The Remedy of Reduction of Price
Eric E. Bergsten, Anthony J. Miller
Rights: Copyright: CISG Database, Pace Institute of International Commercial Law. Reproduced with permission from 27 American Journal of Comparative Law (1979) 255-277
[This is a commentary on the remedy of reduction of price under Article 46 of the 1978 Draft Convention. For comparison of Article 46 of the 1978 Draft with CISG Article 50, see ‹http://www.cisg.law.pace.edu/cisg/text/matchup/matchup-d-50.html› the match-up of CISG Article 50 and Article 46 of the 1978 Draft.]
Among the provisions in the Draft Convention on Contracts for the International Sale of Goods which were the most difficult to formulate and are among the most likely to generate controversy are those dealing with the remedies of buyer and seller for breach of contract by the other party. Many aspects of the law of sales reflect merchant practice, and to the extent that this practice is standardized in international sales transactions, the problems in formulating the text of the Draft Convention were reduced. However the provisions in respect of breach of contract do not reflect merchant practice. They reflect the efforts of lawyers from many legal systems to reconcile their views on the appropriate actions to be taken by the parties and by a tribunal in case of breach. The result has been a series of provisions which, in our view, are in general harmony with one another but which will often be unfamiliar to lawyers from any given legal system.
Among the provisions which will be unfamiliar for most Common lawyers is art. 46 [of the 1978 Draft], which provides the buyer with the right to reduce the price under certain circumstances. Because the remedy of reduction of price is similar to the remedy of damages in that both grant relief to the buyer measured in money, it is easy to confuse the two. Indeed at several stages of the drafting history of the provision, Common law participants saw the provision as a type of set-off whereby the buyer was authorized to deduct damages from the price.
Nevertheless, reduction of the price is a remedy separate from that of damages, both under the Civil law and the Draft Convention, and should not be confused with the right to set-off. This article (a) explains the nature of the remedy and how it operates, (b) sets forth its drafting history, (c) evaluates the remedy of reduction of price and (d) comments on procedures for the unification of law.
"If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may declare the price to be reduced in the same proportion as the value that the goods actually delivered would have had at the time of the conclusion of the contract bears to the value that conforming goods would have had at that time. However, if the seller remedies any failure to perform his obligations in accordance with article 44 or if he is not allowed by the buyer to remedy that failure in accordance with that article, the buyer's declaration of reduction of the price is of no effect.
The remedy of reduction of price for the purchaser of defective goods derives from the actio quanti minoris in Roman Law. At the risk of considerable over-simplification, this action originated from an Edict of the Aediles which sought to "repress the sharp practices of sellers of slaves and cattle in the City markets."
The Roman law origins of the remedy are reflected in contemporary provisions in Civil law countries. For example, if the goods contain hidden defects, art. 1644 of the French Civil Code enables a buyer to recover part of the purchase price, the amount to be determined by experts, or to rescind the contract and recover the total purchase price.
It has been pointed out that in the Civil law, rescission and reduction of price are the normal remedies for a buyer who has been delivered non-conforming goods, and damages are, in principle, the exception.
The Civil law also offers a remedy similar in effect, though not in theory, to reduction of price for delivery of an insufficient quantity of goods. The theory is that there has been a partial non-execution of the contractual obligation to deliver.
The buyer can reduce the price under art. 46 "if the goods do not conform with the contract." As would be expected, under art. 33 the goods do not conform with the contract if they are not of the quality or description required by the contract. However, in addition art. 33 provides that the goods do not conform if they are not of the requisite quantity or are not contained or packaged in the manner required by the contract. On the other hand, the fact that the goods are subject to a right or claim of a third party, including a right or claim based on industrial or intellectual property, does not make them non-conforming goods as that term is used in the Draft Convention.
The remedies of reduction of price and of damages overlap to a greater extent under the Draft Convention than they do in the Civil law because the Draft Convention accepts the Common law rule that damages are available for any defective performance even if the non-performing party was not at fault.
In comparing the time at which and the means by which the monetary relief is calculated under the two remedies, we are referring only to the direct damages which the buyer could recover for delivery of non-conforming goods. Under art. 41(2), exercise of the right to reduce the price does not preclude the buyer from claiming any further damages he has suffered which would not be compensated by a reduction of price, such as extra expenses in preparing for the goods or losses caused by spoilage of other goods caused by delivery of the non-conforming goods.
