Introduction
The United Nations Convention on Contracts for the International Sale of Goods (CISG, 1980) has prescribed detailed rules concerning the duties of the seller in a transaction covering the sale of goods across borders. There are provisions in the CISG, which deal with the remedies available to the buyer, in case the seller commits a breach under the contract. While some of the remedies like providing for repairs and compensation are available concurrently, there are other remedies like avoiding the contract and price discounts, which are mutually exclusive. CISG specifically deals with the right to claim performance under Article 46, which is the central focus of this research. The buyer can claim all the remedies available under CISG without the seller having any intention to commit a breach on the part of the seller.
Nevertheless, certain remedies, for example avoidance of contract as compared to all other remedies require satisfaction of the conditions for a “fundamental breach” of the contract. Therefore, it can be stated that CISG is in favor of protecting the buyer in international sale transactions, in comparison to domestic legislation covering the sale of goods, because the buyer can claim compensation for a breach committed by the seller without intention or negligence. However, when it comes to the question of the remedy of avoidance of a contract, CISG appears to be stringent than the national laws and thus appears to be promoting the performance of the contract in case of breaches that are not fundamental. This paper examines the position of CISG with respect to the promotion of performance by CISG in case of breach by the seller and compares it with the relevant provisions in the English law covering the remedy of specific performance for the breach by the seller.
System of Remedies under the CISG
Section III of Chapter II deals with the remedies available to the buyer, in cases, where the seller commits a breach under the contract. There are two categories specified by the CISG grouping the remedies available to the buyer. They are contained in Articles 46 to 52, under which the buyer is entitled to his rights and in Article 74 to 77, under which the buyer can demand compensation for the breach. Article 45 and its sub clauses provide specifically for these remedies. However, it must be noted that since the contractual validity of the provisions of the sale contract does not fall under the purview of the CISG, the applicable national laws can override the remedies made available to the buyer under these clauses. In addition, the presumption of the principles of good faith may also preclude an extreme deviation from the provisions of the CISG covering the remedies. In this case, the provisions of CISG may be applied for the benefit of one of the parties to the contract without taking into account the interests of the other party.
Overview of the Remedies under CISG
Under the provisions of CISG, the buyer is entitled to the following remedies in cases, where the seller commits a breach under the sale contract.
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- “Claims for Performance:
- right to performance [Art. 46 (1) and 47]
- reparation [Art. 46 (2)]
- delivery of substitute goods [Art. 46 (3)]
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- Avoidance of the contract [Art. 49] and its limit: the seller’s right to cure (“Second Tendering”) [Art. 48]
- Reduction of the price [Art. 50]
- Remedies for partial non-performance or partial lack of conformity [Art. 51]
- Refusal to take early delivery or delivery of excess goods [Art. 52 (1) and (2)]
- Suspension of performance [Art. 71]
- Claim for damages” 1
CISG has provided an exhaustive list of remedies to the parties. However, Article 6 of CISG has allowed the parties to derogate from the provisions contained in CISG. As already mentioned, since the validity of the contract or any other provisions does not come under the purview of CISG, the applicable national laws may act to exclude or limit the remedies prescribed by the CISG.
Right to Claim Performance under Article 46
Article 46 of the CISG provides for the remedy of an aggrieved buyer. The buyer at the instance of the seller committing a breach is entitled to press for the actual fulfillment of the promises by the seller under the contract. Although Article 46 appears to be a distinct provision under Chapter I of the CISG, it has to be read in conjunction with Article 28 of the CISG. This is because Article 28 limits the obligations of a court to enforce the rights provided to the buyer under Article 46. The general principle governing the remedy of demanding performance by the seller is stated in Article 46 (1). The remainder of the Article contains provisions specifying the other remedies available to the buyer against the seller to perform under the contract, which includes the replacement of goods that are not in conformity with the contract (Article 46 (2)) and reparation of goods, which do not conform to the standards (Article 46 (3)). These remedies are available to the buyer, when the seller does not meet the prerequisites with respect to the goods to be supplied under the contract. However, Article 28 limits the availability of such performance-oriented remedies to the buyer. Article 28 provides that at the time of enforcing the right of a party to require performance under the CISG, “a court is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention.”2
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According to the UNICTRAL CISG Case Digest, placing Article 46 as the first remedy available to the aggrieved buyer suggests that the Convention is in favor of remedies that promote the performance of the contract and preserve the contractual bond between the parties despite the breach by prescribing the performance-related remedies. The Digest also remarks that there has not been large number of case laws developed for specific performance, although the buyer has a right to demand this remedy. In reality, buyers in most cases prefer other remedies like demand for compensation.
