Q 25-1
Why is Article 25 to be interpreted restrictively?
Because determination of a fundamental breach entitles the non-breaching party to declare avoidance of the contract, which, in light of the complexities involved in international sales, is the ultima ratio remedy and should only apply in limited circumstances.
Q 25-2
(a) According to the Polish case (C 25-2), what should the court consider in determining whether a fundamental breach exists?
(b) Is the question of the existence of a substantial detriment relevant?
(a) The circumstances of the contract and the expectations of the parties, under a full analysis of the text of the contract, any practices, usages, negotiations and all other relevant circumstances.
(b) The existence of a substantial detriment must be assessed subjectively and not objectively.
Q 25-3
(a) How does foreseeability come into play?
(b) Who bears the burden of proof for foreseeability and substantial deprivation?
(a) The breaching party must have been able to foresee that the consequence of the breach would be that the non-breaching party is substantially deprived of what it is entitled to expect under the contract. The foreseeability of the breach itself is not decisive.
(b) The non-breaching party as the party asserting a fundamental breach.
Q 25-4
What appears to be the most relevant factor for determining the existence of a fundamental breach according to C 25-3 and C 25-4?
The ability to resell the defective goods.
Q 25-5
a) How does the foreseeability requirement under Article 25 interact with the concept of a specialised seller who “should have known” that a specific characteristic was central to the buyer’s purpose?
b) For case C 25-5, if the seller convincingly claimed it could not have known the buyer was purchasing the car for investment or collector’s reasons, would that alter the assessment of foreseeability under Article 25?
(a) If due to the seller’s expertise very specific features are clear to be, e.g., “essential” and “value determining”, then their decisive importance leads to a breach, if said features are not given. Such a breach, given the essential nature, is not only material but also foreseeable.
(b) This would require that the features are not inherent to the type of product, but linked to the purpose of the purchase. This can be argued, but heavily depends on the case. Especially, if the resell value or sale value in the first place is impacted by the features, they potentially nevertheless are material to the contract.
Q 25-6
Contrast C 25-3 with C 25-6. What factors did the courts take into account in coming to different findings as to the existence of a fundamental breach?
In C 25-3, the buyer’s inability to resell the goods supported the existence of a fundamental breach. In C 25-6, the fact that the buyer wanted to repair the defects in the goods showed that there was no fundamental breach because, with the repairs, the buyer would receive what it was entitled to expect under the contract.