The differences in calculating the monetary compensation under the two remedies can be summarized as follows: damages are measured as of the time of delivery;
In illustrating the differences between damages and reduction of price it is helpful first to compare reduction of the price with the effect of a partial or complete avoidance of the contract. Art. 47 provides that if the seller delivers only part of the goods or if only part of the goods is in conformity with the contract, all of the remedies of the buyer, including the right to declare the contract avoided, apply to the part which is missing or which does not conform. As a result, in case of partial non-delivery of the goods, reduction of price under art. 46 and partial avoidance of contract under art. 47 would lead to the same measure of monetary relief for the buyer.
Thus, if the seller fails to deliver 10% of the goods called for under the contract, the buyer could either declare the price reduced by 10% under art. 46 or he could declare 10% of the contract avoided. Furthermore, if the partial non-delivery was so serious as to constitute a fundamental breach of the entire contract, the buyer could declare the whole contract avoided and, in effect, reduce the price by 100%. The same relationship exists between avoidance of contract and reduction of price where the non-conformity relates to the quality of the goods rather than quantity. If the non-conformity is so serious as to constitute a fundamental breach of the entire contract, the buyer can declare the contract avoided, and, in effect, reduce the price by 100%. If the non-conformity renders 10% of the goods worthless, the buyer could reduce the price by 10% or declare that portion of the contract avoided. Similarly, if the non-conformity as to quality existed in all the goods and reduced their value by 10%, the buyer could reduce the price by that amount.
If the contract price is equal to the value of the goods at the time of conclusion of the contract and there is no price change between that time and the time of delivery (and no "consequential" damages such as a plant shut-down), there would be no difference in the amount of monetary relief to the buyer whether he reduced the price or claimed damages. However, if there has been a change in the price of the goods, the amount of monetary relief would be different. These differences can be illustrated by the following examples:
Seller contracted to deliver 10 tons of first quality corn at the market price of $200 a ton for a total of $2,000. Seller delivered 10 tons of second quality corn, the market price of which at the time of contracting was $150 a ton. Therefore, if Buyer declared a reduction of price, the price would be $1,500. Buyer would in effect receive monetary relief of $500.
However, if the market price had fallen by half by the time of delivery of the non-conforming goods so that first quality corn sold for $100 and second quality for $75, Buyer's damages would be only $25 a ton or $250. In this case it would be more advantageous for Buyer to reduce the price than to claim damages.
If the reverse were to happen so that at the time of delivery of the non-conforming goods the market price of first quality corn had doubled to $400 a ton and second quality to $300, Buyer's damages would be $100 a ton or $1,000. In this case it would be more advantageous to Buyer to claim damages than to reduce the price.
If the delivery of second quality corn in Example A amounted to a fundamental breach of contract and Buyer avoided the contract, he could purchase in replacement 10 tons of first quality corn for $1,000, i.e., for an amount $1,000 less than the contract price, or purchase 10 tons of second quality corn for $750. If he chose to do the latter, which might be unlikely from a commercial point of view,
The preceding examples were based on three assumptions that will not always be present. One assumption was that the goods ordered were a fungible commodity for which substitute goods were freely available, making it feasible for the buyer to avoid the contract and purchase replacement goods, thereby providing a ready market price as a means of measuring value, and reducing the likelihood of any additional damages by way of lost profits or otherwise. If there is no such ready market for the goods, the problems of evaluation are more difficult, but the mechanism by which reduction of the price operates does not change.
A second assumption was that the proportionate relationship between the value of the goods as actually delivered and the goods as ordered was the same at the time of contracting and at the time of delivery. That is, it was assumed that second quality corn was always worth 75 per cent of first quality corn. This may not be the case of course. What must be remembered therefore is that the price could be reduced under art. 46 by an amount proportionate to the difference in value between the corn at the time of contracting, even though damages would be calculated as of the time of delivery.
If the price of first quality corn had doubled to $400 a ton, as in Example B, but the price of second quality corn had more than doubled to $360 a ton, damages would amount to only $400, not $1,000 as in Example B, but the price could still be reduced by $500, as in Example A.
A third and important assumption was that the contract price was equal to the value of the goods at the time of contracting. This will normally be the case where the sale is a commercial sale of goods, such as commodities which have a recognized market price. However it is less likely to be the case where the sale is not commercial -- a situation which does not normally arise under the Draft Convention
Nevertheless, the price in a commercial contract is not always equal to the value of the goods at the time of contracting. The advantage of reducing price rather than awarding damages is that it preserves the balance of the bargain struck between the two parties.