In practice, Article 28 does not appear to have any impact on restricting the claim for performance under Article 46 (1). Despite the lack of any restriction, the occasions where the buyer demands the performance under Article 46(1) are found to be fewer in number. The common law restrictions on specific performance have been designed to punish the party at breach from pursuing the performance of the contract when such performance does not have any economic sense and is really beneficial to the other party. In fact, the performance-oriented remedies are available more liberally under civil law jurisdictions and such availability reflects the emphasis on the moral obligation of the party at the breach to perform its promises under the contract.
It is observed that Article 28, though having an overriding position on Article 46, has very little impact on the application of CISG both in negative and positive ways. Similarly, several decisions as they appear in the UNICTRAL Digest of Case Law on the CISG appear to be confused about the meaning and implication of Article 46. For example in a recent case,3 a buyer had placed orders for equipment and the orders were marked “urgent”. However, the seller delivered the equipment with a delay of between two to four months after the placing of the orders. On the claim of damages by the buyer for late delivery, the court observed that the buyer had failed to make a demand for performance of the contract as provided for under Article 46 (1). The court also noted that the buyer had neither fixed an additional period for delivery under Article 47(1). Therefore, it was held that the buyer had failed to establish that the seller was late in delivering the equipment. This decision illustrates the point that for claiming performance under Article 46(2) there is the need for a specific statement that the buyer had requested the execution of the promises under the contract.
Specific Performance under CISG
From the above discussion, it can be seen that CISG allows reciprocal remedies against a breach within three established categories to the buyer and seller. It is clearly established that the primary remedy available to an aggrieved party is specific relief in the form of specific performance. The second relief is in the form of a substitutionary relief. Under this relief, the Convention has established that the party in breach has to make good the loss suffered by the other person by paying monetary compensation. This money is to compensate the money lost by the aggrieved party. Third, the injured party will be entitled to a right to terminate the contract and bring the association between the parties under the contract to an end. Because of the availability of these remedies, CISG can be considered to correspond with all the major legal systems of the world, which provide for the three-category remedy of “specific performance, damages and avoidance of the contract”.
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CISG deals with the remedies available to both the buyer and the seller in separate sections under Part III. The system of remedies is unified in approach and easy to follow.4 As mentioned earlier, Article 45 summarizes the remedies available to the buyer, while Article 61 sets forth the remedies available to the seller in case there is a breach in the performance. Article 45 (1) enumerates the remedies available to the buyer, in cases of breach by the seller. The remedies include specific performance, termination of the contractual relationship, damages to compensate the loss to the buyer and a possible reduction in price. Article 61(1) provides for the remedies available to the seller, in the case of breach by the buyer. Remedies available to the seller under Article 61 (1) differ from the relief that the buyer can claim under Article 45 (1) under two counts, which are obvious and logical. First, there is no question of the seller claiming any price reduction and there is no need for the seller to make good a defect in the performance- in other words, the buyer cannot do anything under the contract to better his performance to remove any defect in the goods.5
In general, the provisions of CISG symbolize a via media approach between the provisions of the civil law and common law systems of different jurisdictions. However, in some instances, CISG reflects concepts, which are peculiar to a legal method, which does not form part of the other.
“In general, the CISG has features that are familiar from both of the two major legal systems, i.e. civil and common law systems. However, on the other hand, the CISG is an international convention, which reflects the compromise between civil law and common law aspects; and it has therefore not been possible to achieve a totally uniform scheme of remedies compared with different domestic legal systems. The range of remedies is more comprehensive than what is available under common law and some of these remedies are even foreign to common law.”6
The availability of specific performance as a primary remedy under CISG for the breach by the seller of the contract can be found to correspond with civil law systems as against the common law systems, which provide for damages to compensate the loss as the primary remedy for the breach of a party. Under CISG provisions, specific performance as a remedy is available to both the buyer under Article 46 and to the seller under Article 62. In the overall arrangement of CISG, specific performance appears to be the main remedy, before the buyer and seller have executed their respective promises under the contract. The party at breach is entitled to demand compensation in the same way as he demands specific performance. Under Article 46, in case of a breach by the seller, the buyer is entitled to demand specific performance from the seller, who is at breach demanding delivery of the ordered goods, delivery of substitute goods and reparation to make the goods acceptable. Article 62 entitles the seller to insist on the buyer, who is at the breach to pay the agreed price, accept the goods or perform his other promises under the contract. These remedies are not available to the seller if he has taken any action, which is inconsistent with the requirements of Article 62.
