Remedies Available to Buyer upon Seller's Breach

• Author: Jack Michael Graves
• Pages: 81-110

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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