"If . . . the ordinary value of the goods in a non-defective condition is £100 at the time the contract is concluded and if the ordinary value [at that time] of the defective goods delivered is £50, the agreed sale price of £80 may be reduced to £40," whereas a claim for damages would in effect reduce the price to £30, by allowing £50 in damages to be subtracted from the sale price of £80.
Given this illustration, it is easy to see the significance of the traditional Civil law rule that the buyer could claim damages only when the non-conformity of the goods was due to the seller's fault; it was only when the seller was at fault that the buyer could disturb the balance of the bargain by claiming damages.
On the other hand, where fault is established by the mere fact of delivery of non-conforming goods by a commercial seller or, as in the Draft Convention, damages can be claimed without demonstrating fault, reduction of price is not the buyer's exclusive remedy by way of monetary allowance. In Example E where reduction of price would give a smaller measure of monetary relief than would damages, the buyer can claim damages under the Draft Convention and the balance of the bargain will not be maintained. Where the buyer has made a bad bargain, reduction of the price gives the buyer a larger measure of monetary relief than does a claim for damages.
The facts are the same as in Example E except that the contract price was £120 for goods worth £100 at the time of contracting. Since the defective goods as delivered would have been worth £50 at the time of contracting, the buyer can reduce the price by one half or £60.
Although the most obvious difference between damages and reduction of price is the time at which and the means by which the monetary allowance will be calculated for defective performance, there are a number of other differences between the two.
One difference (more formalistic than substantive) is that, under the Draft Convention, the remedy of price reduction is effectuated by the unilateral declaration of the buyer. No further action by the seller, such as acquiescing to the reduction of price, or by a tribunal in confirming the reduction, is necessary. This can be compared with the remedy of damages in which the buyer may "claim" the damages from the seller but his claim is not liquidated until the seller or a tribunal has agreed to it. Interestingly enough, this aspect of the remedy appears to be unique to the Draft Convention since in at least French and German law something more than the unilateral declaration of the buyer is necessary to change the juridical situation.
Although the only other remedy under the Draft Convention which is effectuated by the unilateral act of a party, i.e., a declaration of avoidance of contract, is required to be made by notice to the other party,
From the point of view of the final adjustment of the financial obligations of the parties, it is of no consequence that the price is reduced by the buyer's unilateral declaration. If the price has not yet been paid, he will offer to discharge his obligation by paying the reduced sum. If the price has been paid he will claim the amount of the reduction back from the seller. However the same result would occur if the buyer were to make a claim for damages. And in either case, if the seller disagrees with the buyer as to the existence of a non-conformity in the goods -- or other failure of performance -- or as to the monetary consequences of that non-conformity, the issue must ultimately be settled in court.
On the other hand, some consequences may attach to the fact that the price is reduced by the unilateral act of the buyer. A declaration would probably constitute a binding election of remedies. It may affect the running of a period of limitation
Three rules which restrict the amount of damages that can be awarded do not apply to reduction of price. Similar to the Common law rule in Hadley v. Baxendale,
It may be doubted whether it is of great significance that the remedy of reduction of price is not subject to the test of foreseeability. It would always appear to be foreseeable that non-conformity in respect of quantity or quality would lead to a reduction in value of the goods, although the amount of that reduction might not be foreseeable. This assumption is so strong that under the UCC the requirement that the loss be foreseeable explicitly applies only to the buyer's consequential damages, but not to his direct or incidental damages.
Although the mitigation principle of art. 73 does not apply to reduction of price, the same result is achieved by art. 46 itself. According to the second sentence of art. 46, even if the buyer has already declared the price reduced, if the buyer does not permit the seller to remedy the non-conformity of the goods in accordance with art. 44, e.g., by sending the missing goods, by repairing the defect or by sending replacement goods, his declaration of reduction of price will be of no effect.
On the other hand, the fact that "exemption" from damages under Art. 65 is not applicable to reduction of price
As a result, if the seller is unable to deliver all of the required goods or to deliver them in the required condition because of an impediment which meets the requirements of art. 65, he would nevertheless have to stand ready to deliver all that he could in the best possible condition. The buyer would have a choice whether to accept the goods offered or, if the extent of the non-delivery or the non-conformity as to quality was great enough, to avoid the contract. If the buyer accepted the goods delivered by the seller, he would be liable to pay for them at the contract price as reduced under art. 46. However the buyer could not claim damages, whether direct, incidental or consequential, as a result of the missing or non-conforming goods.