Damages under CISG
It must be noted that it is not a specific performance, which is available as an exclusive remedy to the injured party to a sale of the contract. The right to claim and obtain damages also plays a significant role within the scheme of CISG. Damages in the form of monetary compensation are the only remedy available to the injured party under the Convention if, for example, the buyer or seller is unable to meet the requirements for granting specific performance or the right of avoidance of the contract. It can therefore be argued that CISG does not promote the performance of the contract, in case of breach by a seller and damages are the primary remedy available under the provisions of CISG. In addition, the right of the injured party to claim and obtain damages substantially increases the right of the party to demand specific performance, in that he can retain the right to demand and get damages at all times. So that the position of the injured party is reverted to the same as that would have been, had the other person fulfilled his promises under the contract, the injured person carries at all times the right to demand compensation. This right runs in addition to his right to demand specific performance or avoid the contract.
Avoidance of Contract
Avoidance of contract is one of the remedies available to the aggrieved party, under Articles 49 and 64, under which the buyer or seller has the right to declare the contract avoided. Avoidance of contract under CISG acts to terminate the contract and to bring the contractual responsibilities, to an end. This is an extreme measure of remedy available under CISG, which is available to the buyer or seller, only when there is a fundamental breach. There are several conditions to be satisfied in order for a breach to become a fundamental breach. The idea behind providing avoidance of the contract against only a fundamental breach illustrates the scheme of the CISG to promote the performance of the contract even if there is a breach by any of the parties to the contract. Moreover, CISG has been designed to take into account the extraordinary circumstances, the buyer and the seller may be made to meet in international sale contracts. There are peculiar circumstances such as the remoteness between the destinations, huge costs involved in transporting the goods and the duration of the period during which the contract is alive. It is important that all these circumstances affecting the international sale of goods be taken into account, while deciding on the remedies available to the parties, in case of breach by another. Because of this design, CISG can be said to emphasize remedies, which are intended to preserve the contract by promoting performance, notwithstanding the fact that there was a breach committed by one of the parties against the other.
Other Remedies under CISG
Provisions contained under Article 47/63 of CISG further support the deliberation that CISG supports the performance of the contract to preserve it. Under Articles 47 and 63 CISG provides a tool for furthering the chances of performance of a contract, which is similar to the provisions available under the German Legal System. This principle is known as “Nachfrist”, under which the injured party has the choice of providing extended time to enable the party at the breach to fulfill his promises under the contract. The principle also provides that during the extended period the aggrieved party shall not resort to any other remedy unless the aggrieved receives notice of the inability or non-acceptance of the other party to perform his part of the contract.
In order to ensure the performance of the contract, even in the case of breach by a party, CISG provides for some additional remedies besides the remedies mentioned above.
CISG provides for a suspension of performance under Article 49/64 for an anticipatory fundamental breach (Article 72). This right to suspend the performance is available besides the right to avoid the contract and this right is available under situations specified under Article 71. Under Article 72, a party to the contract is entitled to suspend the performance of his obligations under the contract, if the party becomes aware after the execution of the contract that the other person will not execute a significant part of his contractual obligations.
Secondly, CISG provides an opportunity to the seller to solve the problem on hand by encouraging him to make good the defects in the performance of his part of the contract. Under Article 48 of the CISG, where the seller has committed a breach, he is given the right to rectify his own mistakes. This provision substantiates the argument that CISG promotes the performance of the contract to preserve the contract, even in case there is a breach by the seller.
Third, under Article 50 of the CISG, the buyer, who is aggrieved by the breach of the seller, is given the right to claim a reduction in the price of the goods. This right to claim price discount is available to the buyer in the place of his right to demand compensation from the seller for his failure to meet his promises. This right acts as a restitutionary measure of monetary compensation. The specialty of this right is that it is available even when the buyer is not entitled to claim avoidance of the contract for the breach.
“Fourthly, if under the contract the buyer is to specify the form, measurement or other features of the goods and he fails to make such specification either on the date agreed upon or within a reasonable time after receipt of a request from the seller, the Seller may, without prejudice to any other rights he may have, make the specification himself in accordance with the requirements of the buyer that may be known to him (Art. 65).”7
The seller may make these prescriptions according to the needs of the buyer to the extent, the seller knows about the specifications. This provision is contained under Article 65 of the CISG. All these additional remedies have been provided under CISG to ensure that the seller performs under the contract and preserve the contractual relationship, in spite of the fact that he has committed a breach under the terms of the contract.
