Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Buyer's Right to Withhold Performance and Termination [Avoidance] of Contract under the UN Sales Convention
2.2.2. Nachfrist
As already pointed out, termination of contract is primarily to be justified on the basis of the doctrine of "fundamental breach." This criterion is to be applied even where the seller fails to perform his obligations within the contract time. Under this requirement, termination can be a thorny problem, for in any case the buyer must be sure that the breach is fundamental. This will not always be a proper solution for him. Once the seller is, for instance, late in performing, the buyer may rightly be doubtful whether the seller's delay amounts to a fundamental breach. One way to circumvent this problem is by use of the German law solution of Nachfrist according to which, where one party is in default the other party may give him a reasonable time within which he should perform his obligations. If at the end of this additional period of time, the defaulting party has not performed, the innocent party can terminate the contract. In the case of buyer's remedies, Art. 47(1) adopted a version of this concept. The provision authorises the buyer to fix an additional period of time of reasonable length for performance by the seller of his obligations. The wording of the provision appears to cover the whole range of obligations arising under the contract and the Convention, such as delivery of all or part of the goods, the remedy of any lack of conformity by repair of the goods or by delivery of substitute goods or performance of any other act which would constitute performance of the seller's obligations. However, Art. 49(1)(b) only refers to the case where the seller has failed to deliver the goods. Accordingly, the question is whether the buyer's right to terminate the contract on the basis of Nachfrist notice arises only where the seller has failed to deliver on the date set for delivery in the contract or if it also comes into operation in respect of failure to perform other obligations.
Although ULIS started with the idea that the buyer could avoid a contract only for a fundamental breach (Art. 43), it also allowed the buyer to demand that the seller cure the defect within a reasonable time and, if the seller did not, the buyer could declare the contract avoided (Art. 44(2)). The UNCITRAL Working Group's early drafts were also broad and covered any failure of the seller to perform any of his non-fulfilled obligations within the additional period of time. However, in 1973 at the fourth session several representatives advanced proposals to restrict the notice-avoidance procedure to cases where the seller has not delivered the goods. UNCITRAL accepted those proposals on the ground that the procedure could be abused to convert a minor breach into a fundamental breach by using the Nachfrist system provided under Art. [47(1)] and avoid the contract where the seller did not perform his obligations within the additional time. The restricting provision survived in Art. 45(1)(b) of UNCITRAL's 1978 Draft Convention. At the Vienna Conference, the [next page]