Source: http://www.cisg.law.pace.edu/cisg/principles/uni46.html
Timestamp: 2019-04-24 07:47:40+00:00

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(e) the party entitled to performance does not require performance within a reasonable time after it has, or ought to have, become aware of the non-performance.
conjunction with notice given under article 39 or within a reasonable time thereafter.
In Part III Sale of Goods, the Convention provides and regulates the respective obligations and rights of the parties to an international sales contract governed by the CISG, including the remedies available to a party for breach by the other party of the latter's corresponding obligations (duties) arising under the Convention.
In Chapter II Obligations of the Seller (Art. 30), Sections I Delivery of the Goods and Handing Over of Documents (Arts. 31 - 34) and II Conformity of the Goods and Third Part Claims (Arts. 35 - 44), the Convention sets forth the seller's obligations to the buyer. The buyer's remedies for seller's breach of these obligations are set forth in Section III Remedies for Breach of Contract by the Seller (Arts. 45 - 52).
In an exercise of structural, as well as substantive, equality between the parties to the contract, in Chapter III, Obligations of the Buyer (Art. 53), Sections I Payment of the Price (Arts. 54 - 59) and II Taking Delivery (Art. 60), the Convention sets forth the buyer's obligations to the seller. The seller's remedies for buyer's breach of the latter's corresponding obligations are set forth in Section III Remedies for Breach of Contract by Buyer (Arts. 61 - 65).
The present analysis focuses on the right of a party to require the other party to perform the latter's obligations to the former pursuant to the Convention's provisions (CISG Arts. 28, 46 and 62).
Under the regime of the UNIDROIT Principles, the counterpart provisions regarding the right of a party to require performance by the other party are set forth in Chapter 7 Non-Performance, Section 2 Right to Performance (Arts. 7.2.1, 7.2.2, 7.2.3, 7.2.4 and 7.2.5).
The legislative history of and subsequent commentary on CISG Art. 28 reveal the purpose of the provision, its scope and the reason for its inclusion in the Convention as well as the compromises (semantic, substantive and political) that it contains.
The practical effect of CISG Art. 28 is to restrict in some cases an aggrieved party's general right, which is granted pursuant to CISG Arts. 46 (buyer's right) and Art. 62 (seller's right) to require specific performance of the other party's obligation after a breach of contract by the latter.
Although the regime of the Convention's remedies includes these general rules (CISG Arts. 46 and 62) that a party in breach may be compelled to perform his obligations, thus establishing the primacy of the remedy of specific performance under the Convention, it does not specify and instead leaves to the domestic law of the forum any procedural measures necessary to enforce the remedies available under the Convention.
The inclusion of CISG Art. 28 in the text of the Convention, carving out an exception from the general right of an obligee to require specific performance by a defaulting obligor, is seen as constituting a necessary compromise in order to recognize the historically divergent approaches in doctrine and civil procedure to requiring performance under different legal systems - this view is shared among many commentators of the CISG.
"[A] court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention."
Essentially, CISG Art. 28 may be applied to determine the question whether an obligee can obtain the aid of a court to enforce the obligation of a defaulting obligor to perform the contract. Generally speaking, courts in legal systems which as a matter of doctrine and judicial procedure grant orders of specific performance should not be affected by the application of CISG Art. 28. On the other hand, the provision has more practical significance in jurisdictions which do not grant certain forms of specific performance.
Thus, pursuant to CISG Art. 28, a court belonging to the latter category (e.g., common law system) is not bound to require specific performance of the breaching party's obligations under a contract governed by the Convention unless it woulddo so under its own law in respect of domestic contracts of sale. Effectively, if the law of the forum would not grant specific performance in a domestic contract of sale (i.e., in accordance with domestic law of contract), the court is not bound to enter a judgment of specific performance in respect of the particular international contract of sale under the Convention.
It has been said that CISG Art. 28 has a potential for mischief because "parties will be encouraged to forum-shop for a national court system that will or will not grant specific performance". However, the degree of practical importance of this provision has been questioned by several other commentators, mainly because the right to require specific performance is rarely asserted in international trade. It also seems that the legislative history of the Convention supports the latter body of opinion.
The UNIDROIT Principles contain no counterpart provision to CISG Art. 28. In their Definitions section, Art. 1.10, the Principles, however, provide a definition of a word also contained in CISG Article 28: "court". The Official Commentary on the Principles also states that, and explains the reason why, the term "court" covers arbitral tribunals as well as courts.
The definition of "court" contained in the Principles may arguably serve to answer a relevant question regarding the interpretation of the same word (i.e., "court") contained in CISG Art. 28, so that the reference to that word in the Convention be similarly interpreted as being inclusive of arbitral tribunals.
CISG Art. 46 provides the general rule on the buyer's right to require performance by the seller of his contractual obligations. The buyer may invoke this rule when the seller has failed to perform any  of his obligations  under the Convention  and the contract.
CISG Art. 46 also provides, however, specific restrictions on the invocation of the right to compel specific performance.
The first restriction is set for the in CISG Art. 46(1) which provides that the buyer's right to specific performance is subject to the buyer not having resorted to another remedy which is inconsistent with the requirement that the seller in breach perform his obligations, e.g., declaring the contract avoided pursuant to CISG Art. 49(1).
Art. 46(3) provides that the buyer may require the seller to remedy the lack of conformity (which does not need to constitute fundamental breach) by repair unless this is unreasonable having regard to all the circumstances.
CISG Art. 62 sets forth the general rule on the seller's right to require the buyer to perform his obligations under the Convention  and the contract  - a parallel rule to the one set forth in CISG Art. 46, which was discussed in Section III, supra.
CISG Art. 62 provides that the seller may require  the buyer to pay the price for the goods, take delivery of the goods and perform his other obligations.
The buyer may conceivably default in his obligations either after he has received and retains the goods or by refusing to receive the goods. In any case, a proviso, similar to the one contained in CISG Art. 46(1), is also incorporated in and limits the application of CISG Art. 62; i.e., the party's right to specific performance by the other party of his obligations is subject to the obligee not having resorted to another remedy (e.g., declaration of avoidance) which is inconsistent with the requirement that the obligor in default perform.
Under the regime of the UNIDROIT Principles (UP) the provisions regarding the right of a party to require performance by the other party are set forth in Chapter 7 Non-Performance, Section 2 Right to Performance (Arts. 7.2.1, 7.2.2, 7.2.3, 7.2.4 and 7.2.5).
The rules regarding the right of the obligee to require performance by the obligor under the UNIDROIT Principles, unlike the rules of the Convention, make a clear distinction between performance of monetary and non-monetary obligations.
UP Art. 7.2.1 provides the general rule of the UNIDROIT Principles that where a party who is obliged to pay money under a contractual obligation does not do so, the other party may require payment. This rule, which gives an aggrieved party the right to require the party in default to perform his monetary obligations under the contract, should be applicable, for instance, to the payment of the price for the goods under a sales contract.
The principle of contractual performance of the parties' (monetary) obligations, on which this rule is based, is also generally recognized in the Convention as well as specifically embodied in CISG Art. 62 which sets forth the seller's right to require buyer to pay the price for the goods.
UP Art. 7.2.2 provides the general rule of the Principles that where a party who owes a non-monetary obligation does not perform, the obligee may require performance of that obligation. This rule again reflects the general approach of the counterpart provisions of the Convention.
It is arguable that the basis of the stated exceptions is provided by the application of the general principle - also recognized in the Convention - of reasonableness to the various contexts in which UP Art. 7.2.2 (a) - (e) is applicable.
UP Art. 7.2.5 provides that aggrieved party may abandon the remedy of requiring performance of a non-monetary obligation and opt instead for another remedy or remedies.
UP Art. 7.2.5(1) provides that an aggrieved obligee who has required and who has not received performance within a period fixed (or otherwise within a reasonable) period of time may invoke any other remedy.
UP Art. 7.2.5(2) further provides that the aggrieved obligee may invoke any other remedy where the decision of a court for performance of a non-monetary obligation cannot be enforced.
UP Art. 7.2.3, similarly to CISG Art. 46(3), expressly provides that the obligee's right to require the obligor to remedy his defective performance includes, in appropriate cases, the right to require repair, replacement, or other cure.
