• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.66
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• pp.47-73
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• 2015

This study primarily concerns the fundamental breach of contract by a seller and a buyer's two remedies that are entitled to under the CISG. Regarding the breach of contract, the CISG simply provides a list of each party's obligations and regulates that both parties should fulfill the obligations under the contract as well as the Convention. When the CISG specifies the remedies for both parties, it requires to divide the fundamental breach of contract from breach of contract. By doing so, it provides different remedies to both parties depending on whether it is the fundamental breach of contract or not. From the point of buyer's view, the buyer has two remedies when there is the fundamental breach of contract by the seller; they are the right to declare the avoidance of contract and to require the delivery of substitute goods. The fundamental breach of contract is a pre-requisite condition to be fulfilled in order to exercise these two remedies. Although the CISG provides the definition of fundamental breach of contract, its meaning is not clear enough, so it is interpreted and applied case by case. Therefore, this paper will analyze recent cases focusing on the most debated issues regarding the interpretation of fundamental breach of contract; first, who determines the substantial deprivation and when is the time for determination, second, when is the time for unpredictability of substantial deprivation, and last, who has a burden of proof.

• Asia-Pacific Journal of Business
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• v.11 no.3
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• pp.273-290
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• 2020

Purpose - The purpose of this paper is to examine the buyer's right to avoid the contract under SGA and CISG. Design/methodology/approach - This paper has conducted literature reviews to analyze the right to avoid the contract of the buyer based on the comparative study. Findings - Under s. 11(3) of SGA, the breach of a condition and an intermediate which deprives the buyer substantially of the whole benefit of the contract may give rise to a right to treat the contract as repudiated. But under Art. 49 of CISG, the buyer has the right to terminate the contract where the seller's failure to performance amounts to a fundamental breach of contract. Regarding the breach of an intermediate and the breach under CISG, the buyer should take into account where the seller's breach is fundamental or not. Moreover, an anticipatory breach can give rise to a right to avoid the contract. The anticipatory breach of a condition justifies termination. The breach of an intermediate and the breach under CISG require an anticipatory fundamental breach of the contract. Under SGA, the buyer has to prove an anticipatory breach in fact but CISG does not require virtual certainty, which SGA has stricter criteria to assess an anticipatory breach. Research implications or Originality - Comparative study helps to understand the nature of provisions under SGA and CISG and suggests practical advice to choose applicable laws. SGA gives more certainty to classify a contractual term. In case of the breach of a condition including the anticipatory breach under SGA, the buyer does not have to ask how much serious the breach is. But CISG requires the fundamental breach of the contract, which means that the buyer has the more burden of proof compared with SGA.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.19
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• pp.67-93
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• 2003

The CISG approach was intended to make the remedial system clear, but produced ambiguity, and complexity. The CISG does not differentiate between main, auxiliary and participatory obligations. There is no distinction between breaches of main or breaches of auxiliary obligations, rather, a distinction is made between fundamental and other breaches of contract. Articles 25 gives the definition of fundamental breach of contract. This concept is the essential of avoidance and remedial system in the CISG. This concept, however, is ambiguous. The fact that the fundamentality of a breach of contract in many cases is the condition for an avoidance of contract, is expression of the trend of the CISG to preserve contracts, which I consider as essential in international trade. The elements which define a substantial detriment are extremely complex. It will become obvious that the relevant detriment is not a static element, but in many instances occurs only when the breach of contract continues. It should be added that it is the circumstances of each individual case which are relevant. It is to be stressed that a fundamental breach of contract must constitute also a non-fulfillment of a contractual obligation.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.55
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• pp.95-124
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• 2012

Referring to Buyer's obligations, the Buyer must pay the price for the goods and take delivery of them as required by the contract. There are vital importances to the Buyer's Fundamental Breach. The legal effects of a breach of contract do not depend on the nature of the obligation broken, but on the consequences of the breach the detriment to the other party. The obligations mentioned to Article 53 are primary obligations which are to be fulfilled in the normal performance of the contract. They include a number of different acts which could be seen as the subject-matter of different obligations. CISG gives further details for the payment of the price in Articles 54 to 59 and for taking delivery in Article 60. The buyer has to take delivery at the respective place within a reasonable period after this communication since he cannot be required to take delivery immediately. Refusing to take delivery in case of delay not constituting a ground for avoiding the contract makes no sense, since this would lead to even later delivery. For the understanding of Buyer's Fundamental Breach, We need to search the Cases referring to the breach of buyer's main obligations.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.44
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• pp.3-29
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• 2009

The PECL have been drawn up by an independent body of experts from each member state of the european union under a project supported by the european commission and many other organizations. Salient features of the general provisions of the PECL, freedom of contract and pecta sunk servanda, good faith and fair dealing, most of the PECL are non-mandatory. The CISG uses the term fundamental breach in various setting. The concept of fundamental breach is a milestone in its remedial provisions. Its most important role is that it constitutes the usual precondition for the contract to be avoided(Art. 49., Art. 51., Art. 64., Art. 72., Art. 73). In addition, where the goods do not conform with the contract, a fundamental breach can give rise to a requirement to deliver substitute goods. Furthermore, a fundamental breach of contract by the seller leaves the buyer with all of his remedies intact, despite the risk having passed to him(Art. 70). Basically, PECL, PICC generally follows CISG, it was similar to all the regulation's platform though the terms and content sometimes differ. For example regarding to the non-performance and remedies, in the case of non-performance, that is the PECL/PICC term analogous to breach of contract as used in the CISG. Furthermore the PECL/PICC used fundamental non-performance refered to in PECL Art. 8:103 ; PICC Art. 7.1.1. correspond generally to the concept of fundamental breach referred to in CISG Art. 25. The main significance of the fundamental non-performance, in any systems, is to empower the aggrieved party to terminate the contract. The need for uniformity and harmony in international commercial contracts can be expected to lead to growth of international commerce subject to the CISG, PICC, and PECL. It is hoped that the present editorial remarks will provide guidance to improve understanding between the contractual party of different countries in this respect and following key-words.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.51
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• pp.187-210
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• 2011

