for Albert H. Kritzer CISG Database

of the Institute of International Commercial Law

at Pace University Law School

[ document manifest ]

<< previous toc next >>

Endnotes

 1. See "Drafting History," text infra at n.33.

 2. Sutton, "The Draft Convention on the International Sale of Goods," 4 Australian Bus. L. Rev. 269 (1976) and 5 Australian Bus. L. Rev. 28 and 92 at 100 (1977).

 3. UCC 2-717 and United Kingdom, Sale of Goods Act 1893, s. 53(1)(a). The Sale of Goods Act is the basis of numerous Sale of Goods Acts in the Common law world. See Sutton, The Law of Sale of Goods in Australia and New Zealand 3 (2d ed. 1974).

 4. Amaudruz, La garantie des défauts de la chose vendue et al non-conformité de la chose vendue 131-132 (1968). A little later the author notes that this price reduction is in reality an action for damages exercised as a defence (at 134). However the point is that the remedy was not analyzed under damages but under price reduction to make it more familiar to Civil law readers.

 5. de Zulueta, The Roman Law of Sale 50 (1957). For an account of the evolution and operation of this edict in Roman Law and its role in modern Roman Dutch Law see Honoré, "The History of the Aedilitian Actions from Roman to Roman Dutch Law," in Daube, Studies in the Roman Law of Sale 132-159 (1959). For an excellent brief overview of the remedy and its impact on the Civil law see Morrow, "Warranty of Quality: A Comparative Survey," 14 Tul. L. Rev. 327 and 529 at 354-360 (1940). See also Bernini, "The Uniform Laws on International Sales, The Hague Conventions of 1964," 3 J. World Trade L. 689 (1969).

 6. The manner in which reduction of the price was calculated under Roman Law is a matter of some controversy. See and contrast the views of Mulligan, "Quanti Minoris Than What?" 70 So. Af. L.J. 132 (1953) with those of Honoré, supra n.5 at 150-157. However, for the purposes of the present article it is only necessary to note that price reduction was a separate remedy for a specific problem. The Draft Convention supplies a formula for the calculation of the amount of the price reduction.

 7. De Zulueta, supra n. 5.

 8. See Répertoire de Droit Civil (Dalloz, 1976) vol. 7, Vente (obligations du vendeur) paras. 459-573 (hereafter "Répertoire"). Although the buyer has the option to rescind the contract, case law has established that the courts may, at their discretion, reduce the price (la réfraction de la vente) if the difference in quality does not surpass that recognized by usage and does not make the goods unfit for their contract use (see Répertoire, para. 31). See also Kahn, La vente commerciale internationale 148-155 (1961).

 9. See Daniels, "The German Law of Sales," 6 Am. J. Comp. L. 489-495 (1957); Zweigert, "Aspects of the German Law of Sale," Int. and Comp. L.Q., Supp. Pub. No. 9 (1964) at 2-4; Amaudruz, supra n. 4 at 132-133; Rabel, "The Hague Conference on the Unification of Sales Law," 1 Am. J. Comp. L. 66 (1952) noted that the "old action, quanti minoris, for reduction of the price is presented in its best form under ?relative calculation?."

 10. Szakats, "The Influence of Common Law Principles on the Uniform Law on the International Sale of Good," 15 Int. and Comp. L.Q. 762-763 (1966).

 11. See e.g., Riegert, "The West German Civil Code, Its Origins and Its Contractual Provisions," 45 Tul. L. Rev. 75-78 (1970); Lawson, "Fault and Contract -- A Few Comparisons," 49 Tul. L. Rev. 295 (1975); Nicholas, "Rules and Terms -- Civil Law and Common Law," 48 Tul. L. Rev. 952-954 (1974); Rabel noted that "the Roman sources led civil law to the conception that, as warranty does not require fault as normal liabilities do, it also does not include damages. Yet the practice in France, Germany, and other countries has riddled this idea with exceptions." Supra n. 9 at 65-66.

 12. See Amaudruz, supra n. 4 at 38-40. The distinction becomes ill-defined in the operation of these rules in particular legal systems. E.g., in principle in French Law if the seller delivers only a portion of the goods art. 1184 and 1220 of the Civil Code would indicate the right to rescind the contract and claim damages. However case law has clearly established that it is for the trial judge (juge de fond) to decide whether to permit avoidance or to simply reduce the price, if the missing quantity is not essential (Répertoire, paras. 162-163). For a comparative analysis of the situation in French and German law see Treitel, "Remedies for Breach of Contract," in VII Int. Encyc. Comp. L. Ch. 16, para. 175 (1976).

