Q 75-1
(a) Which situations does Article 75 CISG govern?
(b) Was it necessary to establish Article 75 alongside Article 74 CISG?
(c) If the aggrieved party does not proceed under Article 75 CISG, is it deprived of any other remedies available under the CISG?
(a) According to the wording of Article 75 CISG, the contract must have been avoided and a concrete substitute transaction must have taken place.
(b) Under the principle of full compensation, a substitute transaction could be used to calculate damages for non-performance. Article 75 CISG offers an easy way to prove the non-performance loss.
(c) If no avoidance has taken place, damages may still be recovered under Article 74 CISG. Furthermore, damages in the amount of a concrete substitute transaction may be asked for if the other party had seriously and finally refused to perform (see C 75-1 and C 75-2). C 75-2 seems to leave the question open as to whether the damages claim can be based on Article 75 CISG or on Article 74 CISG. The decision emphasises that the substitute transaction prior to avoidance of the contract was reasonable, preventive and ultimately successful.
Q 75-2
(a) What factors are used to determine whether the cover transaction satisfies the ‘reasonability test’ in Article 75 CISG?
(b) On which other provision of the CISG can the requirement that the cover transaction be reasonable be based?
(a) Quality and amount of the goods, time of the substitute transaction.
(b) Article 77 CISG, the duty to mitigate damages.
Q 75-3
What is the consequence if there is a significant difference between the contract price and the price in the substitute transaction?
Depending on the circumstances this could lead to a reduction in damages because of the duty to mitigate damages under Article 77 CISG.
Q 75-4
(a) Is there a guideline as to what constitutes a reasonable time?
(b) When will the reasonable time begin to run? See C 75-4.
(a) In general, the reasonableness depends upon the circumstances of the case.
(b) The reasonable time begins to run at the time of the avoidance of the contract. Article 77 CISG may call for a cover transaction before performance would be due under the contract.
Q 75-5
(a) Compared to corresponding legal provisions from other legal systems, does Article 75 constitute a generally acknowledged rule?
(b) Do the domestic legal provisions also require a termination of the contract prior to the cover transaction?
(a) The rules laid down in Article 7.4.5 PICC 2016 and in the UCC are comparable. Other legal systems know similar rules.
(b) The domestic provisions reprinted here (UCC and OR) do not require a prior avoidance of the contract.
