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Global Sales Law Prof. Dr. Ingeborg Schwenzer University of Basel Switzerland Global Sales Law Prof. Dr. Ingeborg Schwenzer University of Basel Switzerland

Introduction • • • Development of global trade 2010: 9, 5% increase (WTO) 2000 Introduction • • • Development of global trade 2010: 9, 5% increase (WTO) 2000 -2008: average annual growth 5% Focus: China, Brazil, Russia, Africa 2007/08: Africa annual growth: exports: 18/28%, imports: 23/27% • Different laws = obstacle to trade

Introduction • Different sets of sales law • Domestic: SGA, CC, others • Regional: Introduction • Different sets of sales law • Domestic: SGA, CC, others • Regional: OHADA Uniform Act on General Commercial Law (UAGCL), general contract law • Global: UN Convention on Contracts for the International Sale of Goods (CISG), UNIDROIT Principles of International Commercial Contracts

Introduction • • • History of Unification of sales law 1920 s: Ernst Rabel Introduction • • • History of Unification of sales law 1920 s: Ernst Rabel 1960 s: Hague Conventions ULIS/ULF 1980: Vienna Conference CISG 1988: Entering into force 2011: 76 member states covering 80% of world trade • Africa: 9 member states, only two OHADA states

Introduction • • Structure of the CISG Part I: Sphere of application Part II: Introduction • • Structure of the CISG Part I: Sphere of application Part II: Formation of the contract Part III: Substantive rules for the sale of goods, incl. duties of the parties, remedies, risk of loss • Part IV: Final provisions – international public law

Part I: Sphere of application • • • Application and ambit of CISG (Art. Part I: Sphere of application • • • Application and ambit of CISG (Art. 1 -6) CISG itself determines ist applicability Art. 1(1) CISG: different states (Art. 10 CISG) Art. 1(1)(a) CISG: both states are member states Art. 1(1)(b) CISG: rules of private international law lead to member state • Example China – Cameroon • Application by arbitral tribunals

Part I: Sphere of application • • Party autonomy Art. 6 CISG Opting out Part I: Sphere of application • • Party autonomy Art. 6 CISG Opting out in whole or in part Choice of domestic law, f. e. Swiss law Litigating under the wrong law

Part I: Sphere of application • • Ambit of the CISG Sale of goods Part I: Sphere of application • • Ambit of the CISG Sale of goods contracts Barter contracts, back-to-back-sale Distribution agreements Art. 3 CISG: work and labour, services Art. 3(1) CISG: manufacture of goods Art. 3(2) CISG: mixed contracts (factory)

Part I: Sphere of application • Ambit of the CISG • Goods: factory, machine, Part I: Sphere of application • Ambit of the CISG • Goods: factory, machine, food, shoes, clothes, cars, circus elephant • Documents representing the goods • Art. 2 CISG exceptions • Art. 2(a) CISG: consumer sales • Art. 2(b)(c) CISG: auctions, bancruptcy • Art. 2(d)(e)(f) CISG: certain goods

Part I: Sphere of application • Substantive ambit • Art. 4 CISG: Formation, rights Part I: Sphere of application • Substantive ambit • Art. 4 CISG: Formation, rights and obligations of parties • Art. 4(a) CISG: validity questions • Public policy, mandatory rules, capacity of the parties, fraud, mistake? • Art. 4(b) CISG: transfer of title, retention of title, bona fide purchase

Part I: Sphere of application • Substantive ambit • Art. 5 CISG: Compensation for Part I: Sphere of application • Substantive ambit • Art. 5 CISG: Compensation for personal injury and death • Compensation for damage to property • Limits of the CISG (external gaps) • Agency, assignment, transfer of debts, joint debtors, limitation of actions, set-off? • Form requirements: Art. 11 CISG

Part I: Sphere of application • Art. 7 CISG: Interpretation of the CISG • Part I: Sphere of application • Art. 7 CISG: Interpretation of the CISG • Art. 7(1) CISG: international character, promotion of uniformity, good faith • Art. 7(2) CISG: gap-filling • General principles of CISG (party autonomy, burden of proof, stamdard of proof, set-off) • PICC?

