The idea is to emphasise the principle of concurrent performance, according to which a party should not be obliged to perform if it is sufficiently obvious that the promised counter-performance will not be rendered or not be conforming to the contract.

In C 71-2, it was not the buyer’s execution of the main performance that was jeopardised, ie, the payment of the purchase price, but rather the protection of the seller’s patent right and the confidentiality of its expertise. Article 71 CISG applied to this situation, first, because it allows for suspension of performance before the date performance by the debtor is due, and secondly, because it only requires that a ‘substantial part’ of the other party’s performance be compromised. In contrast, Article 82 OR would not apply to this case: withholding performance is permitted only where the debtor’s performance is already due, and even then, performance can only be withheld if the other party fails to tender its main obligations, ie, its counter-performance in the proper sense.

(a) The right to suspend performance in Article 71(1) is available to both seller and buyer and allows for the suspension of performance of a party’s obligations if it becomes apparent that the other party will not perform a substantial part of its obligations. The right to prevent the handing over of the goods in Article 71(2) CISG is available to the seller only and allows the prevention of handing over of the goods to the buyer after they have been dispatched.

(b) No, Article 7.3.4 PICC refers to the right to withhold performance, without making any further distinctions.

(c) Both Section 2-705 UCC and Section 44 SGA deal with the seller’s right to prevent the handing over of the goods, that is, with the situation which, under the Convention, is governed by Article 71(2).

According to the court, ‘singular delayed payments or a sluggish mode of payment are normally not sufficient to show a serious loss of creditworthiness.’ Thus, the ‘buyer’s default in payment of the deliveries from February and March 1993 [were] not sufficient to legitimise a right of suspension according to Art 71 CISG’.

(a) According to the view expressed in C 71-3, the lack of notification allows the debtor to claim damages to cover its loss of profit resulting from the creditor’s suspension of performance. In C 71-4, the arbitral tribunal held that the compensation of damages arising out of the suspension should be limited to the immediate and direct damage caused by the suspension.

(b) The position taken in C 71-3 extends the damages to the consequences of the lack of notification in the execution of the whole contract, whereas the position adopted in C 71-4 limits the damages to the immediate consequences of the suspension. The first view seems prohibitively strict and renders the self-help remedy of Article 71 virtually meaningless.

The Convention does not state any period of time within which adequate assurance must be furnished. The PICC require that it be provided ‘within a reasonable time’. Section 2-609(4) UCC is more precise in stating that a failure to provide assurance within a reasonable time not exceeding 30 days constitutes a repudiation of the contract. The solution under the UCC is to be preferred over that of the CISG. Under Article 71(3), the creditor can take no action as long as a breach of contract is impending and no adequate assurance has been provided, whereas the solution of the UCC is clear-cut and does not put the creditor at the mercy of the debtor.