Damages Under the UN Sale of Goods Convention

Abstract

This article provides an overview of damages under the United Nation Convention on Contracts for the International Sale of Goods (“CISG”) and compares how they differ from what might be typical under Canadian provincial sale of goods law. CISG Article 74 establishes the basic principles concerning recovery and the calculation of damages, and it reflects the general principle of full compensation (not unlike the Supreme Court’s “actual loss”). In contrast with the common law system, which requires that a loss be contemplated by both parties, the CISG makes it clear that it is foreseeability of the breaching party that is of legal significance. In addition, the CISG’s foreseeability test is both subjective and objective: the party may be held liable not only for losses which it actually foresaw, but also for losses which it “ought to have foreseen.” Thus, to make a party liable, it is not necessary to prove that the party actually foresaw the loss in question, as long as it was in a position to reasonably foresee the loss.

Keywords: Damages, Contracts, CISG, UN Convention on Contracts for the International Sale of Goods, Private International Law, Sale of Goods