334 Part 6: Obligations of the buyer, passing of risk and remedies of the seller
6. Burden of proof
It is submitted that the seller has the burden of proof concerning the exist-
ence of the buyer’s obligation, the fundamental breach requirements under
Art. 64(1) lit. (a) CISG and the fact that a reasonable “Nachfrist” has been
fixed under Art. 64(1) lit. (b) CISG. As a general rule the burden of proof
with regard to the buyer’s defences (e.g. that he actually made performance
so that there is no breach) or to the limitations to the right of avoidance
(see p. 325 et seq.) should be on the buyer. With regard to the time limits in
Art. 64(2) CISG the burden of proof for the beginning and the end of the
relevant period of time should be on the buyer, whereas the burden of proof
with regard to the fact that the declaration of avoidance was effectively made
within that period (Art. 27 CISG) should be on the seller.
IV. Damages
1. Outline
According to Art. 61(1) lit. (b) CISG the seller is entitled to claim dam-
ages as provided in Art. 74-77 CISG. The actual basis for the damages claim
is Art. 61(1) lit. (b) CISG, whereas Art. 74-77 CISG govern the details on
calculating the amount and the type of damages. The provisions of Art. 74
et seq. CISG have been explored in detail above with regard to the buyer.1230
It is submitted that the general principles which have been established there
will in principle also be valid for damages claims of the seller (for example,
liability without the fault requirement, but subject to Art. 79, 80 CISG; fore-
seeability; the question of whether the performance interest can be liquidat-
ed without being entitled to avoid the contract; calculation of damages under
Art. 75, 76 CISG etc.). The following considerations are therefore limited to
selected issues which may in practice become particularly relevant where it is
the seller who claims damages.
2. Specific issues
a) Late payment
In the case of late payment the question may arise whether the loss result-
ing from a depreciation of the contract currency between the agreed date of
payment and the actual date of payment is recoverable under Art. 74 CISG.
1230
See above p. 268 et seq.
Peter Huber
§ 16. Remedies of the seller 335
It is submitted that in principle such a loss is recoverable but that it will be
a question of foreseeability in each individual case.1231 It will usually depend
on whether the buyer ought, in the circumstances, to have foreseen that the
seller was going to convert the owed debt from the contract currency to an-
other currency. If for instance the contract currency is not the seller’s home
currency this will often be the case. It will usually be different if the contrac-
tual currency is the seller’s home currency, unless the seller mainly operates
under a foreign currency and this was foreseeable for the buyer.
b) Lost volume
Specific problems may arise with regard to the situation of the so-called lost
volume seller, i.e. a seller which has more or less unlimited supply of the
goods that he sells.
Assume the following example: The contract provides for delivery of goods
for a price of 100,000, the seller’s (S) profit being 20,000. The buyer (B) does
not take delivery of the goods and definitely refuses to do so in the future.
This breach amounts to a fundamental breach of contract so that S is entitled
to avoid the contract under Art. 64(1) lit. (a) CISG. B will be liable for dam-
ages under Art. 61(1) lit. (b), Art. 74 et seq. CISG. S sells the goods which
had originally been bookmarked for B within a reasonable time after avoid-
ance and in a reasonable manner to X for 90,000.
In the author’s opinion, S may claim 20,000 as damages. The reasons for
this submission can be summarized as follows: Had B’s breach not occurred
S would have made a profit of 30,000, i.e. 20,000 from the contract with B
and 10,000 from the contract with X; in fact, due to his unlimited access
to supply, S could and would have made the contract with X anyway. As a
result of B’s breach S now only made the profit from the contract with X,
i.e. 10,000. The resulting amount of damages is 20,000. To put it differently,
the seller’s damage is caused by the fact that he lost one of his transactions
(“lost volume” of transactions). With regard to the legal basis for this claim
it is submitted that S may either proceed entirely under Art. 74 CISG (the
foreseeability requirement usually being met in cases like that) or under a
combination of Art. 75 and 74 CISG (Art. 75 CISG concerning the 10,000
that constitute the difference between the contract price (contract S-B) and
the price in the cover sale (S-X); Art. 74 CISG concerning the 10,000 which
constitute the remaining loss of profit arising out of the fact that the contract
1231 See for instance (German) Oberlandesgericht Düsseldorf 14 January 1994,
CISG-Online No. 119; P. Huber, in: Münchener Kommentar zum Bürgerlichen
Gesetzbuch, Art. 74 para. 49 et seq.