Part I: Sphere of application • Art. 8 CISG: Interpretation of party statements and Part I: Sphere of application • Art. 8 CISG: Interpretation of party statements and conduct • Art. 8(1) CISG: true intention of parties • Art. 8(2) CISG: reasonable person • Art. 8(3) CISG: circumstances to be considered • Art. 9(1) CISG: usages and practices • Art. 9(2) CISG: international usages

Part I: Sphere of application • Art. 11 CISG: freedom of form • Formation, Part I: Sphere of application • Art. 11 CISG: freedom of form • Formation, Art. 29(1): modification • Excluded: procedural requirements, pariol evidence rule, consideration, cause, statute of frauds • Art. 12 CISG: reservation • Agreed form, Art. 13 CISG: writing • Art. 29(2) CISG: modification

Part II: Formation of the contract • • General remarks Art. 14 et seq. Part II: Formation of the contract • • General remarks Art. 14 et seq. CISG antiquated Offer-acceptance mechanism e-commerce, UNCITRAL Concention 2004 Standard terms: incorporation – validity Pre-contractual duties Breaking off negotiations

Part II: Formation of the contract • Offer • Art. 14 CISG: criteria for Part II: Formation of the contract • Offer • Art. 14 CISG: criteria for an offer • Art. 14(1) CISG: definiteness (pretium certum – Art. 55 CISG), intention to be bound (invitatio ad offerendum) • Art. 14(2) CISG: public offer (advertisements, websites)

Part II: Formation of the contract • Offer • Art. 15(1) CISG: effective upon Part II: Formation of the contract • Offer • Art. 15(1) CISG: effective upon reaching the offeree • Art. 15(2) CISG: withdrawal of offer • Art. 16 CISG: revocability of offer • Art. 16(1): Common Law starting point • Art. 16(2): restrictions on revocability • Art. 17 CISG: termination of offer

Part II: Formation of the contract • • • Acceptance (Art. 18 -22 CISG) Part II: Formation of the contract • • • Acceptance (Art. 18 -22 CISG) Art. 18(1): acceptance by declaration Statement or conduct (delivery, payment) Acceptance by silence Effectiveness of acceptance: Art. 18(2 s. 1): reaching, Art. 18(3): performance of act

Part II: Formation of the contract • • Acceptance (Art. 18 -22 CISG) Deadline Part II: Formation of the contract • • Acceptance (Art. 18 -22 CISG) Deadline for acceptance (Art. 18(2) CISG) Art. 20 CISG: calculating the period of time Art. 21 CISG: when late acceptance may be effective • Divergence between offer and acceptance • Art. 19(1): rejection and counter-offer • Art. 19(2)(3): insignificant modifications

Part II: Formation of the contract • Battle of forms • Practical importance • Part II: Formation of the contract • Battle of forms • Practical importance • Possible solutions: last shot doctrine, knock-out doctrine • Commercial letter of confirmation (acceptance by silence? )

Part II: Formation of the contract • Effectiveness of statements • Importance of statement Part II: Formation of the contract • Effectiveness of statements • Importance of statement reaching the other party, Art. 23: conclusion of contract • Art. 24: when does statement reach the other party? • e-commerce, standard terms (making available, transparency) • Art. 29: modification of contract

Part III/1: Substantive Rules General • Content of Part III: General, obligations of seller, Part III/1: Substantive Rules General • Content of Part III: General, obligations of seller, obligations of buyer, passing of risk, common provisions • Basic remedies • Specific performance (Art. 28 CISG) • Right to withhold performance • Damages • Avoidance of contract, Art. 25: fundamental breach

Part III/1: Substantive Rules General • Art. 26 CISG: declaration of avoidance • Art. Part III/1: Substantive Rules General • Art. 26 CISG: declaration of avoidance • Art. 27 CISG: dispatch principle – transmission risk • Other notices (non-conformity

Part III/1: Substantive Rules General • • Art. 25 CISG: fundamental breach Fundamentality: effect Part III/1: Substantive Rules General • • Art. 25 CISG: fundamental breach Fundamentality: effect on creditor Foreseeability In case of non-performance: impossibility, delay – time of the essence, ancillary duties • Non-conformity of the goods: purpose of the contract, repairable defect, time of the essence

Part III/1: Substantive Rules General • • • Art. 25 CISG: fundamental breach Breach Part III/1: Substantive Rules General • • • Art. 25 CISG: fundamental breach Breach of buyer‘s obligations Payment, repudiation, insolvency Taking delivery Art. 28 CISG: Specific performance Common law – Civil law