Primacy of Specific Performance under Articles 46/62 of CISG
“The general purpose of all contract remedies is to place the aggrieved party in as good a position as he would have enjoyed had the other party performed his obligations under the contract. This means that all contract remedies must seek to protect one’s contractual rights. The purpose of specific performance is to help the creditor obtain, to the fullest extent possible, the actual subject matter of his bargain. But granting specific performance is not free of restrictions in all legal systems”.8
Most of the contracts include a promise to perform the contractual obligations by all the parties to the contract. While one of the parties undertakes to supply goods or services under a contract of sale, the other party promises to pay a sum of money in return. When one party fails to perform his part of the obligations under the contract, a problem arises as to whether the party who has failed can be demanded specific performance or whether he can be legally proceeded with paying damages representing the monetary compensation to the injured party to make good the loss resulting from the non-performance.9
Both common law and civil law systems follow different approaches to resolve this problem. This difference in the approaches causes many difficulties in providing comprehensive rules covering specific performance under CISG10. Generally, civil law systems provide for specific performance as the primary remedy. On the other hand, the common law systems provide for damages as the primary remedy. Under common law jurisdictions, the courts may grant the remedy of specific performance only when the court considers that damages would be inadequate to meet the monetary loss incurred by the injured party. Under common law systems, the court also maintains its discretionary powers in granting specific performances as remedy. Specific performance is not provided by the common law courts as a right to the plaintiff. Instead, it is the discretion of the court, whether to grant the right to specific performance. Contrary to common law, civil law systems have adopted specific performance as the primary remedy and damages as the secondary remedy. However, a civil law court does not have any discretionary power to award specific performance. The court has to provide the remedy of specific performance, unless it observes certain circumstances that act as an exception.
CISG serves to unify divergent rules governing international sales contracts and the objective of the rules is to reduce the potential conflicts arising out of international transactions. It is to be mentioned that although the convention has achieved its objectives to some extent, it was not able to unify the rules fully. This is because of the deep-rooted differences among the different legal systems in their approaches, which sometimes are difficult to eliminate. This is the case with the right of the aggrieved buyer to demand specific performance. CISG addressed this issue under Articles 46, 62, and 28. “Article 46/62 has civilian overtones. Article 28 is a compromise provision. It reads rules of the forum into a court’s obligation to compel specific performance.”11
CISG adopts specific performance as the prime remedy to the aggrieved party, and it is a rule under the CISG. The provisions of CISG enable the aggrieved party (both the buyer and seller) to have a clear right to require the performance by the other party his obligations under the contract.
A clear indication that could be inferred from the scheme of CISG is that specific performance is the primary remedy available to both the buyer and seller and the primacy of this remedy has been made explicit by CISG for several reasons. The most important point is that CISG gives the injured party the right to choose between the remedies of specific performance and to claim damages. This approach can be considered to have particular significance, because in many of the international contracts, the remedy of damages alone may not be sufficient to compensate the aggrieved party to make good the monetary loss.
In order to examine whether CISG promotes the performance of the contract, it is essential to note the style in which Articles 46/62 have been drafted. The style in drafting the provisions under the Articles corresponds to the premise that in many legal schemes that a legal draft defining the law governing sales contracts must be drafted in such a way to specify the duties and responsibilities of the parties to the contract between themselves. Essentially the text must not take the form of directives addressed to a tribunal or other forum to deal with such rights and obligations of the parties. “In other legal systems, the remedies available to one party on the other party’s failure to perform are stated in terms of the injured party’s right to the judgment of a court granting the requested relief.”12 The intention of these two different systems of legislative drafting is to achieve the same objective. Therefore, when Article 46 (1) states, “the buyer may require performance by the seller” or when Article 62 states, “seller may require the buyer to pay the price, take delivery or perform his other obligations” it is expected that if the buyer does not perform, the court will interfere to pass an order for such performance.
The court will also ensure that such order requiring performance is executed by the means available to the court under its procedural jurisdiction.13 Under the provisions of CISG, if the court is expected to pass a judgment for specific performance under the legal system governing the proceedings of the court, in respect of similar contracts of sale not subjected to the provisions of the CISG (under Article 28), then the court would be required to pass an order for specific performance, when the buyer/seller meets the requirements of Article 46/62. Under such circumstances, CISG has not provided for any discretionary power to the court to reject the plea of an aggrieved party for an order for specific performance under Article 46/62. In this respect, Article 46/62 is said to “have the effect of changing the remedy of obtaining an order by a court that a party performs the contract from a limited remedy, which in many circumstances is available only at the discretion of the court, to a remedy available at the discretion of the other party.”14
Another aspect of CISG, which supports the premise that CISG promotes preserving the contract despite a breach by the seller, is the waiver of some requirements by the CISG to claim specific performance under Article 46/62. CISG does not provide for the identification of the goods covered under the contract as a prerequisite to demand specific performance. In contrast with the provisions of Articles 67(2) (“risk of loss does not pass to the buyer until the goods are identified to the contract”) and 69 (3) (“if the goods are not identified to the contract, they are not considered placed at the buyer’s disposal until identification occurs”), there are no express provisions under Articles 46 and 62 requiring the identification of the goods to the contract. There can be no inference of such requirement from the reading of the terms of Articles 46 and 62. However, there are certain cases, where it may be mandatory to seek the order of a court to require the goods to be identified for availing the remedy of specific performance under Articles 46 and 62.
