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From: Global Sales and Contract Law
Ingeborg Schwenzer, Pascal Hachem, Christopher Kee

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 Formation of the Contract, 13 Agency »

From: Global Sales and Contract Law (2nd Edition)
Ingeborg Schwenzer, Edgardo Muñoz
This chapter discusses the authority and liability of agencies. Agents act on behalf of people taking part in modern commercial transactions. The general law of agency is still primarily governed by case law with the exception of India, Pakistan, and Malaysia. Special rules exist for the agency in commercial environments, especially for countries with distinctions between civil law and commercial code. The chapter explains how the law could establish authority and the intent of the principal. It also notes that an agent’s liability is dependent whether it is towards the principal or the third party.

Part III Formation of The Contract, 13 Agency »

From: Global Sales and Contract Law
Ingeborg Schwenzer, Pascal Hachem, Christopher Kee
13.01 Modern commercial transactions cannot be conceived without intermediaries interacting on behalf of those parties which will finally be the contracting partners. Such persons acting on behalf of others are regarded as agents. Those for whom the agents are acting—the principals—are bound by the agents’ act and thus subject to the rights and duties arising from the thereby concluded contract.1 The agent, in contrast, is not a party to the contract.2 For the general concept of agency it matters not whether the principal is a natural person or—as usually in...

Part XI Remedies for Breach of Contract, 47 Avoidance »

From: Global Sales and Contract Law (2nd Edition)
Ingeborg Schwenzer, Edgardo Muñoz
This chapter notes the notion of avoidance, which represents the most severe interference with the contractual relationship established between the parties. The conceptual guidelines of the CISG are used to remedy the avoidance of contracts. The ambiguity of the term ‘avoidance’ also pervades at the international level. The grounds for avoidance vary from impossibility, delay, non-conformity, and legal defects. The chapter covers the extent of the Nachfrist approach and Fundamental Breach approach. It clarifies the difference between avoidance and rescission as well. Moreover, exercising the right to avoid the contract might result in the impossibility to make restitution.

Part XI Remedies for Breach of Contract, 47 Avoidance »

From: Global Sales and Contract Law
Ingeborg Schwenzer, Pascal Hachem, Christopher Kee
47.01 The concept of avoidance of contract has in many of its facets given rise to long-standing debates. Although nowadays certain convergences can be ascertained, the traditional starting points often vary considerably and typically follow directly from the approach individual legal systems take to the system of breach of contract and the system of remedies. In this chapter, the basic structures of the remedy of avoidance will be outlined.1 The effects of avoidance and the resulting unwinding of the contract will be dealt with in a subsequent chapter.2 47.02 As...

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

Bibliography »

From: Global Sales and Contract Law (2nd Edition)
Ingeborg Schwenzer, Edgardo Muñoz

Bibliography »

From: Global Sales and Contract Law
Ingeborg Schwenzer, Pascal Hachem, Christopher Kee

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.