Ch.5 Article 74: A General Overview

Subject(s):

Breach of contract — Remedies for breach of contract — Calculation of damages — Types of loss and damages — UN Sales Convention and damages

This chapter focuses on article 74 of the United Nations Convention on Contracts for the International Sale of Goods (CISG), which allows the aggrieved party to claim damages for any breach of a contract. Four general points need to be addressed to understand the consequences of a breach. The first point to note is that article 74 does not specify what types of losses are included in a claim of damages except loss of profit. Second, damages can be claimed only if a promisee is not in breach of any of the rules of the Convention. Third, consideration must be given to the fact that article 74 is in competition with other remedies pursuant to article 45. The fourth point is that article 74 contains what appears to be a simple formula for calculating damages. Under article 74, the calculation of damages can ‘only be based on maintenance and performance of the contract’.