On the other hand, as the legislative history shows, unlike in the case of common law, the aggrieved party doesn’t need to show the court that damages are an inadequate remedy. Similarly, the aggrieved buyers or sellers don’t need to demonstrate that they are not in a position to purchase or resell the goods covered by the contract, before demanding specific performance. “Hence, neither article 46 nor article 62 requires the unavailability of cover or resale as a prerequisite for ordering specific relief”.15
The remedial right of specific performance is broadly dealt with in the CISG, with a broad scope for preserving the contract. It is evident from the right given to the aggrieved party to demand the breaching party to perform the full range of the latter’s obligations under the contract. For instance, Article 46 has not made any distinction between different types of breaches. “The buyer can require the seller to perform all “his obligations” under the contract”16.
“The buyer may be entitled, subject to the restrictions provided by the Convention, to this remedy when the seller fails to procure or produce the goods or to deliver them, hand over any documents relating to them at the right place or date fixed in the contract (Arts. 31, 33 and 34). He may also apply to the court for this remedy where the seller refuses to deliver goods, hand over any documents relating to them (Art. 30), or where part of the purchased goods are missing or does not conform to the contract (Art. 51) and do all other acts necessary to fulfil the contract as originally agreed.”17 In short, the aggrieved party is entitled to demand specific performance by the party in breach with regard to any of the obligations of the latter. The conditions prevailing around the individual sale contract will determine the mode of execution of specific performance.
English Law Approach to Specific Performance under Sale Contracts
Specific performance in the context of international trade assumes particular importance.18 In international sales contracts, the buyer aggrieved by the breach of the seller may have to spend considerable time and efforts to find an alternative source of supply for the goods originally contracted. When the seller commits a breach, the granting of compensation may make good the loss to the buyer to some extent to cover the extra cost to which the buyer is exposed, where such costs can precisely arrive. However, it may so happen that the buyer incurs some additional suffering unless the seller is made to fulfill his promises. The conditions in contracts for sales within the country may be different with the availability of goods immediately replacing the original goods.
In contrast to CISG, “Under English law, granting specific performance of the terms of a contract is an extraordinary remedy, granted in very limited circumstances”.19 Section 52 (1) of the Sale of Goods Act reflects the position with respect to specific performance clearly. The section states
“In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the plaintiff’s application, by its judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages.”20
There is number of elements of Section 52 (1), which becomes noteworthy in the context of comparison with the provisions of CISG in this respect. More specifically, some of the schemes under English Law and the provisions of Sale of Goods Act covering specific performance themselves are subject to misapprehension. “Section 52(1) limits specific performance to those circumstances involving “specific” or “ascertained” goods”.21 “In other words, section 52(1) only clearly applies to goods “identified and agreed on at the time a contract of sale is made,”22 or “identified in accordance with the agreement after the time a contract of sale is made.”23 On its face then, section 52(1) is only meant to apply in limited circumstances involving limited types of goods.”24
On a reading of the provisions of Section 52 (1), it may appear that the section will apply in limited circumstances involving certain type of goods. However, it cannot be taken for granted that because specific or ascertained goods are involved, the remedy of specific performance would be available. In many instances, the court will exercise its discretion and may order specific performance including those instances, where the buyer was made to face substantial hardship in arranging for replacement of the originally ordered goods.25 This approach of the court to award specific performance on its own volition under English Law is not consistent by its character. Therefore, a plaintiff who seeks specific performance in no way can ascertain whether there is the likelihood of the court granting specific performance, even if there are valid grounds for such award based on the uniqueness of the goods involved.
