The United Nations Convention on Contracts for the International Sale of Goods (hereinafter CISG) entitles the non-defaulting party of an international commercial contract to claim for damages in case of failure of the other party. Despite the fact that a fundamental breach of the contract (art. 25 CISG) could not be proved, parties could submit a claim for damages. However, there is an exception to this general rule, which is contained under the authority of article 79 CISG:
“(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.
(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 nonreceipt.
(5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention.”
Comparing this article with Civil Code of Argentina it is reasonable to assume that it is similar to “force majeure” (art. 514 Civil Code). CISG did not use the words “force majeure” because the meaning of them vary depending on the country and as it is well know one of the most important aims of the Convention is to uniform international sales law. As a consequence it is used the phrase “impediment beyond his control”.
What is considered an impediment beyond the parties´control? An event that is unavoidable and the party could have not prevented. Hurricanes, earthquakes, social crisis and in some cases strikes. This last example depends on where have happened strikes according to case law.
Concerning temporary impediments, Honnold says: “…in the context of the Convention ´s limited rights of avoidance there is no justification for a rule that a party awaiting performance is both a) deprived of compensation for delay and b) require to accept the late performance”.
The cornerstone of this matter is the burden of proof.
“The burden of proof as regards liability exemption must be lifted by the party who seeks an exemption, and this means that the non-performing party remains liable unless he proves that a series of 'conditions' are fulfilled”.
“To overcome” means to take the necessary steps to preclude the consequences of the impediment. It is closely associated with the condition of the external character of the impeding event. The attention should be focused on the behaviour of the defaulting party.
A party who is under an obligation to act must do all in his power to carry out his obligation and may not await events which might later justify his non-performance.
The possibility to avoid or overcome an impediment has to be judged according to the contractual allocation of risks (cf. Schlechtriem-Stoll, Art. 79 CISG, para. 16 et seq.). Regarding the fact whether seller or buyer retains the risk it is necessary to take into consideration INCOTERMS (FOB, CIF, CFR, etc).
In order to avoid liability parties should not forget to notify the impediment within reasonable time.
To conclude it is important to highlight that art. 79 CISG only provides an exemption to reward damages when the party was prevented from performing the contract because of an impediment beyond its control. There is no restriction to claim for others right protected by the Convention.
http://www.cisg.law.pace.edu/cisg/biblio/loo79.html
Tallon, Denis in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 572-595 (1987) 572-595. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A. http://www.cisg.law.pace.edu/cisg/biblio/tallon-bb79.html
http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-79.html