UP Art. 7.2.4 sets forth a provision to which there is no counterpart in the Convention; i.e., a judicially imposed sanction to ensure compliance with judgments ordering the performance of contractual obligations.
UP Art. 7.2.4(1), in contradistinction to the provisions of the Convention, provides that a court orders a party to perform, it may also direct that party to pay a penalty if it does not comply with the order.
UP Art. 7.2.4(2) makes clear that payment of the judicial penalty to the aggrieved party does not exclude any claim for damages, but it is subject to the mandatory rules of the lex fori.
The comparison between provisions of the Convention regarding the right to specific performance and the counterpart provisions of the UNIDROIT Principles has revealed similarities and differences between the two instruments.
As a starting point, both the Convention and the UNIDROIT Principles adopt the principle of contractual performance of the parties' obligations, which is embodied in counterpart rules regarding the right of the obligee to require specific performance by the obligor.
There are however, several distinctions, structural and substantive, between the counterpart provisions of the two instruments.
Under the regime of the UNIDROIT Principles, the provisions regulating the right of a party to require performance by the other party do not follow the distinctive structure adopted in the Convention's counterpart provisions - the latter instrument makes separate, albeit similarly balanced between themselves, provisions for a seller and a buyer in an international sales contract governed by the Convention.
On the other hand, the rules regarding the right of the obligee to require performance by the obligor under the UNIDROIT Principles, unlike the rules of the Convention, form what is arguably a more detailed and coherent set of regulations and they make a clear distinction between performance of monetary and non-monetary obligations.
In stark contrast to the Convention, the Principles do not treat specific performance as a discretionary remedy which is dependant on domestic law and the rules of the forum, but the Principles expressly provide several exceptions to the general rule on the obligee's right to require performance of non-monetary obligations. These exceptions are based on specific manifestations of the general principle of unreasonableness - which is also a general principle on which the Convention is based.
Furthermore, the Principles include a provision to which there is no counterpart in the Convention; i.e., a judicially imposed sanction (judicial penalty) to ensure compliance with judgments ordering the performance of contractual obligations.
1. The Convention further provides in Part III supplementary rules on remedies that are applicable to both parties, see Chapter V Provisions Common to the Obligations of the Seller and of the Buyer, Sections I Anticipatory Breach and Instalment Contracts (Arts. 71 - 73), II Damages (Arts. 74 - 77), III Interest (Art. 78), IV Exemptions (Arts. 79 -80), V Effects of Avoidance (Arts. 81 - 84) and VI Preservation of the Goods (Arts. 85 - 88).
2. In preparing the Vienna Convention, the drafters of CISG Art. 28 generally followed its predecessor [Art. VII(1) of the 1964 Hague Convention, and Art. 16 of the Uniform Law on the International Sale of Goods (ULIS)]. See the Text of Secretariat Commentary on Art. 26 of the 1978 Draft [draft counterpart of CISG Art. 28], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-28.html#sec>. See also Bergsten E.E., Subsequent Commentary on CISG Art. 28, Les Ventes 1nternationales de Marchandises (Problèmes juridiques d' actualité)", Paris Economica 1981, pp. 11-14; available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-28.html#sub>.
"The CISG grants the obligee a right to specific performance. In the event of a breach of contract such right persists as long as there is no right to avoidance or it can be asserted alternatively instead of the latter (Art. 46, paragraph 1; Art. 62): The rights to delivery of substitute goods and to repair, respectively under certain restrictive conditions (Art. 46, paragraphs 2 and 3), constitute specific forms of the right to performance."
Enderlein & Maskow, ibid., also note that there possibly exist in the Convention further, albeit indirect, restrictions of the right to specific performance, relating to the application of CISG Arts. 88(2) and 77.
Honnold J.O., Uniform Law for International Sales, Kluwer Law International, 3rd ed. (1999), at 225, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/honnold.html>, notes that CISG Art. 28 permits deviation only from the rules of the Convention that require performance of a party's obligations and does not affect the Convention's restrictions on specific performance.
4. CISG Art. 46(1) reads: "The buyer may require performance by the seller of his obligations [...]." See further analysis, Section III, infra.
5. CISG Art. 62 reads: "The seller may require the buyer to pay the price, take delivery or perform his other obligations [...]." See further analysis, Section IV, infra.
6. CISG Art. 28 may in certain cases restrict the obligee's right to require specific performance from the obligor, but it does not affect other remedies available under the Convention (e.g., avoidance (CISG Arts. 49 and 64), damages (Arts. 74-76), etc.).
Para 2. "'Specific performance' means that a party may require the other party to perform its obligations under the contract (and seek enforcement through court action)."
"[A] judicial 'requirement' of performance [...], a type of remedy that in 'common law' may be implemented by a judicial decree ordering 'specific' performance. The scope of the remedy 'requiring' (specific) performance was one of the most stubborn issues encountered in the preparation of the uniform rules. Article 28 [...] relaxes general rules on coerced performance that appear later in the Convention [see Arts. 46 and 62]."
8. The right of an obligee to require specific performance by the defaulting obligor of his contractual obligations is said to reflect a principle which has emanated from civil law theory. See Dawson J.P., "Specific Performance in France and Germany", 57 Michigan Law Review (1959) 495; Treitel G.H., Remedies for Breach of Contract - A Comparative Account, Oxford: Clarendon (1988), Ch. III.
Note, however, that although the principle of specific performance is embedded in civil law theory, the frequency of invocation and enforcement of the remedy of specific performance in practice must not be overestimated. See Henrik Lando, "The Myth of Specific Performance in Civil Law Countries" (April 2004), American Law & Economics Association Annual Meetings. American Law & Economics Association 14th Annual Meeting. Working Paper 15; available online at <http://law.bepress.com/alea/14th/art15>. In that paper, the author argues that when breach involves the non-performance of an action, i.e. when performance cannot be ensured by the handing over of an existing good, specific performance is largely a myth in the three civil law countries Denmark, France and Germany. The paper provides evidence which suggests that a claim for specific performance of an action is, roughly speaking, not enforced in Denmark, weakly enforced in France, and though enforced in Germany, only rarely sought. According to the evidence presented in that paper, it is concluded that specific performance is largely irrelevant as a remedy for the non-performance of an action in civil law countries. Furthermore, the paper argues that the non-use of specific performance can be ascribed to the costs and difficulties of forcing the breaching party to perform an action.
Para 1. "The article constitutes a compromise between legal systems that deal differently with the contractual right of a party to claim specific performance of the contract. According to article 28, a court is not obliged to grant specific performance under the Convention if it would not do so for similar sales contracts under domestic law."
"Under English law, granting specific performance of the terms of a contract is an extraordinary remedy, granted in very limited circumstances."
11. For relevant commentary on point, see Honnold (1999), op. cit., at pp. 219-220, and further references provided therein.
"This provision [Art. 28] contains a compromise between the legal systems of the continental European countries and those countries which are influenced by their law, which generally provide for the right to performance, on the one hand, and the legal systems which are based on the common law, on the other [...]. The right to specific performance is granted in the common law countries only under particular conditions" [references omitted].
"Article 28 provides a procedural exception primarily tailored to suit the peculiarities of Anglo-American law, which does not generally provide the remedy of specific performance in the context of most sales contracts."
Convention on Contracts for the International Sale of Goods", Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000) 3-78; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/boghossian.html>.
See also Honnold (1999), op. cit., 225-228; Enderlein & Maskow, op .cit.
13. The expression "not bound" does not limit any rights to specific performance that may ensue from the proper application of the Convention's provisions. See Enderlein & Maskow, op. cit., at 122, where the authors states that a court "can grant a right to specific performance in such events where it would normally not do so" [emphasis added].
"[I]ndicates that a court that would not 'require' performance under its own law is free either to 'require' performance or to apply other remedies provided by the Convention such as awarding damages under Article 74."