 13. See Weill and Terré, Droit Civil, les obligations, paras. 465-477 (2nd ed., 1975). The authors note that the French Civil Code, unlike the German, does not contain a general provision setting out this principle but merely contains provisions which are specific applications of it. Case law has however extended the principle to all bilateral contracts (paras. 470-473). As the exception reflects the idea that obligations in bilateral contracts must be performed reciprocally, it operates as a temporary form of self-help which does not require judicial intervention. Partial avoidance of the contract would require judicial intervention (paras. 475-6).

 14. Arts. 39 and 40.

 15. For an exception, see art. 65 and Nicholas, "Force Majeure," supra at II-B.

 16. Art. 70, which sets out the formula for measurement of damages where the contract has not been avoided, does not specify the date as of when damages are to be measured. However, for the purposes of comparing damages with reduction of price, it is sufficient to state that the damages are measured as of the time of delivery. Cf. UCC 2-714(2), "time and place of acceptance" and United Kingdom, Sale of Goods Act, s. 53(3), "time of delivery."

 17. The most important difference between arts. 46 and 47 in this example is that if the contract has been partially avoided under art. 47, the seller loses his right to remedy the non-conformity whereas reduction of price under art. 46 does not terminate the seller?s right to remedy the non-conformity.

 18. These examples are slight modifications of Examples 31E, 31F and 31G in the Commentary on the Draft Convention (A/CN.9/116, Annex II), VII Yearbook 117. These examples will appear in the Commentary to the UNCITRAL Draft Convention.

 19. If the buyer were to purchase second quality corn in replacement, it might also show that the delivery of this corn rather than first quality corn did not amount to a fundamental breach of contract. Cf. Cehave N.V. v. Bremer Handelgesellschaft mbH; The Hansa Nord, [1976] Q.B. 44.

 20. Art. 2(a) provides that the Convention does not apply to sales "of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use."

 21. Amaudruz, supra n. 4 at 132. See also Draft of a Uniform Law on International Sale of Goods (Corporeal movables) and Report, U.P.L. 1939 - - Draft I(2) (UNIDROIT, 1951) at 80, hereafter, "1939 UNIDROIT Report."

 22. Infra n. 40. The German example assumed no price change between the time of contracting and the time of breach.

 23. Art. 1644 of the French Civil Code provides that the amount of price reduction in cases of hidden defects is to be determined by experts. In cases of "réfaction," the Court will determine the amount of the price reduction. ? 472 BGB provides a formula for reducing the price in the proportion that the value of conforming goods at the time of the sale bears to the value of the defective goods as of that time. Daniels, supra n. 9 at 491, notes that "if the parties cannot agree on the actual market value of the defective goods such value will be fixed by the Court."

 24. The right of the buyer to declare the contract avoided is set out in art. 45, that of the seller is set out in art. 60. The requirement that the declaration be by notice to the other party is in art. 24.

 25. Art. 25.

 26. See UNCITRAL, Report on Tenth Session (1977) A/32/17, Annex I, paras. 301-302; VIII Yearbook 46-47.

 27. Art. 20 of the Convention on the Limitation Period in the International Sale of Goods, U.N. doc. A/CONF.63/15, reprinted in 23 Am. J. Comp. L. 356 (1975), has the effect of making a new limitation period of four years run from the date of a written acknowledgement to a creditor or from partial performance of an obligation by the debtor if it can reasonably be inferred from that performance that the debtor acknowledges that obligation. Should seller challenge the amount of the price reduction, a Court might treat the buyer?s act of declaring a reduction in price as an acknowledgment that starts a new limitation period of four years for the buyer?s obligation.

 28. Some Common law jurisdictions offer certain procedural advantages to claims for the recovery of liquidated debts as opposed to claims for damages. Thus if the buyer has paid the price and then declares it reduced and this reduction is judged reasonable, it might be treated as a claim for a liquidated debt just as claims based on quantum meruit or quantum valebant counts are treated as claims for a debt or a liquidated demand for money. For an extensive discussion of these matters see Alexander v. Ajax Insurance Co. Ltd., [1956] Vict.L.R. 436; also Lombard Australia Ltd. v. Smeaton, [1966] Vict. R. 272.

 29. (1854) 9 Exch. 341.

 30. Compare UCC 2-712, 2-713, 2-714 and 2-715(1) with 2-715(2).

 31. According to art. 44(1), the buyer need not allow the seller to remedy the non-conformity unless "he can do so without such delay as will amount to a fundamental breach of contract and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer." He also need not allow the seller to remedy the non-conformity if he has declared the contract avoided.

