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Part II Formation of the Contract, Art.18 CISG: Acceptance and its effectiveness »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter takes a look at Article 18. Under the Sales Convention’s contract conclusion regime, sales contracts are generally formed through two corresponding party declarations, ‘offer’ and ‘acceptance’. Article 18 is the introductory provision on acceptances and addresses two important aspects of this essential building block for contract formations. In particular, Article 18 governs two separate, but related matters: indication of offeree’s assent to an offer and effectiveness of an acceptance. The Article furthermore provides an overview of three types of acceptance: expressly declared acceptance, which must reach the offeror; impliedly declared acceptance, the expression of which must reach the offeror; and implied acceptance, which becomes effective with the conduct expressing acceptance.

Part II Formation of the Contract, Art.19 CISG: Acceptance modifying the offer (including ‘battle of forms’) »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter examines Article 19. Article 19 supplements the basic provision on acceptances in Article 18 by a special provision addressing a practically common constellation, namely declarations by offerees that appear to be an ‘acceptance’, but partially deviate from the offer by containing different terms. If the traditional ‘mirror image’ rule was strictly applied in such scenarios, no contract would be concluded, because the terms of both party declarations do not perfectly match; accordingly, the ‘declaration of acceptance’ whose content deviates from that of the earlier offer could merely constitutes a counter-offer. The problem arising therefrom results from the experience that minor differences in terms between offer and acceptance often remain undetected in commercial practice or are being ignored by the parties, so that also contracts that have technically not (or not yet) been concluded are subsequently performed, either in part or completely. Against this background, the use of a strict mirror image approach brings with it the risk that one of the parties may later ‘detect’ a minor discrepancy between offer and acceptance, and may point to the technical lack of consensus between the parties in order to reject a contract that, for reasons entirely unrelated to its conclusion, has become unattractive for this party.

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.I Anticipatory Breach and Instalment Contracts, Art.72 CISG: Avoidance in case of anticipatory breach of contract »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter focuses on the provisions of Article 72, which entitles a party to avoid the contract before the other party’s obligations become due. The conditions to exercise this right are strict: a clear fundamental breach on behalf of the debtor in the future is required. The creditor must, if time permits, notify the other party of its intention to avoid the contract in order to grant it the opportunity to provide sufficient security, in which case the creditor will be deprived of the right to avoid the contract. On the other hand, in case of an anticipatory breach where the debtor has definitely declared that it will not fulfill its contractual obligations, the creditor has an unconditional right to declare the contract avoided at once and is not obliged to give notice to the debtor before it terminates the contract.

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.I Anticipatory Breach and Instalment Contracts, Art.73 CISG: Avoidance of instalment contracts »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter looks closely at Article 73, which provides for special rules of contract avoidance where the performance of an instalment contract is impaired. The provision states that a fundamental breach regarding one instalment entitles the creditor to avoid the contract with regard to that instalment. It also deals with the likeliness of a future breach in an instalment contract; if a breach of duty with regard to the current instalment indicates that future instalments might be impaired, the creditor may avoid the contract for the future. Next, it draws further consequences for the whole contract from the breach of a single delivery: the buyer who declares the contract avoided with regard to a single instalment may at the same time avoid the contract in relation to prior and/or future instalments, if, because of their interdependence, the fundamental breach of the single instalment affects also the other instalments or the contract as a whole.

Bibliography »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.IV Exemptions, Art.80 CISG: Breach caused by creditor »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter focuses on provisions about how a party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party’s act or omission. Article 80 has no direct predecessor in the ULIS. It explains that the article was included in the Convention based on a proposal by the former German Democratic Republic and provides for a complete exemption of the promisor from its contractual obligations. The chapter mentions civil law authors that conceive Article 80 to be an expression of the general principle of good faith. In contrast to other provisions, Article 80 does not specify the consequences of contributory or comparative negligence on the part of the promisee.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.II Conformity of the Goods and Third Party Claims, Art.38 CISG: Buyer’s examination of the goods »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter notes the purpose, method, period and costs of the examination of the goods in line with Article 38. Additionally, the buyer’s obligation to examine the goods within a period forms the basis of its obligation to notify the seller of defects under Article 39. The obligation to examine the goods and to notify the seller of any lack of conformity is intended to ensure the seller will deliver its remedy by the delivery of missing goods, by repair, or by reducing the buyer’s loss in some other way. Article 38 applies to all cases of lack of conformity within the meaning of Article 35.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.II Conformity of the Goods and Third Party Claims, Art.44 CISG: Buyer’s excuse for not giving notice »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter tackles the reasonable excuses of buyers for not giving appropriate notification in line with Article 44. It explains how the failure to give notice does not allow the right to require delivery of substitute goods or repair, the right to avoid the contract, and the right to claim damages for loss of profit. The mitigation of the consequences of a failure to give notice under Article 44 only applies when the buyer has failed to observe the time limits. The chapter highlights the importance of understanding and leniency in relation to the discretion of reasonable excuses. It also includes the consequences such as price reduction and seller’s right to cure defects.

