Q 50-1
What are the practical differences between the solution under the CISG and that under common law?
Different outcomes are only possible if the purchase price agreed upon was either lower or higher than the real value of the goods. If the purchase price equals the value of the goods, the results are the same. In many instances, where the market price cannot be ascertained by referring to listed market prices, it can be assumed that the purchase price constitutes the real value of the goods.
Q 50-2
How does the CC approach differ from the other legal systems?
Whereas according to the Roman law approach reduction of the price can only be asked for in case of non-conformity of the goods, the CC 2016 has extended this remedy to apply to any breach of contract.
Q 50-3
Do you think Article 50 CISG also applies in the case of encumbrances with third party intellectual or industrial property rights? Why or why not?
The clear wording of Article 50 CISG militates against its application in case of encumbrances with third party intellectual property rights, although it can be argued that it would be economically reasonable to apply Article 50 CISG by analogy as Article 42 CISG is more similar to Article 35 CISG than to Article 41 CISG.
Q 50-4
How does the above case (C 50-1) explain the relationship between Article 49(1)(a) CISG and Article 50 CISG?
Unlike Article 205(3) OR (Swiss Law of Obligations) that explicitly excludes a price reduction to zero, the court in C 50-1 came to the conclusion that under the CISG, Article 49 CISG does not prevail over Article 50 CISG. Thus, a price reduction to zero under Article 50 CISG may be made if the prerequisites for avoidance are not given.
Q 50-5
If a fundamental breach is found to exist, what consequences does this have for any price reduction?
In many cases, where there is a fundamental breach the goods may be ‘worthless’ to the buyer. However, this does not mean that they are indeed completely worthless—if only they have a scrap value—so that a price reduction to zero could be claimed by the buyer.
Q 50-6
(a) What does this case (C 50-2) state should be the method used to calculate the reduction of the price under Article 50 CISG?
(b) Is this solution workable in practice?
(a) The reduction in price is determined by a proportional calculation. The reduced price should bear the same proportion to the contract price as the value of the goods actually delivered bears to the value of conforming goods at the time of delivery.
(b) This solution is workable in practice only if the true value of the goods at the time of the conclusion of the contract as well as the reduced value of the non-conforming goods can be determined.
