GENERAL

Avoidance (“termination” in the context of the PECL) of the contract is normally the most extreme measure a party may take in response to a breach (“non-performance” in the context of the PECL) of contract. Avoidance puts a stop to any future performance, except for contractual performances designated to take effect upon avoidance, such as dispute resolution clauses or liquidated damages. (Any restitution following avoidance is not, properly speaking, a contractual performance, but a statutory or common law requirement, as the case may be). Both the CISG and the PECL offer aggrieved parties less extreme measures to deal with breach or with anticipatory breach, such as suspension of performance and requirement of assurances, requirement of performance, or unilateral price reduction. They likewise contain various cure measures that – when applied or applicable – allow for delayed or remedial performance and thus either delay recourse to avoidance or render it unnecessary. In this, both the CISG and PECL manifest a “relational” bias; namely, they attempt to salvage fractured contractual relations by providing an escalation of remedial measures, whose eventual failure ultimately leads to breaking up of the contractual framework through avoidance. In this, the CISG and PECL differ from several national systems that either allow for avoidance in cases of lesser breaches or simply fail to offer such sliding scales.

FUNDAMENTAL BREACH

Due to its extreme nature, both the CISG and the PECL reserve avoidance to special cases, namely to fundamental breaches (non-performances) of the contract.