Suspension or Avoidance against Anticipatory Breach - Chapter 8 - Remedies in International Sales
About the Author:
Chengwei Liu has practiced as a PRC lawyer in international trade and arbitration, FDI, M & A and IPO since his graduation from Renmin University of China. He has contributed to a CISG comparative review book published by Cambridge University Press and has authored over ten journal articles that have appeared in the Pace Review of the CISG, China Law & Practice, etc.
About the Editor:
Marie Stefanini Newman is the Director of the Pace University School of Law Library and an Associate Professor of Law. She also serves as Database Manager of the Pace website devoted to the United Nations Convention on Contracts for the International Sale of Goods.
Originally from Remedies in International Sales - Hardcover
Remedies in International Sales - PDF
§8.1 General
Non-performance of a contract, in sales law, entails a variety of legal consequences for the parties involved. In general, sales law “defines the point in time at which the seller and buyer are to perform their respective obligations. Prior to this [performance] time, there can be no breach, and thus no remedy for breach in the usual sense.”
On the other hand, when one party clearly repudiates his obligation to perform, the other party can no longer be expected to remain ready to perform a one-sided deal [emphasis added]; therefore, in domestic law, such injured party’s duties are, at the minimum, considered discharged. Even short of an outright repudiation, the serious possibility of one party's non-performance and the accompanying threat of injury to the other will, in certain circumstances, necessitate legal protection [emphasis added].
Such issues are dealt with under the concept “anticipatory breach of contract,” which most legal systems of the world have. This concept has its root in common law, while the civil-law countries support it indirectly. A typical example of anticipatory breach is the case where one party declares that it will not perform the contract. The basic idea is that “if, before a debtor’s performance deadline, the debtor refuses to perform explicitly or implicitly, a creditor can consider such a behavior as a breach of contract.” In certain other cases, the circumstances also may indicate that there will be a nonperformance. A party faced with such circumstances needs legal protection as well. In any event, “a party to a contract cannot reasonably be expected to continue to be bound by [the contract] once it has become clear that the other party cannot or will not perform at the due date.”
Section
§8.1 General
§8.2 Overview of the CISG Approach
§8.3 Suspension of Performance: CISG Art. 71
8.3.1 Overview
8.3.2 Grounds for suspension
(a) Non-performance of “a substantial part of his
obligations”
(b) Deficiency in “ability to perform” or “creditworthiness”:
CISG Art. 71(1)(a)
(c) “Conduct” in performing or preparing to perform: CISG
Art. 71(1)(b)
(d) A summary
8.3.3 Degree of certainty for the anticipation
8.3.4 Seller’s right of stoppage in transit: CISG Art. 71(2)
(a) Narrow scope of the application
(b) The right against carrier
(c) The right against third party
(d) A summary
§8.4 Early Avoidance: CISG Art. 72
8.4.1 The remedy in context
8.4.2 Element a): “prior to the date for performance”
8.4.3 Element b): “will commit a fundamental breach of contract”
8.4.4 Element c): “it is clear”
§8.5 Notice Requirement
8.5.1 Immediate notice after suspension: CISG Art. 71(3)
8.5.2 Prior notice before avoidance: CISG Art. 72(2)
8.5.3 No need for notice: CISG Art. 72(3)
8.5.4 Notice of the intention to declare avoidance under CISG
Art. 72(2) distinguished from the avoidance declaration
under CISG Art. 26
§8.1 Remedies in International Sales
8.5.5 A summary
§8.6 Adequate Assurance Following the Notice
8.6.1 Opportunity for the other party to provide adequate
assurance of performance
8.6.2 Provision of adequate assurance
8.6.3 Effects following failure to provide adequate assurance