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Abbreviations »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
About the Author »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Acknowledgements »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Ch.5 Article 74: A General Overview »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
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’.
Ch.10 Attorneys’ Fees »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter shows that attorneys' fees are a substantive and not a procedural matter, and hence are included under article 74. Article 74, in the spirit of the United Nations Convention on Contracts for the International Sale of Goods (CISG), contains no direct reference to individual classes of losses except loss of profit. The answer to whether attorneys' fees were intended to be included in the sphere of the provision lies in the application of the general principles on which the CISG relies. Great care must be taken to distinguish between court costs and legal fees if any autonomous interpretation of article 74 is to be developed. Even so, tribunals and courts throughout the CISG realm do not agree on this matter. This is demonstrated by comparing cases from different jurisdictions.
Bibliography »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Ch.3 Breach of Contract: An Overview »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter examines some transnational generic contract law principles of remedial relief. Not all contracts run the intended course, and a breach will mostly likely result in damages to at least one party. The intention of the law is to secure the bargain, but this security is only as good as the ability of courts and tribunals to award appropriate remedies. The ability to award damages is an important economic function, and it is not surprising to find laws regulating the awarding of damages in a variety of legal documents. Indeed, the United Nations Convention on Contracts for the International Sale of Goods (CISG) has recognized that the awarding of damages is an important, if not the most important, remedy and structured its remedial system in such a way that damages can always be claimed irrespective of any other claims.
Ch.4 Breach of Contract: The CISG »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter details the remedial provisions of the United Nations Convention on Contracts for the International Sale of Goods (CISG). The CISG has two articles, namely articles 45 and 61, which provide an overview of the remedies available to the buyer or the seller in the event of a breach. Article 45(2) for the buyer and article 61(2) for the seller make it clear that damages provide the most important and all-embracing remedy, as both the buyer and seller never lose the right to damages even if they choose another remedy. In addition, parties to a sale are relieved of liability for a breach of contract only by article 79, which indicates that only an impediment beyond the control of the party will excuse non-performance. The CISG allows for three broad categories of remedies: specific performance, avoidance, and substitutionary relief.
Ch.8 Calculation of Losses under Article 74 »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter explains how losses pursuant to article 74 of the United Nations Convention on Contracts for the International Sale of Goods (CISG) are to be calculated. Article 74 clearly stipulates that the plaintiff can claim only losses that have been suffered as a consequence of the breach. Losses are divided or categorized into direct losses, incidental losses, consequential losses, and loss of profit. Article 74 does not specifically mention a concrete calculation and therefore does not directly disallow an abstract one either. However, the tone of the article certainly suggests that losses, in order to be proven, should be calculated on a concrete basis. Arguably, a hypothetical or abstract calculation can be accepted if both parties agree to it, but any unilateral suggestion of an abstract nature appears to be rejected by the courts.
Case Law and Arbitral Awards »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Ch.17 Conclusion and Observations »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This concluding chapter argues that two important factors need to be taken into account at a time when the pace of globalisation and internationalisation of trade has quickened. First, an understanding of the problems of devising and implementing uniform and harmonised laws is necessary. Second, existing international conventions, such as the United Nations Convention on Contracts for the International Sale of Goods (CISG), that offer practical solutions to harmonisation must be recognised and adopted by the legal profession when drafting international contracts. Ultimately, unification of laws will depend on internationalisation and respect for other systems' decisions. As such, the uniform European laws must be replaced by uniform international laws as trade spans international borders.
Contents »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Ch.1 Description of the Problem: Uniform Laws and Damages »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This introductory chapter provides an overview of the landscape in which any determination of damages takes place. Whenever a contract is being negotiated, each party attempts to identify and minimize the risks involved in the sale of goods. Several issues are important such as which law is to apply, and which jurisdiction is to be preferred. This is of importance as the question of minimizing damages in cases of a breach is tied up in the choice of a legal system. The problem is that as long as transnational laws are not ratified and importantly embraced by the business community, a truly seamless trade system will not eventuate despite the existence of a physical transnational supply network. The United Nations Convention on Contracts for the International Sale of Goods (CISG), despite perceived shortcomings, is still the only harmonised sales law as 85 countries have ratified the Convention.
Ch.16 The Doctrine of Anticipatory Repudiation »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter addresses how the United Nations Convention on Contracts for the International Sale of Goods (CISG) governs anticipatory repudiation of a contract. Under the CISG, anticipatory breach does not pose any problems but is different from the common law position. The differences are in the application and in the terminology. A party under the CISG can resolve a potential unease whether the other party will perform in a two-step approach unlike under common law where repudiation is the only approach. Importantly, the CISG governs two situations. First, a party can suspend its own performance once it suspects that the other party will not perform. Secondly, the innocent party can avoid the contract without having to wait until the contract is actually breached, thereby allowing the applicability of the principles of fundamental breach.
Ch.12 Exemptions »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter studies the effects of unforeseen circumstances on a contract. The approach to changed circumstances varies from country to country, and there is simply no uniformity in approach. The classic concepts of force majeure and hardship are the basis on which attempts have been made to solve the problem of non-performance of a contract. Generally speaking, the aim of force majeure is to settle a contract through either suspension or termination of obligations. However, termination of a contract is always the last resort. The United Nations Convention on Contracts for the International Sale of Goods (CISG) attempts to keep the contract alive as long as is practicably possible. Article 79 indicates that a settlement of the dispute and hence a continuation of contractual obligations is possible. Only in cases where the impediment falls under articles 49 and 25 can the contract be avoided.
Ch.13 Fundamental Breach and the CISG »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter discusses the concept of fundamental breach. In brief, the United Nations Convention on Contracts for the International Sale of Goods (CISG) offers two different approaches to a breach of contract. If the breach is ‘minor’, the aggrieved party simply concludes the contract and asks for damages. If the breach is ‘major’, the contract can be avoided, or terminated, and remedies for breach of contract can be sought. Damages are among the most important remedies any legal system can award to restore financial equilibrium. However, in certain circumstances damages are not the remedy that is envisaged or practical. It should be noted that a breach of a contract gives rise to secondary rights and obligations. Fundamental breach is one of the secondary rights and must be read within the remedial framework of the CISG.
Index »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
Ch.6 Limitation on Claims within Article 74 »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter looks at the limitations on the right to claim damages under the United Nations Convention on Contracts for the International Sale of Goods (CISG). A breach of a contract within the CISG does not give unlimited access to damages. Thus, it must be stressed that principles limiting damages must be found within the four corners of the CISG and there should be no recourse to domestic principles. Three limiting factors need to be considered: the foreseeability rule contained in article 74; a duty to mitigate damages by the promisee pursuant to article 77; and the exemption from paying damages for those breaches that are due to an impediment beyond the control of the breaching party pursuant to article 79.
Ch.2 The Methodology for Interpretation of the CISG »
From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)Bruno Zeller
This chapter discusses the methodology for interpreting the United Nations Convention on Contracts for the International Sale of Goods (CISG). Before any attempt is made to comment on and interpret the method of awarding damages under the CISG, the interpretive model must be understood. The CISG, in article 7, makes it clear that interpretation must be within the ‘four corners’ of the convention, without recourse to domestic law; that is, interpretation cannot rely on methods or processes that are not contained within the CISG. Thus, article 7 regulates the method by which the CISG is applied internationally. It is the reason domestic courts are interpreting the CISG uniformly and without recourse to domestic law and its methodology.
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