"Article 28, properly understood in the setting of domestic procedural systems, can mitigate the appearance of rigidity of the Convention's general rules on 'requiring performance'. Certainly it would be wrong to assume that there are only two rules: (1) Rigid rules of the civil law world, embodied in Articles 46(1) and 62, that call for coerced performance; (2) A more flexible approach under Article 28 applicable only to actions before 'common-law' courts. The flexibility permitted under Article 28 is not confined to the procedural approach of one legal system. As Professor Treitel has shown, remedial law in many legal systems is less rigid than the 'require performance' rule of the Convention [Treitel G.H., Remedies for Breach of Contract - A Comparative Account, Oxford: Clarendon (1988), Ch. III, at 47 et seq.]. In sum, domestic rules mitigating the harshness and dangers of abuse from demands of coerced performance are available in any forum where the Convention is in force."
The balance between Article 28 on the one hand and Articles 46 and 62 on the other is not, therefore, a compromise only between the civil law recognition of the principle that a party has the right to require the other party to perform the contract and the common law restriction on that right. It is also a recognition that in many legal systems the courts will use discretion in enforcing the right and that such discretion is to be preserved by the Convention."
"In a Soviet-American compromise in the lobby, [...], 'could' was changed into 'would' at the conference following a British and an American proposal which, in regard to the substance, were identical. Hence, American and British concerns were met, noting that their courts had a large scope of operation, but did not exhaust it. The projected rule, however, could force them to do so" [references omitted].
See also Schlechtriem (1986), op. cit., at 62, where the author has commented that the effect of the particular change in the wording of CISG Art. 28 was to restrict "the possibilities of a judgment compelling specific performance."
15. The reference by the rule in CISG Art. 28 to a national court's "own law" leads to the important question whether the language of the provision invokes the domestic lex fori on specific performance or instead the proper law of the contract applicable by virtue of the rules of private international law. The answer to that question, however, has created little controversy; see Honnold (1999), op .cit., at 223-225.
"This rule positively determines the applicable national law. It does not refer to the norms of the international private law of the forum [...]. The rule itself rather has the character of a conflict-of-law rule, to put it more concretely, of a horizontal conflict-of-law rule, [...] even if only a very specific legal issue is connected. The law of the courts is to be invoked even when another law is the statute of the contract [...]. It is also not relevant whether what matters is material or procedural law."
"Even where absolute obstacles in performance would release a party from its obligations under domestic law, the remedy of specific performance remains intact under the Convention. Nevertheless, a court may not compel an impossible performance; Article 28 allows consideration to be given to the more extensive release that domestic law provides. But this interpretation should not open the road to domestic law whenever CISG gives a remedy unknown to the local law of the forum, such as the claim for repair in Article 46(3). 'Its own law', however, does not refer to the conflict rules of the forum, which would invoke perhaps a foreign law allowing enforcement of specific performance. A contrary interpretation would be contrary to the purpose of Article 28" [references omitted].
"Like UCC 2-716(2), [CISG] Article 45(2) permits appropriate damages in addition to performance. Under [CISG] Article 28, a court is not bound to require performance under the Convention unless it would do so under the domestic rules of the forum. Therefore, if a buyer seeks to require performance pursuant to [CISG] Article 46 and the forum is a U.S. state which has enacted the uniform Commercial Code, the seller is permitted to assert applicable UCC 2-716(1) defenses to an action for specific performance."
Regarding the seller's right to require performance by the buyer, under the Convention and the UCC, see Kritzer, ibid., at 218-219.
- Argentina 21 July 2002 Appellate Court (Cervecería y Malteria Paysandú S.A. v. Cervecería Argentina S.A.); case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/020721a1.html>. In this case a Uruguayan seller commenced proceedings against an Argentinian buyer for payment of the purchase price of the goods (malted barley). The appellate court, confirming the lower court's decision, found that CISG was applicable as the Argentinian rules of private international law led to the application of Argentinian law as the governing law of the contract, and then to the Convention by virtue of CISG Art. 1(1)(b). The court found that as the goods had been correctly delivered, the seller had complied with his obligations and that the buyer was therefore obliged to pay the agreed price. The court also held that according to Argentinian law, which was applicable in the case at hand, the alleged lack of conformity could only be ascertained according to a specific procedure of arbitration and expertise. As the buyer had not initiated such a procedure, its defenses based on the alleged lack of conformity had to be rejected. Thus, the court concluded that the seller was entitled to require payment of the purchase price, pursuant to CISG Arts. 28, 53, 59, 61 and 62 (as well as interest, pursuant to CISG Art. 78).
- United States 7 December 1999 Federal District Court [Illinois] (Magellan International v. Salzgitter Handel), presentation available at <http://cisgw3.law.pace.edu/cases/991207u1.html>. This court stated that the remedy of specific performance sought by the buyer in this case is generally available under the Convention (CISG Art. 46(1)), with the exception that a court is not bound to enter judgment for specific performance unless it would do so under its own law of contracts (CISG Art. 28). In this case, it was held that the U.S. Uniform Commercial Code was applicable and in accordance with UCC 2-716(1) (pursuant to which, specific performance may be granted when the buyer proves the difficulty of obtaining similar goods on the market), the court upheld the buyer's claim for specific performance.
- Switzerland 31 May 1996 Zürich Arbitration proceeding, presentation available online at <http://cisgw3.law.pace.edu/cases/960531s1.html>. This case concerned multi-party litigation and the CISG: the buyer was a group of companies operating aluminum casting works in Argentina and Hungary, and the seller was a Russian firm which produced raw aluminium (the "goods"). When the seller's new owners stopped all deliveries of raw aluminum to buyers, the buyers commenced proceedings in various fora, including this arbitral tribunal. The tribunal, dealing with the buyers' request for specific performance, stated: 348. The Arbitral Tribunal believes that this is primarily a question of the applicable law. It sees no basis for claims for specific performance under Russian law. The Vienna Convention does not provide for this. If the law applicable to the procedure (Swiss law? - again the Vienna Convention) applied, the Arbitral Tribunal sees no basis for specific performance either.
349. Apart from that the Arbitral Tribunal fails to see how specific performance could be an appropriate remedy for [buyers] in this case. They can hardly expect to be able, under the New York Convention or otherwise, to have an award enforced in Russia providing the [seller] must specifically perform its obligations under the various contracts for the next eight or ten years, producing the aluminum and delivering it to [buyers]."
350. "The Arbitral Tribunal will accordingly grant [buyers'] 'alternative' request for relief in the form of damages."
18. Kastely A.H., "Unification and Community: A Rhetorical Analysis of the Convention", 8 Northwestern Journal of International Law and Business (1988) 574-622, at 615, including supporting references to Gonzalez O., "Remedies Under the U.N. Convention for the International Sale of Goods", 2 Int'l Tax & Bus. Law (1984) 79-100 at 96-97 (1984) and Grigera Naón H., "The U.N. Convention on Contracts for the International Sale of Goods", in: Horn/Schmitthoff ed., The Transnational Law of International Commercial Transactions: Studies in Transnational Economic Law, Deventer: Kluwer (1982) vol. 2, 89-124, at 107.
"Although legal systems differ in the enforcement of claims for specific performance, [...] this regulation will not have much impact in actual practice, since parties in international trade normally shun such time-consuming procedures as judicial enforcement of specific performance and, therefore, promptly liquidate their unsuccessful transactions. On the other hand, where the goods are unique, such as art objects or specially made machines and installations, the remedy of specific performance should be enforceable in Anglo-American courts as well"[references omitted].
"[T]the right to specific performance of the contract in international trade in many instances is not practicable because assertion of that right, even if it exists without any doubt, is much more complicated than in the case of financial claims and of the right to avoid the contract. But this depends on the state of performance. In general, the realization of a transaction cannot be halted until there is a decision on the right to specific performance. The enforcement of a relevant decision entails additional problems. The authors of this commentary, therefore, agree in that the right to performance is rarely asserted."
