INTRODUCTION

Article 49 CISG regulates a buyer's right of avoidance in case of breach of contract by the seller. Although paragraph (1) lays down the conditions under which the buyer is entitled to declare the contract avoided, paragraph (2) provides for situations where he loses the remedy of avoidance. Because the consequences of this remedy are harsh for the seller, the remedy is limited to two situations. Subparagraph (1)(a) gives the buyer the right to avoid the contract where the seller's breach amounts to a fundamental breach of the contract in terms of Article 25 CISG. Subparagraph (1)(b) deals with late delivery and cases where the seller does not deliver the goods at all. Even if late delivery or non-delivery does not per se qualify for fundamental breach but only if timely delivery is of the essence of the contract, the buyer can declare the contract avoided where the seller fails to deliver the goods within an additional period (Nachfrist) set by the buyer in accordance with Article 47(1) CISG. The avoidance regime under the UNIDROIT Principles also distinguishes between termination based on fundamental non-performance (Article 7.3.1 of the UNIDROIT Principles, the UNIDROIT Principles counterpart to fundamental breach) and a termination in case of late delivery due to non-compliance with a Nachfrist (Article 7.1.5 of the UNIDROIT Principles). In this chapter, only the second of the two grounds for avoidance/termination under both instruments is analyzed.