The Right of the Buyer to Reduce Price in the Case of the Seller’s Breach of Contract on International Sale of Goods

Abstract

This article deals with the right of the buyer to reduce price in the case of the seller’s breach of contract on international sale of goods. Primarily, the subject of the analysis is the Article 50 of the UN Convention on contracts for the international sale of goods (CISG). The article also deals with relevant court and arbitration practice, as well as with legal doctrine. The buyer may use his right to reduce price if the seller has delivered non-conforming goods. The CISG does not envisage price reduction as a remedy for delivery of goods that is under third party claims. Still, there is a serious discussion about this issue in the literature. If the seller remedies any failure to perform his obligations in accordance with the article 37 or article 48 or if the buyer refuses to accept performance by the seller in accordance with those articles, the buyer may not reduce the price. According to the Article 50 of the CISG, the buyer must take appropriate procedural steps in order to exercise his right to reduce price. The buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time.