"In principle, the right to require performance is the natural remedy in all continental legal systems. In practice, in the Western market economy legal systems if one party does not perform, the other party will not insist that he do so when it would be cheaper, easier and faster to procure the goods or services from some other party. If there are consequent additional costs, they can eventually be recovered as damages. The right to require performance is of practical importance where the party in breach is the only supplier, or the only supplier who can deliver in the requisite period of time. What is in principle the natural remedy in the continental Western market economy countries is the most important remedy in the planned economies of the socialist States of Eastern Europe. [...] Nevertheless, Article 28 may not have been of importance to a proper integration of the Convention into the domestic law in the civil law countries whereas it was of vital importance to the common law. This arises from the fact that in the civil law legal systems the statement as to the rights of the parties, including remedies for breach of contract, tends to be set forth in the Civil Code as a statement of the relationship between the parties themselves. The means of enforcing those rights in the courts is set forth in the law of civil procedure. The fact that the right to require performance by the other party may be absolute as a matter of civil law does not necessarily mean that the obligation of the court to enforce that right would be absolute as a matter of civil law procedure."
See also Henrik Lando, op. cit., where the author argues that specific performance is largely irrelevant as a remedy for the non-performance of an action in civil law countries and, furthermore, that the non-use of specific performance can be ascribed to the costs and difficulties of forcing the breaching party to perform an action.
"Finding a generally acceptable provision on the right to require performance has been difficult. However, it would be easy to exaggerate the practical importance of this 'right'. Enforcing this right is subject to the delays of litigation. Since a seller who is resisting performance will usually claim some justification, such as a dispute over required quality or breach by buyer in providing for payment, the buyer can seldom anticipate a final decision by the trial and appellate courts -- and eventual coerced performance -- within the period required by his business needs. Instead, he will supply his needs elsewhere; if damage results he can pursue this claim without interrupting his business activity. Hence, even in legal systems where specific performance is theoretically available in the normal cases, this remedy is seldom invoked in legal proceedings. In practical operation, the threat of a damage claim (and the loss of confidence by the buyer and others in the trade) seem to be more effective sanctions than the threat of an action compelling specific performance." UNCITRAL, Yearbook V, A/CN.9/SER.A/1974, p. 53, para. 127; Honnold J.O., Documentary History of he Uniform Law for International Sales, Kluwer (1989), p.130.
"In these Principles - 'court' includes an arbitral tribunal."
Comment 1. Courts and arbitral tribunals: "The importance of the Principles for the purpose of the settlement of disputes by means of arbitration has already been stressed (see . . . the comments on the Preamble). In order however to avoid undue heaviness of language, only the term 'court' is used in the text of the Principles, on the understanding that it covers arbitral tribunals as well as courts."
23. Further support for such inclusive interpretation of the word "court" is found in the Text of Secretariat Commentary on the Articles of the 1978 Draft.
24. See the Text of Secretariat Commentary on Art. 42 of the 1978 Draft [draft counterpart of CISG Art. 46]. Paragraphs (1) and (2) of Art. 42 of the 1978 Draft and CISG Art. 46 are virtually identical. A paragraph (3) was added to CISG Art. 46 at the 1980 Vienna Diplomatic Conference, in order to make express reference to the buyer's right to repair of non-conforming goods. See match-up of CISG Art. 46 with Art. 42 of the 1978 Draft, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-46.html>, which validates the relevancy of the Secretariat Commentary on CISG Art. 46.
Secretariat Comment 11: "Subject to the rule in paragraph (2) relating to the delivery of substitute goods, [and the rules on repair contained in paragraph (3) that was added to article 46 of the Official Text], this article does not allow the seller to refuse to perform on the grounds that the non-conformity was not substantial or that performance of the contract would cost the seller more than it would benefit the buyer. The choice is that of the buyer."
The legislative history of the Convention reveals that Professor Farnsworth (U.S.A delegate at the Vienna Diplomatic Conference) proposed that the seller should "be permitted to determine the manner in which he intended to remedy his failure to perform." This proposal was rejected. See OR 352, paras. 31-35 [OR = Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna 10 March 1980, A/CONF. 97/19].
25. For a detailed analysis of the seller's obligations under the Convention, see Schlechtriem P., "The Seller's Obligations Under the United Nations Convention on Contracts for the International Sale of Goods", in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 6, pp. 6-1 to 6-35; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem10.html>.
26. Regarding the obligations of the seller under the Convention, see the text of the Convention, Chapter II Obligations of the Seller (Art. 30), Sections I Delivery of the Goods and Handing Over of Documents (Arts. 31 - 34) and II Conformity of the Goods and Third Part Claims (Arts. 35 - 44). The buyer's remedies for seller's breach of these obligations are set forth in Section III Remedies for Breach of Contract by the Seller (Arts. 45 - 52).
"The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions."
Comment 1: "The non-mandatory character of the Convention is explicitly stated in article 5 [draft counterpart of CISG Art. 6]. The parties may exclude its application entirely by choosing a law other than this Convention to govern their contract. They may also exclude its application in part or derogate from or vary the effect of any of its provisions by adopting provisions in their contract providing solutions different from those in the Convention.
The text of CISG article 6 and Art. 5 of the 1978 Draft are identical. The Secretariat Commentary on Art. 5 of the 1978 Draft should therefore be relevant to the interpretation of CISG Art. 6; see match-up of CISG Art. 6 with Art. 5 of the 1978 Draft, at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-06.html>.
28. Note that CISG Art. 46 must be read in conjunction with CISG Art. 28; see Section II, supra. See also Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-62.html>, Comment 6, supra.
In addition to such limitations as may be present under the lex fori (CISG Art. 28) and which are contained in CISG Art. 46, the buyer's right to require specific performance may be subject to additional restrictions that ensue from the application of CISG Arts. 7, 9(1), 77, 85, 86, and 88(2). See Kritzer, op. cit., at 351-352, and accompanying references therein.
"Avoidance of the contract releases both parties from their obligations under it, subject to any damages which may be due [...]" [emphasis added].
[draft counterpart of CISG Art. 46], Comment 7.
Comment 4: "In addition to the right to require performance of the contract, article 41(2) [draft counterpart of CISG Art .45(2)] ensures that the buyer can recover any damages he may have suffered as a result of the delay in the seller's performance."
"This paragraph was added to specifically set forth the buyer's right to require repair if the goods do not conform to the contract (this was in response to concerns that under certain legal systems [the UCC, for example], this is not expressly provided for in the applicable sales code in situations in which the contract is silent on the subject."
See also Conference relevant colloquy: OR 335-337, paras. 11-45 [OR = Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna 10 March - 11 April 1980, A/CONF. 97/19].
"A court's power [...] to order specific performance may also include the power to require delivery of substitute goods if, for instance, seller was the sole source of supply and the goods it had delivered could not be repaired. Unlike the remedies provided in Articles 46(2) and (3) of the Convention, however, an order requiring repair or delivery of substitute goods [...] is presumably limited to situations falling within UCC 2-716(1) [...] that is, where the goods are unique or in the proper circumstances."
Comment 13. "If the buyer does require the seller to deliver substitute goods, he must be prepared to return the unsatisfactory goods to the seller. Therefore, article 67(1) [draft counterpart of CISG article 82(1)] provides that, subject to three exceptions set forth in article 67(2) [draft counterpart of CISG article 82(2)], "the buyer loses his [the] right . . . to require the seller to deliver substitute goods if it is impossible for him to make restitution of the goods substantially in the condition in which he received them."
"Even if the buyer is not allowed to require delivery of substitute goods, the seller may deliver such goods if this is more favourable to him (unless such substitution of goods is an unreasonable inconvenience to the buyer)."
Comment 12. "If the goods which have been delivered do not conform to the contract, the buyer may want the seller to deliver substitute goods which do conform. However, it could be expected that the costs to the seller of shipping a second lot of goods to the buyer and of disposing of the non-conforming goods already delivered might be considerably greater than the buyer's loss from having nonconforming goods."
34. For the definition of fundamental breach, see CISG Art. 25: A fundamental breach with regard to non-conformity of the goods occurs when the delivery of the defective goods substantially deprives the buyer of what the buyer is entitled to expect under the contract. For an analysis of the concept of fundamental breach and its application under the Convention, see Koch R., "The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods", in Pace ed., Review of the Convention on Contracts for the International Sale of Goods, 1998, Kluwer Law International (1999) 177 - 354; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/koch.html>.
A fundamental breach under CISG Art. 46(2) has to be determined in the same way as under article 49 and in accordance with the general definition given in CISG Art. 25.
35. In that case, the buyer must request substitute goods either in conjunction with a notice of non-conformity (CISG Arts. 39 and 43) or within a reasonable time thereafter (CISG Art. 46(2)).
