Friday, 12 November 2010

The Controversy surrounding the United Nations Convention on Contract for the International Sale of Goods (CISG) 1980

The CISG is not to be confused with the English Act of the Sales of Goods 1979.  One of its milestone objective is the doctrine of fundamental breach found under article 25 . Most articles in the Convention tend to set out guidelines as to what a remedy for a fundamental breach of contract would be. For example, articles 49 and 61 state that avoidance of the contract is a necessary precondition for breach, whilst article 46 deals with the buyer being entitled to delivery of substitute goods if contract is breached by the seller. Nevertheless, the evident flaw is to be found in these two articles; articles 74 and 25. Article 74 provides that in the event of a mere non-fundamental breach, the wronged party will be entitled to claim damages. Now, it would of course, be expected that a definition of what constitutes a fundamental breach and non-fundamental, be given in the Convention for differentiation purposes but this is not the case. In fact, all it as much as does in article 25 is give the definition for fundamental breach. The question is, what then is a non-fundamental breach? It is undeniable that this is an inherent problem which hampers the uniformity of interpretation urged by article 7 as  logically, domestic interpretations have become the next port of call. Legal scholars have repeatedly urged avoidance of domestic elucidations of the law given the fact that there are civil and common law jurisdictions all over the globe. However, as one may rightly guess, there is undoubtedly still the risk of conflicting decisions amongst various international courts like European Court of Justice and the International Court of Justice.

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