Part III/2: Substantive Rules – Seller‘s obligations • • • Overview Art. 30 -44 Part III/2: Substantive Rules – Seller‘s obligations • • • Overview Art. 30 -44 CISG Cornerstone of any sales law Art. 30 -35: delivery, conformity Art. 37 -40: non-conforming goods Art. 41 -43: third party rights Art. 44: buyer‘s excuse for not giving notice

Part III/2: Substantive Rules – Seller‘s obligations • Seller‘s duty to deliver • Art. Part III/2: Substantive Rules – Seller‘s obligations • Seller‘s duty to deliver • Art. 30 CISG: delivery, documents, transfer of title • Art. 31 CISG: place of delivery • Primarily party agreement • Incoterms 2010: EXW (ex works), FCA (free carrier)/FOB (free on board), CIF (cost, insurance, freight), DAP (delivered at place)

Part III/2: Substantive Rules – Seller‘s obligations • • Seller‘s duty to deliver Subsidiary Part III/2: Substantive Rules – Seller‘s obligations • • Seller‘s duty to deliver Subsidiary rules Art. 31(a): carriage of goods Art. 31(b): goods at specific place Art. 31(c): seller‘s place of business Making available Art. 32: obligations during transport Jurisdiction at place of delivery

Part III/2: Substantive Rules – Seller‘s obligations • Seller‘s duty to deliver • Art. Part III/2: Substantive Rules – Seller‘s obligations • Seller‘s duty to deliver • Art. 33: time of delivery: primarily party agreement • Art. 33(a): fixed date • Art. 33(b): fixed period of time • Art. 33(c): reasonable time after conclusion of contract • Art. 52(1): early delivery by seller

Part III/2: Substantive Rules – Seller‘s obligations • • Art. 34: handing over of Part III/2: Substantive Rules – Seller‘s obligations • • Art. 34: handing over of documents Documents of title Other documents Place and time of handing over of documents • Right to cure in case of early delivery

Part III/2: Substantive Rules – Seller‘s obligations • Art. 35 CISG: conformity of the Part III/2: Substantive Rules – Seller‘s obligations • Art. 35 CISG: conformity of the goods • Most important provisions of CISG • CISG key concept: quality, quantity, aliud packaging treated alike • Domestic approaches: warranties/ conditions (SGA), express/implied warranties (UCC), vices cachés (CC), peius/aliud (CC, Germanic systems), partial non-delivery, ancillary duties

Part III/2: Substantive Rules – Seller‘s obligations • • Art. 35 CISG: conformity of Part III/2: Substantive Rules – Seller‘s obligations • • Art. 35 CISG: conformity of the goods Art. 35(1): primarily party agreement Quantity: trade usages Quality: features of goods, origin, manufacturing practices, ethical standards • Dicrepancies in nature: aliud • Packaging • Additional duties: services, non-competition

Part III/2: Substantive Rules – Seller‘s obligations • Art. 35 CISG: conformity of the Part III/2: Substantive Rules – Seller‘s obligations • Art. 35 CISG: conformity of the goods • Art. 35(2): objective criteria to determine conformity • Art. 35(2)(a): fitness for ordinary purpose • Commercial purposes, resalability, average quality? • Public law requirements, regional v. global players

Part III/2: Substantive Rules – Seller‘s obligations • • Art. 35 CISG: conformity of Part III/2: Substantive Rules – Seller‘s obligations • • Art. 35 CISG: conformity of the goods Art. 35(2)(b): fitness for particular purpose Purpose made known to seller Buyer reasonably relying on seller‘s skill and judgement • Art. 35(2)(c): sample or model • Art. 35(2)(d): adequate packaging • Art. 35(3): buyer‘s knowledge

Part III/2: Substantive Rules – Seller‘s obligations • • Art. 36: determinative time for Part III/2: Substantive Rules – Seller‘s obligations • • Art. 36: determinative time for conformity Art. 36(1): passing of risk Burden of proof Art. 36(2): after risk has passed: breach of obligation, guarantee • Durability in general • Art. 37: seller‘s right to cure nonconformity

Part III/2: Substantive Rules – Seller‘s obligations • Art. 38, 39: Examination and notice Part III/2: Substantive Rules – Seller‘s obligations • Art. 38, 39: Examination and notice • Comparative overview: SGA, CC, UCC, Germanic systems • Drafting history • Art. 38: Examination • Method of examination • Period for examination: general, carriage of goods, redirection or redispatch

Part III/2: Substantive Rules – Seller‘s obligations • • Art. 39: notice Specificity of Part III/2: Substantive Rules – Seller‘s obligations • • Art. 39: notice Specificity of notice Form and transmission risk Reasonable time: nature of goods, „noble month“ • Beginning of period • Art. 39(2): two year cut-off period