In other words, the buyer forfeits his right by failure to give the required notice. The buyer is also entitled to set an additional period of time for performance in accordance with CISG Art. 47.
"If the buyer does not through immediate notice request a delivery of substitute goods or repair, he has to do so within a reasonable time. The CISG is based on the assumption that this rule serves the interests of both parties. Usually the buyer is interested in receiving conform[ing] goods as quickly as possible, and the seller wants to know the claims of the buyer. It should be avoided in any case that the buyer can speculate on rising market prices. What is appropriate here is therefore to fix a short time and by no means another two-year period as allowed for under Article 39, paragraph 2."
36. Also in that case, the buyer must make the request for repair either in conjunction with a notice of non-conformity (CISG Arts. 39 and 43) or within a reasonable time thereafter (CISG Art. 46(3)). In other words, the buyer forfeits his right by failure to give the required notice. The buyer is also entitled to set an additional period of time for performance in accordance with CISG Art. 47.
Comment 14: "In place of requesting the seller to perform pursuant to this article, the buyer may find it more advantageous to remedy the defective performance himself or to have it remedied by a third party. Article 73 [draft counterpart of CISG article 77], which requires the party who relies on a breach of contract to mitigate the loss, authorizes such measures to the extent that they are reasonable in the circumstances."
See also Enderlein & Maskow, op. cit., at 180, where the authors opine that the seller has an obligation to bear all costs involved in the repair of non-conforming goods: "Cure includes delivery of spare parts, and substitution of parts as well as repair itself." The authors, ibid., further note: "If there is a third party right or claim in respect of the goods, the cure may be such that the seller buys a patent or a license, or redeems a pledge or other right in title."
38. See Honnold (1999), op. cit., at 309, where the author informs that at the Diplomatic Conference it was noted that "some minor repairs could be made more readily by the buyer, particularly when the seller's facilities for repair are in a foreign country. The statutory language was designed to encourage a reasonable and flexible approach to such cases."
See also Kritzer, op. cit., at 348, where the author explains that the proviso of reasonableness in CISG Art. 46(3) was "so phrased to allow the courts to take into account the relative practicality of repairs for both buyer and seller" [references omitted and emphasis added].
A claim for repair may be unreasonable if there is no reasonable ratio between the costs involved and the price of the goods or if the seller is a dealer who does not have the means for repair [...], or if the buyer himself can repair the goods at lesser cost. Repair may not only be unreasonable; it may be technically impossible (this could, however, constitute a fundamental breach of contract). The nature of some goods is such as to exclude repair at all, e.g. in the case of agricultural products. A repair can also be impractical, e.g. as with throw-away goods. In such cases the buyer nevertheless retains the right to a reduction in price and compensation for damages" [references omitted].
It must also be noted that, in addition to being specifically mentioned in CISG Art. 46(3), reasonableness is a general principle of the Convention. For further views of commentators (Vilus, Schlechtriem, van der Velden, Maskow, Bonell and Honnold) on references to reasonableness in the CISG, go to <http://cisgw3.law.pace.edu/cisg/text/reason.html#view>.
40. Regarding the obligations of the buyer under the Convention, see the text of the Convention, Chapter III, Obligations of the Buyer (Art. 53), Sections I Payment of the Price (Arts. 54 - 59) and II Taking Delivery (Art. 60). The seller's remedies for buyer's breach of the latter's corresponding obligations are set forth in the Convention Section III Remedies for Breach of Contract by Buyer (Arts. 61 - 65).
41. See CISG Art. 6, which establishes the primacy of the contractual provisions over the Convention.
42. The seller's right to require performance of the other party's obligations are subject to the concession to domestic law provided by CISG Art. 28; see Section II, supra. See also Secretariat Commentary on Art. 58 of the 1978 Draft [draft counterpart of CISG Art. 62], Comment 6.
The same restriction applies to the corresponding remedy available to the buyer; see Sections II and III, supra.
"[T]he words 'judgement for specific performance' suggest that the provision does not apply to a suit in which the seller tenders the goods to the recalcitrant buyer and claims the price. Such a suit, traditionally one at law rather than in equity, is not commonly thought of as one for 'specific performance', even though it gives the seller relief that might accurately be described as 'specific'."
"[J]urists of common law persuasion do not think of an action to recover the price as comparable to an action to require delivery of the goods. But one cannot be tied to local terminology in construing the Convention."
"Whether an action by the seller for the price is a form of specific performance is controversial. In the end, it is merely a problem of denomination, because no one doubts that the action is enforceable against the buyer"[references omitted].
For a detailed analysis of the issue, see Ziegel J.S., "The Remedial Provisions in the Vienna Sales Convention: Some Common Law Perspectives", in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 9, pp. 9-1 to 9-43; also available at <http://cisgw3.law.pace.edu/cisg/biblio/ziegel6.html>.
45. There is hardly any case law on the seller's right to require buyer to take delivery of the goods. For a general statement regarding inter alia buyer's refusal to take delivery, see Germany 8 February 1995 Oberlandesgericht [Appellate Court] München; CLOUT case No. 133; case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/950208g1.html> (case concerned contract for the sale of eleven cars).
Comment 9. In some cases the seller may be authorized or required to substitute his own performance for that which the buyer has failed to do. Article 61 [draft counterpart of CISG Art. 65] provides that in a sale by specification, if the buyer fails to make the specifications required on the date requested or within a reasonable time after receipt of a request from the seller, the seller may make the specifications himself. Similarly, if the buyer is required by the contract to name a vessel on which the goods are to be shipped and fails to do so by the appropriate time article 73 [draft counterpart of CISG Art. 77], which requires the party who relies on a breach of contract to mitigate losses, may authorize the seller to name the vessel so as to minimize the buyer's losses."
Comment 2. "This article recognizes that the seller's primary concern is that the buyer pay the price at the time it is due. Therefore, if the price is due under the terms of [CISG Art. 58 and 59] and the buyer does not pay it, this article authorizes the seller to require the buyer to pay it."
CISG article 62 and 1978 Draft Art. 58 are identical except for the reference to "this requirement" rather than "such requirement"; see match-up of CISG Art. 62 with Art. 58 of the 1978 Draft, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-62.html>. The Secretariat Commentary on Art. 58 of the 1978 Draft should therefore be relevant to the interpretation of CISG Art. 62.
Enforcing the buyer's obligation to pay the price resembles an action to collect a debt and it may give seller the right to recover the goods under CISG Art. 81(2). See Honnold, (1999), op. cit., 378 - 379.
Cf. U.S.A. Uniform Commercial Code 2-709 Action for the Price. Section 2-709(1)(a), which provides for recovery of the price when goods have been accepted by buyer.
48. In that case, the seller's right to compel the consummation of the transaction including receipt of the goods may not be so straight-forward. When the seller remains in possession of the goods other provisions of the Convention (CISG Arts. 85 - 88, provisions regarding preservation of the goods) may further restrict his right to compel the buyer to take delivery and pay the price. See Honnold, (1999), op. cit., 379 - 383.
Cf. U.S.A. Uniform Commercial Code Section 2-709(1)(b), which provides that a seller in possession of the goods may recover the price from the buyer when the seller is unable after reasonable efforts to resell the goods at a reasonable price.
49. See Section III, supra.
50. Further possible limitations on the remedy CISG Art. 62 provides seller to require performance of the buyer's obligations have been identified in relation to other provisions of her Convention (Arts. 7, 77, 78 and 79); see Kritzer, op. cit., 422.
"Under Article 79(1) a party is not liable for failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control. According to Article 79(5), nothing in that Article prevents either party from exercising any right other than to claim damages. It would seem that the seller is entitled to require payment even if the buyer is exempted from damages. The implications of this are not all that clear. Presenting such a requirement may affect the seller's right to interest on the price if under national law such a demand is necessary. Since interest, according to the Convention [Article 78], does not fall under the heading of damages, the provision in Article 79(5) would also apply to interest."
Regarding CISG Art. 77 [Mitigation of damages], which provides that "a party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss", see Secretariat Commentary on Art. 73 of the 1978 Draft [draft counterpart of CISG Art. 77], available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-77.html>.