 32. See Nicholas, "Force Majeure and Frustration," II-B supra.

 33. The sequence of events leading to the preparation of this draft is succinctly described in UNIDROIT, Unification of Law 103 (1948). The English text of the draft is at page 105. See also Nadelmann, "The Uniform Law on the International Sale of Goods: A Conflict of Laws Imbroglio," 74 Yale L.J. 453 (1964-5).

 34. Art. 36 provided that the seller undertook that the goods would be free from "defects." Arts. 37-42 defined the concept of "defects."

 35. Art. 85 set forth the amount of damages which could be recovered if the contract was not avoided.

 36. 1939 UNIDROIT Report, supra n. 21 at 74.

 37. Part of Resolution IV of the Final Act of the Conference on a Draft Convention Relative to a Uniform Law on the Sale of Goods, held at the Hague (1-10 November 1951). The Final Act in the French original with an English translation is contained in Unification of Law 282-305 (1954).

 38. The 1956 Draft may be found in I Unification of Law 70-115 (1956).

 39. The original text of the 1939 and the 1956 Drafts was in French. The English text was indicated to be a translation. Supra n. 33 and 38. The 1963 Draft was original in both English and French, which were also the languages in which ULIS was adopted in 1964 with "both texts being equally authentic." Unofficial Russian and Spanish translations of ULIS were published in the Russian and Spanish language versions of I U.N. Register of Trade Law Texts (1971) (UN Sales Nos. R.71.V.3 and S.71.V.3 respectively). These unofficial translations served as the basis for the Russian and Spanish language versions of the text of the Draft Convention as adopted by UNCITRAL. In addition to the four language versions in which the Draft Convention was adopted by UNCITRAL, the U.N. translation service has translated the Draft into Arabic and Chinese as part of UNCITRAL, Report on Eleventh Session(1978), A/33/17.
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.

 40. Diplomatic Conference on the Unification of Law Governing the International Sale of Goods, The Hague, 2-25 April 1964 Vol. I: Records: Vol. II: Documents (1966), vol. II, p. 98. (These records will be referred to as "Hague Official Records" with citation to the appropriate volume and page.) See also text supra at n. 22.

 41. Id. at 192. The establishment and activities of this Special Commission are described at 26-27.

 42. The French text read: "(b) réduire le prix dans la proportion o&ugrave; la valeur que la chose avait au moment de la conclusion du contrat a été réduite du fait de défaut de conformité au contrat. . . ."

 43. The English text read: "(b) to reduce the price by the amount by which the value of the goods at the time of the conclusion of the contract has been diminished because of the lack of conformity. . . ."

 44. Hague Official Records, supra n. 40, vol. II at 192.

 45. E.g., the observation of the delegates from the U.S.A., Hague Official Records, Vol. I at 79 and 177.

 46. Hague Official Records, supra n. 40, vol. II at 315.

 47. 1963 Draft, art. 50(b), Hague Official Records, vol. II at 220; text of art. 56 prepared by the Drafting Committee of the 1964 Hague Conference Committee on Sales, (id. at 385); text of art. 56 prepared by Drafting Committee during Plenary Session (id. at 409).

 48. Text of art. 56, Hague Official Records, vol. II at 409.

 49. Hague Official Records, vol. I at 290-291.

 50. In the Preface to the Official Records the Secretary-General of the Conference noted that some parts of the documentation "are still somewhat brief and incomplete; the excuse for this is the high pressure under which the records were made during the Conference." (Hague Official Records, vol. I at ix).

 51. "The revision of the text was not completed when the final Act was signed on April 25, and a penultimate text was circulated to delegates on May 12, 1964, for their observations. The Secretariat, having received observations, examined them in consultation with the President of the Drafting Committee and corrected the text in so far as it appeared necessary, without finding it possible to comply with all observations." Ellwood, "The Hague Uniform Laws Governing the International Sale of Goods," in Some Comparative Aspects of the Law Relating to Sale of Goods, Int. and Comp. L.Q. Supp. Pub.No.9 (1964) at 42-3.

 52. By coincidence, the price reduction provision is found in art. 46 of both ULIS and the current text of the Draft Convention revising ULIS.

 53. See Working Group, Report on Third Session (1972) A/CN.9/62 and Adds. 1 and 2, Annex II, paras. 109 to 113; III Yearbook 89.