In some of the cases in which the buyer could reduce the price, but not claim damages because of "exemption" under art. 65, he could achieve the same result by declaring a portion of the contract avoided under art. 47. He could do so in case of a partial non-delivery of the goods or if some of the goods were so non-conforming in quality as to amount to a fundamental breach of the contract as to those goods. However if the defect in the goods did not amount to a fundamental breach even as to the individual goods that were defective, or if the buyer wished to keep the defective goods at an appropriately reduced price, art. 46 is the only provision under the Draft Convention by which this could be achieved.
The drafting history of art. 46 of the Draft Convention is an unusually good example of the difficulties inherent in the process of preparing a provision which seeks to introduce into all legal systems a concept known only to some. Not only were there the conceptual difficulties suggested above arising out of differences in the domestic legal systems, but mistakes in translation (probably caused in part by these difficulties) exacerbated the problem.
The 1939 Draft Uniform Law on Intentional Sale of Goods (Corporeal Movables) approved by the International Institute for the Unification of Private Law (UNIDROIT)
In the case of partial delivery, art. 32 of the 1939 Draft enabled the buyer to "avoid the contract for the whole, if the delivery of the whole is an essential condition of the contract." Art. 33 went on to provide that "even though the buyer may not be entitled to avoid the whole of the contract, he may avoid it in part, and only pay so much of the price as is proportionate to the value of the part which has been duly delivered to him."
On the other hand, art. 47 of the Draft provided that when the quality of the goods was defective,
"(a) either to avoid the contract and claim damages as provided by Articles 87 to 91, or
"(b) to demand reduction of the price in proportion to the diminution, by the defect, of the value of the goods as of the time of the conclusion of the contract, or
"(c) to demand compensation for the loss caused by the defect according to Article 85."
In consequence, the buyer could reduce the price for delivery of an insufficient quantity (art. 33) or for delivery of defective goods (art. 47(b)). Since the drafters realized that at times it would be difficult to distinguish partial delivery of conforming goods from delivery of goods a portion of which were defective,
This recommendation was carried out in the 1956 Draft.
Whatever difficulties might have been encountered by Common lawyers in understanding the nature of the remedy of price reduction were increased by the unsatisfactory drafting in French. The French version of art. 50(b) of the 1956 Draft provided that the disappointed buyer could:
"(b) réduire le prix d'un montant correspondent à la diminution que, par rapport au prix de vente, le défaut de conformité fait subir à la valeur de la chose appréciée lors de la conclusion du contrat, sans préjudice, s'il y a lieu, des dommages-intérêts prévus à l'article 94."
The text of art. 50(b) was undoubtedly sufficient for most Civil lawyers who understood the mechanism by which the price reduction would be effectuated. It was certainly much clearer in these respects than, e.g., the equivalent provision in the French Civil Code, art. 1644, which provides that in the case of latent defects in the goods
"l'acheteur a le choix de rendre la chose et de se faire restituer le prix, ou de garder la chose et de se faire rendre une partie du prix, telle qu'elle sera arbitrée par experts."
However, the text of art. 50(b) was not clear to those who translated it into English.
This discrepancy between the French and the English versions of art. 50(b) was noted in the written comments submitted by the Federal Republic of Germany on the 1956 Draft.
The Special Commission redrafted art. 50(b) in light of these comments.
Given the fact that the English version of the article on price reduction seemed to say that a sum in the nature of damages was to be deducted from the price, it was not surprising that some Common law delegates to the 1964 Hague Conference were disturbed that the time of calculation of these particular damages differed from that used in the calculation of other damages.
"article 50(b) does not contain an error; the proportional reduction of the price must in fact be calculated on the basis of the value of the goods as of the time of the conclusion of the contract. On the other hand, it should be stressed that in the case provided for in article 50(b), the buyer is entitled to damages, which will be determined on the basis of the actual position."
It is not surprising that this explanation did not resolve the matter, especially in view of the fact that none of the English language versions of the various proposals for the price reduction provision submitted to the Conference correctly set forth the means by which the price was to be reduced.
It is not clear by what mechanism the English version of the price reduction provision was finally translated correctly. The report of the Drafting Committee to the Plenary Session of the Conference contained the incorrect text.
