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Fundamental Breach of Contract Under the CISG: A Controversial Rule

Published online by Cambridge University Press:  28 February 2017

Eduardo Grebler
Eduardo Grebler*
Affiliation:
Pontifical Catholic University of Minas Gerais; Permanent Court of Arbitration
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Abstract

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Type
The UN Sales of Goods Convention: Perspectives on the Current State-of-Play
Information
Proceedings of the ASIL Annual Meeting , Volume 101 , 2007 , pp. 407 - 413
Copyright
Copyright © American Society of International Law 2007

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References

1 United Nations Convention on Contracts for the International Sale of Goods, UN Doc. A/CONF. 97/18, Annex I, S. Treaty Doc. No. 98-9, 1489 UNTS 3, 19 ILM 668 (Apr.ll, 1980), available at <http://www.uncitral.org/uncitral/en/index.html>.

2 For an updated list of signatory states, see Status: 1980—United Nations Convention on Contracts for the International Sale of Goods (2006), available at <http://www.UNCITRAL.org/en-index.htm>.

3 Convention Related to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 UNTS 107, 3 ILM 854 (ULIS), and Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (July 1, 1964), 834 UNTS 169, 3 ELM 864 (ULF).

4 For an analysis of a future global commercial law, see Bonell, Michael Joachim, Do We Need a Global Commercial Code?, 106 Dick. L. Rev. 87, 99 (2001)Google Scholar.

5 Criticism has encompassed the alleged misplacement of Article 25 in Chapter I of Part Ш, where it seems somewhat out of order. See Fritz Enderlein & Dietrich Maskow, International Sales Law 111 (1992).

6 United Nations Convention on Contracts for the International Sale of Goods, Apr. 11, 1980, Art. 25, available at <http://www.uncitral.org/pdf/english/texts/sales/cisg/Cisg.pdf>.

7 See Graffi, Leonardo, Case Law on the Concept of “Fundamental Breach” in the Vienna Sales Convention, in Revue De Droit Des Affaires Internationals/Int’l Bus. L. J. 338-49, n. 3 (2003), passim, available at <http://www.cisg.law.pace.edu/cisg/biblio/graffi.html>Google Scholar.

8 Cf. Eiselen, Sieg, Adoption of the Vienna Convention for the International Sale of Goods (the Cisg) in South Africa, 116 S. Afr. L. J. 323, 357 (1996), available at <http://cisgw3.law.pace.edu/cisg/biblio/eiselen.html>Google Scholar.

9 Albert H. Kritzer Editorial Remarks: Article 25, at <http://www.cisg.law.pace.edu/cisg/biblio/kritzer-25.html>.

10 Article 74, CISG.

11 See Wills, M., in Commentary on the International Sales Law 7 (Bianca, & Boneil, eds., 1987)Google Scholar.

12 See Zeller, Bruno, Fundamental Breach and the Cisg—A Unique Treatment or Failed Experience ?, Vindobon A J. Int’l Comm. L. & Arb. 81, 88 (2004), available at <http://www.cisg.law.pace.edu/cisg/biblio/zellerl2.htm>Google Scholar.

13 See id. at 91.

14 See Ferrari, Franco, Fundamental Breach of Contract Under the UN Sales Convention—25 Years of Article 25 CISG, 25 J.L. & Com. 489, 490 (2006), available at <http://www.cisg.law.pace.edu/cisg/biblio/ferraril4.html>Google Scholar.

15 See Guide to Article 25—Comparison with Principles of European Contract Law (PECL) (Hossam El-Saghir ed., July 2000), available at <http://www.cisg.law.pace.edu/cisg/text/peclcomp25.html>; Robert Koch, Commentary on Whether the UNIDROIT Principles of International Commercial Contracts May Be Used to Interpret or Supplement Article 25 Cisg, available at <http://www.cisg.law.pace.edu/cisg/biblio/koch.html>.

16 Uniform Commercial Code (UCC), § 2-608(1), § 2-612(3).

17 See Schwenzer, Ingeborg, The Danger of Domestic Pre-Conceived Views with Respect to the Uniform Interpretation of the CISG: The Question of Avoidance in the Case of Non-Conforming Goods and Documents, Victoria U. Wellington L. Rev. 795-807 (2005), available at <http://cisgw3.law.pace.edu/cisg/biblio/schwenzer.html>Google Scholar.

18 Argentina, Chile, Colombia, Cuba, Ecuador, El Salvador, Honduras, Mexico, Paraguay, Peru, and Uruguay. Venezuela signed the CISG in 1981 but as of February 2007 had not ratified it.