Peter Huber
336 Part 6: Obligations of the buyer, passing of risk and remedies of the seller
S-B was not performed).1232 It should be noted, however, that these consid-
erations only apply where there is a real “lost volume” situation, i.e. where
the seller has unlimited supply and that he could easily have made the trans-
action with X anyway.
A further issue with regard to “lost volume” cases concerns the application of
Art. 76 CISG. Where the seller wants to calculate the damages under Art. 76
CISG, the buyer might invoke the duty to mitigate (Art. 77 CISG) arguing
that the seller should have conducted a cover sale. As a general rule, this
defence may be successful where such a cover sale was reasonable under the
circumstances. Where, however, the seller is in a “lost volume” situation, it
is submitted that the mitigation defence will usually fail because – as shown
above – the cover sale would not reduce the “lost volume” damage suffered
by the seller.1233
c) Other issues
As a rule, the buyer is responsible for his financial capacity so that his chances
for being exempt from liability under Art. 79 CISG are very low.1234 The buy-
er also has to bear the risk that he cannot make the originally intended use of
the goods. Thus he should not (normally) succeed in justifying his failure to
take delivery of the goods by arguing that due to a change of circumstances
he now has no more use for the ordered goods.1235
With regard to the burden of proof it is submitted that generally the seller
should bear this burden with regard to the general requirements for a claim
1232
See with regard to these issues P. Huber, in: Münchener Kommentar zum Bürgerli-
chen Gesetzbuch, Art. 75 para. 20, Art. 76 para. 12, Art. 77 para. 10; Stoll/Gruber,
in: Schlechtriem/Schwenzer, Commentary, Art. 75 para. 11; (Austrian) Oberster
Gerichtshof 28 April 2000, Internationales Handelsrecht (IHR) 2001, 207, 208 =
CISG-Online No. 581.
1233 P. Huber, in: Münchener Kommentar zum Bürgerlichen Gesetzbuch, Art. 76
para. 12, Art. 77 para. 10.
1234 See Stoll/Gruber, in: Schlechtriem/Schwenzer, Commentary, Art. 79 para. 16, poin-
ting out, however, that there may be an exemption where the financial difficulty is
due to a State intervention. But see also Arbitral Award, Chamber of Commerce
Hamburg, 21 March 1996, CISG-Online No. 187, which assumes a rather strict
liability for the financial capacity.
1235 See P. Huber, in: Münchener Kommentar zum Bürgerlichen Gesetzbuch, Art. 79
para. 22; (French) Cour d’Appel Colmar 12 June 2001, CISG-Online No. 694;
Arbitral Award Bulgarian Chamber of Commerce and Industry CISG-Online
No. 436.
Peter Huber
§ 16. Remedies of the seller 337
for damages (including the contemplation requirement1236) whereas the buy-
er should bear the burden with regard to his defences (e.g. that he actually
made performance so that there is no breach) or to the exceptions to the li-
ability for damages (e.g. Art. 79, 80 CISG).1237
1236
(German) Oberlandesgericht Bamberg 13 January 1999, CISG-Online No. 516.
But see for a different view (German) Oberlandesgericht Zweibrücken 31 March
1998, CISG-Online No. 481 (reversed on other points in (German) Bundes-
gerichtshof 24 March 1999, CISG-Online No. 396); Magnus, in: Staudinger
Kommentar zum Bürgerlichen Gesetzbuch, Art. 74 para. 62.
1237
See Stoll/Gruber, in: Schlechtriem/Schwenzer, Commentary, Art. 74 para. 52,
Art. 79 para. 53 et seq., Art. 80 para. 8.
Peter Huber