1. Remedies for breach of contract Art 45-52 --- remedies for the buyer Art 61-65 --- remedies for the seller General remedies for both seller and buyer: 1. Avoidance of the contract 2. Specific performance 3. Compensation

2. Avoidance of the contract Article 49 (1) The buyer may declare the contract avoided: (a) if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with paragraph (1) of article 47 or declares that he will not deliver within the period so fixed.

3. Article 64 (1) The seller may declare the contract avoided: (a) if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) if the buyer does not, within the additional period of time fixed by the seller in accordance with paragraph (1) of article 63, perform his obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed.

4. 中国合同法 - 解除合同 第九十四条有下列情形之一的，当事人可以解 除合同： （一）因不可抗力致使不能实现合同目的； （二）在履行期限届满之前，当事人一方明确 表示或者以自己的行为表明不履行主要债务； （三）当事人一方迟延履行主要债务，经催告 后在合理期限内仍未履行； （四）当事人一方迟延履行债务或者有其他违 约行为致使不能实现合同目的； （五）法律规定的其他情形。

5. Avoidance of the contract Fundamental Breach Breach of the contract - the non-performance of a duty under a contract Fundamental Breach Non- fundamental breach

6. Article 25 – Fundamental breach A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.

7. Fundamental Breach (1) A breach of contract results in detriment (2) The detriment must substantially deprives him of what he is entitled to expect under the contract (3) The violating party must have foreseen the result of breach. BURDEN OF PROOF 1),2) – the aggrieved party 3) – the violating party

8.  Seller – Australia  Buyer – U.S.  Goods – Turkey (for resell during Charismas)  Deliver the goods to Boston between 15 Dec – 19 Dec 2010  Actual deliver - 29 Dec 2010  The buyer hardly resell the turkey  Seller – Australia  Buyer – U.S.  Goods – chicken (for resell)  Deliver the goods to Boston between 15 Dec – 19 Dec 2010  Actual deliver - 29 Dec 2010  The market price of chicken did not fluctuate in Dec,2010

9. Avoidance of the contract - Non-performance within the additional time - The party gives the violating party the Nachfrist notice, the violating party rejects it or does not perform within the period it specifies.

10. Avoidance of the contract The contract was avoided when the notice reached the other party – Article 26 Avoidance of the contract releases both parties from their obligations under it – Article 81

11. Avoidance of installment contracts Article 73 1) Fundamental breach with respect to a particular installment – the other party may declare the contract avoided with respect to that installment. 2) The breach of one installment gives the other party good grounds to believe that a fundamental breach of future installment will occur, he may declare the contract avoided for the particular installment and the future installment. 3) If the installments are interdependent, a fundamental breach of one installment will allow a party to avoid the entire contract. (past and future installments included)

12. Anticipatory breach – suspension of performance Prior to the date of performance: It becomes apparent that the other party will not perform a substantial part of his obligations as a result of: (a) a serious deficiency in his ability to perform or in his creditworthiness; or (b) his conduct in preparing to perform or in performing the contract. - Suspension of performance  must immediately give notice of the suspension to the other party  must continue with performance if the other party provides adequate assurance of his performance.

13. Anticipatory breach – Avoidance of the contract Article 72 － If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided. The innocent party may choose to 1. Declare the contract avoided and claim compensation before the date of performance, or 2. Affirm the contract and demand performance. Then claim compensation after the date of performance

14. Anticipatory breach – Avoidance of the contract Date of performance – 1 March 2010 1 Feb 2010, the Seller notified the Buyer they would not perform the contract. 2 Feb. 2010, the Buyer replied and insisted the seller to deliver the goods 5 Feb 2010, the goods were destroyed during the storm. 1. On 2, Feb - the buyer could avoid the contract and claim compensation for breach 2. 30 Feb 2010 – the buyer lose the right to claim compensation for breach

15. Specific Performance & Damages In common law countries  Firstly: compensation are preferred (common law)  Then: specific performance (equity law) In civil law countries  Firstly: specific performance  Then: compensation

16. Specific Performance & Damages CISG  Article 28: if, in accordance with the provisions of this convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance China  Firstly: specific performance  Then: compensation

17. Specific performance Article 46 Article 62 - unless the buyer or the seller has resorted to a remedy which is inconsistent with this requirement. - The buyer may require delivery of substitute goods if the lack of conformity constitutes a fundamental breach of contract.

18. Claim compensation Art. 74: 1) Actual loss 2) Loss of profit The principle of foreseability - Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract,

19. DISPUTED COMPENSATIONS Compensation for loss of reputation Compensation for loss of commercial opportunity The detriment should be certain and definite

20. Obligation of mitigation Article 77 A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.

21. Obligation of mitigation Ie: Call off the performance immediately when the contract is avoided Resell the goods or buy the substitute goods to mitigate the loss of profit Take reasonable measures to protect the nonconforming goods delivered by the buyer Give notice when necessary

22. Seller – price reduction - When the buyer delivered the non-conforming goods, the buyer may accept the goods and ask for price reduction. The contract price has to be reduced in proportion of the value of the delivered goods to the value of conforming goods would have on the date of delivery.