"Where the buyer has neither obtained performance of the contract by the seller nor declared the contract avoided, the buyer may reduce the price in the same proportion as the value of the goods at the time of the conclusion of the contract has been diminished because of their lack of conformity with the contract."
The difficulties experienced by UNIROIT and at the Hague Conference in attempting to draft an unambiguous text of art. 46 of ULIS were to some degree repeated during the revision by UNCITRAL.
The subject was discussed for the first time at the third session of the Working Group on the International Sale of Goods. A number of conflicting views were expressed in respect of the value of the provision and of the clarity of its drafting.
This study was submitted to the Working Group at its next session.
In order to remedy these objections, the study recommended that there be only one standard for measuring the buyer's claim arising out of non-conformity of the goods, namely that of damages, and that art. 46 be redrafted so as to authorize the buyer to "deduct all or any part of the damages resulting from any breach of the contract from any part of the price due under the same contract."
The Working Group was more influenced by the Civil law origins of the remedy of price reduction
"Where the goods do not conform with the contract, the buyer may declare the price to be reduced in the same proportion as the value of the goods at the time of contracting has been diminished because of such non-conformity."
This text, with the minor amendment indicated in n. 57 above, which was added at the Working Group's seventh session, was submitted to UNCITRAL.
By the tenth session of UNCITRAL at which the current text of art. 46 was adopted, all the problems of the past had been isolated and identified. The Common law participants recognized and accepted that reduction of price was, and was intended to be, a remedy separate from that of damages. The Civil law participants recognized that the nature of the remedy and the mechanism by which it worked could be difficult for Common lawyers to understand from the wording of the text alone. Therefore, the provision was redrafted to make it as self-explanatory as possible.
It may be asked whether art. 46 is worth the difflculty it seems to have caused. Would it not be better to follow the suggestion raised on several occasions in the past and transform reduction of price into a set-off provision?
Such an alternative is not open. Reduction of price is too well known to Civil law jurists as the ordinary form of monetary relief available to a buyer who has received non-conforming goods for there to be any question of deleting it from the Draft Convention.
Furthermore, international contracts of sale of generic goods frequently provide for reduction of price in cases of non-conforming goods,
Certainly, it is useful to have some procedure which relieves the buyer from paying the full contract price when the reason that the seller failed to deliver all of the goods or delivered them, or some of them, in a defective condition was the existence of an "impediment" which was beyond the seller's control and which met the other requirements of art. 65. The buyer cannot get monetary relief by claiming damages, since art. 65 exempts the seller from liability for damages in such a case. It is true that in cases of partial nondelivery art. 47 enables the buyer to get the same relief offered by art. 46 by declaring the avoidance of that portion of the contract which has not been performed. However, partial avoidance of the contract under art. 47 is not useful when there is a non-conformity of quality which does not justify even partial avoidance or when the buyer does not wish to avoid any portion of the contract. In such cases only art. 46 can give the needed monetary relief. In essence, art 46 gives the same result in most of these situations as would be reached under UCC 2-613 and 2-615,
As noted above, the most important aspect of art. 46 is the impact of the different method of calculating the buyer's monetary relief compared with damages. In this regard it should be said that reduction of price does not have the same justification in the Draft Convention as it does in some Civil law systems. The justification for a reduction of price for defect in quality is a reformation of the original contract which retains the relative balance of the bargain made by the parties.
It is a form of monetary relief which the buyer will not seek very often since the only occasion when it is to his advantage to reduce the price is when he has made a bad bargain. But these are the occasions when the seller, having made a good bargain, will strive with more than normal diligence to perform the contract.
Nevertheless, sellers do breach profitable contracts and it might be asked whether in these circumstances the buyer should be able to receive by way of reduction of price more than he would in damages. It would also be possible to ask the opposite question: should the Draft Convention permit a buyer who has made a good bargain to claim damages for his direct losses of an amount greater than he would receive from reduction of price even though there was no fault on the part of the seller. The question however must be asked by those who are more committed to fault as a prerequisite to a claim for damages than are the authors of this article.
