Ch.9 Special Damages: Interest Rates

Subject(s):

Contract — Interest rate and damages — UN Sales Convention and damages

This chapter assesses the right to claim interest under article 78 of the United Nations Convention on Contracts for the International Sale of Goods (CISG). The advantage of relying on article 78 is obviously the fact that losses do not need to be proven and that the limitation of article 79 also does not apply. The problem is that article 78 may not provide full compensation, but a claim pursuant to article 78 may still be the fastest and cheapest way to get an award. In summary, article 78 is to be understood in two ways. First, the interest rate issue is not governed by the convention, and therefore the conflict of laws rules will determine the applicable domestic law. Second, it appears that the majority of courts follow this suggestion; in other words, jurisprudence supports the view that the rate of interest has to be set via domestic law.