Part III/2: Substantive Rules – Seller‘s obligations • • • Art. 40: seller‘s knowledge Part III/2: Substantive Rules – Seller‘s obligations • • • Art. 40: seller‘s knowledge Consequences of failure to give notice General – Art. 44: reasonable excuse Limitation periods UN Convention on Limitation period: 4 years • Domestic rules vary from 6 months to 6 years, compatability with Art. 39(2)

Part III/2: Substantive Rules – Seller‘s obligations • Art. 41, 42: defects in title Part III/2: Substantive Rules – Seller‘s obligations • Art. 41, 42: defects in title and intellectual property rights • Distinction unknown to most countries • Art. 41: defects in title • Third party rights (property, encumbrances) • Third party claims • Public law encumbrances

Part III/2: Substantive Rules – Seller‘s obligations • Art. 42: third party industrial or Part III/2: Substantive Rules – Seller‘s obligations • Art. 42: third party industrial or intellectual property rights • Third party rights or claims • Art. 42(1)(a)(b): territorial restriction • Seller‘s knowledge • Art. 42(2): exclusion of seller‘s liability • Art. 43: notice requirement

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • • • Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • • • Art. 45 -52 CISG: buyer‘s remedies Unified approach: breach of contract Some special rules: non-conformity Art. 45: overview of buyer‘s remedies Concurrent domestic remedies: contract law (mistake), tort law (culpa in contrahendo, negligent misrepresentation)

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 48 Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 48 CISG: seller‘s right to cure • Distinguish Art. 37 • Relationship to buyer‘s right to avoid the contract • Setting time limits • Art. 47: buyer fixing additional time for performance • Art. 48(2)(3): seller requesting additional time

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 46, Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 46, 47 CISG: right of performance and substitute performance • Art. 46(1): right to specific performance subject to Art. 28 and Art. 79 • Art. 46(2): restriction on right to substitute goods in case of non-conformity (fundamental breach) • Art. 46(3): restriction on right to repair in case of non-conformity

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 49: Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 49: Avoidance of contract • Art. 49(1)(a): fundamental breach • Art. 49(1)(b): „Nachfrist“-principle (additional period in case of non-delivery and breach of additional obligations) • Art. 49(2): restriction in case of delivery of goods • Avoidance by declaration

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Part performance Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Part performance and delivery of partly non-conforming goods • Art. 51 and Art. 73 CISG • Art. 51(1), 73(1): principle: partial avoidance only • Art. 51(2), 73(3): avoidance of the whole contract in case of fundamental breach • Art. 72: Anticipated breach of contract

Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 50 Part III/3: Substantive Rules – Buyer‘s remedies in case of breach • Art. 50 CISG: reduction of purchase price • Roman law descent • Difference to damages: calculation, Art. 79 not applicable • Art. 45(1)(b), 74 et seq. : damages • Right to withhold performance, general principle • Art. 71: right to suspend performance • Right to reject the goods (perfect tender rule? ) • Art. 52(2): rejection of excessive quantity

Part III/4: Substantive Rules – Buyer‘s obligations • Art. 53 CISG: payment, taking delivery Part III/4: Substantive Rules – Buyer‘s obligations • Art. 53 CISG: payment, taking delivery • Art. 54 -59: payment of purchase price • Art. 54: encompasses all arrangements, form of payment, letter of credit, compliance with public law regulations etc. • Currency: agreement, place of seller • Art. 57(1): place of payment • Jurisdiction?

Part III/4: Substantive Rules – Buyer‘s obligations • Art. 58: time of payment • Part III/4: Substantive Rules – Buyer‘s obligations • Art. 58: time of payment • Agreement • Art. 58(1)(2): subsidiarily: step by stepperformance • Art. 58(3): reasonable opportunity to inspect the goods • Art. 60 CISG: duty to take delivery • Necessary preparatory steps, taking over • Offer of non-conforming goods

Part III/4: Substantive Rules – Buyer‘s obligations • Art. 66 -70 CISG: passing of Part III/4: Substantive Rules – Buyer‘s obligations • Art. 66 -70 CISG: passing of risk • Art. 66: payment obligation if seller performed all of its obligations, even if goods destroyed or damaged • Which events are covered? Acts of states? • Exception: loss or damage due to seller • Primarily: agreement of parties (practice) • Incoterms – who must insure the goods?

