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2.0 REMEDIES OF BUYER

            Breach
of contract under Convention on Contract for the International Sale of Goods
(CISG)1 is used to portray a party’s
non- performance accountability under a contract. For a buyer, remedies which
are available are stated in Part III of the Convention, from Article 45 to
Article 52. The CISG allows numerous remedies such as right to performance;
which stated in Article 46 (specific performance), Article 48 (right to cure),
Article 49 (rescission) and so forth.

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            In matter of preservation of
contract, CISG highly regarded it to be in higher standard of care in which the
direct consequences which is remedy of rescission on contract is only granted
in cases relating to fundamental breach. However, if the breach is not been
regarded as material breach, buyer can still step aside from the contract as
long as the seller need to be notified in the first place which requests the
seller to overhaul the goods and also stating an additional time limit for the
seller to complete the Nachfirst
notice. 2

2.1 REMEDIES AVAILABLE TOWARDS A
BUYER

            Article
45 laid down the remedies available to a buyer in situation that a seller unsuccessfully
to execute any of the seller fundamental obligations under the contract or
CISG. In situations where a seller’s act contravene with the CISG or the
contract, the buyer may raise five legal remedies as following: (1) Article 46
(Right to performance – specific performance); (2) Article 48 (Right to cure); (3)
Article 49 (Right to avoid contract due to fundamental breach of contract – recession);
(4) Article 50 (Right of price reduction); (5) Article 45(1) (b) (Right to
damages).

            In order for a buyer to recover
damages, the requirements of non-conformity stated by CISG must be satisfied. Furthermore,
buyer also be restrained off their remedy if they fail to perform in line with
the remedy they sought during the course of the contract. In practical
application, attorneys often conferred with the issues of the remedies after
the facts had arose. Therefore, consulter should include what the client expect
to get and what is applicable to them based on the rules laid down in the contract
and also in the CISG.

2.1.1A RIGHT TO PERFORMANCE ARTICLE
46 (1)

            Article
46 set forth the buyer’s right to demand a remedy which authorizes several choice
to the buyer. Article 46(1) grants a buyer with the remedy of specific
performance. However, the applicability of the remedy will be based on the
remedy which is been recognise under the domestic law prior to Article 28 of
the convention. 3Article
46(1) reflects an understanding between the jurisdictions of common law and
civil law where the authority of the court is being determined by the terms of
the contract. Therefore, if the facts stated in the complaint sufficiently
satisfy for an order of specific performance under Article 46(1) and domestic
law observes said remedy prior to Article 28, then such action for specific
performance will be  recognize.

            Article 46(1) diminish the right to
compel performance in situation where the buyer has already devote to a remedy
which contradict with performance. Buyer may merge its request for performance
and claim of any damage that remains. From that time forward, the buyer may
choose a different remedy, however if the buyer has established an additional
duration for performance, all other remedies that were available is no longer
applicable to the buyer except damages which is stated under Article 47.

2.1.1B DELIVERY OF SUBSTITUTE GOODS ARTICLE
46 (2)

            In
cases where the performance does not conform to the contract, the delivery of
substitute goods may be enforced and this amounts to ‘fundamental breach’ within
the definition of Article 25. Such claim can be imposed only within a strict
period of time stipulated by Article 39 in relation with the duty to notify the
seller on the deficiency of quality. In cases where seller delivers substitute
goods, the issue arises as to whether the buyer may claim for the damages of
the extra costs of reparation carried out by the buyer itself or shall the
buyer offer seller opportunity to perform those acts. This can be seen in the
case of GERMANY, Case CLOUT No. 1254

            In this case, the seller an Italian
manufacturer of windows and door concluded a contract for sale of windows with
the German buyer. However, after the windows delivered and installed. The buyer
found out that the windows to be defective. The seller agreed to replace the
fault windows with new ones but were installed by the buyer. The buyer wanted
to claim to the seller for the instalment costs where it was supposed to be
completed by the seller. Court held that the buyer was entitled to claim the
costs as performance of works by the buyer himself does not violate interests
of the seller.

2.1.1C REPARATION ARTICLE 46(3)

            Buyer
may raise right to repair if the delivered goods does not accommodate to the
contract within Article 35. Moreover, such repair must be reasonable within the
mild of all the circumstances. Finally, the buyer have to provide timely notice
of its request for repair. A request for repair may be unreasonable if the
customer ought to without any hardships to repair the goods itself. However,
seller still remains liable for any remuneration of the repairs. This statement
was discussed in the following case.