23. Compensation after the contract avoided Article 75 in a reasonable manner within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction as well as any further damages recoverable under article 74.

24. 合同－ 买卖 100 套机械工具，合同价为 FOB$50, OOO 如果合同被履行，卖方将需花费 $45,000 元的支出。 其中 $40 ， 000 作为因履行合同的成本支出 ( 如，原材料， 能源，劳工雇用或是每一生产单位的支付 ) 另 $S,5000 元作为合同存在已承担的企业日常费用 ( 如，借 款成本，一般行政管理费 ) 。 （ 1 ）如果买方在卖方开始生产前解除合同，卖方可以获得多 少损害赔偿？ （ 2 ）如果在买方解除合同前，卖方己经生产了一些货物，花 费了 $15, 000 元成本费用，这部分产品向第三者出售后获 取 $12 ， 000 ，此时卖方可以获得多少损害赔偿？

25. Compensation after the contract avoided Article 76 If the contract is avoided and there is a current price for the goods, the party claiming damages may, if he has not made a purchase or resale under article 75, recover the difference between the price fixed by the contract and the current price at the time of avoidance as well as any further damages recoverable under article 74.

26. 买卖合同 －－ 1000 吨大米 －－ 一级大米 每吨 200 美元，共 200 ， 000 美元 卖方交货时，实际交货的品质为二级大米 二级大米订立合同时每吨为 150 美元 1. 如果交货时市场价格没有发生变动，买方同意收货，买 方应支付多少价款？ 2. 如果交货时，市场价格下跌，一级大米每吨 100 美元，二 级大米每吨 75 美元。在此情况下，买方又如何处理？为 什么？ 3. 假如在实际交货时，大米市场价格上涨，一级大米每吨 400 美元，二级大米每吨 300 美元，在此情况下，买方又 如何处理？为什么？ 4. 假如在第 3 ）的情况下，买方拒绝接收货物后，又从第三 方购得 1200 吨一级大米，单价为 350 美元每吨，为了补 进货物，买方另行支付 5 万美元，此时买方可获得多少损 害赔偿？

27. Liquidated Damages Liquidated damages are the amount agreed by the parties during the formation of a contract, which is for the injured party to collect as compensation upon a specific breach Part of the contract

28. Liquidated Damages Compensatory for the purpose to compensate the innocent party when breach happens Liquidated Damages Punitive designed to punish the wrongdoer. (penal, penalty clause)

29. Common law countries  Compensatory: enforceable  Punitive: unenforceable Civil law countries  Both are enforceable International rule  Both are enforceable China  Both are enforceable Legal effect of liquidated damages

30. 中国 《合同法》第一百一十四条规定： 1. 约定的违约金低于造成的损失的，当事人可以请求人民法院或者仲 裁机构予以增加 ; 2. 约定的违约金过分高于造成的损失的，当事人可以请求人民法院或 者仲裁机构予以适当减少 ; 《最高人民法院关于适用中华人民共和国合同法〉若干问题的解释 ( 二 ) 》 第二十九条当事人主张约定的违约金过高请求予以适当减少的，人民 法院应当以实际损失为基础，兼顾合同的履行情况、当事人的过错程 度以及预期利益等综合因素，根据公平原则和诚实信用原则予以衡量， 并作出裁决。 当事人约定的违约金超过造成损失的百分之三十的，一般可以认定为 合同法第一百一十四条第二款规定的 “ 过分高于造成的损失 第二十八条当事人依照合同法第一百一十四条第二款的规定，请求人 民法院增加违约金的，增加后的违约金数额以不超过实际损失额为限。 增加违约金以后，当事人又请求对方赔偿损失的，人民法院不予支持。

31. 中国 《合同法》第一百一十六条规定 “ 当事人既约定 违约金，又约定定金的，一方违约时，对方可 以选择适用违约金或者定金条款。 ” 违约金和损害赔偿 – 选择适用

32. 甲公司与乙公司依法订立一份总货款为２０万元 的购销合同。合同约定违约金为货款总值的５ ％。同时，甲公司向乙公司给付定金５０００ 元，后乙公司违约，给甲公司造成损失２万元。 甲公司依法最多可要求乙公司偿付多少？ Ａ．２万元 Ｂ．３．５万元 Ｃ．２．５万元 Ｄ．３万元 D

33. Other remedies: Early delivery and excess quantities Article 52 (1) If the seller delivers the goods before the date fixed, the buyer may take delivery or refuse to take delivery. (2) If the seller delivers a quantity of goods greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. If the buyer takes delivery of all or part of the excess quantity, he must pay for it at the contract rate.