Comment 3. "The sanction provided by article 73 [draft counterpart of CISG Art. 77] against a party who fails to mitigate his loss only enables the other party to claim a reduction in the damages. It does not affect a claim for the price by the seller pursuant to article 58 [draft counterpart of CISG Art. 62] or a reduction in the price by the buyer pursuant to article 46 [draft counterpart of CISG Art. 50].
Comment 11: "[T]his article does not allow the seller to refuse to perform on the grounds that the non-conformity was not substantial or that performance of the contract would cost the seller more than it would benefit the buyer. The choice is that of the buyer" [emphasis added].
Also, mitigation principles do not appear to require the injured party to choose the remedy which would be least expensive to the party in breach. A qualification to this conclusion could, however, apply to choice of damages remedies, i.e., as between Art. 75 and Art. 76 [provisions regarding the measurement of damages when contract has been avoided]. Language contained in the 1976 Draft of these articles that permitted the injured party to choose the damages remedy most beneficial to himself was changed. UNCITRAL Yearbook VIII, A/CN.9/SER.A/1977, pp. 161 and 59-60, paras. 472 and 489. Prior to that change, there was a Secretariat Commentary which stated that this was permissible. UNCITRAL Yearbook VII, A/CN.9/SER.A/1976, p. 137. However, with that change, this portion of that Secretariat Commentary was deleted.
Comment 11 [Inconsistent Acts by the Seller] "Article 58 [draft counterpart of CISG Art. 62] also provides that in order for the seller to exercise the right to require performance of the contract he must not have acted inconsistently with that right, e.g. by avoiding the contract under article 60 [draft counterpart of CISG Art. 64]."
The seller is also deprived of the right to specific performance if he has fixed an additional period of time for performance (CISG Art. 63). See the UNCITRAL Digest of case law on CISG Art. 62, op. cit., para 3.
"If the seller has fixed an additional period of time for payment, during this period he may not, under Article 63(2), resort to any remedy for breach of contract. It may be asked whether he still may require the price to be paid during this period. It seems that fixing an additional period of time for payment of the price is one way of requiring payment. It is difficult to see any reason why such a requirement may not be repeated during the fixed period."
52. For the purposes of CISG Art. 62, obligee denotes seller and obligor denotes buyer.
53. This rule is said to "reflect a generally accepted principle that payment of money which is due under a contractual obligation can always be demanded and, if the demand is not met, enforced by legal action before a court." See Official Comment on UP Art. 7.2.1. The Official Commentary on UNIDROIT Principles, available online both at <http://cisgw3.law.pace.edu/cisg/principles/uni46.html#official> and <http://cisgw3.law.pace.edu/cisg/principles/uni62.html#official>.
The Official Commentary also makes clear that, in exceptional circumstances, "the right to require payment of the price of the goods or services to be delivered or rendered may be excluded. This is in particular the case where a usage [UP. Art. 1.8] requires a seller to resell goods which are neither accepted nor paid for by the buyer" [emphasis added]. Ibid.
54. See Section III, supra.
55. See Section IV, supra.
"In accordance with the general principle of the binding character of the contract (see Art. 1.3), each party should as a rule be entitled to require performance by the other party not only of monetary, but also of non-monetary obligations, assumed by that party. While this is not controversial in civil law countries, common law systems allow enforcement of non-monetary obligations only in special circumstances.
Following the basic approach of CISG (Art. 46) this article adopts the principle of specific performance, subject to certain qualifications.
The principle is particularly important with respect to contracts other than sales contracts. Unlike the obligation to deliver something, contractual obligations to do something or to abstain from doing something can often be performed only by the other contracting party itself. In such cases the only way of obtaining performance from a party who is unwilling to perform is by enforcement."
"While CISG provides that 'a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by [the] Convention' (Art. 28), under the Principles specific performance is not a discretionary remedy, i.e. a court must order performance, unless one of the exceptions laid down in the present article applies."
a.	Impossibility. "A performance which is impossible in law or in fact, cannot be required (sub-para. (a)). However, impossibility does not nullify a contract: other remedies may be available to the aggrieved party. See Arts. 3.3 and 7.1.7(4).
The refusal of a public permission which is required under the applicable domestic law and which affects the validity of the contract renders the contract void (see Art. 6.1.17(1)), with the consequence that the problem of enforceability of the performance cannot arise. When however the refusal merely renders the performance impossible without affecting the validity of the contract (see Art. 6.1.17(2)), sub-para. (a) of this article applies and performance cannot be required."
Cf. CISG Art. 4(a), which provides that, except as otherwise expressly provided in the Convention, the CISG is "not concerned with the validity of the contract or of any of its provisions or of any usage".
b.	Unreasonable burden. "In exceptional cases, particularly when there has been a drastic change of circumstances after the conclusion of a contract, performance, although still possible, may have become so onerous that it would run counter to the general principle of good faith and fair dealing (Art. 1.7) to require it." See also Illustration 1, ibid.
c.	Replacement transaction. "Many goods and services are of a standard kind, i.e. the same goods or services are offered by many suppliers. If a contract for such staple goods or standard services is not performed, most customers will not wish to waste time and effort extracting the contractual performance from the other party. Instead, they will go into the market, obtain substitute goods or services and claim damages for non-performance. In view of this economic reality sub-para. (c) excludes specific performance whenever the party entitled to performance may reasonably obtain performance from another source. That party may terminate the contract and conclude a replacement transaction. See Art. 7.4.5. The word 'reasonably' indicates that the mere fact that the same performance can be obtained from another source is not in itself sufficient, since the aggrieved party could not in certain circumstances reasonably be expected to have recourse to an alternative supplier." See also Illustration 2, ibid.
d.	Performance of an exclusively personal character. "Where a performance has an exclusively personal character, enforcement would interfere with the personal freedom of the obligor. Moreover, enforcement of a performance often impairs its quality. The supervision of a very personal performance may also give rise to insuperable practical difficulties, as is shown by the experience of countries which have saddled their courts with this kind of responsibility. For all these reasons, sub-para. (d) excludes enforcement of performance of an exclusively personal character. The precise scope of this exception depends essentially upon the meaning of the phrase 'exclusively personal character'. The modern tendency is to confine this concept to performances of a unique character. The exception does not apply to obligations undertaken by a company. Nor are ordinary activities of a lawyer, a surgeon or an engineer covered by the phrase for they can be performed by other persons with the same training and experience. A performance is of an exclusively personal character if it is not delegable and requires individual skills of an artistic or scientific nature or if it involves a confidential and personal relationship. The performance of obligations to abstain from doing something does not fall under sub-para. (d)." See also Illustrations 3 and 4, ibid.
e.	Request within reasonable time. "Performance of a contract often requires special preparation and efforts by the obligor. If the time for performance has passed but the obligee has failed to demand performance within a reasonable time, the obligor may be entitled to assume that the obligee will not insist upon performance. If the obligee were to be allowed to leave the obligor in a state of uncertainty as to whether performance will be required, the risk might arise of the obligee's speculating unfairly, to the detriment of the obligor, upon a favourable development of the market. For these reasons sub-para. (e) excludes the right to performance if it is not required within a reasonable time after the obligee has become, or ought to have become, aware of the non-performance. For a similar rule concerning the loss of the right to terminate the contract, see Art. 7.3.2(2)."
Comment 1. Aggrieved party entitled to change of remedy. "This article addresses a problem which is peculiar to the right to require performance. The aggrieved party may abandon the remedy of requiring performance of a non-monetary obligation and opt instead for another remedy or remedies. This choice is permitted on account of the difficulties usually involved in the enforcement of non-monetary obligations. Even if the aggrieved party first decides to invoke its right to require performance, it would not be fair to confine that party to this single option. The non-performing party may subsequently become unable to perform, or its inability may only become evident during the proceedings."
Comment 4. Time limits. "In the event of a subsequent change of remedy the time limit provided for a notice of termination under Art. 7.3.2(2) must, of course, be extended accordingly. The reasonable time for giving notice begins to run, in the case of a voluntary change of remedy, after the aggrieved party has or ought to have become aware of the non-performance at the expiry of the additional period of time available to the non-performing party to perform; and in the case of para. (2) of this article, it will begin to run after the aggrieved party has or ought to have become aware of the unenforceability of the decision or award requiring performance."
