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Published online by Cambridge University Press: 20 October 2009
INTRODUCTION
CISG Article 75 and its counterpart UNIDROIT Principles Article 7.4.5. regulate substitute transaction in a similar manner. Both articles correspond to each other in substance; hence the Official Comments on this Article of the UNIDROIT Principles can arguably be used for the interpretation and gap-filling of the CISG.
The basic premises that must be taken into consideration when interpreting the text of CISG Article 75 are the characteristics of the substitute transaction, the time and manner in which the substitute transaction should be made, the nature of recoverable damages, and any further damages recoverable for additional harm.
Starting with the prerequisite included in both articles – avoidance of the contract (termination of the contract in the terminology of the Principles) by the injured party – it must be noted that this particular element in CISG Article 75 and UNIDROIT Principles Article 7.4.5 provides for a special application of the general rule that is applicable to the proof of the existence and the amount of the harm caused to one of the contracting parties by the other.
The new element that both counterpart Articles introduce is the facilitated mechanism for measuring damages that does not require proof of market price. However, instead it provides for the comparison between the contractual price and the price of the substitute transaction, and it is that difference that defines the amount of the damages.
SUBSTITUTE TRANSACTION
The Official Comments to the UNIDROIT Principles contain several instructions on the particularity of the substitute transaction.
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