Seller’s right to avoid the contract in international transactions: Comparative analysis of the respective provisions in the CISG and the PECL

Avoidance of the contract (“termination,” in the language of the PECL) by an aggrieved seller is the most extreme measure offered by both the CISG and PECL in response to breach by the buyer (“non-performance,” in the language of the PECL). Avoidance severs the contractual relations and nullifies obligations pertaining 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 designed to reinstate as much as possible the respective parties' pre-contractual positions, as opposed to post-avoidance measures designed to protect the expectation interest, such as damages). Both the CISG and the PECL offer aggrieved parties less extreme measures to deal with breach or with anticipatory breach, and both 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 or unavailable. In this, both the CISG and PECL manifest a “relational” bias; namely, attempting 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. Therefore both the CISG and PECL generally reserve avoidance of the contract to instances of so-called fundamental breach, although both allow for some non-fundamental breaches to be “upgraded” to the status of “avoidable” breaches through the use of curative (Nachfrist) periods set by the aggrieved seller.