            The buyer received a minimum quantity
of drinking water heater by the seller. The contract included a five years
warranty clause. However on the time of performance of the buyer to pay
purchase price of the goods, the goods start to develop operational damages. The
buyer did not pay the agreed costs and himself repair the goods without
informing the seller the fault in the appliances. The buyer only fax to the
seller stated that there are defects in one of the equipment. Court held in
this case by rejecting the buyer’s claim on the ground that the buyer fails to
demand the manufacturer’s warranty and also fails to notify the defects
equipment to the seller. The buyer may undertake the reparation and claim
damages only when seller been notified and refuse to repair the goods.5

2.2 RIGHT TO CURE ARTICLE 48

             Until the buyer need viably avoided the
agreement, the seller could cure for the most part of it which the delivered
goods need to be make repairs or replace the parts. However, seller might not take
an unreasonable time to act or resulting buyer to suffer more losses. The buyer
hold its rights to claim damages due to the delay even as a result of his cure,
the seller fully fulfils his duty. In addition to the right to cure, Article
48(2) allows the seller to seek for clarification whether buyer agrees the
cure. If buyer disagree, it will not lead to any remedies which contradict to the
performance by the seller specifically avoidance of the contract. If the seller
cures after the reasonable time which will allow it to be a fundamental breach
of contract, the buyer is allowed to avoid the contract.

2.3 AVOIDANCE OF THE CONTRACT
ARTICLE 49

            The
buyer is allowed to avoid the contract on two circumstances only; in matter of
fundamental breach within the meaning of Article 25 and if the seller fails to
deliver the goods within extra time period allocated by the buyer which the
buyer may exercise his remedies in Article 48. Applying Article 25 is a
delicate task for every court. This can be seen in the case of GERMANY, Case CLOUT No.2.6

In
this case, an Italian manufacturer agreed to make 130 pairs of shoes based on
the requirements stated by the buyer. Then, at a fair, the seller later
displayed the shoes in which it was produced based on the buyer’s
specifications and bearing. The seller refuse to take down the shoes and the
buyer had informed the seller that he had discontinued their relationship and
refuse to pay for the sample shoes where it was valueless to the buyer. The court
held that:

“Also the breach of an obligation which is not a primary obligation of
the contract, but, rather, a secondary obligation can be, without anything
further, fundamental. . . . A breach of contract is fundamental when the
purpose of the contract is endangered so seriously that, for the concerned
party to the contract, the interest in the fulfillment of the contract ceases
to exist as a consequence of the breach of the contract (and this was capable
of being known by the party in breach of the contract)”

2.4 REDUCTION OF PRICE ARTICLE 50

            Article
50 allows the buyer to reduce the price of goods if the goods do not conform to
the contract. However, this remedy is not applicable if the breach is based
upon late delivery or breach of any other obligation by the seller. Reduction applies
despite if the non-conformity amounts a fundamental or mere breach of contract
and also do not took into account whether the goods been paid by the buyer. Amount
of price reduction must also be calculated proportionately. Based in Article
45(2), buyer may merge several remedies under Articles 46-52. However, if
damages are claimed together with price reduction, they can only entitled for
any loss other than reduced value of goods.

            In cases where buyer after losing
right to avoid by not following the deadlines is still entitled to reduce
purchase price to zero. This was discussed in the case of GERMANY, Case CLOUT No. 724. 7In this case, claimant
which is an Italian manufacturer of wine bottles took action against the buyer
for payment of purchase price of some shipments of goods after the defendant
refused to pay on ground that the packaging of the goods were not effective and
bottles had broken and unsuitable to use.

            The Higher Regional Court of Koblenz
held that the claimant had failed to act upon its obligation based on Article
35(2) (d) to provide manner packaging for the bottles to be transported by
truck. Therefore, the seller is liable for the damage although the risk was
pass to the buyer when it was delivered. The court allows the buyer for reduce
the price to zero according to Article 50 of CISG even though the buyer had
lost right to avoid the contract due to misses the deadline prior to Article
49(2)(b) of CISG.

           

1 United Nations Convention on
Contracts for the International Sale of Goods 1980

2 To extend seller and buyer’s
deadline, to give or grant an extension

3 Magellan International v.
Salzgitter Handel 1999

4 OLG Hamm, 1995

5 SPAIN,
Case CLOUT No. 397, 2000

6 Germany
Appellate Court Frankfurt, 1991.

7 Oberlandesgericht Koblenz, 2006.

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