Can an instalment contract be avoided under Art.49/64 CISG?
In continuation to my earlier post, in this post, I will be proposing a counter argument - that an instalment contract can be avoided under Art.49/64 CISG
In determining the meaning of an international treaty, one of the rules of the 1969 UN Convention on the Law of Treaties is that recourse may be had to supplementary means of interpretation including the preparatory work of the treaty. (Article 32 of the 1969 Vienna Treaty Convention.) In the interpretation of the CISG also, its legislative history can be decisive, as this would be in accordance with Art. 7(1) of the CISG.
If we look at the legislative history of Art.73, we will see that the purpose of incorporating 73(1) is to enable the buyer to make partial avoidance of an installment contract. The purpose of 73(2) was to encompass an anticipatory breach situation, where the basis of the anticipation is a breach already committed. While the purpose of Art. 73(3) is to provide for a right of avoidance having retroactive effect, justified by the close interdependence between the breached instalments and other instalments. Art.73 however does not take into account a situation where, the breach of obligation in respect of an instalment amounts to fundamental breach of the whole contract.
On the other hand Art. 49 (1) (a) allows the buyer to avoid the contract when the failure by the seller of any of his obligations under the contract or convention, constitutes a “fundamental breach of the contract.” Thus Art 49 refers to situations where the failure to perform by the seller concerns the contract as a whole.( Anna Kazimierska ) Thus even if the contract is a contract for delivery of goods by instalments, the buyer can avoid the entire contract under Art. 49(1)(a) if the seller's default constitutes a fundamental breach of the entire contract. (Harry M. Flechtner). This argument can similarly apply to Art.64 i.e. it refers to situations where the failure to perform by the buyer concerns the contract as a whole and thus the seller can avoid the entire contract under Art. 64 (1)(a) if the buyer’s default even in respect of one instalment constitutes a fundamental breach of the entire contract.
In determining the meaning of an international treaty, one of the rules of the 1969 UN Convention on the Law of Treaties is that recourse may be had to supplementary means of interpretation including the preparatory work of the treaty. (Article 32 of the 1969 Vienna Treaty Convention.) In the interpretation of the CISG also, its legislative history can be decisive, as this would be in accordance with Art. 7(1) of the CISG.
If we look at the legislative history of Art.73, we will see that the purpose of incorporating 73(1) is to enable the buyer to make partial avoidance of an installment contract. The purpose of 73(2) was to encompass an anticipatory breach situation, where the basis of the anticipation is a breach already committed. While the purpose of Art. 73(3) is to provide for a right of avoidance having retroactive effect, justified by the close interdependence between the breached instalments and other instalments. Art.73 however does not take into account a situation where, the breach of obligation in respect of an instalment amounts to fundamental breach of the whole contract.
On the other hand Art. 49 (1) (a) allows the buyer to avoid the contract when the failure by the seller of any of his obligations under the contract or convention, constitutes a “fundamental breach of the contract.” Thus Art 49 refers to situations where the failure to perform by the seller concerns the contract as a whole.( Anna Kazimierska ) Thus even if the contract is a contract for delivery of goods by instalments, the buyer can avoid the entire contract under Art. 49(1)(a) if the seller's default constitutes a fundamental breach of the entire contract. (Harry M. Flechtner). This argument can similarly apply to Art.64 i.e. it refers to situations where the failure to perform by the buyer concerns the contract as a whole and thus the seller can avoid the entire contract under Art. 64 (1)(a) if the buyer’s default even in respect of one instalment constitutes a fundamental breach of the entire contract.
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