Zbornik Radova Pravnog Fakulteta u Splitu (Jan 2012)
Contractual parties’ right to postpone obligations and the seller’s right to stop goods being transported according to the United Nations’ Convention on Contracts for the International Sale of Goods
Abstract
International uniform law envisages a number of situations in which a breach is said to have occurred prior to the time agreed upon for performance. In the area of international sales contracts, arts. 71, 72, and 73(2) of the United Nations Convention on Contracts for the International Sale of Goods (hereafter "CISG"), applicable to both the buyer and the seller, lay down, on the one hand, the situations in which an anticipatory breach is deemed to have occurred and, on the other hand, the remedies available to the aggrieved party. In other words, these provisions designate the circumstances in which, even though no breach of contract has yet been committed and the time for performance of the obligation has not yet elapsed, a party may, in order to protect his own interests, temporarily stop complying with his contractual obligations or completely free himself from those obligations. In this respect, arts. 71, 72, and 73(2) CISG differ from arts. 49 and 64 CISG, which govern the right of the aggrieved party to avoid the contract when performance is overdue, that is when the other party has actually committed a fundamental breach of contract. Under art. 71 CISG, if it becomes apparent that one party will not perform a substantial part of his obligation, the other party may suspend performance of his obligations. The innocent party is however compelled to restore performance if the other party provides adequate assurance of performance. Such assurance may be considered adequate even if it shows that performance might not be complete and perfect. Furthermore, the failure, by one party, to provide adequate assurance of performance does not constitute, in itself, a fundamental breach, and consequently does not authorize the other party to declare the contract avoided. In turn, the conditions that ought to be satisfied, under art. 72 CISG, for the innocent party to be entitled to declare the contract avoided, are more onerous than those of art. 71 CISG. They require that the future occurrence of the breach be objectively "clear" (rather than just "apparent") and that the suspected breach be of fundamental nature. Furthermore, in the case of art. 72 CISG, the innocent party must give notice to the other party prior to the declaration of avoidance, in order to allow the latter party to provide adequate assurance of performance.
