregoing applies only when there is a breach of fundamental nature. When a seller totally fails to deliver the goods as stipulated by the contract, the buyer has the right to claim performance under article 46 1 CISG. When such a situation occurs the will not be relieved of his obligation to deliver. As long as the seller do not fulfill his obligation delivery of goods the buyer retains the right to delivery. The same applies when there is an incomplete delivery or the goods are delivered at another location than agreed in the contract. In this case, performance or non-performance depends on the buyer because of the fact the seller is not allowed to do not perform on the grounds that the benefits to the buyer outweigh the costs of the seller or on grounds that the non-conformity is not essential. However article 46 2 and 3 are separate remedies, they can be both applied in some circumstances. So they are not considered as alternatives, this is why, in some cases, the buyer can opt for the delivery of substitute goods and the repair of goods. This right to specific performance is laid down in article 62 CISG: However the rationale behind article 62 CISG is the same as article 46 CISG, namely promoting respect for the agreement and to ensure there is a adequate compensation. Another rationale behind article 62 CISG is the difficult task of the seller of the seller to dispose of goods when the buyer refuses to comply with his obligation to take the delivery of certain goods. According to Page 11