Remedies Available to Buyer upon Seller's Breach

AuthorJack Michael Graves
Pages81-110
Buyer’s Remedies—an Overview
In the event that seller breaches one or more of its obligations, buyer will be
entitled to a variety of potential remedies. These remedies are fully explored
in the nal, and longest, portion of this chapter. However, before reaching
the matter of buyer’s remedies, two threshold issues should be addressed.
First, an aggrieved buyer must take certain actions to preserve its reme‑
dial rights, or some—and perhaps all—of these rights may be lost. Second,
in the event of a breach by seller, a buyer will always be entitled to damages,
assuming they can be proven and buyer has taken any necessary actions
to preserve its right to recover them. However, even in the event of breach,
seller may nevertheless have a right to cure the breach. While cure does
not relieve the seller of liability for any damages occurring, notwithstand‑
ing cure, it may signicantly reduce the amount of seller’s liability for the
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REMEDIES
AVAILABLE TO
BUYER UPON
SELLER’S BREACH
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breach. Perhaps most important, cure may preserve the contract by eliminat
ing any basis for avoidance by the buyer. Each of these two threshold issues
is fully addressed before turning to the ultimate issue of buyer’s remedies.
Preserving Buyer’s Remedies
All of buyer’s remedies are predicated on seller’s breach. However, buyer
must promptly provide notice of certain breaches or it may be precluded
from relying on those breaches in seeking a remedy. If buyer cannot estab‑
lish a breach, it is not entitled to any remedy whatsoever.
Preserving Remedies—Nonconforming Goods
Upon delivery by the seller, “the buyer must examine the goods within as
short a period as is practicable under the circumstances.”
CISG Article 38(1) and (2)
(1) The buyer must examine the goods, or cause them to be examined, within
as short a period as is practicable in the circumstances.
(2) If the contract involves carriage of the goods, examination may be deferred
until after the goods have arrived at their destination.
This language is remarkable for its departure from the more typical “reason
ableness” standard found in the CISG. In fact, some German and Austrian
courts have interpreted it quite strictly, requiring a very prompt examination
by the buyer. Article 38(3) provides a bit of latitude to the buyer in cases in
which the goods are “redirected in transit or redispatched by the buyer with
out a reasonable opportunity for examination,” but the standard remains
a strict one, placing an afrmative obligation on the buyer to act promptly.
Notably, however, Article 38 does not provide any sanction for the buyer’s
failure to conduct such a prompt examination. Instead, the examination
requirement of Article 38 informs the analysis of whether notice is timely
under Article 39, and the latter provision includes a very signicant sanction.
THE ABCS OF CISG
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