International transactions have the threat of non-payment by the buyer or non-performance by the seller. Parties tend to search for additional means of securing performance and payment beyond the mere agreement in the contract. Such security may be achieved by means of a letter of credit. When contracting parties have agreed to pay by means of a letter of credit, the buyer's bank takes upon itself the obligation to pay the purchase price when the seller tenders the documents that are stipulated in the letter of credit. The documents must comply strictly with the terms of the credit.. The documents play a crucial role in letter of credit transaction. The principles of abstraction, separability and strict compliance governing the letter of credit transaction are considered. The concept of fundamental breach of Article 25 CISG was discussed. This article examines whether a failure to deliver documents conforming to the terms of the letter of credit can constitute a fundamental breach of the sales contract as defined by Article 25 of the CISG by the seller and thereby enable the buyer to avoid the contract. For letter of credit transactions it should be accepted that the delivery of non-performing documents constitutes a fundamental breach, if the result of this breach is that the bank refuses to pay the price for the goods. On the other hand, in the interpretation of Article 25 CISG, it should be noted that if the parties have agreed to payment by means of a letter of credit, they have simultaneously agreed to apply the strict compliance principle to the delivery of documents in the sales contract. Finally the parties should ensure that inconsistency between the requirements under the documentary credit and the requirements under the contract of sale is avoided, since the buyer may be in breach of his payment obligation if the seller cannot get paid under the documentary credit when his documents conform with the contract of sale.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.39
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• pp.3-26
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• 2008

CISG provides the Convention's default provisions on anticipatory breach. Article 71 permits the aggrieved party to suspend the performance of his obligations if it becomes apparent that the other party will not perform a substantial part of his obligations after the conclusion of the contract. The aggrieved party must give notice of the suspension to the other party and if he provides adequate assurance of his performance, the party must continue with performance. Article 72 authorizes the aggrieved party to avoid the contract to the date of performance when it is clear that the other party will commit a fundamental breach. The aggrieved party is also required to give the other party notice of his intent to avoid the contract if time allows. The requirements for avoidance under Article 72 are more stringent than those for suspension under Article 71. Article 72 requires reasonable prior notice only if time allows, while article 71 requires immediate notice with no exceptions.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.66
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• pp.119-148
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• 2015

Generally, the liability for breach is defined as the civil liability that arises from the conduct of violation of a contract. There are two notable principles governing liability for breach that have fundamental impacts on the unified Contract Law of the People's Republic of China (hereinafter Chinese Contract Law) in the remedies. In China, during the drafting of the Contract Law, there was a great debate as to whether damages for breach of contract ought to follow the fault principle or to follow the strict liability principle. Ultimately the Chinese Contract Law follows the model of the CISG on this point, namely, it follows the strict liability principle (article 107) with an exemption cause of force majeure. Under Chinese Contract Law, it is interpreted as strict liability in principle. Strict Liability is a notion introduced into Chinese Contract Law from the Anglo-Saxon Law. The strict liability or no fault doctrine, on the contrary, allows a party to claim damages if the other party fails to fulfill his contractual obligations regardless of the fault of the failing party. Pursuant to the strict liability doctrine, if the performance of a contract is due, any non-performance will constitute a breach and the fault on the party in breach is irrelevant. This paper reviews problems of legal character or legal ground of contractual liability in Chinese contract law. Specifically, focusing on the interpretation of Chinese contract law sections and analysis of three cases related contractual liability in freight agency, the paper proposes some implications of structural features of Chinese contract law and international commercial transactions.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.26
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• pp.87-111
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• 2005

The buyer must pay the price under the contract and must take delivery of the goods of contract. The buyer's obligation to pay the price includes taking such steps and such formalities under the contract. The remedial system of the rights of the seller is easier than that of the buyer, for the obligations of the former are less complicated. The seller has the right to avoid a contract provided two conditions are fulfilled : (a) the buyer must have committed a fundamental breach of contract, or (b) the additional period for performance set by the seller in the case of non-performance must have expired. A decision is more difficult to take in the case of a delay where there is no fixed-term contract, to clarify the situation the seller may set a Nachfrist. It is essential that the contracting parties in Korea should understand the provisions of CISG.

• 한국무역상무학회:학술대회논문집
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• 2004.12a
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• pp.79-104
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• 2004

The buyer must pay the price under the contract and must take delivery of the goods of contract. The buyer's obligation to pay the price includes taking such steps and such formalities under the contract. The remedial system of the rights of the seller is easier than that of the buyer, for the obligations of the former are less complicated. The seller has the right to avoid a contract provided two conditions are fulfilled : (a) the buyer must have committed a fundamental breach of contract, or (b) the additional period for performance set by the seller in the case of non-performance must have expired. A decision is more difficult to take in the case of a delay where there is no fixed-term contract, to clarify the situation the seller may set a Nachfrist. It is essential that the contracting parties in Korea should understand the provisions of CISG.