There is another uncertainty arising in connection with the operation of Section 52 (1). This is because of a lack of consensus on the nature and application of the provisions of the Sale of Goods Act itself. Some of the legal professionals are of the view that Sale of Goods Act is merely the codification of common law and equity and consequently, the parties can expect to have the remedies expressly set forth under the provisions of the Act. Some others are of the view that the Sale of Goods Act operate to provide alternative reliefs the can be provided under other legal systems.26 This view becomes relevant particularly for awarding specific performance in respect of ascertained goods. The decision in the case of Re Wait [1927] Ch 606 led to the formation of the style of codification. In this case, the majority was inclined to refuse the grant of specific performance covering the goods, which have not been identified. Some of the legal professionals were not in favor of this “codification” view and this view has not adopted with consistency in deciding all cases.
The Sky Petroleum27, case relates to a contract, which ran for a long period, entered into for supplying petrol to a particular petrol station. When the seller made a default in the supply of petrol, the buyer had difficulties in locating another party to provide the required petrol. The Yom Kippur War caused an interruption to the supply of petrol. Considering the circumstances of the case, the court decided to award a decree of specific performance in favor of the buyer. The award of specific performance was a precedent for the grant of such a remedy. This relief granted to the buyer made the position of Sky Petroleum weak. This is because the court did not consider the issue, whether really it had the authority to award the relief of specific performance considering the conditions associated with the case. The court also failed to look at the ways in which the remedy fit into section 52, or the decision in the case of Re Wait, or even the general scheme of remedies under the Sale of Goods Act. The court cases that followed have raised doubts on the position of Sky Petroleum, as to whether the provisions of sale of goods apply to them.28 Depending on this position, the English case law appears to remain disquiet in respect of the grant of the remedy of specific performance. There is no clarity on the scope of the situations, where a court might have the power or discretion to award the remedy of specific performance for breach by any of the party to the contract.
When considered under extraordinary circumstances, the text used in constructing section 52 (1) as compared with the placing of the particular section in the Sale of Goods Act, is most likely to lead to consequential misinterpretation. It must be noted that section 52 (1) mentions only “plaintiff” and “defendant” instead of referring to “buyer” and “seller”. Nevertheless, the section 52(1) is placed under the heading “Buyer’s Remedies” in the Sale of Goods Act.29 Because of this ambiguity, there is an argument that theoretically the seller can also demand specific performance under the section.30 There are counter arguments that only a buyer can demand specific performance.31 This ambiguity may not have any practical implications, as it is only the buyer, who usually seeks the remedy of specific performance.
Comparison of CISG Provisions with English Law
Article 46 of the CISG contains the equivalent provision to section 52 (1) of the Sale of Goods Act. As seen earlier, Article 46 of the CISG provides that a “buyer may require performance of the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement.” Unlike the Sale of Goods Act, the CISG contains a provision to provide the remedy to seller under Article 62, which requires the buyer to “pay the price, take delivery or perform his other obligations.” However, the addition of a provision in the CISG providing for specific performance in favor of the seller does not appear to have any practical significance except that there may be some exceptional circumstances, where such right may be of any use.32 Consequently, the central focus of this comparison is on the availability of the remedy of specific performance to the buyer under both the legal traditions.
Unlike the English Law, “there is no requirement under Articles 46 or 62 of the CISG that the goods be specific, ascertained or otherwise identified under the contract.”33 By excluding this requirement, CISG has avoided some of the uncertainty, which is associated with the scope of specific performance under the Sale of Goods Act. CISG limits the right of the buyer to claim specific performance only when the buyer chooses to pursue any other relief, which is not commensurate with the demand for the seller to perform under the contract. As is the case with the Sale of Goods Act, the buyer is not prohibited from claiming damages in addition to specific performance under the CISG. “Some types of remedies that would be considered inconsistent are avoidance of the contract under Articles 26, 49 or 81 or reduction of the contract price under Article 50.”34
“The first obvious difference between Section 52(1) of the SGA and Article 46 of the CISG is the difference in emphasis on who may pursue the remedy.”35 While under the English Law, specific performance is a remedy awarded by the court on its own volition, under CISG, the buyer is given the choice, to demand specific performance by the seller in breach. The buyer may exercise this choice without moving any court of law. According to Secretariat Commentary CISG chose this drafting to reflect “the view in many legal systems that a legislative text on the law of sales governs the rights and obligations between the parties and does not consist of directives addressed to a tribunal.”36
English Law clearly grants discretion to the court to decide on the provision of the remedy of specific performance. On the other hand, CISG does not provide for any discretionary action by the court. Based on this premise, it might be concluded that there would be more instances where specific performance would have been granted under CISG than under the Sale of Goods Act. However, as observed earlier, in reality it is not the case. It is important at this context to note the significant restriction that Article 28 of the CISG places on the capacity of a person to get the relief of specific performance. The Article states:
“If, in accordance with this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention.”37
As provided by Article 28, before deciding to award specific performance to any party, the court may have to look back at the existing English law to decide whether the court would in fact grant such a remedy. “In other words, the court would refer to the traditional rules encompassed in Section 52(1) of the SGA discussed above in order to exercise its discretion in accordance with that provision.”38 However, it is observed that there is no serious impact of Article 28 on the decisions relating to the award of specific performance by the courts.