34. The buyer failed to specify the form Article 65 (1) If under the contract the buyer is to specify the form, measurement or other features of the goods and he fails to make such specification either on the date agreed upon or within a reasonable time after receipt of a request from the seller, the seller may, without prejudice to any other rights he may have, make the specification himself in accordance with the requirements of the buyer that may be known to him. (2) If the seller makes the specification himself, he must inform the buyer of the details thereof and must fix a reasonable time within which the buyer may make a different specification. If, after receipt of such a communication, the buyer fails to do so within the time so fixed, the specification made by the seller is binding.

35. Remedies for the buyer to compel specific performance to compel deliver substitute goods to require the seller repair the goods to avoid the contract for fundamental breach or non-delivery. to reduce the price to refuse early delivery and excess quantities to claim money compensation

36. Remedies for the seller to compel specific performance to avoid the contract for fundamental breach or non-delivery. to fix the description of the goods to claim money compensation

37. Exemptions Article 79 Relief from liability for damages

38. Frustration of contract 1. Impossibility of performance 1)The death or injury of one party Robinson v Davision 2)The destruction of the specific subject matter of the contract. Taylor v Caldwell

39. 2. Frustration of purpose Krell v Henry 3. supervening illegality 4. commercial impracticability - The nonbreaching party will be excused only if performance would result in extreme hardship, difficulty, or unreasonable expense as a result of an unforeseen event.

40. Limitation of frustration The event should not be foreseeable The event is caused by the fault of one party The contract could be partially perfomed.

41. The effect of frustration 1. The price paid before the event should be returned 2. The price which should have be paid before the event should be paid after the event 3. The cost benefited the other party shall be compensated after the event

42. Civil law system Force Majeour Hardship/changed circumstances

43. The effect of force majeour Avoidance of contract Delayed performance

44. Force Majeure Unforeseeable objective test + subjective test The impediment can not be overcome by the party The impediment is not induced by one of the parties

45. Hardship/Changed circumstances Commercial impracticability Effect: 1. Alteration of the contract 2. Avoidance of the contract

46. CISG Article 79 (1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. (2) If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if: (a) he is exempt under the preceding paragraph; and (b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him.

47. (3) The exemption provided by this article has effect for the period during which the impediment exists. (4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt. (5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention.

48. PASSING OF RISK Article 66 Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller. Risk - incidents, which are not caused by one of the parties to the contract or by persons for whom they are responsible, but incidents which are caused by independent third parties or incidents which are not caused by human persons. It must be casual loss or damage.

49. PASSING OF RISK If involves carriage of the goods and the seller is not bound to hand them over at a particular place, - the risk passes to the buyer when the goods are handed over to the first carrier for transmission If the seller is bound to hand the goods over to a carrier at a particular place - the risk does not pass to the buyer until the goods are handed over to the carrier at that place. risk.

50. 中国－ 甲公司 － 卖方 美国 － 乙公司 － 买方 合同约定：甲公司出售一批衣料给乙公司 履行方式为：甲公司于 7 月份将该批衣料自重庆交铁路发运至大连，后由大连船运 至美国纽约，乙公司支付相应对价。 7 月份，甲公司没有履行。 8 月 3 日，乙公司通知甲公司，该批衣料至迟应在 8 月 20 日之前发运。 8 月 10 日，甲 公司依约将该批衣料交铁路运至大连。 但该批衣料在自大连至纽约的运输途中因海难损失 80% 。由于双方对货物灭失的 风险约定不明遂发生争执。 乙公司认为，甲公司未于 7 月份履行合同违约在先，应承担损害赔偿责任。合同因 甲公司未按时履行义务已终止，故货物损失的风险理应由甲公司承担。 乙公司拒 绝支付价款。 1. 乙公司认为本案合同因甲公司违约已经终止的观点是否正确，为什么？ 2. 如果衣料在 8 月 25 日才发运，此时乙公司可否主张合同已经终止？ 3. 本案中，货物损失的风险应由谁承担，为什么？ 4 ．乙公司是否有权拒绝支付价款，要求甲公司承担损害赔偿责任，为什么？

51. 甲出售 1000 吨小麦给乙， 承运人装运甲的 3000 吨散装小麦运往乙国家。 受载船只在途中遇到风险，货物损失 1200 吨， 另有 1800 吨安全到达目的港。 甲宣称出售给乙的 1000 吨小麦全部损失，并认 为依据 CFR 合同，甲对此项风险不承担任何责 任。 在这种情况下，小麦毁损的风险应由谁来承 担？

52. PASSING OF RISK EXCEPTION the risk does not pass to the buyer until the goods are clearly identified to the contract, whether by markings on the goods, by shipping documents, by notice given to the buyer or otherwise.

53. The passing for risk with goods in transit. Article 68 The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller.

54. Article 69 Other situations: 1. The risk passes to the buyer when he takes over the goods 2. The risk passes to the buyer from the time when the goods are placed at his disposal but his commits a breach of contract by failing to take delivery 3. The risk passes to the buyer when delivery is due and the buyer is aware of the fact that the goods are placed at his disposal at that place.

55. Article 70 If the seller has committed a fundamental breach of contract, articles 67, 68 and 69 do not impair the remedies available to the buyer on account of the breach.