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61 J.L. Pol'y & Globalization 126 (2017)
Avoidance of Contract as a Remedy under CISG and SGA: Comparative Analysis

handle is hein.journals/jawpglob61 and id is 127 raw text is: ISSN 2224-3240 (Paper) ISSN 2224-3259 (Online) Vol.61, 2017 HE Avoidance of Contract as a Remedy under CISG and SGA: Comparative Analysis Bzhar Abdullah Ahmed Lecturer and Head of Higher Education, Faculty of Law, Soran University, Soran, Iraq Hassan Mustafa Hussein Mater in Public Law, Manager of Law affairs at Soran University, Soran, Iraq Abstract This article deals with fundamental breach in the 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) and the 1979 Sale of Goods Act (SGA). It provides ways of terminating sale contracts in the two legal systems. There are ambiguous terms in the CISG and this article explains them. At the same time, this article emphasises the questions to which satisfactory answers have not yet been provided, and provides appropriate answers to them. In this article the writer undertook comparative analysis on the rules of avoidance of contract under the CISG and SGA. It ends with an appreciation of when a sale contract could be terminated under both laws. The comparative analysis revealed that the CISG discourages the avoidance of contracts and allows it only in the case of a fundamental breach. However, the SGA allows it only if a condition is breached. It has also been revealed that the SGA seeks to gain certainty, but the CISG seeks to achieve justice in commercial transactions. However, a question remains: should certainty override justice? Key words: CISG, SGA, Fundamental Breach, Avoidance of Contract, Substantially Deprive. Introduction The CISG is considered as the most successful international convention in the area of business law. It was drafted by the United Nations Commission for International Trade Law (UNCITRAL) in 1980. 1 The importance of the CISG can be seen more obviously in some countries implementing and enacting it as national law, such as the Scandinavian countries, with some differences in implementation. Sweden and Finland introduced the CISG alongside domestic sales law based on the CISG and Norway has implemented the CISG as an international convention and as its domestic sales law. Furthermore, there are other ways in which the CISG has had an influence on the domestic law of other countries because even though the CISG has not been introduced as domestic law by some, uniform law was taken into account when they reformed their contract law. For example, the Netherlands Civil Code of 1992 had already been influenced by ULIS and ULFIS, and reform of the German law of obligations of 1984 was robustly influenced by ULIS, ULFIS and later by CISG, in particular breach of obligations.2 Moreover, the SGA has been a successful Act in the UK for governing contracts. It has gained popularity in the international trade sector, which can be verified by the use of the choice of British courts as a forum for disagreement resolution and the selection of an English law clause in contracts that allows the SGA to be applied in a case even if the case has no connection with the UK.3 It is a more definitive and less ambiguous Act compared with the CISG. For example, remedies which are given for the breach of contract are clearer than those given in the CISG, which is one of the reasons that the UK has given for not ratifying the CISG.' The CISG considers the avoidance of contract as a last resort because of the enormous sums of money involved in international commercial transactions. Consequently, avoidance of contract is discouraged by the CISG and it is allowed only in the case of a fundamental breach. However, under the SGA, terms are simply divided into conditions and warranties, and thus, if conditions are breached, the injured party is entitled to avoid the contract. Under English law the avoidance of contract is allowed even for minor non-conformities according to the rule of perfect tender. Nevertheless, the CISG gives the solution of the avoidance of contracts only where the breach is essential and serious, defined in its provisions as a fundamental breach.6 It is the belief of the researchers that this paper will help international merchants to understand when they are 'Sally Moss, 'Why the United Kingdom has not ratified the CISG' (2005) 25 JLC 483. 2Peter Schelchetriem, 'Basic Structures and General Concepts of the CISG as Models for a Harmonisation of the Law of Obligations' (2005) JI 27, 30 3Indira Carr, International Trade Law (5th edn, Routledge 2014) 61 4Peter Schelchetriem, 'Basic Structures and General Concepts of the CISG as Models for a Harmonisation of the Law of Obligations' (2005) JI 27, 31 5 Darren Peacock, 'Avoidance and the Notion of Fundamental Breach under the CISG' (2003) 8 ITBLR 106. 6.Peter Schelchetriem, 'Basic Structures and General Concepts of the CISG as Models for a Harmonisation of the Law of Obligations' (2005) JI 27, 31 126 Journal of Law, Policy and Globalization WWW.1t-1 0

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