Part III/4: Substantive Rules – Buyer‘s obligations • Art. 66 -70 CISG: passing of Part III/4: Substantive Rules – Buyer‘s obligations • Art. 66 -70 CISG: passing of risk • Art. 67(1): handing over to first carrier, retention of documents irrelevant • Art. 67(2): generic goods must be identified to contract • Goods sold in transit: unclear when goods were destroyed • Art. 68: conclusion of contract. Dating back to handing over in case of insurance (contract valid)

Part III/4: Substantive Rules – Buyer‘s obligations • Art. 69: catch all provision • Part III/4: Substantive Rules – Buyer‘s obligations • Art. 69: catch all provision • Art. 69(1): goods at seller‘s place of business: taking over of goods or failing to take delivery • Art. 69(2): other places of delivery (incl. buyer‘s place of business): when delivery is due, notification of buyer, identification to contract

Part III/5: Substantive Rules – Seller‘s remedies in case of breach • Art. 61 Part III/5: Substantive Rules – Seller‘s remedies in case of breach • Art. 61 CISG: overview of seller‘s remedies • Art. 61(3): no period of grace as CC • Art. 62: payment of purchase price, Art. 28 applicable • Can Art. 77 be applied to specific performance of purchase price? Disputed. • Art. 62: taking delivery and other duties • Art. 63: fixing additional period of time

Part III/5: Substantive Rules – Seller‘s remedies in case of breach • • Art. Part III/5: Substantive Rules – Seller‘s remedies in case of breach • • Art. 64: avoidance of contract Art. 64(1)(a): fundamental breach Art. 64(1)(b): lapse of „Nachfrist“ Fundamentalility of breach very rare: discuss non-payment, taking delivery, other duties • Art. 64(2): restriction where price has been paid in the meantime (price main interest)

Part III/5: Substantive Rules – Seller‘s remedies in case of breach • Art. 61(1)(b), Part III/5: Substantive Rules – Seller‘s remedies in case of breach • Art. 61(1)(b), 74: damages • Rights of retention: Art. 58(1): step-by-step -principle, Art. 71(1): if seller must perform first, Art. 71(2): right of stoppage in transitu (does not apply against carrier) • Specification by the seller, Art. 65 • Notice to buyer necessary • Art. 65 applicable to other duties?

Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance and stoppage • Art. 71(1)(a): deficiency in ability to perform (f. e. political situation, natural disaster), creditworthiness (buyer or seller) • Art. 71(1)(b): debtor‘s conduct • Relevant time: after AND before conclusion of the contract (becomes apparent), domestic remedies for mistake

Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance and stoppage • Evidential threshold: reasonable person • Weight of anticipated breach: „substantial part“ less than fundamental breach • „suspension“ of performance as well as preparatory steps • Art. 71(2): right of stoppage • Art. 71(3): duty to give notice, adequate assurance of performance

Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance Part III/6: Substantive Rules – Common provisions • Art. 71: right to suspend performance and stoppage • End of in-between-state: Art. 72: no adequate assurance of performance, fundamental breach threatening • Art. 72: anticipatory breach • Art. 72(1): prior to date of performance, fundamental breach, „clear“

Part III/6: Substantive Rules – Common provisions • Art. 72: anticipatory breach • Repudiation Part III/6: Substantive Rules – Common provisions • Art. 72: anticipatory breach • Repudiation by one party, demanding price adjustment, factual circumstances • Art. 72(2)(3): possibility to give adequate assurance of performance, reasonable notice • Duty to avoid contract before date of performance, Art. 77?

Part III/6: Substantive Rules – Common provisions • Art. 73: installment contracts • Faulty Part III/6: Substantive Rules – Common provisions • Art. 73: installment contracts • Faulty performance of one installment (nondelivery, late delivery, non-conformity) • Art. 73(1): partial avoidance only if fundamental • Art. 73(2): future installments, anticipatory breach, lower threashold than Art. 72 • Art. 73(3): retrospective avoidance • Other remedies? Damages, price reduction

Part III/7: Substantive Rules – Damages • • • Responsibility and discharge Any breach Part III/7: Substantive Rules – Damages • • • Responsibility and discharge Any breach of obligation No fault requirement – strict liability Exemption under Art. 79, 80 Art. 79(1): impediment beyond control, not foreseeable, not avoidable • Covers all contractual duties • Subsequent and initial impediments