Comment 2. Voluntary change of remedy. "Two situations must be addressed. In the first case, the aggrieved party has required performance but changes its mind before execution of a judgment in its favour, perhaps because it has discovered the non-performing party's inability to perform. The aggrieved party now wishes to invoke one or more other remedies. Such a voluntary change of remedy can only be admitted if the interests of the non-performing party are duly protected. It may have prepared for performance, invested effort and incurred expense. For this reason para. (1) of this article makes it clear that the aggrieved party is entitled to invoke another remedy only if it has not received performance within a fixed period or otherwise within a reasonable period of time. How much additional time must be made available to the non-performing party for performance depends upon the difficulty which the performance involves. The non-performing party has the right to perform provided it does so before the expiry of the additional period."
Comment 3. Unenforceable decision. "Para. (2) addresses the second and less difficult case in which the aggrieved party has attempted without success to enforce a judicial decision or arbitral award directing the non-performing party to perform. In this situation it is obvious that the aggrieved party may immediately pursue other remedies."
Comment 3. Restrictions. "The right to require cure of a defective performance is subject to the same limitations as the right to performance in general. Most of the exceptions to the right to require performance that are set out in Art. 7.2.2 are easily applicable to the various forms of cure of a defective performance. Only the application of sub-para. (b) calls for specific comment. In many cases involving small, insignificant defects, both replacement and repair may involve 'unreasonable effort or expense' and are therefore excluded. See also Illustration, ibid.
Comment 1. Right to performance in case of defective performance. "This article applies the general principles of Arts. 7.2.1 and 7.2.2 to a special, yet very frequent, case of non-performance, i.e. defective performance. For the sake of clarity the article specifies that the right to require performance includes the right of the party who has received a defective performance to require cure of the defect."
Comment 2. Cure of defective performance. "Under the Principles cure denotes the right both of the non-performing party to correct its performance (Art. 7.1.4) and of the aggrieved party to require such correction by the non-performing party. The present article deals with the latter right. The article expressly mentions two specific examples of cure, namely repair and replacement. Repairing defective goods (or making good an insufficient service) is the most common case and replacement of a defective performance is also frequent. The right to require repair or replacement may also exist with respect to the payment of money, for instance in case of an insufficient payment or of a payment in the wrong currency or to an account different from that agreed upon by the parties."
Comment 2. "Apart from repair and replacement there are other forms of cure, such as the removal of the rights of third persons over goods or the obtaining of a necessary public permission."
Comment 6. Penalties imposed by arbitrators. "Since according to Art. 1.10 'court' includes an arbitral tribunal, the question arises of whether arbitrators might also be allowed to impose a penalty. While a majority of legal systems seems to deny such a power to arbitrators, some modern legislation and recent court practice have recognised it. This solution, which is in keeping with the increasingly important role of arbitration as an alternative means of dispute resolution, especially in international commerce, is endorsed by the Principles. Since the execution of a penalty imposed by arbitrators can only be effected by, or with the assistance of, a court, appropriate supervision is available to prevent any possible abuse of the arbitrators' power."
Comment 2. Imposition of penalty at discretion of the court. "The use of the word 'may' in para. (1) of this article makes it clear that the imposition of a penalty is a matter of discretion for the court. Its exercise depends upon the kind of obligation to be performed. In the case of money judgments, a penalty should be imposed only in exceptional situations, especially where speedy payment is essential for the aggrieved party. The same is true for obligations to deliver goods. Obligations to pay money or to deliver goods can normally be easily enforced by ordinary means of execution. By contrast, in the case of obligations to do or to abstain from doing something, which moreover cannot easily be performed by a third person, enforcement by means of judicial penalties is often the most appropriate solution."
Comment 1. Judicially imposed penalty. "Experience in some legal systems has shown that the threat of a judicially imposed penalty for disobedience is a most effective means of ensuring compliance with judgments ordering the performance of contractual obligations. Other systems, on the contrary, do not provide for such sanctions because they are considered to constitute an inadmissible encroachment upon personal freedom. The present article takes a middle course by providing for monetary but not for other forms of penalties, applicable to all kinds of orders for performance including those for payment of money."
Comment 5. Form [and Procedure]. "A judicial penalty may be imposed in the form of a lump sum payment or of a payment by instalments."
Comment 3. Beneficiary. "Legal systems differ as to the question of whether judicial penalties should be paid to the aggrieved party, to the State, or to both. Some systems regard payment to the aggrieved party as constituting an unjustified windfall benefit which is contrary to public policy. While rejecting this latter view and indicating the aggrieved party as the beneficiary of the penalty, the first sentence of para. (2) of this article expressly mentions the possibility of mandatory provisions of the law of the forum not permitting such a solution and indicating other possible beneficiaries of judicial penalties."
Comment 4. Judicial penalties distinguished from damages and from agreed payment for non-performance. The second sentence of para. (2) makes it clear that a judicial penalty paid to the aggrieved party does not affect its claim for damages. Payment of the penalty is regarded as compensating the aggrieved party for those disadvantages which cannot be taken into account under the ordinary rules for the recovery of damages. Moreover, since payment of damages will usually occur substantially later than payment of a judicial penalty, courts may to some degree be able, in measuring the damages, to take the payment of the penalty into account. Judicial penalties are moreover to be distinguished from agreed payments for non-performance which are dealt with in Art. 7.4.13, although the latter fulfil a function similar to that of the former. If the court considers that the contractual stipulation of the payment of a sum in case of non-performance already provides a sufficient incentive for performance, it may refuse to impose a judicial penalty."
Comment 5. [Form and] Procedure. "The procedure relating to the imposition of a judicial penalty is governed by the lex fori."
Comment 7. Recognition and enforcement of decisions imposing penalties. "Attention must be drawn to the problems of recognition and enforcement, in countries other than the forum State, of judicial decisions and of arbitral awards imposing penalties. Special rules on this matter are sometimes to be found in national law and to some extent in international treaties."
This article reflects the generally accepted principle that payment of money which is due under a contractual obligation can always be demanded and, if the demand is not met, enforced by legal action before a court. The term "require" is used in this article to cover both the demand addressed to the other party and the enforcement,whenever necessary, of such a demand by a court.
The article applies irrespective of the currency in which payment is due or may be made. In other words, the right of the obligee to require payment extends also to cases of payment in a foreign currency. For the determination of the currency in which a monetary obligation is due or payment may be made, see Arts. 6.1.9, 6.1.10 and 7.4.12.
Exceptionally, the right to require payment of the price of the goods or services to be delivered or rendered may be excluded. This is in particular the case where a usage requires a seller to resell goods which are neither accepted nor paid for by the buyer. For the applicability of usages, see Art. 1.8.
In accordance with the general principle of the binding character of the contract (see Art. 1.3), each party should as a rule be entitled to require performance by the other party not only of monetary, but also of non-monetary obligations, assumed by that party. While this is not controversial in civil law countries, common law systems allow enforcement of non-monetary obligations only in special circumstances.
The principle is particularly important with respect to contracts other than sales contracts. Unlike the obligation to deliver something, contractual obligations to do something or to abstain from doing something can often be performed only by the other contracting party itself. In such cases the only way of obtaining performance from a party who is unwilling to perform is by enforcement.
While CISG provides that "a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by [the] Convention" (Art. 28), under the Principles specific performance is not a discretionary remedy, i.e. a court must order performance, unless one of the exceptions laid down in the present article applies.
A performance which is impossible in law or in fact, cannot be required (sub-para. (a)). However, impossibility does not nullify a contract: other remedies may be available to the aggrieved party. See Arts. 3.3 and 7.1.7(4).
The refusal of a public permission which is required under the applicable domestic law and which affects the validity of the contract renders the contract void (see Art. 6.1.17(1)), with the consequence that the problem of enforceability of the performance cannot arise.When however the refusal merely renders the performance impossible without affecting the validity of the contract (see Art. 6.1.17(2)), sub-para. (a) of this article applies and performance cannot be required.
