Sales Law, Domestic and International by Clayton Gillette

Author:Clayton Gillette
Language: eng
Format: epub
ISBN: 9781634602181
Publisher: West Academic
Published: 2015-01-15T00:00:00+00:00

C. Under the CISG

1. “Impediment Beyond His Control”

The CISG reflects the UCC’s analysis of excuse to a significant degree, though the CISG employs a different language. Article 79 of the CISG “exempts” either the seller or the buyer from liability for failure to perform contractual obligations if the defaulting party proves (1) that the failure was due to an impediment “beyond his control,” (2) that “he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract,” and (3) that once the impediment materialized, he could not reasonably have avoided or overcome it or its consequences. Of course, the party seeking exemption must also demonstrate a causal relationship between the non-performance and the impediment. The party seeking exemption will bear the burden of proof on all these issues.153 Although the Article avoids language of “impracticability” and phrases such as “the occurrence of a contingency the nonoccurrence of which was a basic assumption,” the principles behind those terms appear also to inform the CISG standard. Nevertheless, the term “exemption” is descriptively correct, since the CISG does not end the obligation, but simply “exempts” the affected party from liability for failure to perform its obligations.

The requirement that materialization of the impediment must be beyond the control of the party seeking exemption is somewhat ambiguous. It does not simply indicate that the party must take reasonable precautions against materialization of the impediment. That obligation is addressed through the condition that exemption is permitted only if the party could not reasonably be expected to have avoided the impediment or its consequences. The “beyond his control” requirement imposes a stricter requirement that the impediment materialized from some exogenous event outside of what some commentators call the “sphere of influence” of the party seeking exemption. A labor strike at the seller’s plant that prevents production of the required goods may be within the seller’s control, while a general strike that has the same effect is not. This suggests something close to a strict liability rule in which an obligor guarantees performance with respect to matters of internal organization and perhaps choices of suppliers and employees. Similarly absolutist language can be found in the Secretariat Commentary to the CISG, which includes that statement that the draft counterpart to Article 79 “reflects the policy that a party who 288

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.”154

As an interpretation of Article 79, the rule described by these statements is too strict. At some cost, an obligor will almost always be able to avoid loss. Fire can be prevented by hiring round-the-clock guards armed with fire extinguishers; shipping disasters can be avoided by shipping the goods twice, in case something goes awry with the first shipment. But these possibilities make the possibility of an exemption superfluous. Indeed, notwithstanding that doing so seems to replicate the “reasonably avoidable” requirement elsewhere in

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