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Published online by Cambridge University Press: 01 November 2021
This article compares and contrasts the doctrine of adequate assurance of performance under the US Uniform Commercial Code (the UCC) and the UN Convention on Contracts for the International Sale of Goods (the CISG). The article argues that, in the context of the CISG, the mechanism of adequate assurance found in the UCC is a faux ami. Despite some similarities, the doctrine of adequate assurance regulated in the CISG is distinct and serves different functions to its UCC counterpart.
For comments on earlier drafts of this article, the author thanks Cemre Bedir, Mark Campbell, Chathuni Jayathilaka, Joanna McCunn, Harry McVea, Konrad Osajda, Holly Powley, Paul Verbruggen, two anonymous reviewers and the editors. The usual disclaimer applies.
1 For an overview see Schwenzer, I, Hachem, P, Kee, Ch, Global Sales Law (Oxford University Press 2012) 548–59Google Scholar.
2 For a thorough analysis of the doctrine of anticipatory breach under English law see Q Liu, Anticipatory Breach (Hart Publishing 2011). For the history of the evolution of the doctrine see Sir MJ Mustill, ‘Anticipatory Breach of Contract: The Common Law at Work’ in Butterworth Lectures 1989–90 (Butterworths 1990).
3 (1853) 2 El & Bl 678 reported in 188 ER 922.
4 Hochster v de la Tour (1853) 2 El & Bl 678 reported in 188 ER 922 at 927 per Lord Campbell. For a detailed analysis of the ideas underlying the doctrine of anticipatory breach see F Dawson, ‘Metaphors and Anticipatory Breach of Contract’ (1981) 40 CLJ 83.
5 [1976] QB 44 (CA).
6 ibid 60.
7 For an overview of the civil law jurisdictions which have adopted the doctrine of avoidance for anticipatory breach, as well as those jurisdictions which still do not recognise this doctrine, see Schwenzer, Hachem, Kee (n 1) 744.
8 United Nations Convention on Contracts for the International Sale of Goods (adopted 11 April 1980, entered into force 1 January 1988) 1489 UNTS 3 (CISG).
9 See arts 71, 72 and 73(2) CISG.
10 See eg D Saidov, ‘Anticipatory Non-Performance and Underlying Values of the UNIDROIT Principles’ (2006) 11 UnifLRev 795, 798–9; Mustill (n 2) 42; JW Carter, A Phang, S-Y Phang, ‘Performance Following Repudiation: Legal and Economic Interests’ (1999) 15 JCL 100, 107–9, 121; L Vold, ‘The Tort Aspect of Anticipatory Repudiation’ (1928) 41 HarvLRev 343, 368–70; JW Carter, ‘Adequate Assurance of Due Performance’ (1996) 10 JCL 1, 6.
11 Saidov, ‘Anticipatory Non-Performance and Underlying Values of the UNIDROIT Principles’ (n 10) 800.
12 MJ Borden, ‘The Promissory Character of Adequate Assurances of Performance’ (2010) 76 BrookLRev 167, 206; R Beheshti, ‘Anticipatory Breach of Contract and the Necessity of Adequate Assurance under English Law and the Uniform Commercial Code’ [2018] LMCLQ 276, 283; MW Sargis, ‘The Uniform Commercial Code Section 2-609: A Return to Certainty’ (1980) 14 JMarshallLRevJ 113, 120.
13 RJ Robertson Jr, ‘The Right to Demand Adequate Assurance of Due Performance: Uniform Commercial Code Section 2–609 and Restatement (Second) of Contracts Section 251’ (1988–89) 38 DrakeLRev 305, 353.
14 In the US, the mechanism of adequate assurance has also been regulated in Section 251 of the Restatement (Second) of Contracts. It has found further support in the case law—see eg Norcon Power Partners v Niagara Mohawk Power Co 705 NE 2d 656 (NY 1988).
15 MG Strub, ‘The Convention on the International Sale of Goods: Anticipatory Repudiation Provisions and Developing Countries’ (1989) 38 ICLQ 475, 498. See also W Lawrence, ‘Serious Deficiencies in the Drafting of Article 71 of the CISG on Suspension Due to Prospective Impairment of Contract Expectations’ (2020) 39 JL&Com 39.
