INTRODUCTION

Article 64 CISG deals with a seller's right of avoidance in case of breach of contract by the buyer. It is the counterpart provision to the buyer's right to avoid the contract under Article 49 CISG. Although paragraph (1) lays down the conditions under which the seller is entitled to declare the contract avoided, paragraph (2) provides for situations where he loses the right to the remedy of avoidance. The avoidance remedy is limited to two situations. Subparagraph (1)(a) gives the seller the right to avoid the contract where the buyer's breach amounts to a fundamental breach of the contract in terms of Article 25 CISG. Subparagraph (1)(b) deals with non-payment or not taking delivery of the goods. Non-payment or not taking delivery does not per se qualify for a fundamental breach but only if timely payment or timely taking of delivery is of the essence of the contract. However, the seller can declare the contract avoided, where the buyer fails to pay and/or take delivery of the goods within an additional period (Nachfrist) set by the seller in accordance with Article 63(1) CISG. The avoidance regime under the UNIDROIT Principles similarly 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 payment or late taking delivery due to non-compliance with a Nachfrist (Article 7.1.5 of the UNIDROIT Principles).