In exceptional cases, particularly when there has been a drastic change of circumstances after the conclusion of a contract, performance, although still possible, may have become so onerous that it would run counter to the general principle of good faith and fair dealing (Art. 1.7) to require it.
1. An oil tanker has sunk in coastal waters in a heavy storm.Although it would be possible to lift the ship from the bottom of the sea, the shipper may not require performance of the contract of carriage if this would involve the shipowner in expense vastly exceeding the value of the oil. See Art. 7.2.2(b).
The words "where relevant, enforcement" take account of the fact that in common law systems it is the courts and not the obligees who supervise the execution of orders for specific performance. As a consequence, in certain cases, especially those involving performances extended in time, courts in those countries refuse specific performance if supervision would impose undue burdens upon courts.
As to other possible consequences arising from drastic changes of circumstances amounting to a case of hardship, see Arts. 6.2.1 et seq.
Many goods and services are of a standard kind, i.e. the same goods or services are offered by many suppliers. If a contract for such staple goods or standard services is not performed, most customers will not wish to waste time and effort extracting the contractual performance from the other party. Instead, they will go into the market, obtain substitute goods or services and claim damages for non-performance.
In view of this economic reality sub-para. (c) excludes specific performance whenever the party entitled to performance may reasonably obtain performance from another source. That party may terminate the contract and conclude a replacement transaction. See Art. 7.4.5.
The word "reasonably" indicates that the mere fact that the same performance can be obtained from another source is not in itself sufficient, since the aggrieved party could not in certain circumstances reasonably be expected to have recourse to an alternative supplier.
2. A, situated in a developing country where foreign exchange is scarce, buys a machine of a standard type from B in Tokyo. In compliance with the contract, A pays the price of US $100,000 before delivery. B does not deliver. Although A could obtain the machine from another source in Japan, it would be unreasonable, in view of the scarcity and high price of foreign exchange in its home country, to require A to take this course. A is therefore entitled to require delivery of the machine from B.
Where a performance has an exclusively personal character, enforcement would interfere with the personal freedom of the obligor. Moreover, enforcement of a performance often impairs its quality. The supervision of a very personal performance may also give rise to insuperable practical difficulties, as is shown by the experience of countries which have saddled their courts with this kind of responsibility. For all these reasons, sub-para. (d) excludes enforcement of performance of an exclusively personal character.
The precise scope of this exception depends essentially upon the meaning of the phrase "exclusively personal character". The modern tendency is to confine this concept to performances of a unique character. The exception does not apply to obligations undertaken by a company. Nor are ordinary activities of a lawyer, a surgeon or an engineer covered by the phrase for they can be performed by other persons with the same training and experience. A performance is of an exclusively personal character if it is not delegable and requires individual skills of an artistic or scientific nature or if it involves a confidential and personal relationship.
3. An undertaking by a firm of architects to design a row of 10 private homes can be specifically enforced as the firm can delegate the task to one of the partners or employ an outside architect to perform it.
4. By contrast, an undertaking by a world-famous architect to design a new city hall embodying the idea of a city of the 21st century cannot be enforced because it is highly unique and calls for the exercise of very special skills.
The performance of obligations to abstain from doing something does not fall under sub-para. (d).
Performance of a contract often requires special preparation and efforts by the obligor. If the time for performance has passed but the obligee has failed to demand performance within a reasonable time, the obligor may be entitled to assume that the obligee will not insist upon performance. If the obligee were to be allowed to leave the obligor in a state of uncertainty as to whether performance will be required, the risk might arise of the obligee's speculating unfairly, to the detriment of the obligor, upon a favourable development of the market.
For these reasons sub-para. (e) excludes the right to performance if it is not required within a reasonable time after the obligee has become, or ought to have become, aware of the non-performance.
For a similar rule concerning the loss of the right to terminate the contract, see Art. 7.3.2(2).
This article applies the general principles of Arts. 7.2.1 and 7.2.2 to a special, yet very frequent, case of non-performance, i.e. defective performance. For the sake of clarity the article specifies that the right to require performance includes the right of the party who has received a defective performance to require cure of the defect.
Under the Principles cure denotes the right both of the non-performing party to correct its performance (Art. 7.1.4) and of the aggrieved party to require such correction by the non-performing party. The present article deals with the latter right.
Most of the exceptions to the right to require performance that are set out in Art. 7.2.2 are easily applicable to the various forms of cure of a defective performance. Only the application of sub-para. (b) calls for specific comment. In many cases involving small, insignificant defects, both replacement and repair may involve "unreasonable effort or expense" and are therefore excluded.
A new car is sold which has a small painting defect which decreases the value of the car by [0.01%] of the purchase price. Repainting would cost [0.5%] of the purchase price. A claim for repair is excluded but the buyer is entitled to require a reduction in the purchase price.
The present article takes a middle course by providing for monetary but not for other forms of penalties, applicable to all kinds of orders for performance including those for payment of money.
The use of the word "may" in para. (1) of this article makes it clear that the imposition of a penalty is a matter of discretion for the court. Its exercise depends upon the kind of obligation to be performed. In the case of money judgments, a penalty should be imposed only in exceptional situations, especially where speedy payment is essential for the aggrieved party. The same is true for obligations to deliver goods. Obligations to pay money or to deliver goods can normally be easily enforced by ordinary means of execution. By contrast, in the case of obligations to do or to abstain from doing something, which moreover cannot easily be performed by a third person, enforcement by means of judicial penalties is often the most appropriate solution.
While rejecting this latter view and indicating the aggrieved party as the beneficiary of the penalty, the first sentence of para. (2) of this article expressly mentions the possibility of mandatory provisions of the law of the forum not permitting such a solution and indicating other possible beneficiaries of judicial penalties.
The second sentence of para. (2) makes it clear that a judicial penalty paid to the aggrieved party does not affect its claim for damages. Payment of the penalty is regarded as compensating the aggrieved party for those disadvantages which cannot be taken into account under the ordinary rules for the recovery of damages. Moreover, since payment of damages will usually occur substantially later than payment of a judicial penalty, courts may to some degree be able, in measuring the damages, to take the payment of the penalty into account.
Judicial penalties are moreover to be distinguished from agreed payments for non-performance which are dealt with in Art. 7.4.13, although the latter fulfil a function similar to that of the former. If the court considers that the contractual stipulation of the payment of a sum in case of non-performance already provides a sufficient incentive for performance, it may refuse to impose a judicial penalty.
Since according to Art. 1.10 "court" includes an arbitral tribunal, the question arises of whether arbitrators might also be allowed to impose a penalty.
While a majority of legal systems seems to deny such a power to arbitrators, some modern legislation and recent court practice have recognised it. This solution, which is in keeping with the increasingly important role of arbitration as an alternative means of dispute resolution, especially in international commerce, is endorsed by the Principles. Since the execution of a penalty imposed by arbitrators can only be effected by, or with the assistance of, a court, appropriate supervision is available to prevent any possible abuse of the arbitrators' power.
In the first case, the aggrieved party has required performance but changes its mind before execution of a judgment in its favour, perhaps because it has discovered the non-performing party's inability to perform. The aggrieved party now wishes to invoke one or more other remedies. Such a voluntary change of remedy can only be admitted if the interests of the non-performing party are duly protected. It may have prepared for performance, invested effort and incurred expense. For this reason para. (1) of this article makes it clear that the aggrieved party is entitled to invoke another remedy only if it has not received performance within a fixed period or otherwise within a reasonable period of time.
For similar conditions which restrict the right of termination in case of delay in performance, see Art. 7.3.2(2).
Para. (2) addresses the second and less difficult case in which the aggrieved party has attempted without success to enforce a judicial decision or arbitral award directing the non-performing party to perform. In this situation it is obvious that the aggrieved party may immediately pursue other remedies.
In the event of a subsequent change of remedy the time limit provided for a notice of termination under Art. 7.3.2(2) must, of course, be extended accordingly. The reasonable time for giving notice begins to run, in the case of a voluntary change of remedy, after the aggrieved party has or ought to have become aware of the non-performance at the expiry of the additional period of time available to the non-performing party to perform; and in the case of para. (2) of this article, it will begin to run after the aggrieved party has or ought to have become aware of the unenforceability of the decision or award requiring performance.

References: Art. 28
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Art. 46
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