Part III/7: Substantive Rules – Damages • Typically: force majeure situations • Hardship? Threshold, Part III/7: Substantive Rules – Damages • Typically: force majeure situations • Hardship? Threshold, consequences (duty to renegotiate? ) • Non-conformity of goods. Exemption rare • Liability for own employees: Art. 79(1) • Liability for third persons: Art. 79(2) • Passing impediment: Art. 79(3) • Art. 79(4): duty to give notice

Part III/7: Substantive Rules – Damages • Art. 79(5): other remedies: withholding performance, avoidance, Part III/7: Substantive Rules – Damages • Art. 79(5): other remedies: withholding performance, avoidance, reduction of price, specific performance? • Art. 80: creditor causing failure to perform • All remedies excluded • Causation by both parties (…to the extent) • Apportionment of damages, avoidance?

Part III/7: Substantive Rules – Damages • • Extent of damages claim, Art. 74 Part III/7: Substantive Rules – Damages • • Extent of damages claim, Art. 74 Principle of full compensation All losses, causation required Non-performance loss, incl. Loss of use, costs of repair • Incidental loss, additional costs etc. Legal costs? • Consequential loss, f. e. penalty, liability, damage to property • Loss of profit

Part III/7: Substantive Rules – Damages • Pecuniary (loss of reputation, loss of a Part III/7: Substantive Rules – Damages • Pecuniary (loss of reputation, loss of a chance) v. non-pecuniary loss (pain and suffering, loss of amenities) • Calculation of loss • Concrete and abstract calculation • Art. 75: concrete: cover purchase • Art. 76: abstract: market-price-rule • Abstract calculation of other losses, esp. loss of use?

Part III/7: Substantive Rules – Damages • Betterment • Disgorgement of profits (performance principle) Part III/7: Substantive Rules – Damages • Betterment • Disgorgement of profits (performance principle) • Art. 74: foreseeability rule (contemplation rule) • Standard: „possible consequence“ • Examples: non-performance loss, incidental loss, consequential loss

Part III/7: Substantive Rules – Damages • • Contractual stipulations on liability Freedom of Part III/7: Substantive Rules – Damages • • Contractual stipulations on liability Freedom of contract, Art. 6 Agreed sums (liquidated damages, penalties) Limitations of liability – validity Art. 4(a) Art. 77: duty to mitigate Scope: damagess, other remedies? Examples, substitute transactions Consequences of breach

Part III/8: Substantive Rules – Interest • • Art. 78: price or any sum Part III/8: Substantive Rules – Interest • • Art. 78: price or any sum in arrears Highly controversial, Islamic countries Preconditions: sum due Interest rate: CISG itself? PICC? Domestic law? • Full compensation -> interest rate at creditor‘s place, currency of payment • Compound interest?

Part III/9: Substantive Rules – Effects of Avoidance • Art. 81(1): release from primary Part III/9: Substantive Rules – Effects of Avoidance • Art. 81(1): release from primary obligations, arbitration clauses not affected • Art. 81(2): restitution of what has been performed, concurrently • Art. 82(1): impossibility of restitution = bar to avoidance or substitute delivery (antiquated rule, better: damages) • Art. 82(2): cases excluded: other than buyer‘s conduct, examination, normal use

Part III/9: Substantive Rules – Effects of Avoidance • Restitution: nature of claim? Effect Part III/9: Substantive Rules – Effects of Avoidance • Restitution: nature of claim? Effect of avoidance on property. CISG: contract remains intact (Art. 81(1) CISG) • If goods are damaged after avoidance -> damages (Art. 74) • Art. 84(1): interest on purchase price • Art. 84(2): benefits from goods, surrogates, fruits, use (no abstract calculation)

Part III/10: Substantive Rules – Preservation of goods • Breach of contract: problem: fate Part III/10: Substantive Rules – Preservation of goods • Breach of contract: problem: fate of the goods? Examples • Art. 85: seller‘s duty if buyer does not take delivery • Art. 86: buyer‘s duty if it rejects the goods • Art. 86(2): duty to take possession • Reasonable preservation measures, depend on nature of goods • Art. 87: storage in a warehouse

Part III/10: Substantive Rules – Preservation of goods • Art. 88: self-help sale • Part III/10: Substantive Rules – Preservation of goods • Art. 88: self-help sale • Art. 88(1): normal self-help sale („may), notice required • Art. 88(2): emergency sale, perishable goods („must“), possible notice • Art. 88(3): proceeds: set-off against costs, account for balance