Q 72-1
Things are more complicated both where the notice given is unreasonably short and where the assurance provided by the debtor is insufficient. Should these two cases really be treated in the same way as those where no notice or no assurance at all were provided?
There is no clear answer to those questions. However, based on the idea of a ‘second chance’ reflected in Article 48 CISG, it seems preferable to give the creditor the possibility to adjust the period fixed in the notice and make it conform to the ‘reasonableness’ requirement. Likewise, the debtor should have the opportunity to subsequently provide assurance which is ‘adequate’.
Q 72-2
Distinguish Article 72 CISG from Articles 71, 49 and 64 CISG.
Articles 72 and 71 both operate in the run-up to performance. Whereas Article 72 allows for an avoidance of the contract, Article 71 provides for a preliminary remedy only. Articles 49 and 64, like Article 72, relate to a fundamental breach and provide for the right to avoid the contract. However, under Articles 49 and 64, the fundamental breach must have actually occurred, whereas Article 72 requires that there clearly will be a fundamental breach in the future.
Q 72-3
How must the requirement that an anticipatory fundamental breach be ‘clear’ be distinguished from the prerequisite in Article 71 CISG that it must ‘become apparent’ that one party will not perform a substantial part of its obligations?
It is virtually undisputed that Article 72 CISG requires a higher degree of probability than Article 71. This is implied already in the wording used in Articles 71 and 72, respectively; but, more importantly, it follows from the differences in purpose and legal consequences of Articles 71 and 72.
Q 72-4
(a) What is the purpose of the ‘notice’ requirement in Article 72(2) CISG?
(b) In which cases will a notice within the meaning of Article 72(2) CISG not be required? See also C 72-1.
(a) To give the debtor the opportunity to provide adequate assurance and thus dispel doubts about its capacity or willingness to perform.
(b) Article 72(3) CISG states that a notice is unnecessary if a party has declared its intention not to perform the contract. C 72-1 illustrates this: the declaration of a party not to meet the delivery deadline was regarded as a repudiation of the contract.
Q 72-5
(a) What are the consequences if no notice is given under Article 72(2) CISG?
(b) What happens if the debtor cannot furnish any adequate assurance?
(a) Failure to give notice deprives the creditor of its right to declare the contract avoided. If such declaration of avoidance has been made without prior notification of the debtor, the creditor itself commits an anticipatory breach of contract within the meaning of Article 72(3) CISG.
(b) The debtor unable to furnish adequate assurance cannot avert the avoidance of the contract by the creditor.
Q 72-6
(a) How does the UCC settle the conflict between renewed willingness on behalf of the debtor to perform and the creditor’s already having resorted to a remedy incompatible with the debtor’s performance of the contract?
(b) Has this question been solved under the CISG? What could be a reasonable solution?
(a) The creditor may resort to any remedy for breach, even though it has notified the repudiating party that it would await the latter’s performance.
(b) The question has not been explicitly settled, but for the purpose of Article 72(2), it must be assumed that if the debtor does not furnish adequate assurance within a reasonable time, the creditor may avail itself of any remedy, including the one to avoid the contract.
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