Does the right to avoid the contract (Art. 49) trump the seller's right to cure (Art. 48(1))?
The relationship between the seller's right to cure (Art. 48 CISG) and the buyer's right to avoid the contract (Art. 49 CISG) is not clear-cut. The starting point of controversy are the first few words of Art. 48(1) CISG: The seller has a right to cure only "[s]ubject to article 49".
As can be seen from the following overview, the majority of cases consequently argue that Art. 49 CISG should prevail, but they thereby shift the relevant question elsewhere: Can there be a fundamental breach under Art. 25 CISG as required by Art. 49(1)(a) CISG, if the non-conformity can be cured in a reasonable manner? Most cases deny a fundamental breach under these circumstances (unless time is of the essence). Merely an award by an ICC Tribunal could be understood to state the opposite (see below).
Bundesgericht/Tribunal fédéral (Swiss Federal Supreme Court)
Switzerland, 18 May 2009 – 4A_68/2009, CISG-online 1900
Buyer was allowed to avoid the contract, because multiple attempts to cure failed. Art. 49 CISG prevails, but when assessing whether a fundamental breach exists, the possibility and reasonableness of cure has to be considered
Oberlandesgericht Köln (Court of Appeal Cologne)
Germany, 14 October 2002 – 16 U 77/01, CISG-online 709
Buyer was allowed to avoid the contract, because the buyer reasonabily lost trust in the seller's ability to cure. Art. 49 CISG prevails, but when assessing whether a fundamental breach exists, the possibility and reasonableness of cure has to be considered
Oberster Gerichtshof (Austrian Supreme Court)
Austria, 22 November 2011 – 4 Ob 159/11b, CISG-online 2239
Buyer was not allowed to avoid the contract. Art. 49 CISG prevails, but the possibility and reasonableness of cure is one among different factors to decide whether a fundamental breach existed. Seller was willing to effect cure, but buyer denied the opportunity
Cámara Nacional de Apelaciones en lo Comercial (National Commercial Court of Appeals)
Argentina, 31 May 2007 – 87484 / 102.876/2002, CISG-online 1517
Buyer was not found to have avoided the contract rightfully. Art. 49 CISG prevails, but resolution of the contract should not be possible as long as a fundamental breach can be avoided by a cure of the non-conformity under Arts. 34, 37 and 48 CISG
Oberlandesgericht Koblenz (Court of Appeal Koblenz)
Germany, 31 January 1997 – 2 U 31/96, CISG-online 256
Buyer was not allowed to avoid the contract. Art. 49 CISG only prevails over Art. 48 CISG if there has been a fundamental breach. To assess whether Art. 25 CISG is fulfillled, the willingness of the seller to cure and the reasonableness of such cure is relevant
Handelsgericht des Kantons Aargau (Commercial Court Canton Aargau)
Switzerland, 05 November 2002 – OR.2001.00029, CISG-online 715
Buyer was not allowed to avoid the contract. Art. 49 CISG only prevails over Art. 48 CISG if there has been a fundamental breach. To assess whether Art. 25 CISG is fulfillled, the willingness of the seller to cure and the reasonableness of such cure is relevant
Gerechtshof Arnhem (Court of Appeal Arnhem)
Netherlands, 07 October 2008 – 104.003.479, CISG-online 1749
Art. 49 CISG prevails, but the possibility of a cure under Art. 48(1) CISG is relevant to decide whether a fundamental breach under Art. 25 CISG exists (para. 4.14 of the judgment)
ICC International Court of Arbitration
Arbitration, 1994 – 7531 (Final Award), CISG-online 565
Buyer has rightfully avoided the contract. Art. 49 CISG prevails over Art. 48(1) CISG. Moreover, Art. 48 CISG should not be considered when deciding whether a fundamental breach under Art. 25 CISG. The award is interpreted to impliedly apply this understanding, because the tribunal stated that "[seller] is not entitled to supply substitute items after the delivery date specified in the contract without the consent of [buyer]."
Landgericht Regensburg (District Court Regensburg)
Germany, 24 September 1998 – 6 O 107/98, CISG-online 514
Buyer has not rightfully avoided the contract, since he has not given the seller a chance to remedy the non-conformities before declaring the avoidance