16 See S Eiselen, ‘Remarks on the Manner in which the UNIDROIT Principles of International Commercial Contracts May Be Used to Interpret or Supplement Articles 71 and 72 of the CISG’ in J Felemegas (ed), An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law (Cambridge University Presss 2009) 210.
17 The term faux amis has been used in the literature to describe concepts adopted in uniform law which have similar names but different meanings to concepts used in domestic legal systems—see Part IV of this article.
18 It has been pointed out by Garvin that although ‘adequate assurance may be one of Llewellyn's creations, … it was rooted in firmly established common-law principles’. For a broader analysis of the common law origins of the doctrine of adequate assurance, see LT Garvin, ‘Adequate Assurance of Performance: Of Risk, Duress, and Cognition’ (1998) 69 UColoLRev 71, 76ff.
19 State of New York Law Revision Committee Report, Hearings on the Uniform Commercial Code 108 (1954), at 112 (emphasis in original).
20 State of New York Law Revision Committee Report, Hearings on the Uniform Commercial Code 108 (1954). See also JQ Whitman, ‘Commercial Law and the American Volk: A Note on Llewellyn's German Sources for the Uniform Commercial Code’ (1987) 97 YaleLJ 156, 163; IM Hillinger, ‘The Article 2 Merchant Rules: Karl Llewellyn's Attempt to Achieve the Good, the True, the Beautiful in Commercial Law’ (1985) 73 GeoLJ 1141, 1147–8.
21 K Llewellyn, ‘The Modern Approach to Counselling and Advocacy – Especially in Commercial Transactions’ (1946) 46 ColumLRev 167, 178.
22 See K Llewellyn, ‘On the Good, the True, the Beautiful, in Law’ (1942) 9 UChiLRev 224, 229.
23 Llewellyn, ‘The Modern Approach to Counselling and Advocacy – Especially in Commercial Transactions’ (n 21) 178.
24 ibid.
25 See the 1941 draft: An Act Relating to Sales of Personal Property and to Contracts for the Sale Thereof, and to Rights, Obligations, and Remedies Arising out of Such Sales or Contracts and in Connection with Financing or Other Transactions Commonly Associated Therewith, and to Make Uniform the Law of Such Matters § 16-C (1941[?]), reprinted in E Slusser Kelly and A Puckett (eds), 1 Uniform Commercial Code Confidential Drafts 3, 73 (1995). In fact, the draft lacks a date. However, based on its context, it is placed in 1941.
26 Garvin (n 18) 90.
27 JJ White and RS Summers, Uniform Commercial Code (6th edn, Thomson Reuters 2010) 278, section 7–2.
28 Section 2-609(2).
29 Official Comment, para 4.
30 (1981) 517 F Supp 1319.
31 Official Comment, para 4.
32 Beheshti (n 12) 286.
33 GS Crespi, ‘The Adequate Assurance Doctrine after U.C.C. 2–609: A Test of the Efficiency of the Common Law’ [1993] VillLRev 179, 183–4.
34 D Saidov, ‘Art 71’ in S Kröll, L Mistelis and P Perales Viscasillas (eds), UN Convention on Contracts for the International Sales of Goods (CISG): A Commentary (CH Beck/Hart/Nomos 2018) para 50.
35 Garvin (n 18) 113.
36 Report of the New York Law Revision Commission, Hearing on Art 2 of the Uniform Commercial Code (1954) 153; R Cosway, ‘Sales – A Comparison of the Law in Washington and the Uniform Commercial Code (Part IV)’ (1961) 36 WashLRev 50, 83–4.
37 Robertson (n 13) 316; CR Taylor, ‘Self-Help in Contract Law: An Exploration and Proposal’ (1998) 33 WakeForestLRev 839, 884.
