Art. 77 CISG

A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.

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Secretariat Commentary

The Secretariat Commentary on Art. 73 of the 1978 New York Draft, predecessor to Art. 77 CISG, gives insight into the drafters' unterstanding on the eve of the 1980 Vienna Diplomatic Conference.

Commentary on the Draft Convention on Contracts for the International Sale of Goods, prepared by the Secretariat (UN Doc. A/CONF.97/5), in: United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March – 11 April 1980, Official Records: Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committees, New York: United Nations (1991), pp. 14 et seq., at p. 61

Overview of case law on Art. 77 CISG: UNCITRAL Digest

The UNCITRAL Digest on the CISG can be used as a starting point to discover the relevant case law on this article.

2016 UNCITRAL Digest of case law on Art. 77 CISG

Interpretation of Art.77 CISG: Selected issues discussed in case law

"such measures as are reasonable in the circumstances"

PVC foil case
Oberlandesgericht Naumburg (Oberlandesgericht des Landes Sachsen-Anhalt) (Court of Appeal Naumburg)
Germany, 24 April 2019 – 12 U 152/18, CISG-online 4506

Interpretation of the "reasonable measures" standard used in Art. 77 CISG

Deal with the breaching party

Is a seller or buyer required to accept an offer by the breaching party to fulfill the contract for a price that is worse than the contract price but better than the price a third party offers for the goods?

Yes

Internationale Jute Maatschappij BV v. Marin Palomares S.L.
Tribunal Supremo (Spanish Supreme Court)
Spain, 28 January 2000 – 454/2000, CISG-online 503

The court reduced the seller's claim for damages under Art. 77 CISG because he rejected an offer of the buyer to buy the goods at a lower than originally agreed upon price and instead sold the goods to a third party at an even lower price than offered by the buyer

Tankers International LLC, V.B.R. et al. v. Aegean Bunkers at Sea NV
Hof van Beroep Antwerpen (Court of Appeal Antwerp)
Belgium, 17 December 2012 – 2010/AR/157, CISG-online 4592

The court reduced the buyer's claim for damages under Art. 77 CISG because he rejected an offer of the seller to buy the goods at a higher than originally agreed upon price and instead bought the goods from a third party at an even higher price than offered by the seller

Pharmaceutical glycerin case
Oberlandesgericht Wien (Court of Appeal Vienna)
Austria, 27 February 2017 – 1 R 207/16t, CISG-online 2814

The court considered the seller to be possibly required under Art. 77 CISG to accept an offer by the buyer to pay less for the goods if the price offered still surpasses the amount offered by third parties. However, since the buyer did not offer an exact amount and merely asked for renegotiations, the seller's claim was not reduced