Certainly, to allow the buyer to reduce the price where he has made a bad bargain would put him in a better position than he would be in if the seller were to perform the contract, a situation which cannot be justified by the usual explanation of the function of damages. Nor can this result be explained as a reformation of the original contract which maintains the balance of the bargain, the explanation often given by Civil law jurists for reduction of price,
Nevertheless, reduction of price as it functions in art. 46 is justified if it is seen as a partial avoidance of the contract, a role which it shares in some situations under the Draft Convention with art. 47. When viewed this way, the monetary relief given under art. 46 can be compared not only with damages, but also with the monetary relief given the buyer when he declares the entire contract avoided. As seen in example C,
There is a practical side to this justification. Where the buyer has made a bad bargain, he is encouraged by the traditional measure of damages to seek avoidance of the entire contract in order to be able to purchase substitute goods at the lower prevailing price. Courts tend to be suspicious of the buyer's evaluation of the seriousness of the defect of the goods in such a situation, and well they might. Reduction of price goes part way towards meeting the buyer's desire to get out of the entire contract. By doing so it may cause some buyers to keep goods which they might otherwise reject, a policy greatly to be favored when it is remembered that the rejected goods in a case falling under the Draft Convention will be in a country other than that of the seller. To this extent art. 46 reinforces the policy which lies behind the rule in the Draft Convention that a party can declare the contract avoided only if the breach is fundamental.
The history of art. 46 demonstrates many of the difficulties inherent in the international unification of law and suggests some of the steps which can be taken to overcome them.
Reduction of price was a remedy so well known to the drafters of the original versions of what became art. 46 that they felt no need to clearly specify the mechanism for calculating the price reduction. However, the remedy was to apply also in legal systems where it was hitherto unknown. For this reason, that which was clear to those who understood it had to be made clear to those who did not.
The history of art. 46 also shows that a provision which has one meaning or justification in the legal system from which it emanates may take on an entirely different meaning in a new context. Since the buyer does not have to show fault in order to claim damages under the Draft Convention, the buyer can declare the price reduced and save the balance of the bargain when it is to his advantage to do so and claim damages, thereby breaking the balance of the bargain, when it is to his advantage to do that, a result not so easily available under the Civil law.
The most obvious difficulty which arose during the history of art. 46 was its mistranslation from French to English. Much has been written about the difficulties of interpreting multilingual legal texts where the different language versions are not identical. Less has been written about the impact of such discrepancies on the negotiation process. It is obvious that much of the misunderstanding of art. 46 during its preparation arose out of its mistranslation.
There are many ways for divergences in the different language versions to occur. Sometimes the text in the original language does not permit precise translation. Sometimes the text is misunderstood by the translator. Sometimes typographical errors are not caught by proofreaders who do not know the subject matter.
These divergences must be isolated and corrected as early as possible so that in the subsequent stages of the drafting process all the participants are working with the same text. There is only one way in which this can be accomplished. The various language versions must be rigorously compared by persons who are concerned with the substance of the project. This is a tedious task, but ideally it should be done each time the text is revised. If it is not, the quality of the comments and proposals of the participants, and therefore of the legal solution on which they flnally agree, will be adversely affected.
Finally, a procedure should be devised whereby the knowledge and understanding of a provision or problem which is gained by the participants at one stage of the preparation of a text is not lost to participants at a later stage. It is somewhat distressing to see that a 1939 UNIDROIT report indicated the differences between the Civil law and the Common law in respect of the means of calculating monetary relief for non-conforming goods
A drafting history which consists of reports and proposals made over a number of years may be of great help to a scholar in a retrospective examination of the text, but is usually of little value to the participant at a meeting, particularly a participant who is new to the particular text. He would not have the time and would often not have the inclination to trace each provision through its evolution, even assuming he had a complete set of records at his disposal. Nor, in most cases, would it be worth his effort when it is recognized that the participants' function at a meeting is to deal with the current text and try, if possible, to improve it. Nevertheless, old battles once settled satisfactorily should not have to be refought by new participants if there is a way to avoid it.
A possible approach is the preparation of a commentary to accompany the first draft text. The commentary should explain the draft provision, what it is intended to do and how it relates to other provisions. In addition, in some ways the most important point of all, the commentary should point out how the proposed text of the uniform law differs from any national law rules with which it could be confused. To serve its function properly, the commentary should be revised after each meeting of the preparatory body so as to reflect changes made in the text. Furthermore, as the discussions in the preparatory body bring out the difficulties in understanding and assimilating provisions new for some legal systems, the commentary should reflect those difficulties, explain how the draft text attempts to solve them and point out the remaining unresolved problems. Such a commentary kept current is no panacea, but it can serve to improve the product that finally emerges from the arduous process of the unification of law.
The anticipated 1980 U.N. Diplomatic Conference will probably adopt a final text in all six official languages of the U.N. even though UNCITRAL did not consider the Arabic and Chinese versions.