Thursday, 18 November 2010

Remedies under the Vienna Convention

Remedies under the Vienna convention

This post will briefly consider the remedies available under the Vienna Convention. It says very little about the conventions itself.

The Vienna Convention, properly known as the United Nations Convention on Contracts for the International sale of goods 1980 was drafted with the aim of harmonizing the law in relation to international sale of goods

The remedies available under the convention include:

Avoidance of contract (Art 25)
Fixing additional time for performance and curing the breach (Art37, 47 48, 49 63)
Specific performance (Art 39, 45, 46 61 and 62)
Reduction in price (Art 50)
Damages (Art 74 and 77)
These remedies are all intended to promote compliance with contractual obligations.

A. Avoidance of the contract. (Art25)
Avoiding the contract under Art 25 will only be available in following circumstance.
1. The party seeking to avoid the contract should suffer a detriment, example, non-payment
2. The detriment must be substantial to deprive the party of his benefit. It is suggested that non- acceptance of the goods will be sufficient.
3. The result must be foreseeable.
Academics such as Indira Carr assert that avoidance of contract as a remedy will only be available in exceptional circumstances.

B. Fixing additional time for performance and curing the breach (Art 37,47,48,49 and 63)
This remedy is not found in common law jurisdictions, it essentially gives, both the buyer and seller of goods the opportunity to cure a potential breach on their part with the result of preventing a possible right of the other party to avoid the contract.

C. Specific performance (Art39, 45, 46, 61 and 62)
Specific performance, for the purposes of the convention allows one party to compel the other to fulfill his obligation under the contract. Unlike common law specific performance the remedy is not conditional upon damages being inadequate. Further, the Convention follows the civil law tradition in allowing specific performance where the seller faces difficulty in acquiring goods to meet the contract stipulation in dispute situations. This has the result of cushioning the harshness of the English courts approach evident in Societe des industries metellargiques SA v Bronx Engineering Co Ltd.

D. Reduction in Price (Art 50)
Under this article the buyer may reduce the price in the same proportion as the value of the goods actually delivered had at the time of delivery bears to the value that conforming goods would have had at that time.

E. Damages (Art 74 and 77)
The party who suffers from a breach is entitled to damages. Damage includes a sum which is equal to any loss, which includes any loss of profit. This does not include foreseeable damages provided that the party who intends to claim took steps to mitigate his loss. Predicting how article 74 will be interpreted is not certain. IndIra Carr seems to suggest that the court in different jurisdictions have not consistently applied the article.

There are other remedies available to the parties that have not be considered in this post, however readers who may wish to consult ‘international Trade Law’ 4th edn by Indira Carr for further details.

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