19 Garro, Alejandro, The U.N. Sales Convention in the Americas: Recent Developments, 17 J. L. & Com. 219 (1998)Google Scholar.

20 See Alberto L. Zuppi, A Comparison of Buyer’s Remedies Under the Cisg With the Latin American Legal Tradition, Review of the Convention on Contracts for the International Sale of Goods 3-39 (1999), reproduced at <http://www.cisg.law.pace.edu/cisg/biblio/zuppi.html>.

21 Article 475, Civil Code (Brazil).

22 Articles 421, 422, Civil Code (Brazil).

23 See Stephan, Paul B. The Futility of Unification and Harmonization in International Commercial Law, 39 Va. J. Int’l L. 743 (1999)Google Scholar.

24 See Hackney, Philip, Is the United Nations Convention on the International Sale of Goods Achieving Uniformity?, 61 La. L. Rev. 473-86 (2001)Google Scholar.

25 See Andersen, Camila Baasch, The Uniform International Sales Law and the Global Jurisconsultorium, 24 J. L. & Com. 159, 164 (2005), available at <http://www.cisg.law.pace.edu/cisg/biblio/andersen3.html>Google Scholar.

26 CISG-AC is a private initiative supported by the Institute of International Commercial Law at Pace University School of Law, and the Centre for Commercial Law Studies, Queen Mary, University of London, to support understanding of the CISG and the promotion and assistance in the uniform interpretation of the CISG.

27 So far, six opinions have been issued by the CISG Advisory Council, dealing with Electronic Communications under CISG (n. 1), Examination of the Goods and Notice of Non-Conformity—Articles 38 and 39 (n. 2), Parol Evidence Rule, Plain Meaning Rule, Contractual Merger Clause (n. 3), Contracts for the Sale of Goods to Be Manufactured or Produced and Mixed Contracts (n. 4), Buyer’s Right to Avoid the contract in Case of Non-Conforming Goods or Documents (n. 5), and Calculation of Damages under CISG Article 74.

28 In Japan, although the Ministry of Justice had an informal working group studying the CISG for a year or two in the 1980s, the ministry suspended the plan without an explanation, “probably the lack of a driving force in Japan to support the unification of international sales law was at least one of the reasons.” However, Japan has apparently resumed its intent to adhere to the CISG. See Nomi, Yoshihisa, The CISG from the Asian Perspective, in> 194 Celebrating Success: 25 Years United Nations Convention on Contracts for the International Sale of Goods (United Nations Commission on International Trade Law (UNCITRAL) and Singapore International Arbitration Centre (SIAC) eds., 2006)Google Scholar; but see id. at 170.

29 An experienced commentator from India expressed that “the CISG would be a good contract law for India only if it turns out that it [ ] enables the buyer and the seller to approach their lawyer requesting him to predict, as far as possible, what a court would do if a dispute were to arise.” The same commentator states that India’s international traders and their legal advisers still have not assessed whether CISG meets that standard. See Dholakia, Shishir, Ratifying the CISG—India’s Option, in 194 Celebrating Success: 25 Years United Nations Convention on Contracts for the International Sale of Goods (UNCITRAL and SIAC eds., 2006)Google Scholar.

30 In the case of Brazil, the business and academic sectors so far have not articulated a consensual view in regard of the Convention. See Grebler, Eduardo, The Convention on International Sale of Goods and Brazilian Law: Are Differences Irreconcilable?, 25 J. L. & Com. 467, 475 (2005-2006), available at <http://www.cisg.law.pace.edu/cisg/biblio/grebler.html>Google Scholar.

31 The United Kingdom’s resistance to adhere to the CISG has been attributed, among other reasons, to “the lack of political will to legislate ‘lawyers’ law,’ combined with the scarcity of parliamentary time,” as well as to the idea that

if the Convention were ratified by the UK and came to be widely applied to international sales, the role of English law in the settlement of international trading matters would obviously be diminished. Consequential effect might well be a reduction in the number of international arbitration coming into this country.

See Linatelli, John, The Economics of Uniform Laws and Uniform Lawmaking, 49 Wayne L. Rev. 1, 40 (2002)Google Scholar; see also Williams, Alison E. Forecasting the Potential Impact of the Vienna Sales Convention on International Sales Law in the United Kingdom, in Pace Review of the Convention on Contracts for the International Sale of Goods 9-57 (2000-2001)Google Scholar.