38 See eg Rockingham County v Luten Bridge Co (1929) 22 III 35 F 2d 301.
39 See eg F Ferrari, ‘Have the Dragons of Uniform Sales Law Been Tamed? Ruminations on the CISG's Autonomous Interpretation by Courts’ in CB Andersen and UG Schroeter (eds), Sharing International Commercial Law across National Boundaries: Festschrift for Albert H Kritzer on the Occasion of his Eightieth Birthday (Wildy, Simmons and Hill Publishing 2008) 134; M Gebauer, ‘Uniform Law, General Principles and Autonomous Interpretation’ (2000) 5 UnifLRev 683; HM Flechtner, ‘The Several Texts of the CISG in a Decentralized System: Observations on Translations, Reservations and Other Challenges to the Uniformity Principle in Article 7(1)’ (1998) 17 JL&Com 187; RA Hillman, ‘Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity’ (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21.
40 Gebauer (n 39) 686–7.
41 ibid.
42 L Chengwei, Remedies for Non-Performance: Perspectives from CISG, UNIDROIT Principles & PECL (Juris Net 2007) para 10.2.
43 B Keller, ‘Favor Contractus. Reading the CISG in Favor of the Contract’ in Andersen and Schroeter (n 39) 258.
44 See eg T Bennett, ‘Art 71’ in CM Bianca and MJ Bonell, Commentary on the International Sales – The 1980 Vienna Sales Convention (Giuffrè 1987) para 3.1; M Azeredo da Silveira, ‘Anticipatory Breach Under the United Nations Convention on Contracts for the International Sale of Goods’ (2005) Nordic Journal of Commercial Law 1, 6.
45 Germany 21 September 1995 District Court Kassel (Wooden poles case), available at: <https://cisg-online.org/search-for-cases?caseId=6167>.
46 Germany 15 September 1994 District Court Berlin (Shoes case), available at: <http://www.unilex.info/cisg/case/218>.
47 D Saidov, ‘Art 72’ in S Kröll, L Mistelis and P Perales Viscasillas (eds), UN Convention on Contracts for the International Sales of Goods (CISG): A Commentary (CH Beck/Hart/Nomos 2018) para 7; P Huber, ‘Art 72’ in HP Westermann (ed), Münchener Kommentar zum BGB. Band 4 (CH Beck 2019) para 7; Azeredo da Silveira (n 44) 5–6.
48 See eg Germany 30 September 1992 District Court Berlin (Shoes case), available at: <http://www.unilex.info/cisg/case/79>; Saidov, ‘Art 72’ (n 47) para 7; T Bennett, ‘Art 72’ in CM Bianca and MJ Bonell, Commentary on the International Sales – The 1980 Vienna Sales Convention (Giuffrè 1987) para 2.2; J Lookofsky, Understanding the CISG. A Compact Guide to the 1980 United Nations Convention on Contracts for the International Sale of Goods (Kluwer Law International 2017) para 6.11.
49 Germany 30 September 1992 District Court Berlin (Shoes case), available at: <http://www.unilex.info/cisg/case/79>.
50 Some authors claim that the difference between the two probability standards is difficult to draw in practice—see eg P Schlechtriem, Uniform Sales Law – The UN-Convention on Contracts for the International Sale of Goods (Manz 1986) 96; Saidov, ‘Art 72’ (n 47) para 7.
51 For a detailed analysis of the relevant case law see Saidov, ‘Art 71’ (n 34) paras 19–26.
52 See Saidov, ‘Art 71’ (n 34) para 52.
53 M Bridge, ‘Issues Arising under Articles 64, 72 and 73 of the United Nations Convention on Contracts for the International Sale of Goods’ (2005–06) 25 JL&Com 405, 418.
54 See Official Records, A/CONF.97/19, at 52.
55 ibid 129.
56 ibid 377 (per Ziegel).
57 ibid.
58 ibid 378 (per Bennett).
59 ibid 378 (per Ferraro).
60 ibid.
61 See eg Azeredo da Silveira (n 44) 16.
62 China 30 January 1996 CIETAC Arbitration proceeding (Compound fertilizer case), available at: <https://cisg-online.org/search-for-cases?caseId=7044>.