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.V Effects of Avoidance, Art.82 CISG: Buyer’s loss of rights where restitution of goods is impossible »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter considers Article 82 as the successor of Article 79(1) ULIS, which compared to its predecessor, has been condensed and complemented by Article 82(2)(c), according to which resale, consumption, or transformation do not hinder avoidance of the contract. Article 82 poses a principle that may appear rather complicated and overly restrictive, but it was adopted and known to many predominant domestic sales laws in the world. It analyzes how Article 82 states that the buyer who cannot hand back to the seller the goods originally received is not entitled to declare the contract avoided. The chapter highlights the fact that the goods are no longer essentially in the condition in which the buyer had received them will deprive the buyer of its right to avoidance. Article 82 and its exception can essentially be traced back to classic Roman law.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.III Remedies for Breach of Contract by the Seller, Art.47 CISG: Buyer’s notice fixing additional time for performance »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter notes the fixing of additional period for performance in line with the rules indicated in Article 47. even without specific legal authorization, the buyer can set one or more additional periods of time for performance by the seller of any obligation regardless of whether it is a primary or secondary obligation. The chapter lists the considerations for fixing the length of the additional time such as the transmission period for the declaration fixing an additional period of time, the delivery circumstances, and the scope and nature of the seller’s obligation. The chapter also includes the burden of proof for buyers and sellers.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.II Conformity of the Goods and Third Party Claims, Art.39 CISG: Buyer’s notice of non-conformity »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter discusses Article 39’s underlying basic principle of the buyer’s duty to give notice of any lack of conformity. Additionally, the principle is maintained in the CISG. Any lack of conformity that the buyer has established upon a proper examination of the goods must be notified to the seller. The notice must indicate the intention to object and exactly specify the nature of the lack of conformity. The chapter notes the consequences of failing to give any or proper notice to the seller at the designated time limit. However, Article 39 is non-mandatory so parties may agree that the duty to give notice of lack of conformity does not apply at all.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.II Conformity of the Goods and Third Party Claims, Art.43 CISG: Buyer’s notice of third party claims »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter notes the responsibility of giving notice of third party claims indicated in Article 43. The buyer loses the right to rely on general defects or intellectual property rights if it does not notify the seller specifying the nature of the third party right or claim. The chapter expounds on the concept of reasonable time to notify the sellers about the defect on third party claims. If the buyer fails to give the notice of the defect under Article 43(1), it loses the right to depend on Articles 41 and 42 as well. However, the buyer retains its rights if the seller knew of the right or claim of the third party and the nature of it.

Part III Sale of Goods, Ch.III Obligations of the Buyer, s.I Payment of the Price, Art.54 CISG: Buyer’s obligation to comply with governmental and banking procedures »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter emphasizes that the buyer’s obligation to pay the price entails taking steps and complying with formalities as may be required under the contract and any laws and regulations to enable payment to be made. It tackles compliance with governmental procedures as well as with banking procedures. The chapter also looks at the seller’s remedies for breach of contract by the buyer, and the situations wherein buyers are exempted from liability. It concludes with a brief discussion on the burden of proof: the seller has the burden of proof that the buyer was under an obligation associated with the payment and that he, in fact, breached this obligation.

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.VI Preservation of the Goods, Art.86 CISG: Buyer’s obligation to preserve the goods »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter examines the application of Article 87 if a party is obliged to preserve the goods by virtue of Articles 85 or 86. The party in question is entitled, but not obliged, to deposit the goods in a third person’s warehouse. It notes that in Article 87 there are no other conditions and the only limiting factor are the costs of warehousing. The chapter talks about the deposition in a warehouse, as with all other steps taken to preserve the goods, that is only admissible if the resulting costs are not unreasonable. If the amount expended on warehousing the goods exceeds that limit, that affects only the depositing party’s right to obtain reimbursement and the incurring of unreasonable expense does not lead to the risk of storage in a warehouse being transferred to the other party.

