This is an overview over the requirements of avoidance by the buyer under Art. 49 CISG

 

Requirements

Art. 49 CISG foresees two possible grounds for avoidance: fundamental breach or lapse of an additional time period in case of non-delivery.

Fundamental breach (Art. 49(1)(a) CISG) or lapse of additional time period (Art. 49(1)(b) CISG)

Fundamental breach (Art. 25 CISG)

Breach of contract

The seller must have committed a breach of contract. This breach can be established by  a non-conformity of the delivered goods (see Art. 35 CISG) or by the non-delivery of goods at the agreed time.

Substantial deprivation of contractual expectations (Art. 25 CISG)

The breach must substantially deprive the buyer of what it was entitled to expect under the contract.

Foreseeability (Art. 25 CISG)

A breach is not fundamental, if the seller could not foresee at the time of conclusion of the contract that a breach of this type would result in a substantial deprivation of the buyer’s expectations. This could be the case e.g. where the seller was not made aware of the particular use of the goods by the buyer.

Lapse of additional time period (Art. 49(1)(b) CISG)

Only in cases of non-delivery can the buyer also avoid the contract after it has fixed an additional time period for the seller's performance and this period has lapsed.

Additional time period fixed (Art. 47 CISG)

The buyer must have fixed an additional time period for the seller to fulfil its obligations.

The time period must be pf reasonable length. The length of this period depends on the circumstances but must give the seller a reasonable opportunity to perform.

Lapse of additional time period (Art. 49(1)(b) CISG)

The time period must have lapsed without the seller having performed successfully.

Declaration within reasonable time (Art. 49(2), 26, 27 CISG)

The buyer loses its right to avoid the contract if it does not do so within in a reasonable time after having become aware of the late delivery (Art. 49(2)(a) CISG) or of the non-conformity of the goods (Art. 49(2)(b)(i) CISG) or after the time period has lapsed or after the seller has declared that it will not perform within this time period (Art. 49(2)(b)(ii) CISG).

No belated notice of  lack of conformity (Art. 38, 39)

If the breach is established by a non-conformity of the goods, the buyer loses its right to rely on such non-conformity if it did not inspect the goods in accordance with Art. 38 CISG and notified the seller of the non-conformity in accordance with Art. 39 CISG.

No additional time period fixed (Art. 47 CISG)

If the buyer has fixed an additional time period for the seller's performance, it may generally not avoid the contract before this time period has lapsed (Art. 47(2) CISG).

No impossibility of restitution (Art. 82 CISG)

The buyer loses its right to avoid the contract if it has already received at least parts of the goods and is unable to restitute them substantially in the condition in which it has received them (Art. 81(1) CISG). However, this is not the case if this inability is not a result of the buyers act or omission (Art. 82(2)(a) CISG), is a result of the examination of the goods in accordance with Art. 38 CISG (Art. 82(2)(b) CISG) or is caused by normal use or a resale in the normal course of business (Art. 82(2)(c) CISG).

 

Effects of avoidance (Art. 81 CISG)

Release from obligation (Art. 81(1) CISG)

Avoidance releases both parties from their primary obligations under the contract.

Avoidance does not affect any secondary obligations such as the obligation to pay damages, any provisions that deal with the settlement of disputes (e.g. arbitration clauses and forum selection clauses) or other obligations which the parties intended to be unaffected by avoidance (e.g. confidentiality agreements)

Restitution (Art. 81(2) CISG)

In case a party has already performed under the contract, it may claim restitution of whatever it has performed (Art. 82(2) CISG) including all benefits that were derived form this performance (Art. 84(2) CISG).

If restitution is not possible and the buyer did not lose its rigt to avoidance in accordance (see Art. 82(2) CISG), the buyer has to restitute all benefits it has derived from the seller's performance (Art. 84(2)(b) CISG).