63 Germany 14 January 1994 Appellate Court Düsseldorf (Shoes case), available at:
<http://www.unilex.info/cisg/case/84>; Germany 30 September 1992 District Court Berlin (Shoes case), available at: <http://www.unilex.info/cisg/case/79>; United States 29 May 2009 US District Court, Southern District of New York (Doolim Corp v R Doll, LLC, et al), available at: <http://www.unilex.info/cisg/case/1451>.
64 Switzerland 31 May 1996 Zurich Arbitration proceeding (Soinco v NKAP), available at: <http://www.unilex.info/cisg/case/396>.
65 Switzerland 20 February 1997 District Court Saane (Spirits case), available at: <http://www.unilex.info/cisg/case/403>.
66 ICC Arbitration Case No 8574 of 1 September 1996 (Metal concentrate case), available at: <http://www.unilex.info/cisg/case/521>.
67 Ch Fountoulakis, ‘Art 71’ in P Schlechtriem and I Schwenzer (eds), Commentary on the UN Convention on the International Sale of Goods (Oxford University Press 2016) para 56.
68 Saidov, ‘Art 72’ (n 47) para 27.
69 For a more general analysis see P Huber, ‘CISG – The Structure of Remedies’ (2007) 71 Rabels Zeitschrift für ausländisches und internationales Privatrecht 13, 20–1.
70 See also R Koch, ‘The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG)’ in Pace Review of the Convention on Contracts for the International Sale of Goods (Kluwer Law International 1999) 309.
71 For the justification for this solution see J Honnold, Uniform Law for International Sales under the 1980 United Nations Convention (Kluwer Law International 1999) 313–14.
72 This example is given in a slightly different context by Saidov—see Saidov, ‘Art 72’ (n 47) para 25.
73 Fountoulakis, ‘Art 72’ in Schlechtriem and Schwenzer (n 67) para 32.
74 Compare Saidov, ‘Art 72’ (n 47) para 25.
75 Section 2-601 UCC.
76 Section 2-508 UCC.
77 B Keller, ‘Favor Contractus. Reading the CISG in Favor of the Contract’ (n 43) 247; U Magnus, ‘Allgemeine Grundsätze im UN-Kaufrecht’ (1995) 59 Rabels Zeitschrift für ausländisches und internationales Privatrecht 469, 483.
78 See eg Italy 11 December 2008 District Court Forlì, available at: <http://www.unilex.info/cisg/case/1368>; Germany 25 January 2008 Appellate Court Hamburg, available at: <http://www.unilex.info/cisg/case/1352>; Germany 3 April 1996 Supreme Court (Cobalt sulphate case), available at: <http://www.unilex.info/cisg/case/182>; Switzerland 28 October 1998 Supreme Court, available at: <http://www.unilex.info/cisg/case/382>; Austria 7 September 2000 Supreme Court, available at: <http://www.unilex.info/cisg/case/473>; Magnus, ‘Allgemeine Grundsätze im UN-Kaufrecht’ (n 77) 483; U Magnus, ‘The Remedy of Avoidance of Contract under CISG – General Remarks and Special Cases’ (2005) 25 JL&Com 423, 424; Huber (n 69) 17. This approach can be clearly seen in the CISG: see arts 25, 34, 37, 47, 48, 49, 63, and 64—for a detailed analysis see Keller (n 43).
79 Art 48 is the prime example.
80 Treitel explains that: ‘Anglo-American courts are, in the matter of termination, less concerned with the protection of the debtor than either German or French law. Their emphasis tends … to be on speedy and convenient remedies for the creditor.’ See G Treitel, Remedies for a Breach of Contract: A Comparative Account (Clarendon Press 1988) 259.
81 Art 72(3) CISG.
82 M Bridge, The International Sale of Goods (Oxford University Press 2017) para 12.20.
83 Some authors have argued that a failure to give notice does not eliminate the right of avoidance but merely triggers a claim for damages. For a critic of this view see Ch Fountoulakis, ‘Art 72’ in Schlechtriem and Schwenzer (n 67) para 19.
84 See Official Records, A/CONF.97/19, at 53.
85 ibid 419. For a detailed analysis see Strub (n 15).
86 See Official Records, A/CONF.97/19, at 129–31, 218–19, 374–7, 419–22; 431–3.
87 ibid 419–20.