Part III Sale of Goods, Ch.III Obligations of the Buyer, s.II Taking Delivery, Art.60 CISG: Buyer’s obligation to take delivery »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter discusses the buyer’s obligation to take delivery of the goods. Article 60 states that this obligation consists in doing all the acts which could reasonably be expected of him or her in order to enable the seller to make delivery, and in taking over the goods. Taking over the goods means that the buyer must take physical possession of them. Furthermore, the chapter lays down the acts enabling the seller to make delivery. The scope of the discussion also covers retention rights, tackling the several cases that the buyer has the right to withhold his cooperation with the delivery by the seller. This includes premature delivery, excess quantity, late delivery, non-conforming goods, and non-conforming documents.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.III Remedies for Breach of Contract by the Seller, Art.45 CISG: Buyer’s remedies for seller’s breach of contract »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter looks into the buyer’s remedies in line with the seller’s failure to perform any of his contractual obligations. Article 45 tackles issues such as claims for damages and the lack of period of grace. All of the buyer’s remedies referred to in Article 45 are available only if the seller fails to perform any one of his obligations under the contract or the Convention. Additionally, the right to perform is not dependent on the fault or circumstances within the seller’s control. The chapter then discusses the remedies under Articles 46-52. It also includes the seller’s guaranteed liability based on the failure to perform the contractual obligation.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.III Remedies for Breach of Contract by the Seller, Art.51 CISG: Buyer’s remedies in case of partial non-performance »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter lays down the supplementary rules which clarify the situation where a seller delivers only a part of the goods sold or where only a part of the goods delivered is in conformity with the contract. It underscores four important points: that generally, the buyer’s remedies are restricted to the missing part; that the contract may also be avoided in part; that the contract may be avoided in its entirety only if the partial failure to perform amounts to a fundamental breach of contract in relation to the contract in its entirety; and lastly, that the buyer may claim compensation according to Article 45(1)(b) for every loss suffered due to the partial non-performance.

Part III Sale of Goods, Ch.V Provisions Common to the Obligations of the Seller and of the Buyer, s.V Effects of Avoidance, Art.83 CISG: Buyer’s retention of other remedies »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter focuses on Article 84 is an integral part of the rules on restitution, stating that the parties’ duty to account for all benefits have been derived under the contract. The parties are to be reinstated in the economic position in which they were before exchanging performances. It cites Article 84(1), which imposes the duty on the seller to pay interest on the purchase price from the day payment was made, while Article 84(2) states the buyer’s duty to account for all benefits that it has derived from the goods. The chapter explores the distinction made within Article 84(2) between the situation where the buyer is able to make restitution of the goods and the case where it cannot return the goods in an unimpaired condition. The distinction relates to Article 82, which bars the buyer’s right to declare avoidance where the goods cannot be returned.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.III Remedies for Breach of Contract by the Seller, Art.49 CISG: Buyer’s right to avoid contract »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter expounds on the buyer’s right to avoid a contract. Article 49 covers the preconditions for the buyer’s right to avoid the contract in the event of the seller’s breach of contract. Avoidance of the contract results in the extinction of both parties’ obligations and in restitution of whatever has already been paid or supplied under the contract. Moreover, time limits are intended to clarify the fate of the contract and the mutual obligations of the parties. Avoidance of the contract under Article 49 assumes the seller failed to perform their obligations and breached its subsequent contract. The chapter also notes the requirements of the declaration of avoidance of the contract.

Part III Sale of Goods, Ch.II Obligations of the Seller, s.III Remedies for Breach of Contract by the Seller, Art.50 CISG: Buyer’s right to reduce price »

Ingeborg Schwenzer, Ulrich G. Schroeter
From: Schlechtriem & Schwenzer: Commentary on the UN Convention on the International Sale of Goods (CISG) (5th Edition)
Edited By: Ingeborg Schwenzer, Ulrich G. Schroeter
This chapter covers the rules of price reduction in Article 50. The price reduction regulated in Article 50 is a legal institution of the continental European legal systems. In line with the principle behind price reduction, the buyer may keep non-conforming goods delivered by the seller. The chapter clarifies price reduction as an adjustment of the contract which is limited by the absolute right to claim damages. It highlights how Article 50 is only applicable if the goods do not conform with the contract. Moreover, the buyer is required to provide a timely notice of defect and non-conformity to claim a price reduction.