The Buyer's Right to Avoid the Contract in International Sales
AN INTERNATIONAL APPROACH TO THE INTERPRETATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE SALE OF GOODS John Felemegas, ed., Cambridge University Press, 2007
25 Pages Posted: 6 Jun 2006
Date Written: 2010
This article presents and analyzes the law pertaining to the Buyer's power to avoid (terminate) an international sales contract for breach of contract by the seller. Avoidance (or “termination”) of the contract is the most extreme measure a party may take in response to a breach of contract. Avoidance excuses any future performance, except for contractual performances designated to take effect upon avoidance, such as dispute resolution clauses or liquidated damages. In international transactions, avoidance of the contract may create extreme hardship and costs for both the defaulting and the aggrieved party. This article offers an analytic framework for termination of contract in international transactions and analyses different regimes for the avoidance of contract, with emphasis on the CISG. It then places termination in the context of less extreme measures to deal with breach (or with anticipatory breach), such as suspension of performance, requirement of assurances, unilateral price reduction and the right to cure in the form of delayed or remedial performance. The article highlights these issues as emerging from several jurisdictions, as well as the CISG, CESL, PECL, UNIDROIT Principles, UCC and the BGB, as well as judicial opinions and arbitral awards from several jurisdictions and forums.
Keywords: International transactions, Buyer, contract, Avoidance, CISG, CESL, PECL, Termination, Self-Help
JEL Classification: J41, K12, K10, K33, K49, K11, L14, M55, K00
Suggested Citation: Suggested Citation