88 Strub (n 15) 477–8.
89 ibid 478.
90 See Official Records, A/CONF.97/19, at 420–2.
91 See a statement made by the delegate from Canada—ibid 433.
92 Eiselen (n 16).
93 For an overview of the literature on this topic see Goode et al., Transnational Commercial Law: Text, Cases and Materials (Oxford University Press 2015) paras 8.50–8.55.
94 R Michaels, ‘Preamble I: Purposes, Legal Nature and Scope of the PICC; Applicability by Courts; Use of the PICC for the Purpose of Interpretation and Supplementation and as a Model’ in S Vogenauer (ed), Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (Oxford University Press 2015) 31, para 18.
95 Gebauer (n 39) 695–7.
96 ibid.
97 See Legal Guide to Uniform Legal Instruments in the Area of International Commercial Contracts (with a focus on sales) by the Hague Conference on Private International Law (HCCH), the United Nations Commission on International Trade Law (UNCITRAL) and the International Institute for the Unification of Private Law (Unidroit), A/CN.9/1029, available at: <https://documents-dds-ny.un.org/doc/UNDOC/GEN/V20/011/78/PDF/V2001178.pdf?OpenElement> paras 350–2.
98 See Goode et al. (n 93) paras 8.50–8.55.
99 Official Comment, at 255.
100 ibid.
101 See, for example, CB Andersen, ‘Uniformity in the CISG in the First Decade of Its Application’ in IF Fletcher, LA Mistelis and M Cremona (eds), Foundations and Perspectives of International Trade Law (Sweet & Maxwell 2001) 293–5; Honnold (n 71) 118; EA Farnsworth, ‘The American Provenance of the UNIDROIT Principles’ (1998) 3 UnifLRev 397, 402; M Heidemann, Methodology of Uniform Contract Law. The UNIDROIT Principles in International Legal Doctrine and Practice (Springer 2007) 70; J Felemegas, ‘Part One. Introduction’ in J Felemegas (ed), An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law (Cambridge University Press 2007) 141–2.
102 It had been emphasised in the Secretariat Commentary to Article 43 of the 1978 draft (currently art 47 CISG) that the procedure regulated in this provision differs from the German doctrine of Nachfrist—see Secretariat Commentary, art 43, para 8.
103 CB Andersen, ‘Furthering the Uniform Application of the CISG: Sources of Law on the Internet’ (1998) 10 PaceIntlLRev 403, 404; see, for example, Germany 10 February 1994 Appellate Court Düsseldorf [6 U 119/93] (Fabrics case), available at: <http://www.unilex.info/cisg/case/53>.
104 US Court of Appeals for the Second Circuit 71 F 3d 1024 (2d Cir 1995).
105 156 Eng Rep 145 (1854).
106 See eg MA Eisenberg, ‘The Principle of Hadley v Baxendale’ (1992) 80 CLR 563.
107 See the decision of the Supreme Court of Spain from 17 January 2008, available at: <http://www.unilex.info/cisg/case/1249>, in which it was stated that the concept derives from common law.
108 For a comparison of the meaning of the concept ‘fundamental breach’ under the CISG and in English law, see M Bridge, ‘Avoidance for Fundamental Breach of Contract under the UN Convention on the International Sale of Goods’ (2010) 59 ICLQ 911, 916–17.
109 ibid 917.
110 See eg Macromex SRL v Globex Inteno, Inc, US District Court, Southern District of New York, 16 April 2008, available at: <http://www.unilex.info/cisg/case/1303>; Genpharm Inc v Pliva-Lachema AS, US District Court, Eastern District of New York, 19 March 2005, available at: <http://www.unilex.info/cisg/case/1310>; Travelers Property Casualty Company of America et al v Saint-Gobain Technical Fabrics Canada Limited, US District Court, Minnesota, 31 January 2007, available at: <http://www.unilex.info/cisg/case/1166>.
111 Ferrari, F, ‘Autonomous Interpretation versus Homeward Trend versus Outward Trend in CISG Case Law’ (2017) 22 UnifLRev 244, 246–7Google Scholar.