Conclusion
There would have been one element added to the English law by the CISG, which has the effect of widening the scope of awarding specific performance, where the English courts commonly decide to grant such remedy. “The provision contained in Section 52(1) of the SGA was originally introduced in the mid-nineteenth century in order to encourage more liberal granting of specific performance”39. However, this provision has a differing effect, since it extrapolates the relief to only goods, which are identified instead of every category of goods. Irrespective of the reasons, there has been a shortage of decisions, where the courts have provided for the remedy of specific performance liberally. There have been criticisms on the rules relating to specific performance as being too rigid. Decisions in some cases are unfair, especially where replacement goods are not easily available.40 Other common law jurisdictions such as United States are more favorable in awarding specific performance. On the contrary, provisions of CISG have been found to be in favor of the award of specific performance more liberally. The provisions contained in the CISG providing for extended period for the seller to perform his contractual obligations, to offer price reductions and the provisions for reparation and supply of substituted goods support the argument that CISG is in favor of performance by preserving the contractual relations, even in cases where there is breach by the seller. CISG encourages the buyer to demand specific performance to make his position as good, had the contract been performed.
A clear indication that could be inferred from the scheme of CISG is that specific performance is the primary remedy available to both the buyer and seller and the primacy of this remedy has been made explicit by CISG by the additional remedies provided by the Convention. In general, the provisions of CISG relate to a via media approach between the provisions of the legal systems of different jurisdictions. Under Article 48 of the CISG, where the seller has committed a breach, he is given the right to rectify his own mistakes. Under Article 50 of the CISG, the buyer, who is aggrieved by the breach of the seller, is given the right to claim a reduction in the price of the goods. “According to article 61 (1) he must make the specification “in accordance with any requirement of the buyer that may be known to him,”41, where the buyer has not done so. All these additional remedies have been provided under CISG to ensure that the seller performs under the contract and preserve the contractual relationship, in spite of the fact that he has committed a breach under the terms of the contract.
Bibliography
Atiyah, P.S. and J.N. Adams, The Sale of Goods, 9th ed. (London: Pitman Publishing, 1995), at 507.
Boghossian Nayiri “A Comparative Study of Specific Performance Provisions in the United Nations Convention on Contracts for the International Sale of Goods”: Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000); p. 15. Web.
Carr Indira and Stone Peter, “International Trade Law” USA: Routledge.
Chengwei Liu, “Remedies for Non-Performance – Perspectives from CISG, UNIDROIT Principles and PECL”. Web.
Grosswald Curran Vivian, Cross Reference and Editorial Analysis: Article 46″. Web.
Farnsworth, E. A. “Damages and Specific Relief” (1979) 27 Am. J. Comp. Law 247.
Furmston, M. Sale of Goods (Surrey: Croner Publications, 1990), at 173.
Galston N.M.and H. Smit, eds., International Sales: The United Nations Convention on Contracts for the International Sale of Goods (New York: Matthew Bender, 1984) 9-1, at 9-30.
Goode. R. Commercial Law, 2nd ed. (London: Penguin, 1995), at 387-388; M.G. Bridge, The Sale of Goods, paperback edition (Oxford: Oxford University Press, 1998) at 531-536.
Kastely, A.H. “The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention” (1988) 63 Wash. L. Rev. 607, reprinted in CISG W3 database, Pace University School of Law, 2 December 1998, at I.A.
Koch Robert “The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG)”: Pace Review of the Convention on Contracts for the International Sale of Goods (CISG) 1998, Kluwer Law International (1999); p. 297. Web.
Lando Ole Salient features of European contract law”: Study of the systems of private law in the EU with regard to discrimination and the creation of a European Civil Code; European Parliament, Directorate General for Research, Working Paper, Legal Affairs Series, JURI 103 EN (1999); p. 6. Web.
Ontario Law Reform Commission, Report on Sale of Goods (Toronto: Ontario Ministry of the Attorney General, 1979), Vol. II at 437.
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Footnotes
- Bacher Gusztav, Dr. “Remedies of the Buyer Under the CISG” – UIA Belgrade Paper at 4.
