• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.62
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• pp.3-32
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• 2014

Article 77 sets forth the principle of prevention applied in several legal systems. Under this principle the party threatened by ooss as a consequence of a breach of contract by the other party is not permitted to await passively incurrence of the loss and then sue for damages. He is obliged to take adequate preventive measures to mitigate his loss. If the injured party abstains from taking such excessive measures he will not be considered to have failed to mitigate the loss under Article 77. The sanction provided in Article 77 against a party who fails to mitigate his loss only enables the other party to claim reduction in the damages. The reduction in damages under Article 77 is equal to the amount by which the loss should have been mitigated if the injured party had taken reasonable measures to avert or to lessen it. The aim of Article 77 is to encourage mitigation of the loss. The duty to mitigate the loss applies not only to a breach of contract in respect of an obligation whose performance is currently due. but also to an anticipatory breach of contract under Article 71. Article 85 contemplates that the buyer is in delay in fulfilling the latter obligation, or else that he fails to pay the price when payment is to be made concurrently with delivery of the goods by the seller. In both these situations of default, the seller who is either in possession of the goods or otherwise able to control their disposition must take measures, reasonable in the circumstances, to preserve them. The right of retention of the goods y the seller exists until he is reimbursed by the other party for the reasonable expenses incurred. Article 87 and Article 88 of the Convention grant different rights to the party obligated to take steps to preserve the goods; Article 87 allows him to deposit them in the warehouse of a third person, and Article 88 to sell them by whatever means appropriate. A difference exists between paragraph Article 88 (1) which grants the right to sell, and paragraph (2) which imposes the duty to take reasonable measures to sell the goods.