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Buyer's Right to Withhold Performance and Termination [Avoidance] of Contract under the UN Sales Convention
1. Withholding Performance
1.1 Introduction
1.1.1. Concept of the Right
Withholding performance under the Convention, as in English law, means that the buyer is entitled to refuse to perform his obligation without being required or even being entitled to terminate [avoid] the contract. Obviously, if the requisites for the latter remedy are met and the buyer, before fulfilling his obligations, has declared the contract avoided in accordance with Arts. 49, 51, 72 or 73 of the Convention, he is no longer obliged to perform his obligations (Art. 81(1)). But such requisites may not be met or the buyer may not wish to declare the contract terminated, but rather demand goods fully conforming with the contract.
In the provisions regulating the buyer's remedies for seller's breach, although the Convention gives specific rights to withhold performance in certain cases, it does not make a general statement that the buyer is entitled to withhold performance of his obligations. The question is, therefore, whether the buyer has a general right to withhold performance of his obligations under the contract where the seller has performed his delivery obligations in a way which does not correspond with the contract or the Convention.
In this respect, some commentators have tried to infer from the Convention's provisions that the buyer should be given a general right to refuse to take delivery. But it seems that they have failed to distinguish between the buyer's right to refuse to recognise goods the seller delivers as the contract goods and his right to refuse to take delivery and, consequently, they have relied on the provisions which concern the former rather than the latter. It is probably for the reason that the Convention does not expressly impose, as English law does, on the buyer a duty to accept what the seller delivers as the contract goods. It is, however, proposed to examine these two possible rights separately. Although in practice both may often arise at the same time, in some cases, the right to refuse to accept arises where the buyer has already performed his duty to take over the goods as defined in Art. 60.
1.1.2. Importance of the Right
From the buyer's point of view, the existence of the right to refuse to recognise the goods offered as the contract goods seems important, since the buyer will thus be entitled to resort to the remedies provided under Art. 46(2) or (3). But what significance follows from the right to refuse to take delivery? It seems that the existence of the right to refuse to take delivery would also be significant for the buyer, not only in respect of the link between delivery and payment (Art. 58(1), (2)), but also in regard to the passing of the risk (at least where the case falls into the scope of Art. 69). That is to say, as long as the seller does not deliver the goods in accordance with the contract and the Convention, the buyer can refuse to take delivery and thereby return [next page]