 54. Id., para. 115 (and Annex I, para. 28).

 55. A/CN.9/WG.2/WP.16, paras. 146-152, IV Yearbook 56-57.

 56. Id., para. 150, IV Yearbook 57.

 57. At its fourth session, the Working Group stated that it "was understood that the phrase ?the buyer may declare the price to be reduced? not only authorized the buyer to withhold the designated portion of the price but also served as a basis for the buyer to recover the designated portion of the price that had been paid." A/CN.9/75, para. 126; IV Yearbook 71. At its seventh session the Working Group elevated this statement of intent into the text of the article on price reduction (then renumbered as art. 31) by adding the words "and whether or not the price has already been paid." See Working Group, Report on Seventh Session (1976) A/CN.9/116, Annex I, art. 31, VII Yearbook 92.

 58. A/CN.9/WG.2/WP.16, para. 148, IV Yearbook 57.

 59. Id., para. 152, IV Yearbook 57.

 60. Working Group, Report on Fourth Session(1973) A/CN.9/75, para. 119, IV Yearbook 71. The influence of the Civil law tradition was also made clear by the fact that one representative expressed the view that the right of the buyer to reduce the price should be limited to breaches of contract in respect of non-conformity of the goods, meaning, presumably, non-conformity as to quality rather than as to quantity (para. 120). Another representative also indicated a Civil law point of view when he pointed out "that an important difference between price reduction and damages was that for a reduction in price it was not necessary to prove fault while damages could only be recovered if fault was proven" (para. 121). One observer supported this view and added "that the right to reduce the price was not even subject to the conditions laid down in article 74 of ULIS" (ibid). (Art. 74 of ULIS exempts a party from liability for non-performance "if he can prove that it was due to circumstances which, according to the intention of the parties at the time of the conclusion of the contract, he was not bound to take into account or to avoid or to overcome. . . .")

 61. Id. at para. 125.

 62. The tenth session of UNCITRAL also added the second sentence of art. 46 of the Draft Convention to make it clear that the seller?s right to remedy any non-conformity in the goods comes ahead of the buyer?s right to reduce the price, A/32/17, Annex I, para. 299.

 63. See text supra at n.2 and 59.

 64. The Report of the Working Group?s fourth session notes that "most representatives who spoke on the issue agreed that the uniform law should provide for the remedy of reduction of the price because it was widely used, especially in civil law countries" A/CN.9/75, para. 119, IV Yearbook 71.

 65. See Report of the Secretary-General on the feasibility of developing general conditions of sale embracing a wide scope of commodities, A/CN.9/78, paras. 154-160, IV Yearbook 94.

 66. For judicial consideration of such provisions see, for example, R. Pagnan and Fratell v. Corbisa Industrial Agropacuaria Limitada, [1971] I W.L.R. 1306. See also judgment of Lord Denning M.R. in the Hansa Nord, supra n. 19 at p. 63.

 67. See Godenhielm, "Some views on the System of Remedies in the Uniform Law on International Sales," 10 Scand. Stud. L. 29-30 (1966).

 68. It is interesting to note that UCC 2-613(b) gives a limited but clear example of reduction of price for an excused defect in quality. 2-613(b) and 2-615 also give clear examples of reduction of price, or partial avoidance of contract, for an excused partial non-delivery.

 69. S.30(1) of the Sale of Goods Act provides that where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so delivered he must pay for them at the contract rate. See Behrend and Co. v. Produce Brokers Ltd., [1920] 3 K.B. 530; Ebrahim Dawood Ltd. v. Heath (est. 1927) Ltd., [1961] 2 Ll. L.R. 512. In H.R. and S. Sainsbury v. Street [1972] 1 W.L.R. 834, seller agreed to sell about 275 tons of barley to be grown on his farm. Events beyond the seller?s control resulted in the production of only 140 tons which were sold to a third party at a higher price. The Court held that although seller was excused from failure to deliver the 135 tons because that part of the contract was frustrated, it was implicit in the contract that he was under an obligation to deliver the rest at the contract rate (at 835-6 and 839). In cases where the quality of goods has been affected the normal remedy is damages. If the contract has been frustrated by the "impediment," the incidence of losses will depend upon whether apportioning legislation such as the Law Reform (Frustrated Contracts) Act 1943 applies. See Chitty on Contracts(24th ed., 1977) at paras. 1448-1463; Sutton, supra n. 3, ch. 5; Benjamin?s Sale of Goods(1974) at paras. 442-446; McElroy, Impossibility of Performance (1941).

 70. See supra n. 21.

 71. See text supra at n. 11.

 72. See text supra at n. 21.

 73. Text supra at n.19.

 74. Amaudruz, supra n. 4 at 135-136 and 145-158.

 75. 1939 UNIDROIT Report at 80.

 76. See further Miller, Liability in International Air Transport 361-64 (1977).


[ document manifest ]

<< previous toc next >>