Originally from: The Practitioner’s Guide to the CISG - Second Edition

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§ 9.1 Overview

So far, the regulations within the CISG have dealt with the rights and duties of buyers and sellers. The formation of the contract, the passing of risk, the question of what constitutes conformity of goods, and what remedies are available in cases of breach of contracts have been considered where the provisions address the buyer or the seller.

This Chapter addresses Articles 71 88. It is the culmination of the regulatory framework which orders the business relationship between buyers and sellers and it focuses on the rules affecting the resolution of a failed contractual relationship.

Throughout this Chapter the distinction between a fundamental breach or avoidance and a non-performance leading to a breach has been maintained. The remedial scheme is different and practitioners must understand that only under the principle of fundamental breach can a contract be terminated or by reliance on Nachfrist pursuant to article 49. A breach of contract which is not fundamental does not terminate the legal relationship between buyers and sellers.

Articles 71–88 can be divided into six categories. First, matters which need to be taken into consideration if a fundamental breach has occurred. Second, remedial matters associated with a breach of contract which did not give rise to avoidance. Third, the obligations of the parties, even if the contract may be avoided. Fourth, matters related to determining the appropriate rate of interest on sums owed. Fifth, matters related to exemptions from liability. Sixth, matters relating to the parties’ obligations in situations where the goods have been delivered, that is the obligation to preserve the goods.

§ 9.1.1 Anticipatory breach and installment contracts

This Chapter starts with two important gap-filling provisions, namely what happens if there is either an anticipatory breach or a dispute in relation to installment contracts. The most important aspect of the former is that a party who suspects an anticipatory breach can suspend performance but must give the other party the opportunity to respond to their concerns. Once the concerns are satisfactorily addressed, performance must continue.