- Carr Indira and Stone Peter, “International Trade Law” USA: Routledge at 88.
- Cour d’appel de Poitiers, France, 26 Oct. 2004, English translation. Web.
- See Nayiri Boghossian in “A Comparative Study of Specific Performance Provisions in the United Nations Convention on Contracts for the International Sale of Goods”: Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000); p. 15. Web.
- See Robert Koch in “The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG)”: Pace Review of the Convention on Contracts for the International Sale of Goods (CISG) 1998, Kluwer Law International (1999); p. 297. Web.
- Chengwei Liu, “Remedies for Non-Performance – Perspectives from CISG, UNIDROIT Principles and PECL” Web.
- Liu Chengwei “Remedial Schemes of the Studied Instruments” Web.
- See Nayiri Boghossian in A Comparative Study of Specific Performance Provisions in the United Nations Convention on Contracts for the International Sale of Goods”: Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000); p. 6. Web.
- See Ole Lando in Salient features of European contract law”: Study of the systems of private law in the EU concerning discrimination and the creation of a European Civil Code; European Parliament, Directorate General for Research, Working Paper, Legal Affairs Series, JURI 103 EN (1999); p. 6. Web.
- See Rivkin, David R. in Lex Mercatoria and Force majeure”: Gaillard ed., Transnational Rules in International Commercial Arbitration (ICC Publ Nr. 480, 4; Paris 1993); p. 163. Web.
- See Vivian Grosswald Curran in CROSS REFERENCE AND EDITORIAL ANALYSIS: Article 46″. Web.
- Global Sales Law “Commentary” Web.
- See Secretariat Commentary on Art. 42 of the 1978 Draft [draft counterpart of CISG Art. 46], Comment 8. Web.
- See Secretariat Commentary on Art. 26 of the 1978 Draft [draft counterpart of CISG Art. 28], Comment 4. Web.
- See Steven Walt in For Specific Performance under the United Nations Sales Convention”: 26 Tex. Int’l L. J. (1991); p. 216. Web.
- See Steven Walt in For Specific Performance under the United Nations Sales Convention”: 26 Tex. Int’l L. J. (1991); p. 216. Web.
- Mrghasem Jafarzadeh “Buyer’s Right to Specific Performance: A Comparative Study under English Law, the Convention on Contracts for the International Sale of Goods, 1980, Iranian and Shi’ah” Web.
- A.H. Kastely, “The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention” (1988) 63 Wash. L. Rev. 607, reprinted in CISG W3 database, Pace University School of Law, 2 December 1998, at I.A.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Lord Hoffmann provides a good description of the general English Law approach to specific performance in the case of Co-Operative Insurance Society Ltd. v Argyll Stores [1997] AC Web.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- Sales of Goods Act, Section 61 (1).
- Re Wait [1927] Ch 606, at 630, per Atkin L.J.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- Societe des Industries Metallurgiques SA v Bronx Engineering Co. Ltd. [1975] 1 Lloyd’s Rep 465.
- Section 62(2) of the SGA, states common law continues to apply except where inconsistent with the terms of that Sale of Goods Act.
- Sky Petroleum Ltd. v VIP Petroleum Ltd. [1974] 1 WLR 576.
- In Re London Wine Company (Shippers) Limited. [1986] PCC 121, at 149. In this case Oliver J. considered the situation in Sky Petroleum to be a long-term supply contract rather than a contract for the sale of goods.
- Halsbury’s Laws of England, 4th ed., Vol. 44(1), Par. 1411.
- M. Furmston, Sale of Goods (Surrey: Croner Publications, 1990), at 173.
- P.S. Atiyah and J.N. Adams, The Sale of Goods, 9th ed. (London: Pitman Publishing, 1995), at 507.
- N.M. Galston and H. Smit, eds., International Sales: The United Nations Convention on Contracts for the International Sale of Goods (New York: Matthew Bender, 1984) 9-1, at 9-30.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- E. A. Farnsworth, “Damages and Specific Relief” (1979) 27 Am. J. Comp. Law 247.
- Piliounis A Peter, “The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?” Web.
- ibid.
- ibid.
- R. Goode, Commercial Law, 2nd ed. (London: Penguin, 1995), at 387-388; M.G. Bridge, The Sale of Goods, paperback edition (Oxford: Oxford University Press, 1998) at 531-536; Ontario Law Reform Commission, Report on Sale of Goods (Toronto: Ontario Ministry of the Attorney General, 1979), Vol. II at 437.
- Global Sales Law “Commentary” Web.